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Approved Changes (5)

Australia

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Australian Taxation Office Issues Notice on Taxpayers' Self-Assessment of Obligation to Lodge Reportable Tax Position

The Australian Taxation Office (ATO) has issued a notice on the need for taxpayers to self-assess their obligation to lodge a Reportable tax position (RTP) schedule.

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Self-assess your requirement to lodge an RTP schedule (public or foreign owned companies)

From 30 June 2019, taxpayers are no longer notified of their obligation to lodge a Reportable tax position (RTP) schedule. Instead, you are required to self-assess your company's requirement to lodge based on certain criteria.

Your company will need to lodge an RTP schedule with the 2019 tax return if it is:

  • an early balancing taxpayer who had been notified of the requirement to lodge their RTP schedule
  • a June or late balancer and
    • is lodging a company tax return for the year ending 30 June 2019 or later
    • is a public or a foreign-owned company
    • has total business income of either
      • $250 million or more in the current year
      • $25 million or more in the current year and is part of a public or foreign owned economic group with total business income of $250 million or more in the current year or the immediate prior year.

Your company will need to lodge the schedule if it meets the criteria even if it has no disclosures.

In exceptional circumstances a taxpayer who does not meet the self-assessment criteria will be asked to lodge the RTP schedule. If your company does not meet the criteria but is required to lodge, we will phone you prior to issuing a notification letter.

We have published guidance and instructions to assist you complete the schedule. Email ReportableTaxPosition@ato.gov.au if you need information on the schedule requirements.

See also:

Reportable tax position schedule

2018 RTP webinar recording

12-09-2019

Ecuador

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Ecuador Publishes Resolution on Reduced Tax Rate for Micro and Small Enterprise and Exporters

Ecuador has published Administrative Resolution CPT-RES-2019-005 in the 26 November 2019 edition of the Official Gazette which establishes the procedures for qualifying taxpayers to apply the 22% corporate tax rate that was maintained for micro and small enterprise, and exporters that maintain or increase employment as part of the 2018 tax reform. As part of the reform, the corporate tax rate was increased to 25%, while a 3% reduction benefit was provided for qualifying taxpayers.

For micro and small enterprises, the 22% tax rate may be applied if the taxpayer qualifies as such according to the Regulation of Investments of the Organic Code of Production, Trade, and Investments, which includes:

  • Micro enterprise - between 1 to 9 workers and annual gross sales or income equal to or less than USD 300,000; and
  • Small enterprise - between 10 to 49 workers and annual gross sales or income between USD 300,000 and USD 1,000,000.

The 22% rate may be applied directly, with the qualification as a micro or small enterprise validated at the time the tax return is filed.

For exporters, the 22% tax rate may be applied if the exporting taxpayer:

  • Complies with current regulations for categorization as an exporting company; and
  • Is included in the registry of habitual exporters of goods maintained by the tax authority in its institutional web portal.

Further, the exporter must confirm the following in its tax return:

  • Compliance with the requirement for increased employment in accordance with the Regulations for the Application of the Internal Tax Regime Law; and
  • The fulfillment of the requirement that increased employment has been maintained as compared to the previous year.

Click the following link for the text of Administrative Resolution CPT-RES-2019-005 as published by a third party. The Resolution entered into force on 26 November 2019.

12-09-2019

Georgia

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Georgia Adopts Latest OECD Transfer Pricing Guidelines

Georgia's Ministry of Finance reportedly issued Decree No. 366 on 2 December 2019, which amends the country's transfer pricing legislation. Under the legislation, reference is made to the OECD Transfer Pricing Guidelines with regard to issues that are not specifically covered under Georgia's transfer pricing rules. The Decree updates this reference from referring to the 2010 OECD guidelines to referring to the 2017 OECD guidelines. As such, the latest updates to the guidelines resulting from the BEPS project are effectively adopted in Georgia.

12-09-2019

Guernsey

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Guernsey Approves Ordinance on Social Security Contributions for 2020

Guernsey has approved the Social Insurance (Rates of Contributions and Benefits, etc.) Ordinance 2019, which generally comes into force on 1 January 2020. For both employer and employee contributions, the contribution rate for 2020 is maintained at 6.6%, while the upper weekly earnings limit for contributions is increased from GBP 2,814 to GBP 2,880 and the upper monthly earnings limit for contributions is increased from GBP 12,194 to GBP 12,480. Gross earnings above the prescribed limits are not considered in calculating the employer or employee contribution amounts.

12-09-2019

Untd A Emirates

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UAE Updates CbC Reporting Webpage with Additional Information on Reporting and Notification

United Arab Emirates Ministry of Finance has updated its Country-by-Country (CbC) Reporting webpage with additional information on the country's CbC reporting and CbC notification requirements. This includes English-language materials presented during a workshop held in October 2019 and a summary of frequently asked questions during that workshop, as well as links to the CbC notification form and a constituent entities template. As previously reported, the UAE has decided not to impose secondary local filing requirements but does require a CbC notification from constituent entities of a foreign MNE group in the UAE. If there are multiple constituent entities, one may be designated to submit the notification. The first notifications are due by 31 December 2019.

Note - At the time of writing, there were technical issues with loading the CbC notification form link, which is expected to be resolved shortly to allow for notification filing by the end of the year.

12-09-2019
Proposed Changes (2)

Ireland

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Irish Revenue Consulting on Dividend Withholding Tax Real-Time Reporting

Irish Revenue has issued eBrief No. 203/19 on a public consultation for Dividend Withholding Tax Real-Time Reporting by Irish companies for dividends and distributions made to individuals.

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Public Consultation Reminder - Dividend Withholding Tax (DWT) – Real-Time Reporting

The Minister for Finance, in his Budget Statement of 8 October 2019, announced a new process for applying and collecting Dividend Withholding Tax (DWT) from dividends and distributions made by Irish resident companies to individuals. The objective of this new process is to ensure individuals pay the correct amount of Income Tax and USC on dividend payments at the right time.

It is planned that the new DWT Real-Time Reporting process will be operational for all dividends paid on or after 1 January 2021.

Revenue is interested in the views of companies, Qualified Intermediaries (QIs), non-QIs, Authorised Withholding Agents (AWA), stock brokers, shareholders, representative bodies, tax practitioners and any other relevant stakeholders. This public consultation process will run until 12 December 2019. Full details of the Public Consultation document can be viewed at DWT Real-Time Reporting Public Consultation Paper.

Please respond by email to: realtimeDWT@revenue.ie

Following this consultation, Revenue will publish a position paper based on the observations, suggestions and comments received and will continue the collaborative process with relevant stakeholders to assist with the design and development of DWT Real-Time Reporting.

12-09-2019

Papua N Guinea

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Papua New Guinea Budget for 2020 Delivered

On 28 November 2018, Papua New Guinea's Minister for Treasury delivered the National Budget for 2020 in parliament. Some of the main tax-related measures of the budget taxation bills include:

  • The introduction of a small business tax regime that includes a 2% flat tax on turnover on a quarterly basis for small businesses with annual turnover below PGK 250,000, excluding professional services businesses (flat tax of PGK 400 annually if below PGK 50,000);
  • A change in the 3:1 debt-equity ratio for resources companies for thin-capitalization purposes to 2:1 (ratio for resources companies aligned with the ratio for all other companies);
  • A change in the requirement to pay disputed tax and additional tax prior to making an appeal with the Review Tribunal or in a National Court so that 50% of the disputed amount must be paid instead of the full amount; and
  • A change in the deadlines for provisional tax payment to 90 days, 180 days, and 270 days after the end of the previous tax year instead of fixed dates of 30 April, 31 July, and 31 October.

Further to the above, a provision is also included that no loss incurred on or before 31 December 2018 is deductible, that, under the provisions in force prior to 1 January 2019, would have been deductible from income derived in the year ended 31 December 2018 or a later year. This is in relation to changes in the loss carryforward rules from 1 December that limit loss carryforward to 7 years in general and 20 years for resource companies. As worded in the draft bill, the provision would effectively disallow the deduction of any losses incurred before 1 January 2019 that would be deductible under prior rules, which is reportedly not the intent of the Internal Revenue Commission and is expected to be amended further before the bill is approved.

Click the following link for the 2020 budget webpage.

12-09-2019
Treaty Changes (5)

Greece-Serbia

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Greek Parliament Approves Pending SSA with Serbia

On 4 December 2019, the Greek parliament approved for ratification the pending social security agreement with Serbia. The agreement, signed 13 July 2017, is the first of its kind between the two countries and will enter into force on the first day of the third month after the ratification instruments are exchanged.

12-09-2019

Japan-Serbia

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Japan Concludes Tax Treaty Negotiations with Serbia

Japan's Ministry of Finance announced on 6 December 2019 that Japan and Serbia have agreed in principle on an income tax treaty, which will be the first of its kind between the two countries. The treaty will be signed after the necessary internal procedures have been completed by the two countries and will enter into force after the ratification instruments are exchanged. Details of the treaty will be published once available.

12-09-2019

Kazakhstan-Cyprus

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Kazakhstan Government Approves Pending Tax Treaty with Cyprus

On 4 December 2019, the Kazakhstan government reportedly approved the bill for the ratification of the pending income tax treaty with Cyprus and submitted the bill in parliament. The treaty, signed 15 May 2019 (previous coverage), is the first of its kind directly between the two countries, although a prior treaty between Cyprus and the former Soviet Union had applied in respect of Kazakhstan but was terminated. The treaty will enter into force once the ratification instruments are exchanged and will generally apply from 1 January of the year following its entry into force.

12-09-2019

Kenya-Vietnam

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Tax Treaty between Kenya and Vietnam to be Negotiated

Officials from Kenya and Vietnam reportedly met on 3 December 2019 to discuss bilateral issues and agreed to begin negotiations for an income tax treaty. Any resulting treaty would be the first of its kind between the two countries and must be finalized, signed, and ratified before entering into force.

12-09-2019

Kosovo-Saudi Arabia

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Update - Kosovo Ratifies Pending Tax Treaty with Saudi Arabia

On 3 December 2019, Kosovo published in the Official Gazette the decree for the ratification of the pending income tax treaty with Saudi Arabia. The treaty, signed 20 October 2019, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Kosovo personal income tax and corporate income tax and covers Saudi Zakat and income tax, including the natural gas investment tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel if the activities continue for the same or connected project within a Contracting State for a period or periods aggregating more than 183 days within any 12-month period.

Withholding Tax Rates

  • Dividends - 5%
  • Interest – 5%
  • Royalties – 5% on royalties paid for the use of, or the right to use industrial, commercial or scientific equipment; otherwise, 10%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
  • Gains from the alienation of shares that constitute a share in a company which is a resident of the other State.

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Entry into Force and Effect

The treaty will enter into force on the first day of the second month after the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.

12-09-2019
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