Get an immediate FREE trial of Orbitax's International Tax Research & Compliance Expert (ITRCE) software for 7 days.

The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (4)

Belgium

Responsive image

Belgium Budget Measures for 2017 including Increased Withholding Tax

Belgium's program law for the implementation of the 2017 budget measures was published in the Official Gazette on 29 December 2016. The main tax-related measures include:

  • An increase in the top withholding tax rates on movable income (dividends, interest, royalties) from 27% to 30% for amounts paid or attributed from 1 January 2017;
  • An increase in the withholding tax rate on early distributions from liquidation reserves from 17% to 20% with effect from the 2018 tax year;
  • The repeal of the speculation tax for individuals (33%) on capital gains from the sale of listed shares if sold within six months of acquisition with effect from 1 January 2017;
  • The introduction of a regime for the recovery of the alleged State aid received by companies through excess profit rulings; and
  • The amendment of provisions regarding paid-up capital so that when shares are contributed to a company's capital and a gain is realized at the time of contribution and not treated as taxable miscellaneous income, the paid-up capital for tax purposes is the acquisition value of the shares for the contributor, and any excess repayment of capital will be treated as a deemed dividend (30% withholding tax from 1 January 2017).

Click the following link for the program law as published (Dutch and French language).

France

Responsive image

France Finance Law for 2017: Employee Related Tax Measures

The French Finance (Budget) Law for 2017 was approved on 20 December 2016 and published in the Official Gazette on 30 December. In addition to the corporate tax measures previously covered, the law also makes certain changes with regard to employees, including the introduction of a PAYE system for income tax and an increase in the CICE credit.

PAYE System

A new pay-as-you-earn (PAYE) type system is introduced from 1 January 2018. Under the system, employers and pension plans are required to withhold tax due on a monthly basis using either:

  • The average income tax rate of the individual employee/pensioner in the previous year; or
  • A neutral rate based on the income amount (upon request).

Individual receiving other types of income, including self-employment income, will be responsible for making provisional tax payments on a monthly basis. Regardless of the nature of the income, individuals are still required to submit an annual return and settle the balance.

CICE Credit

The competitiveness and employment tax credit (crédit d’impôt pour la compétivité et l’emploi - CICE) is increased from 6% to 7%. The credit is based on the amount of salaries paid to employees, with a limit of 2.5 times the minimum salary per month (~EUR 3,700 based on 2017 minimum of EUR 1480.27). The credit may be set off against the corporate tax liability in the year the salaries are paid, with any excess carried forward for up to three years, after which the credit may be refunded.

United States

Responsive image

U.S. IRS Publishes Practice Unit on Arm's Length Determination for Transfers of Intangibles Property and CSAs

On 4 January 2017, the U.S. IRS published an international practice unit entitled IRC 367(d) Transactions in Conjunction with Cost Sharing Arrangements (CSA). The practice unit covers requirements in relation to the practice of transferring high value intangibles to a related party located in low-tax jurisdictions. In particular, the practice unit looks at the determination and potential aggregation of:

  • The arm's length income (charge) required for the use of intangible property transferred to a CFC under Treas. Reg. 1.367(d); and
  • The arm’s length payment required to be made by a CFC to a U.S. parent in relation to a cost sharing arrangement (platform contribution transaction - PCT).

International practice units are developed by the Large Business and International Division of the IRS to provide staff with explanations of general international tax concepts as well as information about specific transaction types. They are not an official pronouncement of law and cannot be used, cited, or relied upon as such.

Click the following link for the International Practice Units page on the IRS website.

Uruguay

Responsive image

Uruguay Senate Passes Legislation to Implement Transparency and BEPS Measures

According to an announcement from the Uruguayan Senate, the draft law on international tax transparency and prevention of money laundering and terrorism financing was passed during an extraordinary session on 29 December 2016. The law includes several transparency and BEPS related measures including:

  • Financial account information reporting requirements for financial institutions and measures for the automatic exchange of such information;
  • Ultimate beneficiary reporting requirements for resident entities and non-resident entities with a permanent establishment or place of effective management in Uruguay;
  • Measures in relation to entities that are resident, domiciled, or incorporated in low or no tax jurisdictions, or subject to special tax regimes, including increased taxation, application of transfer pricing rules (whether related or not), taxation of indirect transfers of Uruguayan property, and other measures; and
  • Country-by-Country reporting and Master file requirements based on BEPS Action 13 from 2017.

The draft law must be enacted by the executive and published in the Official Gazette before entering into force. Additional details of the new measures and requirements will be published once available.

Proposed Changes (1)

Panama-France

Responsive image

Panama to Begin Talks with France to Normalize Relations and Effect Removal from Black List

Panama's Ministry of Foreign Relations has announced that Panama and France will begin talks in order to normalize relations and effect the removal of Panama from the French blacklist of non-cooperative states or territories. Panama had been removed from the blacklist in 2012, but France announced that Panama would be reincluded following the leak of the so-called "Panama Papers". The first meeting to normalize relations is to take place in early January.

Treaty Changes (3)

China-Malaysia

Responsive image

Update - Exchange of Notes to Tax Treaty between China and Malaysia

China's State Administration of Taxation has published the English language text of the exchange of notes concerning the government institutions eligible for the withholding tax exemption on interest provided under paragraph 4 of Article 11 of the 1985 income tax treaty with Malaysia. The exchange of notes was signed by both countries on 1 November 2016 and entered into force on that date.

China-Zimbabwe

Responsive image

Tax Treaty between China and Zimbabwe in Force

China's State Administration of taxation has announced that the income tax treaty with Zimbabwe entered into force on 29 September 2016 and applies from 1 January 2017. The treaty, signed 1 December 2015, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Chinese individual income tax an enterprise income tax. It covers Zimbabwean income tax, non-resident shareholders' tax, non-residents' tax on fees, non-residents' tax on royalties, capital gains tax, and residents' tax on interest.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services within a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months within any 12-month period.

Withholding Tax Rates

  • Dividends - 2.5% if the beneficial owner is a company that directly or indirectly controls at least 25% of company paying the dividends; otherwise 7.5%
  • Interest - 7.5%
  • Royalties - 7.5%

Limitation on Benefits

The beneficial provisions of Articles 10 (Dividends), 11 (Interest), and 12 (Royalties) will not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims, or other rights in respect of which the income is paid was to take advantage of those Articles by means of that creation or assignment. The limitation is included in each of those Articles.

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;
  • Gains from the alienation of shares deriving more than 50% of their value directly or indirectly from immovable property situated in the other State; and
  • Gains from the alienation of shares representing a participation of at least 50% in a company that 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. In respect of dividends received by a Chinese resident company that owns at least 10% of the shares of the paying company, China will also provide a credit for the Zimbabwean tax paid on the profits out of which the dividends are paid.

Effective Date

The treaty applies from 1 January 2017.

Luxembourg-Uruguay

Responsive image

Tax Treaty between Luxembourg and Uruguay to Enter into Force

The income tax treaty between Luxembourg and Uruguay will enter into force on 11 January 2017. The treaty, signed 10 March 2015, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Luxembourg individual income tax, corporation tax, capital tax, and the communal trade tax. It covers Uruguay business income tax, personal income tax, non-resident income tax, social security tax, and capital tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted if an enterprise furnishes services within a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months within any 12 month period.

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company directly holding at least 10% of the paying company's capital, otherwise 15%
  • Interest - 10% (exemption for interest on a bank loan used to finance investment projects with a term of at least three years)
  • Royalties - 5% for the use or right to use commercial, industrial 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 deriving more than 50% of their value directly or indirectly from immovable property situated in the other State (exemption for shares listed on a recognized stock exchange, shares alienated as part of a merger or division, and shares whose value is derived from immovable property in which business is carried on).

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

Double Taxation Relief

Uruguay applies the credit method for the elimination of double taxation, while Luxembourg generally applies the exemption method. However, Luxembourg will apply the credit method in respect of income covered by Articles 10 (Dividends), 11 (Interest), 12 (Royalties), paragraph 4 of Article 13 (Capital Gains) and Article 16 (Artistes and Sportspersons).

Effective Date

The treaty applies from 1 January 2018.

Sitemap

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

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

NEW

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.

NEW

Cross Border Tax Rates

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

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

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

NEW

Tax Forms

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

NEW

Worldwide Tax Treaties

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

NEW

Worldwide Tax Planner

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

NEW

Certified Rates Report

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

NEW

Withholding Tax Minimizer

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

NEW

VAT Rates

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

NEW

NOL Calculator

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

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Crosss Border Rates

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

Get Started with Orbitax Today

With Orbitax, you get reliable and comprehensive solutions for international tax research, compliance and planning. Contact us today to get started with Orbitax.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More