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Approved Changes (8)


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Belarus Introduces Tax on Foreign Currency Purchases

On 19 December 2014, the National Bank of Belarus released Decree No. 786 introducing a tax on the purchase of foreign currency by legal entities and individual entrepreneurs. The rate of the tax was initially 30%, but was later reduced to 20% through an additional decree on 27 December 2014.

The new tax applies at the rate of 20% from 1 February 2015. It will not apply for foreign currency purchases made by the state, or when the purchase is for the purpose of using the foreign currency as payment for gas, oil and electricity.


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China Restricts Outbound Travel of Legal Representatives of Enterprises with Overdue Tax Liabilities

According to a notice issue by China's General Office of the State Administration of Taxation, the Beijing Taxation Bureau has begun taking stronger measures against enterprises with overdue tax liabilities, including preventing the legal representative of such enterprises from leaving the country. According to the notice, the enterprises have substantial taxes overdue and are expected for tax evasion.

Although such strong measures are allowed under the Law of the People's Republic of China Concerning the Administration of Tax Collection, this is the first time such action has been taken in Beijing.

According to the law, the legal representative of a company may be prevented from leaving the country until all taxes and related penalties and fees have been paid in full. Given the lack of payment following several request by the tax authorities and the lack of any warranty being offered by the enterprises, the travel restriction measures were taken.


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Finnish Court Follows CJEU on VAT Treatment of E-Books

On 31 December 2014, the Supreme Administrative Court of Finland issued its decision concerning the value added tax (VAT) treatment of books supplied via different media such as printed books and E-books. The case involved a Finnish provider of e-books and audio books using CDs, USB drives, etc. The company challenged the decision of Finland's Central Tax Board that the reduced VAT rate applied to books printed on paper cannot be applied to books on other media, arguing that it was against the principle of fiscal neutrality for an EU  Member State to apply a reduced rate of VAT solely to books published in paper form.

In coming to its decision, the Supreme Administrative Court of Finland generally followed an earlier decision made by the Court of Justice of the European Union (CJEU) concerning the matter. The CJEU found that the EU VAT directive does not preclude EU Member States from applying different rates of VAT as long as the principle of fiscal neutrality in the common system of value added tax is complied with. Therefore, the Finnish Court decided that the differing VAT rates for books on printed paper and other media can continue to apply.


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French Employment Income Withholding Tax for Non-Residents Adjusted

France has adjusted the brackets for the withholding tax for France source employment income of non-residents for 2015. The brackets and rates are as follows:

  • 0% for income up to €14,431
  • 12% for income over €14,431 up to €41,867
  • 20% for income over €41,867

When employment income of a non-resident exceeds €41,867, an annual individual non-resident income tax return is required even though tax has been withheld.

For French overseas departments, the rates are reduced from 12% and 20% to 8% and 14.4% respectively, although the bracket thresholds are the same.


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Ireland Issues Universal Social Charge (Amendment) Regulations 2014

On 6 January 2015, Ireland published Universal Social Charge (Amendment) Regulations 2014. The changes as introduced in Budget 2015 are:

  • The exemption threshold for the Universal Social Charge (USC) is increased from €10,036 in gross income to €12,012 (when the threshold is exceeded all income is subject to USC), and the USC rates are:
    • 1.5% for income up to €12,012
    • 3.5% for income over €12,012 up to €17,576
    • 7% for income over €17,576 up to €70,044
    • 8% for income over €70,044 up to €100,000
    • 8% for PAYE income over €100,000 and 11% for self-employed income over €100,000

The following is the regulation as issued, which applies from 1 January 2015:



The Revenue Commissioners, in exercise of the powers conferred on them by section 531AAB of the Taxes Consolidation Act 1997 (No. 39 of 1997), hereby make the following regulations:

1. (1) These Regulations may be cited as the Universal Social Charge (Amendment) Regulations 2014.

(2) These Regulations come into operation on 01 January 2015.

2. The Universal Social Charge Regulations 2011 (S.I. No. 658 of 2011) are amended --

(a) in Regulation 15 by substituting the following paragraph for paragraph (2):

"(2) The cumulative USC shall be the amount represented by A in the formula -- A = (B x 1.5%) + (C x 3.5%) + (D x 7%) + (E x 8%) |P where -- |P B is the amount (that may be nil) of the cumulative relevant emoluments chargeable to USC at the rate of 1.5% up to and including the rate cut-off point for that rate, |P C is the amount (that may be nil) of the cumulative relevant emoluments chargeable to USC at the rate of 3.5% up to and including the rate cut-off point for that rate, |P D is the amount (that may be nil) of the cumulative relevant emoluments chargeable to USC at the rate of 7% up to and including the rate cut-off point for that rate, and |P E is the amount (that may be nil) of the cumulative relevant emoluments that exceeds the rate cut-off point referred to in the meaning of D.",


(b) in Regulation 21(1) by substituting "column (2) of Part 1 of the Table" for "column (2) of the Table".

Given under my hand, 24 December 2014.

Niall Cody,

Revenue Commissioner.


(This note is not part of the Instrument and does not purport to be a legal interpretation).

These Regulations amend the Universal Social Charge Regulations 2011 to give effect to the revised rates of USC announced in Budget 2015 and given effect by Finance Act 2014.

These changes come into effect from 1 January 2015.

Notice of the making of this Statutory Instrument was published in "Iris Oifigiúil" of 6th January, 2015.


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Latvia Amends Taxable Base Cap for Social Security Contributions

The regulation amending Latvia's taxable base cap for social security contributions entered into force on 1 January 2015. According to the regulation, the annual taxable base (income) cap per employee for social security contributions in 2015 is increased from €46,400 to €48,600.

The employer portion of social security contributions in Latvia  is 23.59% calculated on the employee's gross salary up to the cap. The employee portion is 10.5%.


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New Dutch Decree on Group Taxation Issued

On 30 December 2014, the Netherlands published Decree No. BLKB2014/2137M in the Official Gazette. The decree, which applies from 16 December 2014, provides that under the Dutch fiscal unity regime, a fiscal group may be formed:

  • Between a Dutch parent and a Dutch sub-subsidiary when the sub-subsidiary is held by one or more intermediaries resident in other EU jurisdictions, and
  • Between multiple Dutch subsidiaries when they share a parent company resident in another EU jurisdiction

The change is primarily the result of a European Court of Justice decision issued in June 2014 stating that the Netherland's fiscal unity regime was not compliant with EU Law because it violated the principle of freedom of establishment.


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Loss Treatment Changes under Spanish Tax Reform for 2015

The Spanish Tax Reform for 2015 that was approved the end of November 2014 includes several changes for the treatment of net operating losses (NOL). The main changes include:

  • The 18 year carry forward limit is abolished and net operating losses may be carried forward indefinitely
  • Loss utilization limits are changed:
    • For 2015, the previous offset rules continue to apply: 50% of the tax base when turnover is between €20 million and €60 million, and 25% when turnover exceeds €60 million
    • For 2016 the limit is changed to 60%, and
    • From 2017 the limit is 70%
    • Carried forward losses up to €1 million may be used without limit
  • The change in control rules are modified, including that the use of losses of an acquired entity will be disallowed if:
    • The acquired entity has been dormant for 3 months or more prior to the acquisition (previously 6 months), or
    • The acquired entity engages in different or additional activities during the two years after its acquisition that generate turnover exceeding 50% of the entities average turnover in the two years prior to the acquisition
  • The statute of limitation for an audit and review of net operating losses by the tax authorities is extended from 4 years to 10 years from the date the loss originally arose

Unless otherwise indicated above, the changes generally apply from 1 January 2015.

Treaty Changes (1)


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New Tax Treaty between China and France has Entered into Force

The 2013 income tax treaty between China and France entered into force on 28 December 2014, and applies from 1 January 2015. The treaty, signed 26 November 2013, replaces the 1984 income tax treaty between the two countries.

Taxes Covered

The treaty covers Chinese individual income tax and enterprise income tax, and French income tax, corporation tax and contributions on corporation tax.

Service PE

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

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company directly holding at least 25% of the paying company's capital, otherwise 10% - Dividends paid out of income and gains derived from immovable property by an investment vehicle are subject to domestic withholding rates on dividends when:
    • The investment vehicle distributes most of this income annually
    • The income or gains from such immovable property are exempted from tax, and
    • The beneficial owner directly or indirectly holds 10% or more of the investment vehicle's capital
  • Interest - 10%
  • Royalties - 10%
  • Capital Gains - the following may be taxable by a Contracting State:
    • Gains from the alienation of immovable property in a Contracting State,
    • Gains from the alienation of movable property forming part of the business property of a permanent establishment in a Contracting State,
    • Gains from the alienation of shares or other rights in a company, trust or any other institution or entity when 50% or more of the value of the assets or property of the entity is directly or indirectly derived from immovable property in a Contracting State at any time during the 36 months prior to the alienation, and
    • Gains from the alienation of shares in a company resident in a Contracting State, when the recipient of the gain has had a 25% or greater participation in the company at any time during the 12 months prior to the alienation

Double Taxation Relief

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

Limitation on Benefits

Article 24 (Miscellaneous Rule) of the treaty includes the provision that the benefits of the treaty will be denied when the main purpose for entering into certain transactions or arrangements is to obtain the benefits of the treaty, and gaining such benefits would be contrary to the object and purpose of the relevant provisions of the treaty.

Effective Date

The treaty applies from 1 January 2015, and replaces the tax treaty between the two countries signed 30 May 1984.


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