Worldwide Tax News
Gabon's Budget Law 2016 was published in the Official Gazette on 15 February 2016. The main tax-related measures of the law include:
- The withholding tax rate for branch profit's is increased from 15% to 20%;
- The withholding tax rates for interest and royalties is increased from 10% to 20%;
- The withholding tax for payments for services furnished or used in Gabon is increased from 10% to 20%;
- Rental payments for immovable property are deductible, with the condition that the payments due not exceed the average for similar properties;
- VAT input deductions are restricted for services supplied by non-residents that could have been supplied locally;
- Certain supplies made for aircraft and vessels operating in international traffic are VAT zero-rated, including supplies of oil and maintenance and repair services;
- The annual tax return deadline is extended to 31 May if filing electronically;
- The standard maximum audit period of 12 months is changed to no limit in the case of transfer pricing matters; and
- A new trust declaration requirement is introduced for resident companies receiving income from a foreign trust.
The measures are generally effective from 1 January 2016.
On 3 June 2016, the Swiss Federal Council approved revisions to the country's federal tax holiday regime. Under the regime, corporate income tax relief in the form of a tax credits is provided for up to 10 years for qualifying industrial enterprises and production-related service providers based on the number of jobs created or maintained by new investments. The main aspects of the federal tax holiday as revised include:
- In order to qualify, an investment must be made in a new enterprises or an existing enterprises for the improvement of products, processes or techniques, and a cantonal tax holiday must have been granted for the same undertaking;
- The maximum tax credit amount for the entire tax holiday is equal to CHF 95,000 per new job created plus CHF 47,500 per job maintained, multiplied by the number of years for the tax holiday - the total tax credit relief is limited to the amount of cantonal relief;
- In the case of new enterprises, the tax holiday begins the year the enterprise becomes subject to income tax, and in the case of existing enterprises, the tax holiday begins from the year a new undertaking begins to generate revenue;
- The qualifying regional areas include 93 regional centers in the following 19 cantons: Aargau, Appenzell Ausserrhoden, Appenzell Innerrhoden, Basel-Landschaft, Berne, Fribourg, Glarus, Grisons, Jura, Lucerne, Neuchatel, Saint Gallen, Solothurn, Thurgau, Ticino, Uri, Valais, Vaud, Zurich; and
- Claw-back of the federal tax relief provided will occur if the cantonal tax holiday is revoked or the conditions for the tax holiday have not been met, such as meeting the required number of new or maintained jobs.
The federal tax holiday regime as revised applies from 1 July 2016.
German Finance Committee Approves Amendments on Capital Losses from Securities Sales and Dividends Income Taxation
On 8 June 2016, the German Bundestag's (parliament) Finance Committee approved draft legislation that includes two main amendments concerning investment taxation:
- Losses on the sale of securities will not be allowed to offset capital gains when the security is acquired less than 45 days before a dividend distribution and subsequently sold less than 45 days after the distribution; and
- The current income tax exemption provided for domestic investment funds on dividend income from German companies will be abolished, with the 15% tax on dividend income that applies for non-resident investment funds applying for domestic funds as well.
The legislation must now be approved by the Bundestag, and once approved, is expected to apply from 1 January 2018.
On 9 June 2016, Ireland's Department of Finance announced the launch of a public consultation on the methodology used to calculate the country's Financial Institutions Levy. The Levy was introduced in 2013 to enable the financial services sector to contribute to economic recovery. Initially to apply through 2016, it was later extended through 2021, subject to a review of the calculation method. The consultation seeks stakeholder views on the proposed approach for the years 2017 to 2021.
Click the following link for the consultation document. Comments are due by 8 July 2016.
Draft legislation including a number of anti-tax haven measures has been reportedly proposed in Portugal's parliament. The measures include increased taxes on income received from tax havens, an increased tax burden on companies that are part of a group headquartered in a tax haven, increased stamp duty on documentation evidencing transactions with tax havens, and others.
Additional details of the measures will be published once available.
Slovenia Publishes Draft Amendments to Tax Procedure Act to Amend Late Tax Payment Penalties and Adopt Tax Ruling and CbC Report Exchange
Slovenia's Ministry of Finance has published draft amendments to the Tax Procedures Act for public comment. The draft amendments include:
- Allowing tax debts to be paid in 60 monthly installments, and adjusting the interest penalties for outstanding tax debts as follows:
- 2% if allowed to defer payment or pay in installments;
- 3% if tax debt is self-declared through a return;
- 5% if tax debt agreed to during a tax inspection (new option);
- 7% if tax debt based on decision of the tax authority following an inspection;
- Transposing into domestic law the EU Directive on Automatic Exchange of Information on Tax Rulings and APAs (previous coverage); and
- Transposing into domestic law the EU Directive on the Automatic Exchange of CbC reports (previous coverage), which includes implementing CbC reporting requirements for MNE groups operating in Slovenia that meet a EUR 750 million consolidated group revenue threshold in the previous year - reporting requirements will apply for fiscal years beginning on or after:
- 1 January 2016, if the ultimate parent of the group is resident in Slovenia; and
- 1 January 2017, if the ultimate parent is not resident in Slovenia.
Click the following link for the draft amendments (Slovenian language). Following the consultation period, which ends 26 June 2016, the amendments must be finalized and sent to parliament for approval. Additional details will be published once finalized.
Officials from Austria and Iran have reportedly agreed to begin negotiations for a protocol to amend the 2002 income and capital tax treaty between the two countries. Any resulting protocol will be the first to amend the treaty, and must be finalized, signed and ratified before entering into force.
On 9 June 2016, the Estonian government approved for signature the draft income tax treaty with Tajikistan. The treaty will be the first of its kind between the two countries, and must be signed and ratified before entering into force.
Additional details will be published once available.
According to a recent release from Iceland's Ministry of Finance and Economic Affairs, officials from Iceland and Japan have agreed to begin negotiations for an income tax treaty. Any resulting treaty will be the first of its kind between the two countries, and must be finalized, signed and ratified before entering into force. The negotiations are expected to begin in early 2017.
According to a recent update from the New Zealand Inland Revenue Department, the 2012 protocol to the 1976 income tax treaty with Malaysia entered into force on 12 January 2016. The protocol, signed 6 November 2012, is the third to amend the treaty. It replaces Article 22 (Exchange of Information), bringing it in line with the OECD standard for information exchange.
The protocol applies for requests made on or after the date of its entry into force with regard to tax years beginning on or after 1 January 2017.