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Approved Changes (2)

Norway

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Norway Issues Interpretation Notice Clarifying the Term Taxpayers for the Purpose of CFC Rules

The Norwegian Ministry of Finance issued an interpretation notice on 2 march 2015, clarifying its position on whether a tax exempt shareholder is considered when determining if the Norwegian ownership threshold is met for the purpose of applying the country's controlled foreign company (CFC) rules.

Norwegian CFC rules apply if at least 50% of a company resident in a low-tax jurisdiction is owned or directly or indirectly controlled by Norwegian resident taxpayers (corporate or individual). Based on this wording, some interpreted the rules to mean that only a taxable participant should be considered when making the assessment of whether Norwegian control exists. However, in its interpretation, the Ministry holds that both taxable and non-taxable participants are to be considered when making the control assessment.

Click the following link for the interpretation as issued by the Ministry of Finance (Norwegian language).

Singapore

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Singapore Publishes GST Guides for E-Commerce, the Hotel Industry, Retailers, and Transfers of Business as a Going Concern

The Inland Revenue Authority of Singapore has recently published several e-guides concerning the application of the country's Goods and Services Tax (GST). The guides, with links, are summarized as follows.

GST Guide for e-Commerce (Second edition)

The GST Guide for e-Commerce (Second Edition) was published 11 March 2015, and covers the GST principles relevant to the e-commerce industry; and assists in understanding how GST should be charged on electronic commerce transactions of physical goods, digitized goods and services.

The guide replaces the "Guide on e-Commerce" published 1 October 2012.

GST Guide for the Hotel Industry (Second edition)

The GST Guide for the Hotel Industry (Second edition) was published 11 March 2015, and covers the GST principles applicable to the hotel industry. Specifically, it highlights the GST treatment for the various forms of payments received by hotels, and common business arrangements undertaken by hotels as part of their business.

The guide replaces the guide "GST: Questions and Answers Relating to the Hotel Industry" published 1 October 2012.

GST Guide For Retailers (Second edition)

The GST Guide for Retailers (Second edition) was published 11 March 2015, and covers details on the GST treatment applicable to common scenarios encountered by retailers (businesses that sell goods to end consumers) and also addresses frequently asked questions.

The new guide replaces the guide "GST: Guide for Retailers" published 18 January 2012.

GST: Transfer of Business as a Going Concern and other Excluded Transactions

The guide GST: Transfer of Business as a Going Concern and other Excluded Transactions was published 3 March 2015, and explains and provides examples of transactions that are regarded as neither a supply of goods nor services and hence are not subject to GST.

The guide is a consolidation of two previous guides, including "GST: Transfer of business as a going concern" published on 15 March 2010, and "Goods and Services Tax Treatment of Transfer for a Consideration of Qualifying Deductions allowed under the Income Tax Group Relief System" published on 16 July 2003.

Proposed Changes (1)

United States

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U.S. Economic Growth and Family Fairness Tax Reform Plan

On 4 March 2015, U.S. Senators Marco Rubio and Mike Lee put forward a tax reform proposal named the Economic Growth and Family Fairness Tax Reform Plan. The plan would simplify the U.S. tax regime overall and includes the following main corporate tax measures.

  • Allow for a 100% deduction for capital investments in the year incurred with no allowance for economic depreciation in subsequent years. A transition period would apply where investments still being deprecated under the old tax code would be recognized after 15 years at the net present value of future depreciation at that time.
  • Set a single corporate tax rate of 25% at the corporate level, and progressive business tax rates of 15% and 25% for pass-through entities (USD 75,000 threshold for individual filers and USD 150,000 for joint filers).
  • Exempt dividends and capital gains on stocks from tax at the individual level.
  • Eliminate extraneous business tax provisions and not renew any of the tax extenders that expired at the end of 2014.
  • Eliminate most interest income from the tax base, and no longer allow the deductibility of new debt. Financial institutions would remain subject to current rules on interest taxation/deduction, although the new proposed tax rates would apply.
  • Implement a repatriation dividend exemption with a transition including a deemed repatriation at 6% for currently deferred taxes that would be booked immediately but payable over 10 years.

The plan also includes a number of changes for individual taxation, including a tax rate of 15% on income up to USD 75,000 (USD 150,000 for joint filers), and a rate of 35% on income exceeding that amount. Also included is the elimination of the standard deduction and most itemized deductions, while a new personal tax credit and child tax credit would be introduced.

Click the following link for the Economic Growth and Family Fairness Tax Reform Plan proposed by Senators Rubio and Lee.

Treaty Changes (5)

Hungary-Luxembourg

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New Tax Treaty between Hungary and Luxembourg Signed

On 10 March 2015, officials from Hungary and Luxembourg signed a new tax treaty. Once in force and effective, the treaty will replace the 1990 income and capital tax treaty between the two countries, which is currently in force. According to a press release issued by the Hungarian government, it is expected that the new treaty will enter into force in 2016.

Additional details will be published once available.

Ireland-Vanuatu

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TIEA between Ireland and Vanuatu has Entered into Force

The tax information exchange agreement between Ireland and Vanuatu entered into force on 19 February 2015. The agreement is the first of its kind between the two countries, and applies for criminal tax matters from the date of its entry into force, and for other matters in respect of tax periods beginning on or after that date.

Luxembourg-Uruguay

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Tax Treaty between Luxembourg and Uruguay Signed

On 10 March 2015, officials from Luxembourg and Uruguay signed an income tax treaty. The treaty is the first of its kind between the two countries, and will enter into force after the ratification instruments are exchanged.

Additional details will be published once available.

Mexico-Spain

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Protocol to the Tax Treaty between Mexico and Spain to be Signed

Spain has approved the signing of a protocol to the 1992 income tax treaty with Spain. The protocol will be the first to amend the treaty since its signing. According to reports, the protocol will amend provisions concerning dividend, interest and capital gains taxation, as well as elimination of double taxation and exchange of information.

Additional details will be published once available.

Portugal-Sao Tome

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Tax Treaty between Portugal and Sao Tome and Principe Signed

On 5 March 2015, officials from Portugal and Sao Tome and Principe signed an income tax treaty. The treaty is the first of its kind between the two countries, and will enter into force after the ratification instruments are exchanged.

Additional details will be published once available.

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