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)

Brazil

Responsive image

Brazil Announces Tax Simplification Initiatives for Companies and Taxpayers

On 7 August 2017, the Brazilian Government announced a series of tax simplification initiatives for companies and taxpayers that are focused on reducing compliance costs and stimulating the business environment. The initiatives include:

  • A new phase of the Digital Bookkeeping System (SPED), which will provide for the sharing of information among tax authorities at various levels to promote greater efficiency in the collection and treatment of information provided by taxpayers (state, federal, etc.);
  • Simplification of additional (duplicative/redundant) tax obligations at the state and federal level by replacing certain declaration and state forms using SPED;
  • Regulation to standardize the issuance of electronic tax invoices and the establishment of an electronic service invoice repository (NFS-e); and
  • A foreign trade portal platform to manage documentation for customs clearance through a single point to reduce the time spent for both import and export, and provide a centralized payment system.

With respect to the last three initiatives, protocols of cooperation have been signed between the state and federal authorities for their implementation. Since the initiatives are administrative measures, further approval by the National Congress is not needed.

Italy

Responsive image

Italy Extends Voluntary Disclosure Application Deadline

On 4 August 2017, Italy published in the Official Gazette the Decree of 28 July 2017 from the President of the Council of Ministers. The Decree extends the deadline from 31 July 2017 to 30 September 2017 to apply for the voluntary disclosure program that was reopened by Law Decree No. 193/2016 and converted into law by Law No. 225/2016 (previous coverage). The Decree does not modify the payment deadline, however, which is 30 September 2017 for a lump sum or the first installment.

Romania

Responsive image

Romania Gazettes Law on Certain Clarifying and Regulating Measures

The Romanian Ministry of Public Finance has announced the publication of Law No. 177/2017 in the Official Gazette, which amends and clarifies certain aspects of the tax reform Law No. 227/2015 (previous coverage). One of the main measures of the law is bringing businesses subject to the specific tax regime (hotels, restaurants, catering services, etc.) into the micro-enterprise tax regime effective 1 August 2017 if turnover in the year ending 31 December 2016 did not exceed EUR 500,000, and other conditions of the micro-enterprise regime are met. The specific tax regime, introduced from 2017, includes that such businesses are not taxed on profit, but rather taxed based on certain factors such as the location of the business, the area of the business, and others. For those businesses now brought into the micro-enterprise tax regime, the specific tax will be prorated for the period ending 31 July.

Other changes in Law 177/2017 include that associations will be exempt from corporate tax from 1 January 2018 if only collecting contribution fees; voluntary health insurance premiums paid by employers up to EUR 400 per year will no longer be considered as part of taxable employment income; and from 1 October 2017, a tax risk analysis will be performed for the registration of taxable persons for VAT purposes (risk analysis applies for registration cancellation as well).

Singapore

Responsive image

Singapore Publishes New FAQs on Taxable and Non-taxable Income and Foreign Tax Credit

The Inland Revenue Authority of Singapore has published updates to its FAQs on Taxable and Non-taxable Income and Foreign Tax Credit. The new FAQs are as follows:

Taxable and Non-taxable Income

Is foreign-sourced income that is kept offshore ("foreign-sourced offshore income") and used for payment of one-tier tax exempt dividends into the shareholder's offshore bank account considered received in Singapore and subject to tax?

No. The foreign-sourced offshore income used by a company in this manner does not constitute income received in Singapore from outside Singapore and is therefore not taxable.

This is subject to the condition that the one-tier tax exempt dividend is paid directly into the shareholder's offshore bank account and does not involve any physical remittance, transmission or bringing of funds into Singapore by the dividend paying company for the purpose of the dividend payment.

A company has foreign-sourced income that is kept offshore ("foreign-sourced offshore income"). It gave an instruction to transmit the foreign-sourced offshore income from its offshore bank account to the Central Depository Pte Ltd (CDP)'s bank account in Singapore, for the payment of one-tier tax exempt dividends to its scripless shareholders. Is the foreign-sourced offshore income considered received in Singapore and subject to tax?

No. The foreign-sourced offshore income used by a company in this manner does not constitute income received in Singapore from outside Singapore and is therefore not taxable.

This is subject to the condition that the one-tier tax exempt dividend is paid directly into the CDP's bank account and does not involve any physical remittance, transmission or bringing of funds into Singapore by the dividend paying company for the purpose of the dividend payment.

Foreign Tax Credit

Singapore tax resident company ("Singapore company") received service fee income from a Malaysian customer on technical services rendered to the Malaysian customer. The Singapore company does not have a permanent establishment in Malaysia. Can the Singapore company claim double tax relief (DTR) for the tax paid in Malaysia in respect of the service fee income?

According to Article 13 of the Singapore-Malaysia DTA, technical service fees derived from Malaysia may be taxed in Malaysia at the maximum rate of 5% if the services are performed in Malaysia. So long as the Singapore company satisfies all conditions for claiming foreign tax credit, DTR will be accorded based on the lower of the foreign tax paid in Malaysia (i.e. 5% of the technical service fees) and the Singapore tax payable on the service fees. The claim for DTR should be made when the Singapore company files the Income Tax Return (Form C).

However, where the technical services are not performed in Malaysia, in accordance with Article 13 of the Singapore-Malaysia DTA, the fees payable to the Singapore company are not taxable in Malaysia. DTR will not be available to the Singapore company for any taxes paid in Malaysia which are not in accordance with the DTA provisions.

Note - the exemption for services performed outside Malaysia was recently confirmed by the Inland Revenue Board of Malaysia (previous coverage).

Proposed Changes (2)

Mauritius

Responsive image

Mauritius Planning to Introduce Three-Tiered Documentation Requirements of BEPS Action 13

According to recent reports, the Mauritius Government is planning for the introduction of the three-tiered documentation requirements of BEPS Action 13, which include the Country-by-Country (CbC) report, the Master file, and the Local file. With respect to the CbC reporting requirement, Mauritius has already committed to its implementation as a member of the BEPS Inclusive Framework and has signed the Multilateral Competent Authority Agreement on the exchange of CbC reports. Details of Mauritius' plan will be published once available.

United States

Responsive image

Legislation Introduced in the U.S. House of Representative Targeting Tax Havens and Jobs Outsourcing

U.S. Representative Jerry McNerney (D-CA) has submitted two bills that are meant to protect U.S. jobs; the Stop Outsourcing and Create American Jobs Act of 2017 ( H.R.3217) and the Outsourcing Accountability Act of 2017 ( H.R.3216).

The Stop Outsourcing and Create American Jobs Act provides for:

  • The creation of a tax haven list by the U.S. Treasury based on certain criteria, including the tax rate in the country, the effective exchange of information, requirements for substantial economic activity, etc.;
  • An increase in the accuracy-related penalties on underpayments when in relation to listed tax havens; and
  • New rules allowing a federal department or agency to give preference in awarding contracts to contractors that do not engage in jobs outsourcing, including an outsourcing disclosure requirement for contractors bidding on government contracts.

The Outsourcing Accountability Act would require public companies with revenues of USD 1 billion or more in the previous year to disclose the number of employees working in the U.S., by state, and the number of employees working abroad, by country. Such companies would also be required to disclose the year-on-year percentage increase/decrease for each. Newer public companies would be exempt for the first five years they are required to file SEC reports.

Treaty Changes (4)

Belgium-Switzerland

Responsive image

Protocol to Tax Treaty between Belgium and Switzerland has Entered into Force

The Swiss Federal Department of Finance has announced the entry into force of the protocol to 1978 income and capital tax treaty with Belgium on 19 July 2017. The protocol, signed 10 April 2014, is the first to amend the treaty. Main changes include:

  • Amendments to Articles 2 (Taxes Covered) and 3 (General Definitions) with respect to Belgian tax covered and the competent authority, as well as amendments to Article 4 (Resident) with respect to the meaning of the term "resident of a Contracting State";
  • The replacement of Article 7 (Business Profits);
  • The addition of a new paragraph in Article 9 (Associated Enterprises) regarding corresponding adjustments;
  • The replacement of paragraph 2 of Article 10 (Dividends) to provide for withholding tax rate of 0% if the beneficial owner directly holds at least 10% of the paying company's capital for an uninterrupted period of at least 12 months, or if paid to a qualifying pension fund; otherwise 15% (originally a 10% rate applies with a 25% holding; otherwise 15%);
  • The replacement of paragraph 3 of Article 11 (Interest) to provide a withholding tax rate of 0% if paid on a loan or credit granted by an enterprise to another, or if paid to a qualifying pension fund; otherwise 10% (originally a 0% rate applies if paid in connection with the sale on credit of industrial, commercial or scientific equipment, goods or merchandise, or on a loan granted by a bank; otherwise 10%);
  • The replacement of paragraph 2 of Article 12 (Royalties), which includes that The term "royalties" means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematographic films and films or recordings used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience;
  • The addition of a new paragraph to Article 13 (Capital Gains), which provides that for the taxation of gains in a Contracting State derived from the alienation of shares of a company deriving more than 50% of their value directly or indirectly from immovable property situated in that Contracting State, with an exemption for:
    • Shares quoted on a recognized stock exchange of one of the Contracting States; or
    • Shares deriving more than 50% of their value from immovable property within which the company carries out its activity;
  • The deletion of Article 22 (Prevention of the Misuse of the Convention), with subsequent Articles renumbered accordingly;
  • The replacement of Article 24 (Elimination of Double Taxation) with a new Article (23);
  • The addition of arbitration provisions to Article 25 (Mutual Agreement Procedure) (renumbered from 26);
  • The replacement of Article 27 (Exchange of Information) with a new Article 26 to bring it in line with the OECD standard for information exchange; and
  • The replacement of Article 29 (Miscellaneous) with a new Article 28, which includes limitation on benefits provisions in relation to items of income transferred to a third state.

The protocol also provides for various amendments to Articles 16 (Directors' Fees), 17 (Artistes and Athletes), 18 (Pensions), 19 (Government Service), and 25 (Non-Discrimination), as well as the addition of a final protocol to the treaty.

The protocol applies from 1 January 2018.

Mauritius-Switzerland

Responsive image

Tax Treaty between Mauritius and Switzerland under Negotiation

According to recent reports, officials from Mauritius and Switzerland met 7 August 2017 and agreed to begin negotiations for 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.

Ukraine-Lithuania

Responsive image

Ukraine Clarifies Treatment of Dividends Paid to Partnership under Tax Treaty with Lithuania

The Ukraine State Fiscal Service has recently published an individual consultation letter (1377/6/99-99-01-02-02-15/IPK) on the withholding tax treatment of dividends paid to a Lithuanian partnership. The letter clarifies that the benefit of the reduced withholding tax rate on dividends under the treaty may apply for dividends paid in favor of a partner, provided that the partner in the partnership is a legal entity formed and operated under the laws of Lithuania and is the actual beneficial owner of the dividend income. In this case, the tax agent may withhold tax by applying the beneficial treaty rate subject to standard conditions, including that the Lithuanian beneficial owner provides proof of residence.

United States-Estonia-Isle Of Man

Responsive image

U.S. Publishes CbC Exchange Arrangements with Estonia and Isle of Man

The U.S. IRS has published the competent authority arrangements on the exchange of Country-by-Country (CbC) reports with Estonia and the Isle of Man. The arrangement with Estonia was signed 26 July 2017 and the arrangement with the Isle of Man was signed 20 July 2017.

The arrangements provide that pursuant to the exchange of information provisions of the 1998 income tax treaty with Estonia and the 2002 tax information exchange agreement with the Isle of Man, as amended (2013), each competent authority will automatically exchange CbC reports received from each reporting entity resident for tax purposes in its jurisdiction, provided that, on the basis of the information provided in the CbC report, one or more constituent entities of the MNE group of the reporting entity are resident for tax purposes in the jurisdiction of the other competent authority, or are subject to tax with respect to the business carried out through a permanent establishment situated in the other jurisdiction.

With respect to Estonia, CbC reports will be exchanged for fiscal years beginning on or after 1 January 2016, with the first exchange to take place no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates (15 months for subsequent years).

With respect to the Isle of Man, CbC reports will be exchanged for fiscal years beginning on or after 1 January 2017, with the first exchange to take place no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates (15 months for subsequent years).

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

Translate Documents

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

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