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Approved Changes (4)

Benin-OECD

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Benin Joins Global Forum on Transparency and Exchange of Information for Tax Purposes

The OECD announced on 9 June 2017 that Benin has joined the Global Forum on Transparency and Exchange of Information for Tax Purposes as the 142nd member. As a member of the Forum, Benin will now be subject to monitoring and a peer review process to ensure the implementation of and compliance with the international standards for information exchange.

Costa Rica

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Costa Rica Suspends Deadline for Filing New Transfer Pricing Declaration until Further Notice

Costa Rica published Resolution No. DGT-R-28-2017 in the 5 June 2017 edition of the Official Gazette, which temporarily suspends the deadline for submission of the new transfer pricing declaration introduced by Resolution N° DGT-R-44-2016 (previous coverage). The declaration requirement applies for large taxpayers and large territorial taxpayers, as well as taxpayers operating under the free trade zone regime. As provided in Resolution N° DGT-R-44-2016, the declaration is to be submitted by the last working day of June following the close of the fiscal year concerned, with the first submission due the end of June 2017 for both the 2015 and 2016 years. However, Resolution No. DGT-R-28-2017 has suspended the deadline until further notice. In particular, it amends Article 4 of Resolution N° DGT-R-44-2016 to provide that the tax administration will communicate, at least three months in advance, the date and means through which it will request the presentation of the first transfer pricing declaration.

Croatia-European Union

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Proposed Council Implementing Decision to Approve Croatia's Increased VAT Registration Threshold

The European Commission has published a proposal for a Council Implementing Decision dated 8 June 2017 to authorize Croatia's derogation from Article 287 of the VAT Directive (2006/112/EC) by increasing the VAT registration threshold to EUR 45,000 equivalent in national currency, HRK 300,000 from 1 January 2018. The authorization is to apply until the earlier of 31 December 2020 or the entry into force of a Directive amending the provisions of the VAT Directive on a special scheme for small enterprises.

The measure to increase the VAT registration threshold from HRK 230,000 to HRK 300,000 was already approved by the Croatian parliament in December 2016 (previous coverage).

Gibraltar

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Gibraltar Enacts Regulations for CbC Reporting

According to recent reports, Gibraltar has enacted the Income Tax Act 2010 (Amendment) Regulations 2017 to transpose into domestic law the amendments made to the EU Directive on administrative cooperation in the field of taxation (2011/16/EU) concerning the exchange of Country-by-Country (CbC) reports (Council Directive (EU) 2016/881). As per the Directive, standard CbC reporting rules apply, including:

  • A EUR 750 million group revenue threshold;
  • The requirement for ultimate parent entities resident in Gibraltar to submit reports for fiscal years beginning on or after 1 January 2016;
  • The requirement for non-parent constituent entities resident in Gibraltar to submit reports for fiscal years beginning on or after 1 January 2017 when local secondary filing conditions are met;
  • A CbC reporting deadline of 12 months after the end of the reporting fiscal year and a CbC notification deadline of 9 months after notifying entity's year-end (tax return deadline); and
  • Penalties of GIP 300 for failing to file a CbC report or provide notification plus up to GIP 1,000 per day of delay, and penalties of up to GIP 3,000 for providing inaccurate information.

Additional details of Gibraltar's CbC reporting requirements will be published once available.

Proposed Changes (2)

Barbados

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Barbados Financial Statement and Budgetary Proposals for 2017

Barbados Minister of Finance and Economic Affairs Christopher Sinckler delivered the Financial Statement and Budgetary Proposals for 2017 on 30 May 2017. The main tax-related proposals include:

  • An increase in the National Social Responsibility Levy from 2% to 10% on all taxable imports and domestic production from 1 July 2017;
  • The introduction of a 2% foreign exchange commission on all sales of foreign currency from 1 July 2017, which will extend to, inter alia, all wire transfers, credit card transactions, and over the counter sale of foreign currencies;
  • An increase in the excise tax rate per liter of gasoline from BBD 0.74 to BBD 0.99 and on diesel fuel from BBD 0.20 to BBD 0.44 from 1 July 2017;
  • A tax amnesty that will run from 1 June 2017 to 30 November 2017 and provides for a waiver of penalty and interest on taxes owed to the Barbados Revenue Authority (BRA) for land tax and value added tax; and
  • The establishment of a special task force to develop a national tax administration registration initiative to ensure registration with the BRA.

Click the following link for the Financial Statement and Budgetary Proposals for 2017.

Botswana

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Botswana Joins Inclusive Framework for Implementation of BEPS Measures

According to a 7 June 2017 update of the list of participants, Botswana has joined the Inclusive Framework for the global implementation of the BEPS Project, bringing the total number of participants to 99. As a member of the Framework, Botswana has committed to the implementation of the four minimum standards, including those developed under Action 5 (Countering Harmful Tax Practices), Action 6 (Preventing Treaty Abuse), and Action 14 (Dispute Resolution), as well as Country-by-Country (CbC) reporting under Action 13 (Transfer Pricing Documentation).

Treaty Changes (4)

Bahamas-Guernsey

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Protocol to TIEA between Bahamas and Guernsey Signed

A protocol to the 2011 tax information exchange agreement between the Bahamas and Guernsey was signed 12 April 2017 by the Bahamas and 16 May 2017 by Guernsey. The protocol adds Article 4A (Automatic Exchange of Information). It is the first to amend the agreement and will enter into force once the ratification instruments are exchanged.

China-Sweden

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Protocol to Tax Treaty between China and Sweden Signed

The Swedish government has announced the signing of a amending protocol to the 1986 income tax treaty with China on 5 June 2017. The protocol is the second to amend the treaty and provides for an exemption from value added tax for enterprises engaged in the operation of aircraft or ships in international traffic. The exemption is the result of regulatory changes in China and currently concerns only tax levied in China. The protocol will enter into force 30 days after the ratification instruments are exchange and will apply retroactively from 1 June 2016.

Guatemala-OECD-France

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Guatemala Deposits Ratification Instrument for Mutual Assistance Convention

The OECD has announced that on 9 June 2017, Guatemala deposited its ratification instrument for the OECD-Council of Europe Convention on Mutual Administrative Assistance in Tax Matters as amended by the 2010 protocol. The Convention, signed by Guatemala on 5 December 2012, will enter into force for the country on 1 October 2017 and will generally apply from 1 January 2018.

In relation to the ratification of the Convention, French President Emmanuel Macron has reportedly announced that Guatemala will be removed from France's list of non-cooperative states and territories. The tax effects of a jurisdiction's inclusion in the list include increased withholding tax rates on passive income (75%), stronger anti-avoidance and disclosure rules, and denial of certain exemption regimes.

Mexico-Panama

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Mexico and Panama Sign Competent Authority Agreement for Exchange of Financial Account Information

Panama's Ministry of Foreign Relations has announced that on 8 June 2017, officials from Mexico and Panama signed a competent authority agreement for the automatic exchange of financial account information. The agreement is the first of its kind signed by Panama for the implementation of the OECD Common Reporting Standard (CRS), which Panama committed to in 2016. The first exchanges are to take place by September 2018.

The announcement also notes that negotiations for similar agreements are underway with Germany, Italy, Spain, Switzerland, and the UK.

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