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Approved Changes (6)

Argentina

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Argentina Introduces an Installment Payment Facility for Outstanding Tax Debts

Argentina has introduced an installment payment facility for outstanding tax, customs duty, and social security contribution that were due up to 28 February 2015. The facility allows payers to pay off the liability in monthly installments over a period of up to 120 months with an interest rate of 1.9% per month (the standard rate is 3% per month).

In order to make use of the facility, the initial payment must be made by 31 May 2015, including a down payment of 7% of the amount due.

Ecuador

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Ecuador Clarifies Taxation of Indirect Transfers of Ecuadorian Companies

On 28 February 2015, Ecuador published Decree 580 in the Official Gazette, which clarifies certain aspects of the Organic Law to Promote Production and to Prevent Tax Fraud published 29 December 2014 and effective from 1 January 2015.

One of the main measures of the Organic Law is that income derived by residents and nonresidents from the sale of direct or indirect participations representing the capital of an Ecuadorian company or permanent establishment is taxable in Ecuador. Decree 580 clarifies that in the case of a nonresident transfer, the transfer will be taxable in Ecuador if at any time during the year of transfer the actual value of the rights representing the capital of a company or permanent establishment in Ecuador directly or indirectly represents at least 10% of the value of the rights representing the capital of the nonresident company being transferred.

El Salvador

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El Salvador No Longer Accepting Paper Returns

On 16 March 2015, the El Salvador Ministry of Finance published a notice that tax declarations for the 2014 fiscal year must be submitted electronically, and that paper returns will no longer be accepted. This applies for both natural persons and legal entities.

Click the following link for the El Salvador Online Services Portal (Spanish).

Mexico

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Mexico Increases Daily Minimum Wage for Geographical Zone B

Mexico has increased the general daily minimum wage for geographical zone B from MXN 66.45 to MXN 68.28 effective 1 April 2015. The general daily minimum wage of MXN 70.10 for geographical zone A is unchanged. It has also been announced that Mexico intends to further increase the daily minimum wage in zone B to match that of zone A in October 2015, resulting in a single general minimum wage for the whole country. Minimum wage is used in determining the minimum and maximum social security contribution limits and certain other tax matters.

Zone B includes the states of Aguascalientes, Campeche, Coahuila, Colima, Chiapas, Durango, Guanajuato, Hidalgo, Michoacan, Morelos, Nayarit, Oaxaca, Puebla, Queretaro, Quintana Roo, San Luis Potosi, Sinaloa, Tabasco, Tlaxcala, Yucatán and Zacatecas. Specific municipalities in the states of Chihuahua, Guerrero, Jalisco, State of Mexico, Nuevo Leon, Sonora, Tamaulipas and Veracruz are also included in zone B.

Click the following link for a detailed list of minimum wages and zones (Spanish).

New Zealand

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New Zealand Approves Increase in Use-of-Money Interest Rate

According to an announcement by New Zealand Inland Revenue, an increase in the use-of-money interest rate was approved by Order in Council on 30 March 2015. The interest rate charged by Inland Revenue on underpaid tax will rise from 8.40% to 9.21%, and the rate for overpaid tax will rise from 1.75% to 2.63%. The rate for underpaid tax is in addition to the standard penalty of 1% of the amount outstanding, plus 4% if not paid within 7 days and 1% per month.

The new rates will apply from 8 May 2015.

United Kingdom

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Corporation Tax (Northern Ireland) Act 2015 has Received Royal Assent

On 26 March 2015, the Corporation Tax (Northern Ireland) Act 2015 received Royal Assent following passage by both Houses. The law provides for the devolution of tax powers to the Northern Ireland Assembly to set a different rate of corporation tax from the rest of the UK. Power over the corporation tax base, including reliefs and allowances, will remain with the UK Parliament.

The rate, in general, will apply to all of the trading profits of a company if that company is a micro, small or medium-sized enterprise (SME), and the company's employee time and costs fall largely in Northern Ireland. It will also apply to a corporate partner's share of the profits of a partnership trade if that company and partnership are both SMEs and the partnership's employee time and costs fall largely in Northern Ireland.

The rate will also apply to the profits of large companies, and (in the case of a corporate partner not covered by the SME rules referred to above) to a corporate partner's share of the profits of a partnership that are attributable to a Northern Ireland trading presence, that presence being termed as a "Northern Ireland regional establishment" (NIRE).

Northern Ireland will be able to set the corporation tax rate from April 2017. Although the rate of corporation tax has not yet been set, it will likely be reduced to be more in line with the Republic of Ireland tax rate of 12.5% according to comments by Northern Ireland officials.

Proposed Changes (1)

Greece

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Proposed Greek Reforms Resulting from the Eurogroup Agreement

Details of the proposed reform measures to be undertaken by Greece as part of the terms for the 20 February 2015 extension of the Master Financial Assistance Facility Agreement with the Eurogroup have recently been published. The measures include several tax, administrative and policy reforms. The main tax related reforms are summarized as follows:

  • Intensify audits on bank transfers and offshore entities will be by combining bank transfer and tax return databases and improving banking sector data mining techniques and current risk analysis systems
  • Improve enforcement of transfer pricing legislation, and possibly introduce a Diverted Profit Tax similar to the one recently adopted by the United Kingdom
  • Counter VAT evasion from the non-issuance of receipts by implementing a VAT lottery system to encourage customers to demand a receipt
  • Strengthen the special VAT fraud unit to better identify VAT fraud in Greece by implementing fraud detection software
  • Improve the VAT collection mechanism by implementing a split payment model for B2B transactions over EUR 500 and B2C transactions over EUR 1,500, i.e. those that should be paid via bank accounts and bank instruments according to Greek legislation
  • Improve the state revenue collection mechanism by clearing the stock of old non-collectible debts and focusing on collectable debts and the implementation of new collection tools
  • Annul the 21 January 2015 suspension of the 20% tax on TV advertising revenue, which has been suspended multiple times since the law introducing the tax was passed in 2010
  • Increase the special contribution "luxury" tax rates on the deemed income of certain "luxury" assets, which include certain motor vehicles, aircraft, yachts, etc.
  • Introduce legislation to ensure profits and salaries are taxed where the economic activity takes place, eliminate exemptions, and streamline tax rates irrespective of income source
  • Reduce tax evasion of self-employed business/professionals by implementing a point of sale electronic application that will record every incoming customer and transfer real-time notifications to the authorities
  • Alleviate the heavy pending court caseload by amending legislation to allow the establishment of committees for administrative settlements at the regional level and provide a reduction of penalties and surcharges at a rate between 33% and 50% when the taxpayer pays the full sum and does not pursue further legal action

Additional areas of reform include:

  • Other Public Revenue Mobilization
  • Privatizations
  • Public Finance Management
  • Public Administration
  • State Owned Enterprises
  • Business Environment & Competition
  • Addressing Critical Deficiencies of the Banking Sector
  • Energy & Environment
  • Judicial Reform
  • Labor Market Reforms
  • Social Security Reforms
  • Rebuilding a Sustainable Health Sector

The reform measures are to be furhter developed by the end of Q2 2015.

Click the following link for the Greek Reforms in the context of the 20/02/2015 EUROGROUP Agreement as published.

Treaty Changes (2)

Belgium

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Mutual Assistance Convention Protocol in Force for Belgium

The amending protocol to the Council of Europe-OECD Convention on Mutual Administrative Assistance in Tax Matters entered into force in respect of Belgium on 1 April 2015. The protocol, signed by Belgium on 4 April 2011, will apply in the country from 1 January 2016.

Cyprus

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Mutual Assistance Convention and Protocol in Force for Cyprus

The Council of Europe-OECD Convention on Mutual Administrative Assistance in Tax Matters and amending protocol entered into force in respect of Cyprus on 1 April 2015. The convention and amending protocol, signed by Cyprus on 10 July 2014, will apply in the country from 1 January 2016.

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