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 (2)

Curacao

Responsive image

Curaçao Publishes Tax Rates for 2016

The Curaçao tax administration has published the applicable tax rates for 2016. The changes are as follows:

  • Corporate tax rate reduced from 25% to 22%; and
  • Individual income tax rates and bracket thresholds are generally reduced overall as follows:
    • up to ANG 30,000 - 9.75%
    • over ANG 30,000 up to 40,000 - 15%
    • over ANG 40,000 up to 60,000 - 23%
    • over ANG 60,000 up to 85,000 - 30%
    • over ANG 85,000 up to 125,000 - 37.5%
    • over ANG 125,000 - 46.5%

The changes apply from 1 January 2016.

Saudi Arabia

Responsive image

Saudi Arabia to Introduce 2.5% Tax on Undeveloped Land

Saudi Arabia's Cabinet has approved the introduction of a new 2.5% tax on the value undeveloped urban land. The tax will apply 180 days after it is published in the Official Gazette, and will be levied annually.

Proposed Changes (2)

Ukraine

Responsive image

Ukraine Publishes Draft Law for a Flat 20% Tax Rate for Corporate Income, Individual Income and VAT

On 30 November 2015, Ukraine's Ministry of Finance published a draft law that would introduce a flat 20% rate for corporate income tax, individual income tax, value added tax (VAT) and social security contributions. The law would also abolish the 7% reduced VAT rate, increase the VAT registration threshold to UAH 2 million, and strengthen certain transfer pricing requirements.

The Ukrainian government has been considering a number of proposals for tax reform. It initially proposed a 20% flat rate in September 2015 (previous coverage), and later considered alternate proposals in October (previous coverage).

The current draft law must be approved by parliament and signed into law by the president before entering into force. If approved, its measures will generally apply from 1 January 2016.

United Kingdom

Responsive image

UK Publishes Overview of Draft Finance Bill 2016 including Patent Box and Hybrid Mismatch Measures

On 9 December 2015, the UK HMRC published an overview of the legislation included in the draft Finance Bill 2016 (further updated 10 December). The draft legislation includes measures from the 2015 Budget, Summer Budget and Autumn Statement.

The overview covers measures concerning individual income tax, corporation tax, capital gains tax, VAT, stamp duty land tax and other duties, tax avoidance and evasion, and tax administration. Some of the key measures affecting businesses as summarized in the overview are as follows.

Patent Box: Substantial Activity

Finance Bill 2016 will include legislation to amend the Patent Box rules (Part 8A of CTA2010) to ensure they comply with the new international framework for Intellectual Property (IP) regimes set out by the OECD BEPS Project (Action 5), and in particular that profits qualifying for a reduced rate of Corporation Tax are determined by reference to the company’s direct engagement in R&D. The changes generally have effect from 1 July 2016, although some IP acquired after 1 January 2016 will also be affected. (Draft clauses 31 and 32 and tax information and impact note (TIIN))

Hybrid Mismatches

The legislation introduces rules to neutralize the effect of hybrid mismatch arrangements in accordance with the recommendations of the OECD BEPS Project (Action 2). The aim is to tackle aggressive tax planning, typically involving multinational groups, where either one party gets a tax deduction for a payment while the other party does not pay tax on the receipt, or where there is more than one deduction for the same expense. The legislation will have effect from 1 January 2017. (Draft clause 33 and TIIN)

Leasing and Capital Allowances Anti-Avoidance

The legislation introduces rules to counter avoidance of tax through artificially low disposal values for capital allowances purposes and non-taxable payments in arrangements involving transfer of lessee obligations. This measure will ensure that the disposal value is increased so that there is no longer a tax advantage and that payments received for agreeing to assume lease obligations are taxed as income. The changes will take effect for arrangements and agreements on or after 25 November 2015. (Draft clauses 35 and 36 and TIIN)

Capital Allowances: Enterprise Zones

Secondary legislation will be introduced to establish 26 new Zones, 10 of which will provide for enhanced capital allowances for qualifying expenditure. The enhanced capital allowances will be available for expenditure incurred on or after 25 November 2015.

Anti-Avoidance: Penalties for the General Anti-Abuse Rule

Legislation will be introduced for a new penalty of 60% of tax due to be charged in all cases successfully counteracted by the General Anti-Abuse Rule to create a disincentive from entering into abusive tax avoidance. The government will also make small changes to the GAAR procedures to improve its ability to tackle marketed avoidance schemes. (Draft clauses 60, 61 and 62 and TIIN)

Click the following link for the Overview of legislation in draft Finance Bill 2016 on the UK.gov website.

Treaty Changes (3)

Argentina-Hong Kong-Jamaica

Responsive image

Argentina has Concluded Negotiations for TIEAs with Hong Kong and Jamaica

According to an announcement from the Argentine government, negotiations were concluded for tax information exchange agreements with Hong Kong and Jamaica, with the initialing of the agreements on 9 December 2015. The agreements are the first of their kind between Argentina and the respective jurisdictions, and must be signed and ratified before entering into force.

Argentina-Mexico

Responsive image

Update - Tax Treaty between Argentina and Mexico

The income and capital tax treaty between Argentina and Mexico was signed 4 November 2015. The treaty is the first of its kind between the two countries.

Taxes Covered

The treaty covers Argentine income tax, presumptive minimum income tax and personal assets tax. It covers Mexican federal income tax.

Residence

If a company is considered resident in both Contracting States, the competent authorities will determine the company's residence for the purpose of the treaty through mutual agreement. If the authorities cannot reach mutual agreement, the company will not be entitled to the benefits of the treaty.

Service PE

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

Substantially similar activities carried on in a Contracting State by an associated enterprise will be considered in determining if the period limit has been met.

Hydrocarbon PE

Article 21 (Hydrocarbons) includes the provision that a permanent establishment will be deemed constituted if an enterprise carries on business consisting of, or relating to, the exploration, production, refining, processing, transportation, distribution, storage or marketing of hydrocarbons situated in the other Contracting State for a period or periods aggregating more than 30 days within any 12-month period.

As with a service PE, substantially similar activities carried on by an associated enterprise will be considered in determining if the period limit has been met.

Withholding Tax Rates

  • Dividends - 10% if the beneficial owner is a company directly holding at least 25% of the paying company's capital; otherwise 15%
  • Interest - 12%
  • Royalties - 10% for royalties paid for the use of, or the right to use, any copyrights of literary, dramatic, musical, artistic or scientific work, any patents, designs and models, plans, secret formulas or processes, computer programs, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, as well as for the rendering of technical assistance services; otherwise 15%

A maximum rate of 10% is included in Article 10 (Dividends) for the additional taxation of repatriated profits attributed to a permanent establishment.

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 or other participation rights 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 or participations, other than the above, in the capital or property of company resident in the other State, limited to 10% if the direct participation in the capital of the company is at least 25%, otherwise 15%

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.

Limitation on Benefits

The treaty includes a substantial limitation on benefits article (Article 28). The provisions of the article are summarized as follows.

The benefits of the treaty will only apply for a company incorporated in a Contracting State if:

  • The company's shares are listed on a recognized stock exchange; or
  • At least 50% of the company's voting rights or shares are directly or indirectly held by one or more individuals resident in a Contracting State and/or other persons incorporated in a Contracting State (the voting rights or shares in such other persons must also be directly or indirectly held by one or more individuals resident in a Contracting State).

Notwithstanding the above, the benefits will be denied if:

  • More than 50% of a company's gross income is paid directly or indirectly to persons who are not resident in either Contracting State; and
  • Such payments are deductible in computing a tax covered by the treaty in the person's state of residence.

However, the above limitations will not apply if the competent authorities agree that the company claiming the benefits carries on an active business in a Contracting State, and the conduct of its operations do not have the principle purpose of obtaining the benefits of the treaty.

In any of the above cases, the competent authorities of the Contracting States will consult each other before the treaty benefits are denied.

In addition, the article includes the provision that a tax benefit under the treaty will not be granted if it is established that one of the main purposes of any arrangement or transaction was to obtain a benefit, unless it is granted in accordance with the object and intention of the relevant provisions of the treaty.

Entry into Force and Effect

The treaty will enter into force 30 days after the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.

China-Romania

Responsive image

SSA between China and Romania under Negotiation

On 3 December 2015, officials from China and Romania agreed to the negotiation of a social security agreement. Any resulting agreement will be the first of its kind between the two countries, and must be finalized, signed and ratified before entering into force.

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