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Approved Changes (3)

European Union

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European Commission Publishes First Report of the Expert Group on the Implementation of Automatic Exchange of Financial Account Information

On 16 March 2015, the European Commission published the first report of the Commission Expert Group on the implementation of automatic exchange of financial account information. The report follows the adoption of 2014/107/EU in December 2014, which brings interest, dividends, gross proceeds from the sale of financial assets and other income, as well as account balances, within the scope of the automatic exchange of information. Revising directive 2011/16/EU on administrative cooperation in the field of direct taxation.

The report lists the major outstanding issues of implementation the automatic exchange of account information, and provides recommendations. Issues covered include the timing of the implementation and guidelines, data protection and privacy, minimizing the administrative burden, treaty relief at source and others.

Click the following link for the full Commission Expert Group report.


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India Announces APA Rollback Provision Implementation

On 14 March 2015, the Indian Central Board for Direct Taxes published a notice for the implementation of APA  roll-back provisions. The plan to introduce rollback provisions was initially announced in the 2014-2015 budget.

With the implementation, taxpayers that enter into APAs with India will be allowed to apply the terms of the APA for the covered related party transactions for a rollback period of up to 4 years. The standard maximum term of an APA is 5 years.

Taxpayers who have applied for or entered into an APA prior to 1 January 2015, must apply for the rollback provision by 31 March 2015. The pre-filing consultation is made optional for the application. Going forward, the application for the rollback period is made along with the APA application.

OECD-Switzerland-El Salvador-Mauritania-Aruba-Cook Isl-Curacao-Hungary-Portugal-Uruguay

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OECD Publishes 9 Country Peer Review Reports on Transparency and Information Exchange

On 16 March 2015, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes published new peer review reports for 9 countries, including:

The reports are part of a review process for compliance with the international standard for information exchange. Phase 1 reports are an evaluation of a jurisdiction's legal and regulatory framework for transparency and exchange of information, and provides recommendations for improvement. Jurisdictions deemed to have a sufficient framework in place move on to the Phase 2 report, which looks at the actual implementation of the standard for information exchange, and provides a compliance rating as well as recommendations for improvement.

Following the Phase 1 reports for El Salvador and Mauritania, and the Phase 1 Supplementary Report for Switzerland, the three jurisdictions will move on to Phase 2 of the review process. The Phase 2 review for El Salvador and Mauritania is scheduled for the first half of 2015, while the review for Switzerland is scheduled for the second half of 2015.

In regard to the Phase 2 reports, Aruba, the Cook Islands, Hungary, Portugal and Uruguay were found to be largely compliant with the standards for information exchange. Curaçao, however, was found to be only partially compliant.

Each jurisdiction's compliance with the main elements for information exchange are briefly summarized as follows:


Aruba was found to be partially compliant in regard to the availability of ownership and identity information to the competent authorities. For other elements, Aruba was found to be largely compliant or compliant.

The Cook Islands

The Cook Islands was found to be largely compliant or compliant for all elements


Curaçao was found to be partially compliant in regard to the following areas:

  • The availability of ownership and identity information to the competent authorities,
  • Ensuring the availability of reliable accounting records,
  • The ability of the competent authorities to obtain and provide information,
  • The effectiveness of its exchange of information mechanisms, and
  • The timeliness of its response to requests for information

For other elements, Curaçao was found to be compliant.


Hungary was found to be partially compliant in regard to its provisions to ensure confidentiality of information. For other elements, Hungary was found to be largely compliant or compliant.


Portugal was found to be partially compliant in regard to the ability of the competent authorities to obtain and provide information, and the effectiveness of its exchange of information mechanisms. For other elements, Portugal was found to be largely compliant or compliant.


Uruguay was found to be partially compliant in regard to the ability of the competent authorities to obtain and provide information, and its notification requirements and rights and safeguards regarding information requests. For other elements, Uruguay was found to be largely compliant or compliant.

Each country has 12 months, to produce a follow-up report on the steps taken to answer the recommendations provided in the Phase 2 reports.

Proposed Changes (2)


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Austria Considering Individual Income Tax and Withholding Tax Changes

According to recent reports, Austria's ruling coalition is planning to propose change in individual income tax rates and withholding tax rates.

The individual income tax rate changes would include an adjustment in the brackets including a reduction in the lowest rate from 36.5% to 25%, and an increased rate of 55% on income exceeding EUR 1 million.

In regard to withholding taxes, the coalition is considering an increase in the dividends withholding tax rate from 25% to 27.5%, and the same increase for withholding tax on capital gains from the sale of shares.

Costa Rica

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Costa Rica Proposed Income Tax Reform Draft

On 11 March 2015, the Costa Rican Ministry of Finance released a public discussion draft of proposed legislation including a number of changes to the country's Income Tax Law. Some of the proposed changes include:

  • Expansion of the tax base
  • Changing the standard tax year from the 12 month period ending 30 September to the calendar year ending 31 December
  • New thin capitalization rules
  • Strengthened transfer pricing rules
  • New capital gains tax at a standard rate of 15%
  • New rules concerning corporate reorganizations
  • New individual income tax upper rates/brackets, as follows
    • up to CRC 793,000 - 0%
    • over CRC 793,000 up to 1,190,000 - 10%
    • over CRC 1,190,000 up to 2,225,000 - 15%
    • over CRC 2,225,000 up to 4,450,000 - 20%
    • over CRC 4,450,000 - 25%

Following the public consultation, the  proposed changes will be submitted to the legislative assembly for amendment/approval.

Treaty Changes (2)


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China Confirms Japan's Local Corporation Tax Creditable under Tax Treaty

China's State Administration of Taxation recently issued a public notice stating that Japanese local corporation tax paid by Chinese resident companies is creditable against Chinese Enterprise Income Tax under the 1983 income tax treaty between the two countries.

The law introducing the local corporation tax was enacted in March 2014, and the tax is effective for tax years beginning on or after 1 October 2014. The tax is equal to 4.4% of the national corporation tax. In general, the local corporation tax does not increase the effective tax rate because the combined standard inhabitants tax (prefecture and municipal tax, also applied against the national corporation tax) was decreased by 4.4% effective from the same date.


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Tax Treaty between Guatemala and Mexico Signed

On 13 March 2015, officials from Guatemala and Mexico signed and 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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