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Worldwide Tax News

Approved Changes (5)

Australia

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Australia Publishes Guidance on Provision of General Purpose Financial Statements by Significant Global Entities

On 28 September 2017, the Australian Taxation Office (ATO) published guidance on the provision of general purpose financial statements (GFPS) by significant global entities. The requirement applies for income years beginning on or after 1 July 2016 for entities with annual global group income of more than AUD 1 billion, including Australian resident entities and foreign residents operating an Australian permanent establishment. In general, the GFPS must be submitted to the Commissioner of Taxation by the entity's tax return deadline, unless already required to be submitted to the Australian Securities and Investment Commission (ASIC) directly. Once submitted, a copy of the GFPS will be made publically available on the ASIC's register. The guidance provides details on who must lodge a GFPS, how to prepare a GFPS, and how to lodge a GFPS, as well as examples.

Costa Rica

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Costa Rica Publishes Corporate and Individual Income Tax Brackets for 2017-2018

Costa Rica published the decrees amending the corporate and individual income tax brackets for the 2017-2018 tax year in the 27 September 2017 edition of the Official Gazette. Although the brackets are adjusted, the rates remain the same.

Corporate income tax brackets and rates:

  • up to CRC 53,113,000 - 10%
  • over CRC 53,113,000 up to 106,835,000 - 20%
  • over CRC 106,835,000 - 30%

Individual employment income tax brackets and rates (monthly):

  • up to CRC 799,000 - 0%
  • over CRC 799,000 up to 1,199,000 - 10%
  • over CRC 1,199,000 - 15%

Individual business income tax brackets and rates (annually):

  • up to CRC 3,549,000 - 0%
  • over CRC 3,549,000 up to 5,299,000 - 10%
  • over CRC 5,299,000 up to 8,840,000 - 15%
  • over CRC 8,840,000 up to 17,716,000 - 20%
  • over CRC 17,716,000 - 25%

The rates apply for the tax year beginning 1 October 2017 and ending 30 September 2018.

Poland

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Poland Issues Regulations on Elements of Required Transfer Pricing Documentation

On 22 September 2017, Poland's Ministry of Finance published a notice on regulations setting out the required transfer pricing documentation elements for both corporate income tax and personal income tax purposes. The regulations are in relation to Poland's new Master file and Local file requirements based on BEPS Action 13 that were approved in October 2015 (previous coverage). The new documentation requirements generally apply from 1 January 2017 with a EUR 2 million annual revenue/expenses threshold for the Local file (EUR 10 million for full benchmarking study) and a EUR 20 million annual revenue/expenses threshold for the Master file.

Switzerland

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Switzerland Confirms Reduction in VAT Rates for 2018

On 25 September 2017, the Swiss Federal Tax Administration published an update confirming the value added tax (VAT) rates that will apply from 1 January 2018. The normal rate will be reduced from 8.0% to 7.7%, the special rate for accommodation services will be reduced from 3.8% to 3.7%, and the reduced rate will be maintained at 2.5%.

Venezuela

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Venezuela Introduces Short-Term VAT Rate Reduction for Electronic Purchases

Venezuela's tax administration (SENIAT) has announced that from 27 September 2017, the standard value added tax (VAT) rate on purchases made electronically will be reduced by 3% or 5% (standard rate is 12%). The 3% reduction applies for purchases of goods and services made by natural or legal persons up to VEF 2 million and the 5% reduction applies for purchases over that amount. The payment must be made exclusively through electronic means, such as credit card, debit card, bank transfer, etc. If any portion of the payment is made through non-electronic means, the standard rate will apply for the entire purchase. Further, certain transactions are not eligible, including when VAT is paid in advance, when goods are imported, and the acquisition of metals and precious stones.

The reduction is meant to promote the use of electronic means of payment in order to maintain better controls on tax evasion and is scheduled to expire 31 December 2017.  

Proposed Changes (2)

Ireland

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Ireland Consultation on Stamp Duty on Share Transactions

On 29 September 2017, Ireland's Department of Finance launched a public consultation seeking views on a review of stamp duty on share transactions. As provided in a related release, the consultation invites interested parties to make submissions regarding:

  • Whether stamp duty on share transactions continues to be justified as part of Ireland's overall taxation system;
  • The extent to which Brexit related developments should influence policy on reducing or eliminating stamp duty on share transactions;
  • What alternative revenue streams from the financial services area or elsewhere could be considered to replace the revenue forgone in the event of a reduction or elimination of stamp duty on shares;
  • What direct impact stamp duty on share transactions would have on Ireland’s competitive position post-Brexit;
  • Is there any evidence that reduction or elimination of stamp duty on shares will result in an increase in availability of equity finance for corporate entities;
  • What impact, if any, will a reduction or elimination of stamp duty on shares have on trading in equities in terms of volume and share price volatility and;
  • Will a reduction or elimination of stamp duty on shares have any impact for pension funds or wealth management activity?

The deadline for submissions is 31 October 2017.

United States

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U.S. Joint Committee on Taxation Publishes Report on International Tax Reform for Public Hearing

The U.S. Joint Committee on Taxation has published a report providing background and selected policy issues on international tax reform for discussion during the 3 October public hearing held by the Senate Committee on Finance.

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Introduction

The Senate Committee on Finance has scheduled a public hearing on October 3, 2017, titled "International Tax Reform." This document, prepared by the staff of the Joint Committee on Taxation, covers a number of topics related to the U.S. taxation of cross-border income. Part I of this document describes general international principles of taxation and how they are applied in the United States under present law. Part II discusses selected issues that have been of particular interest to policymakers as they evaluate the U.S. international tax system, including the competitiveness of the U.S. tax system; the economic distortions arising from deferral; the shifting of income and business operations away from the United States; the tax incentive to locate deductions in the United States; inversions; and the Base Erosion and Profit Shifting Project undertaken by the Organization for Economic Cooperation and Development ("OECD") at the request of the Group of Twenty ("OECD/G20 BEPS Project"). Part III contains background data on cross-border income flows and economic activity, including mergers and acquisitions.

Treaty Changes (3)

Guatemala-OECD

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Mutual Assistance Convention has Entered into Force for Guatemala

On 1 October 2017, the OECD-Council of Europe Convention on Mutual Administrative Assistance in Tax Matters as amended by the 2010 protocol entered into force for Guatemala. The Convention generally applies in Guatemala from 1 January 2018, although it may apply for earlier periods with another signatory if agreed to, and applies in relation to any period regarding criminal matters.

Click the following link for the list of signatories to the Mutual Assistance Convention to date.

Indonesia-San Marino

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Tax Treaty between Indonesia and San Marino to be Negotiated

On 21 September 2017, officials from Indonesia and San Marino met to discuss bilateral relations, including the negotiation of 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.

Turkey-Belgium-Gibraltar

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Turkey Ratifies SSA with Belgium and TIEA with Gibraltar

On 28 September 2017, Turkey published in the Official Gazette the decrees for the ratification of the pending social security agreement with Belgium and the tax information exchange agreement with Gibraltar. The agreement with Belgium, signed 11 April 2014, will enter into force on the first day of the third month following the exchange of ratification instruments and once in force will replace the 1966 agreement between the two countries. The agreement with Gibraltar, signed 4 December 2012, is the first of its kind between the two jurisdictions and will enter into force 30 days after the ratification instruments are exchanged.

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