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Approved Changes (17)


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Belgium Increases Advance Payment Surcharge Credit Percentages to Assist Taxpayers with Liquidity Issues Resulting from COVID-19

The Belgian Ministry of Finance has announced an adjustment in the percentages used in determining the advance tax payment surcharge credit to assist taxpayers with liquidity issues resulting from COVID-19. When advance tax payments do not cover the final tax assessment for the year, a surcharge (tax increase) applies, which is currently equal to 7.0% on 103% of the total tax due, less prepayments, tax credits, withholding tax, etc. A credit against the surcharge amount is provided for timely advance tax payments.

For companies not paying dividends and companies paying dividends, the percentages being provided are as follows for quarterly payments:

  • Companies not paying dividends
    • Q1 - 9.0%
    • Q2 - 7.5%
    • Q3 - 6.75%
    • Q4 - 5.25%
  • Companies paying dividends
    • Q1 - 9.0%
    • Q2 - 7.5%
    • Q3 - 6.0%
    • Q4 - 4.5%

Increased percentages are also provided for personal income tax (for self-employed).

Since the measure is intended for companies with liquidity problems, the increased rates do not apply for companies that redeem their own shares or decrease their capital or for companies that pay or allocate dividends between 12 March 2020 and 31 December 2020.

Advance payment dates are unchanged and remain 10 April, 10 July, 10 October, and 20 December 2020.



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Brazil Extends Individual Income Tax Return and Social Security Contribution Deadlines Due to COVID-19

Brazil has published Normative Instruction RFB No. 1930 of 1 April 2020 in the Official Gazette. The Normative Instruction extends the deadline for the filing of individual income tax returns from 30 April to 30 June 2020 due to COVID-19.

Brazil has also published Ordinance No. 139 of 3 April 2020, which extends the deadlines for the payment of certain social security contributions for the months of March and April 2020. The deadlines are extended to the deadlines corresponding to the months of July and September 2020. The extension applies for the social security contribution (INSS) and the contributions for the social integration program (PIS) and the financing of social security (COFINS).



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Chile Clarifies Tax Exemption for Reorganization Involving Indirect Transfer of Chilean Assets

The Chilean tax authority (Servicio de Impuestos Internos - SII) has published Letter Ruling No. 641 of 27 March 2020 concerning the taxation of a foreign reorganization that involves the indirect transfer (sale) of Chilean assets. In general, the transfer of Chilean assets, including indirect transfers, may be subject to tax in Chile. The letter clarifies, however, that the indirect transfer of Chilean assets through the sale of shares in the context of a reorganization of a foreign business group may be exempt if certain conditions are met.

This includes that the indirect transfer is exempt if the sale of shares takes place in the context of a reorganization of the business group, the shares always remain under the ownership of the same controller, and no income or higher value is generated for the transferor. If after the reorganization there is a disposal (indirect transfer of Chilean assets) generating income, then the respective taxation will be determined based on the circumstances existing at the date of disposal.



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Cyprus Clarifies Return Deadline Extension for COVID-19

The Cyprus tax department has issued a release clarifying the deadline extension being provided for income tax returns due to COVID-19. The release notes that the deadline for the company income tax return for the 2018 tax year that was due 31 March 2020 is extended to 1 June 2020.


European Union

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European Commission Extends State Aid Framework in Response to COVID-19

The European Commission has announced the extension of the State aid Temporary Framework adopted on 19 March 2020 to support the economy in the context of the COVID-19 outbreak.


State aid: Commission extends Temporary Framework to enable Member States to accelerate research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the coronavirus outbreak

The European Commission has adopted an amendment extending the Temporary Framework adopted on 19 March 2020 to enable Member States to accelerate the research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the context of the coronavirus outbreak. The amended Temporary Framework complements the many other possibilities already available to Member States to mitigate the socio-economic impact of the coronavirus outbreak, in line with EU State aid rules.

Executive Vice- President Margrethe Vestager, in charge of competition policy, said: "Today's amendment to the Temporary Framework will further enable Member States to support companies that develop and manufacture much needed products to fight the coronavirus, such as vaccines, medicines, medical devices, disinfectants and protective equipment. We need to act in a coordinated manner. So additional support may be granted to cross-border projects between Member States and to timely delivery of products. In addition, we have extended the temporary framework to give Member States further possibilities to ease liquidity constraints faced by companies and save jobs in sectors and regions that are hit particularly hard by this crisis."

On March 19, the Commission adopted a new State aid Temporary Framework to support the economy in the context of the coronavirus outbreak, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union. The Temporary Framework recognises that the entire EU economy is experiencing a serious disturbance. It enables Member States to use the full flexibility foreseen under State aid rules to support the economy, while limiting negative consequences to the level playing field in the Single Market.

Today's amendment extends the Temporary Framework by providing for additional five types of aid measures:

(i) Support for coronavirus related research and development (R&D): to address the current health crisis, Member States can grant aid in the form of direct grants, repayable advances or tax advantages for coronavirus and other relevant antiviral R&D. A bonus may be granted for cross-border cooperation projects between Member States.

(ii) Support for the construction and upscaling of testing facilities: Member States can grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the construction or upscaling of infrastructures needed to develop and test products useful to tackle the coronavirus outbreak, up to first industrial deployment. These include medicinal products (including vaccines) and treatments; medical devices and equipment (including ventilators and protective clothing, as well as diagnostic tools); disinfectants; data collection and processing tools useful to fight the spread of the virus. To encourage cooperation and to support quick action, companies can benefit from a bonus when their investment is supported by more than one Member State and when the investment is concluded within two months after the granting of the aid.

(iii) Support for the production of products relevant to tackle the coronavirus outbreak: Member States can grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the rapid production of coronavirus-relevant products (as listed under ii.). To encourage cooperation and to support quick action, companies may benefit from a bonus when their investment is supported by more than one Member State and when the investment is concluded within two months after the granting of the aid.

(iv) Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions: to further reduce the liquidity constraints on companies due to the coronavirus crisis and to preserve employment, Member States can grant targeted deferrals of payment of taxes and of social security contributions in those sectors, regions or for types of companies that are hit the hardest by the outbreak.

(v) Targeted support in the form of wage subsidies for employees: to help limit the impact of the coronavirus crisis on workers, Member States can contribute to the wage costs of those companies in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel.

The amendment Temporary Framework also expands on the existing types of support that Member States can give to companies in need. For example, it now enables Member States to give, up to the nominal value of € 800 000 per company, zero-interest loans, guarantees on loans covering 100% of the risk, or provide equity. This can be combined also with so-called de minimis aid (to bring the aid per company to up to €1 million) and with other types of aid. It should be particularly useful to address urgent liquidity needs of small and medium-sized enterprises in a very speedy manner.

The amendment Temporary Framework will be in place until the end of December 2020. With a view to ensuring legal certainty, the Commission will assess before that date if it needs to be extended.

Finally, the Commission is continuously assessing if further measures are necessary to complement the toolbox for Member States to support their economy in these difficult times and help companies bounce back strongly after the crisis, including by further amending the Temporary Framework. In this context, the Commission is also analysing existing State rules, to verify consistency with the principles endorsed in the Temporary Framework for State aid measures to support the economy in the current coronavirus outbreak.



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Germany Provides Tax Exemption for Special Payments to Employees Due to COVID-19

The German Ministry of Finance has announced that special payments for employees due to the COVID-19 pandemic will be exempted from tax and social security contributions. This allows employers to pay grants and subsidies up to EUR 1,500 per employee between 1 March 2020 and 31 December 2020, free from tax and contributions, provided that the special payments are paid in addition to wages owed anyway. Such special payments may be granted in cash or in kind.



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Greece Suspends Several Administrative Procedures During COVID-19 Pandemic

Greece has reportedly suspended a number of administrative procedures and deadlines during the COVID-19 pandemic. This includes:

  • The suspension of the issuance of preliminary or final tax assessments acts and penalties by the tax authorities;
  • The suspension of the deadline for taxpayers to submit objections to preliminary tax assessment acts and penalties;
  • The suspension of the deadline for filing administrative appeals where the standard deadline expires during the period 11 March and 31 May 2020;
  • The suspension of the deadline for Dispute Resolution Directorate to issue decisions on administrative appeals where the standard deadline expires during the period 20 March and 31 May 2020; and
  • The suspension of the statute of limitations for the tax authority to issue tax assessments or penalties where the standard statute of limitation expires during the period 30 March to 31 May 2020.

Greece has also suspended the operation of the beneficial ownership registry to 30 June 2020, with the deadlines for filing information with the registry suspended accordingly.


Hong Kong

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Hong Kong Provides Deadline Extension for Tax Payments and Returns and CbC Notifications for COVID-19

The Hong Kong Inland Revenue Department has issued press releases announcing deadline extensions for tax payments and returns and for CbC report notifications in view of the COVID-19 situation.


Inland Revenue Department extends tax deadlines

The Inland Revenue Department announced today (April 4) that in view of the latest situation of COVID-19, deadlines for tax payments and lodgement of objections and holdover applications as well as submission of tax returns and information that fall between March 23 and May 2 are automatically extended to May 4.

The department encourages the public to use its electronic services to handle their tax affairs as much as possible or send their documents to the department by post. A list of the department's electronic services can be found in its website at

The department will review the situation and make further announcements as necessary.

Country-by-Country Reporting - Notification Deadline

Under section 58H of the Inland Revenue Ordinance (Cap. 112), a Hong Kong entity of a reportable group is required to file a notification in relation to country-by-country ("CbC") reporting for an accounting period. The notification must be filed within 3 months after the end of the relevant accounting period ("notification deadline").

In view of the latest situation of COVID-19, the Department would accept the Hong Kong entity and its service provider as having complied with the notification deadline for the relevant accounting period ended between 31 December 2019 and 29 February 2020, provided that the notification is received via the CbC Reporting Portal on or before 1 June 2020.



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Update - Sectors Eligible for Hungary's COVID-19 Relief Measures

As previously reported, Hungary is providing certain relief measures for taxpayers due to COVID-19, including a four-month exemption from the payment of taxes and contributions on salaries/wages. The sectors/activities eligible for the relief (those deemed most affected by COVID-19) include:

  • Creative, arts, and entertainment activities;
  • Food and beverage service activities;
  • Gambling and betting activities;
  • Hotels and similar accommodation;
  • Inland passenger water transport;
  • Motion picture, video and television program production, sound recording, and music publishing activities;
  • Organization of conventions and trade shows;
  • Physical well-being activities;
  • Programming and broadcasting activities;
  • Publishing of newspapers, journals, and periodicals;
  • Sports activities and amusement and recreation activities;
  • Taxi operation; and
  • Travel agency and tour operator activities.

To be considered eligible, the taxpayer's main source of income should be from the most impacted activities/sectors listed above. This condition is considered met if at least 30% of total income in the 6 months prior to 24 March is from the specified activities/sectors. The activities do not need to be the main activity that is registered in the company registry.



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Indonesia Enacts Government Regulation for COVID-19 Including Tax Reform for Reduced Corporate Tax Rates and Measures for Taxation of E-Transactions

The Indonesian Government has announced the enactment on 31 March 2020 of Government Regulation (in Lieu of Law) No. 1 of 2020. The regulation includes measures in response to the COVID-19 pandemic, including budget and tax reform measures.

The main tax reform measures include the following:

  • The corporate tax rate is reduced to 22% for the 2020 and 2021 fiscal years, with a further reduction to 20% from 2022;
  • For publicly listed companies with a minimum of 40% of shares held by public investors, the corporate tax rate is further reduced by 3%, with further conditions to be issued; and
  • New measures for the taxation of electronic transactions (referred to as "PMSE") are introduced for foreign merchants, foreign service providers, foreign PMSE providers (assume online marketplace/platform), and domestic PMSE providers, including:
    • The required collection and payment of VAT on the utilization of intangible goods and/or services from outside Indonesia through PMSE;
    • The taxation of non-residents without a physical presence in Indonesia on income arising from PMSE transactions if they have a significant economic presence (treated as having a PE in Indonesia) based on meeting certain thresholds (amounts to be specified) for:
      • Gross consolidated group turnover;
      • Sales in Indonesia; and/or
      • Active digital media users in Indonesia;
    • The introduction of a new electronic transaction tax that is levied on the sale of goods and services through PMSE from outside Indonesia in cases where the significant economic presence conditions are met for a permanent establishment, but cannot be applied due to the provisions of a tax treaty;
    • Provisions for the appointment of a tax representative in Indonesia to fulfill the VAT, income tax, or electronic transaction tax obligations, as the case may be; and
    • Provisions for penalties for non-compliance with the new tax obligations for PMSE, which are in line with the general tax law, as well as the possible termination (blocking) of access to the Indonesian market.

Further provisions regarding the new PMSE obligations will be issued through future regulations, including the rates, tax base, etc.

In addition to the above, the Government Regulation also extends certain administration deadlines due to COVID-19 and grants the Ministry of Finance authority to provide customs facilities, including exemptions or waivers of customs duties for certain goods for COVID-19.



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Ireland Updates COVID-19 Information and Advice for Taxpayers and Agents with Relief from Customs, Vehicle Registration Tax, and Excise

Irish Revenue has updated its COVID-19 information and advice for taxpayers and agents, including new relief from customs, vehicle registration tax, and excise.


Customs, Vehicle Registration Tax (VRT) and Excise

Relief from the payment of import duties and VAT for goods imported to combat COVID-19

An EU Commission Decision (C (2020) 2146 of 3 April 2020) provides for the importation of goods to combat the effects of COVID-19 from outside the European Union (EU) without the payment of Customs Duty and Value-Added Tax (VAT) from 30 January 2020 to 31 July 2020.

Importing goods

Critical pharmaceutical products and medicines will be given a Customs green routing to facilitate uninterrupted importation and supply.

Renewal of existing Customs Special Procedure Authorisations

Authorisations due for renewal in March and April have been extended to 31 May.

VRT registration and export appointments

All VRT registration and export appointments in the National Car Testing Service (NCT) Centres have been cancelled from 28 March 2020 until further notice. Customers who have an appointment should keep their booking confirmation in their vehicles when driving. This can be shown to Customs Officers or Gardaí should the vehicle be stopped. When the Centres reopen, Revenue will work closely with them to ensure that any backlog is quickly cleared.

Customers will not be charged additional VRT as a penalty at registration if they:

  • had an appointment scheduled during the period when the NCT Centres are closed, or
  • cannot get an appointment due to the closure and exceed the 30-day period.

Please see for further information on making appointments. Customers can contact Revenue via MyEnquiries with any questions they may have.

Relief from Excise Duty (Alcohol Products Tax) for the manufacture of hand sanitiser products

A relief from APT will continue to apply to alcohol used in the production of a range of medicinal and other products, such as hand sanitisers. To benefit from this relief, producers must apply to Revenue to be authorised to receive alcohol for this purpose. The production of hand sanitiser products must be approved by the Department of Agriculture, Food and the Marine before being made available for sale or use. See:



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Jersey Clarifies Economic Substance Test During COVID-19 Pandemic

The Jersey government has updated its guidance page on economic substance for companies with a notice on economic substance in light of the COVID-19 pandemic.


Coronavirus (COVID-19) and economic substance

Where companies operating practices have to be adjusted to compensate for the Coronavirus outbreak, the Comptroller will not determine under Article 6, Taxation (Companies- Economic Substance) (Jersey) Law 2019, that a company has failed the economic substance test.

Where a company incorporated in another jurisdiction has been tax resident on the basis of control and management in Jersey, and the Comptroller considers that any changes dictated by the Corona Virus are temporary, then this will not disturb the determination of corporate tax residence from that prevailing before this outbreak.

This treatment will only apply to adjustments to the normal operating practices, and to the extent required to mitigate the threats from this outbreak.


A company would normally hold directors' meetings in Jersey but, to avoid travel or because individuals are self-isolating, these meetings are temporarily held virtually to allow those individuals, or alternatives, to attend.

The Comptroller would not regard this as failing to meet the economic substance test.

Any questions on this approach should be directed to



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Montenegro Publishes Guidance on 90-Day Deferral of Tax and Non-Tax Liabilities for COVID-19

Montenegro's Tax Administration has published guidance on the 90-day deferral of tax and non-tax liabilities being provided in response to COVID-19. The guidance clarifies that the 90-day deferral is available in respect of individual income tax, social security contributions, and tax and non-tax amounts owed under payment agreements for liabilities due in March, April, and May 2020. The 90-day deferral is available for all obliged natural and legal persons, except state bodies, public institutions, companies in which the government has a majority stake, etc. Deferrals can be applied for on the ePrijava tax portal.



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OECD Publishes Exchange of Information Compliance Ratings for Eight Jurisdictions

The OECD has announced the publication of eight peer review reports assessing compliance with the international standard on transparency and exchange of information on request.


Global Forum publishes new peer review reports and reveals compliance ratings for eight jurisdictions

06/04/2020 - The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) published today eight new peer review reports assessing compliance with the international standard on transparency and exchange of information on request (EOIR).

These reports evaluate jurisdictions against the updated standard which requires beneficial ownership information of all relevant legal entities and arrangements, in line with the definition used by the Financial Action Task Force Recommendations.

A peer review assessment of a jurisdiction's legal and regulatory framework and its implementation in practice results in one of four distinct overall ratings (a rating is allocated to a jurisdiction once it has undergone a full peer review):

  • Compliant: The EOIR practice is effective. This rating can be granted even if recommendations were issued, but there should be no material deficiencies identified.
  • Largely Compliant: The standard is implemented to a large extent but improvements are needed. Deficiencies are material but have limited impact on EOIR.
  • Partially Compliant: The standard is only partly implemented. At least one material deficiency which has had, or is likely to have, a significant effect on EOIR in practice has been identified.
  • Non-Compliant: Fundamental deficiencies in the implementation of the standard have been revealed.

The eight new reports relate to jurisdictions with very diverse EOIR practice, from Liberia, which received only two requests, to Switzerland that received thousands from multiple partners during the three years of practice under review. The results are equally contrasted, with some jurisdictions struggling to implement their legislation on transparency.

Three jurisdictions – Brunei Darussalam, Macau (China) and Switzerland – received an overall rating of "Largely Compliant" for this second round of peer reviews. These ratings confirmed those issued after the first round of assessment (2010-16). Specific achievements and recommendations include:

  • Brunei Darussalam has taken significant steps to align with the international standard by abolishing the International Business Company (offshore) regime as well as expanding its network of EOIR relationships extensively by becoming a party to Multilateral Convention on Mutual Administrative Assistance on Tax Matters. Further improvements are required to ensure the availability of beneficial ownership and reliable accounting information in all cases.
  • Macau (China) has made a number of improvements since the previous review in 2013, including by abolishing bearer shares. The Multilateral Convention now applies in Macau, which greatly expands its number of EOI partners. The main deficiencies identified in the 2020 peer review concern the availability of ownership and accounting information.
  • Switzerland managed to address a number deficiencies identified in its last review in 2016, including improving its exchange of information process and doubling its staff working in the Exchange of Information Unit. Switzerland should now ensure that notification and appeal procedures do not unduly prevent or delay an effective exchange of information. The preservation of confidentiality of the information received when processing requests should also be further scrutinised. A total of 3 252 individual requests, 8 group requests and 16 bulk requests were dealt with during the assessment period.

The overall rating of Barbados and the Seychelles was downgraded from "Largely Compliant" to "Partially Compliant" since their last reviews, highlighting some significant deficiencies:

  • Barbados' legal and regulatory framework is overall in line with the standard, including concerning the availability of beneficial ownership information. The practical implementation of the relevant rules remains however a challenge.
  • The main concerns identified for the Seychelles refer to the overall effectiveness of supervision and enforcement activities to ensure the availability and access to information in practice, especially in its offshore sector. Some 88% of the requests for accounting information and 62% of the requests for beneficial ownership information could not be answered in the three years reviewed. The report contains a number of recommendations to improve the legal framework and its practical implementation.

Three jurisdictions – Liberia, Peru and Tunisia – were undergoing their first full peer reviews as only their legal framework had been reviewed so far. The resulting reports rated Liberia as "Partially Compliant" while Peru and Tunisia both obtained a "Largely Compliant" rating:

Liberia's progress in complying with the international standard despite an extremely challenging economic environment was duly noted. Important deficiencies in the supervision and enforcement of the newly introduced legal requirements of maintaining ownership and accounting information in line with the international standard were nevertheless highlighted. Liberia has had limited experience in handling requests so far, having received only two requests during the review period and sought information in three cases. The procedural handling of requests was not fully in line with the international standard on confidentiality. Despite recent rectifications to the procedure, a close monitoring will be necessary.

Peru's review showed important progress in establishing the obligation for all relevant entities and arrangements to report beneficial ownership information to the country's tax administration. It expanded considerably the number of jurisdictions with which it can exchange information by becoming party to the Multilateral Convention. The practical exchange of information on request is nevertheless still hindered by some delays.

Tunisia enhanced the availability of the information since the first review of its legal framework in 2016, in particular by establishing a National Register of Enterprises which includes a beneficial owner's register, and by strengthening its Anti-Money Laundering law. These improvements are recent and should thus be monitored to ensure an effective implementation. Tunisia must also ensure the effectiveness of the new practical procedure for obtaining banking information. A total of 194 requests were answered during the three years period under review. Although progresses were made after the assessment period, recurrent issues with delays in answering were noted.

The Global Forum is the leading multilateral body mandated to ensure that jurisdictions around the world adhere to and effectively implement both the standard of transparency and exchange of information on request and the standard of automatic exchange of information. These objectives are achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive technical assistance programme to support its members in implementing the standards and help tax authorities make the best use of cross-border information sharing channels.

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Peru Reduces Interest Rates for Outstanding Tax Debts and Refunds in Response to COVID-19

Peru has published Resolution 066-2020/SUNAT of 31 March 2020 in the Official Gazette. The Resolution provides for a reduction in the interest rate for outstanding tax debts and for refunds of excess tax paid. The rate reductions are due to a reduction in the reference rate by the Central Reserve Bank of Peru in response to COVID-19.

For outstanding tax debts, the default interest rate is reduced to 1.0% per month for tax debts denominated in Peruvian sol (PEN) and to 0.5% per month for tax debts denominated in foreign currency. For refunds of excess tax paid, the refund interest rate is reduced to 0.42% per month for refunds denominated in PEN and to 0.25% per month for refunds denominated in foreign currency.

The rates established by the resolution are effective from 1 April 2020.



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Turkey Provides Social Security Payment Extensions Due to COVID-19

Turkey's Social Security Institution has issued a release announcing that six-month extensions are being provided for social security contribution payments due to COVID-19. The extensions are provided based on the deadline extensions for force majeure announced by the tax administration in March (previous coverage). As such, the extensions apply for taxpayers covered by the force majeure extensions and certain others as follows:

  • the deadline for contributions due by the end of April 2020 is extended to 2 November 2020;
  • the deadline for contributions due by the end of May 2020 is extended to 30 November 2020; and
  • the deadline for contributions due by the end of June 2020 is extended to 31 December 2020.

The extensions are provided without interest or penalties.



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Venezuela Provides Individual Income Tax Exemption for 2019 in Response to COVID-19

Venezuela reportedly published Decree No. 4,171 in the Official Gazette on 2 April 2020, which provides an individual income tax exemption in response to COVID-19. The exemption applies for taxpayers whose gross Venezuelan source income did not exceed VES 450,000 in the 2019 fiscal year. For taxpayers that have already filed their returns and paid income tax for the 2019 fiscal year, an ordinary tax credit is provided that may be carried forward for offset in following fiscal years.

Proposed Changes (1)


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Switzerland Announces Plans for Interest Withholding Tax Reform to Strengthen Swiss Debt Market

The Swiss Federal Council announced plans on 3 April 2020 for interest withholding tax reform to strengthen the Swiss debt market.


Federal Council aims to strengthen Swiss debt market through tax reform

Bern, 03.04.2020 - The debt market in Switzerland is to be strengthened by means of a tax reform. In addition, the Federal Council wants to close a loophole in the withholding tax system. During its meeting on 3 April 2020, the Federal Council initiated the consultation on amendments to the Withholding Tax Act.

The Federal Council is proposing to exempt domestic legal entities and foreign investors from withholding tax on interest-bearing investments. This will enable corporate groups to issue their bonds in Switzerland without withholding tax hurdles. Technically speaking, this involves a partial switch to the paying agent principle. As a rule, banks would thus levy the new withholding tax in the future. As a complementary measure, the transfer stamp tax on domestic bonds is to be abolished.

At the same time, the switch to the paying agent principle will also close a loophole with regard to individuals in Switzerland and make income from foreign interest-bearing investments subject to withholding tax.

Consequences of the reform

It is estimated that the new withholding tax will lead to a one-off reduction in receipts of CHF 750 million. However, this has no budgetary impact, as provisions have been set aside.

Furthermore, at the current level of interest rates, recurrent static receipt reductions estimated at CHF 165 million can be expected (of which 90% for the Confederation and 10% for the cantons). Static additional receipts estimated at around CHF 35 million will result from the closure of the loophole. The abolition of transfer stamp tax on domestic bonds will result in an estimated receipt reduction of CHF 50 million for the Confederation. Caveats are attached to all components of the static effects on receipts, owing to the limited data available and the uncertainty regarding future interest rate levels.

The reform means that bonds previously issued abroad can now be issued in Switzerland. There is also the possibility that more intragroup financing activities will be located in Switzerland, which will strengthen the Swiss debt market. From a dynamic viewpoint, the reform will therefore result in additional receipts for the Confederation, cantons and communes, as it will provide stimulus for value creation and financial sector jobs in the medium to long term. There are clear indications that, from a dynamic viewpoint, the reform has a very favourable cost/benefit ratio. Even for the Confederation, which will bear almost all of the static receipt reduction, the reform could be self-financing in around five years.

Treaty Changes (1)


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Tax Treaty between Indonesia and Tajikistan has Entered into Force

The income tax treaty between Indonesia and Tajikistan entered into force on 13 December 2019. The treaty, signed 28 October 2003, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Indonesian income tax and covers Tajikistan income tax and profit 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 91 days within any 12-month period.

Limited Force of Attraction Provision

Article 7 (Business Profits) includes a limited force of attraction provision whereby taxing rights are granted to a Contracting State on profits attributable to the sale of goods or merchandise or other business activities carried on in that Contracting State by a resident of the other State if the same or similar goods or merchandise or business activities are also sold or carried out by a PE maintained by that resident in the first-mentioned Contracting State.

Withholding Tax Rates

  • Dividends – 10%
  • Interest – 10%
  • Royalties – 10%, including for any assistance that is ancillary and subsidiary to the property or rights within the scope of royalties

Note – The 10% withholding rate under Article 10 (Dividends) also applies as the maximum rate for the additional taxation of repatriated profits attributed to a permanent establishment. However, this shall not affect the provision contained in any production sharing contract and relating to the oil and gas sector concluded by the Government of Indonesia, its instrumentality, its relevant state oil and gas company or any other entity thereof with a person who is a resident of the other Contracting State.

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; and
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in 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.

Effective Date

The treaty applies from 1 January 2020.


Powerful Tax Tools


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Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.


Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.


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Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.


Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.


Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.


Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.


Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.


Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.


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Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.


NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.


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Individual Income Tax Rates

Individual tax rates for over 100 countries.

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Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment Streams.

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