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Worldwide Tax News

Approved Changes (3)

Belgium

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Belgium Removes Reporting Requirement for Payments to Cyprus, Luxembourg and Seychelles

On 8 December 2015, Belgium's Ministry of Finance announced that the requirement to report payments of EUR 100,000 or more to residents in Cyprus, Luxembourg and Seychelles no longer applies. The change is made for these three countries because they have been found to be largely compliant with the OECD international standard for information exchange (previous coverage).

Under Belgian law, payments of EUR 100,000 or more to residents in jurisdictions not in compliance with the standard for information exchange or jurisdictions with a nominal corporate tax rate below 10% (tax havens) must be reported. If not reported, the payments are not deductible for tax purposes.

The change for Cyprus, Luxembourg and Seychelles generally applies for payments made in tax years beginning on or after 1 January 2015.

Spain

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Spain's New Rule on the Treatment of Share Transfers as a Supply of Goods Subject to VAT

On 13 November 2015, Spain's Royal Legislative Decree 4/2015 of 23 October 2015 entered into force. Decree 4/2015 repeals the stock market law 24/1988 and introduces new rules regarding the value added tax (VAT) exemption for the transfer of shares. Under the rule, the transfer of shares will be treated as a supply of goods that is not exempt from VAT when the purpose of the transfer is to avoid tax on immovable property owned by the company whose shares are transferred.

Ukraine

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Ukraine Clarifies that Income from Foreign Exchange Differences Taken into Account for Transfer Pricing Purposes

Ukraine's State Fiscal Service recently issued guidance clarifying that in determining if income/transaction thresholds are met for transfer pricing purposes, income arising from operational and non-operational foreign exchange differences are to be included. Under Ukraine's amended transfer pricing rules, adopted 15 July 2015 (previous coverage), transactions are recognized as controlled when:

  • The taxpayer's annual income exceeds UAH 50 million, and
  • The value of the annual transactions with the related party exceeds UAH 5 million.

Transactions with residents in jurisdictions listed in Ukraine's tax havens list are subject to the transfer pricing rules if the thresholds are met whether related or not (previous coverage).

The rules apply for transaction performed in 2015 and subsequent years.

Treaty Changes (6)

Argentina-Ecuador

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SSA between Argentina and Ecuador Signed

On 9 December 2015, officials from Argentina and Ecuador signed a social security agreement. The agreement is the first of its kind between the two countries and will enter into force after the ratification instruments are exchanged.

Bosnia Herz-Hungary

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Tax Treaty between Bosnia and Herzegovina and Hungary to be negotiated

Officials from Bosnia and Herzegovina and Hungary are reportedly planning to begin negotiations for an income tax treaty. Any resulting treaty would replace the 1985 income and capital tax treaty between Hungary and the former Yugoslavia, which generally continues to apply in respect of Bosnia and Herzegovina and Hungary. The new treaty would need to be finalized, signed and ratified before entering into force.

Cyprus-Ukraine

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Protocol to the Tax Treaty between Cyprus and Ukraine Signed

According to an announcement published by the Cyprus Ministry of Finance, officials from Cyprus and Ukraine signed a protocol to the 2012 income tax treaty between the two countries on 11 December 2015. The protocol is the first to amend the treaty. It adds a most favoured nation (MFN) clause concerning taxes on interest, dividends, royalties and capital gains. The protocol will come into force not earlier than 1 January 2019, the date that the existing treaty will expire.

Additional details will be published once available.

Egypt-Mexico

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Tax Treaty between Egypt and Mexico under Negotiation

According to recent reports, officials from Egypt and Mexico began negotiations for an income tax treaty in July 2015. 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.

India-Japan

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Protocol to the Tax Treaty between India and Japan Signed

According to an announcement published by Japan's Ministry of Finance, officials from India and Japan signed a protocol to the 1989 income tax treaty between the two countries on 11 December 2015. The protocol replaces Article 26 (Exchange of Information), bringing it in line with the OECD standard for information exchange, and adds new provisions regarding assistance in the collection of taxes (Article 26A). It is the second protocol to amend the treaty.

The protocol will enter into force 30 days after the ratification instruments are exchanged. It will apply in Japan from 1 January of the year following its entry into force and in India from 1 April of the year following its entry into force.

Israel-Macedonia

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Tax Treaty between Israel and Macedonia Signed

On 9 December 2015, officials from Israel and Macedonia 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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