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 (4)

Brazil

Responsive image

Brazilian Voluntary Disclosure Program Law Signed by President

On 13 January 2016, Brazil's President Dilma Rousseff signed into law the new voluntary disclosure program that was approved by the Senate on 15 December 2015 (previous coverage). The Currency and Tax Compliance Special Regime (Regime Especial de Regularização Cambial e Tributária, RERCT) provides for a 15% tax rate plus 15% penalty for disclosed assets that were unreported up to 31 December 2014.

While most aspects of the RERCT program as approved by the Senate are maintained, the President vetoed the following:

  • The ability to pay taxes and fines in installments;
  • The ability to declare assets held in the name of a third party and not under a fiduciary arrangement; and
  • The requirement that regulations be issued within 30 days of signature (to provide more time to prepare the necessary systems to handle the disclosures).

The law for RERCT was published 14 January 2016, and the program will be available after the regulations are issued.

Ecuador

Responsive image

Ecuador Publishes Resolution on Exemption from Tax Haven Status for Tax Purposes

On 4 January 2016, Ecuador published Resolution No. DGERCGC15-00003185 in the Official Gazette. The resolution sets out the conditions for a non-resident in a tax haven or low-tax jurisdiction to be deemed not a resident in such a jurisdiction for tax purposes if holding capital rights in a company resident in Ecuador or with a permanent establishment (PE) in Ecuador. The conditions include:

  • The non-resident has issued securities listed on a stock exchange not located in a tax haven or low-tax jurisdiction;
  • All beneficial owners resident in Ecuador have been identified, if any;
  • The Ecuadorian resident company or PE keeps the documentation submitted by the non-resident to the regulatory body of the stock exchange in the past 12 months; and
  • The non-resident agrees in writing to provide information to the Ecuador Internal Revenue Service (SRI) regarding who has control or significant influence on its decision-making process.

Tax haven or low-tax jurisdiction status affects a number of tax issues in Ecuador. One of the main issues is that companies resident in Ecuador owned by residents of such jurisdictions are subject to an increased tax rate of 25% (standard rate 22%) on its income in proportion to the ownership by tax haven or low-tax jurisdiction residents. If greater than 50% ownership, all income is subject to the increased rate. In addition, dividends, interest, royalties and certain other payments to tax haven or low-tax jurisdictions are subject to increased withholding tax.

Poland

Responsive image

Poland Publishes Social Security Basis Cap for 2016

Poland has published the social security basis cap for 2016, which is increased from PLN 118,770 to PLN 121,650 with effect from 1 January 2016. The basis cap applies for pension and disability fund contributions by both employers and employees.

Employer total social security contribution rates ranges from 19.48% to 22.14%. The range is due to the accident fund contribution, which varies by sector. For salary amounts exceeding the basis cap, contributions are still required for the illness fund, accident fund, labor fund and others at combined rates ranging from 3.22% to 6.41%.

Trin & Tobago

Responsive image

Trinidad and Tobago Finance Bill 2016 Approved by Parliament

Trinidad and Tobago's Finance Bill 2016 was passed by the House of Representatives on 12 January 2016 and by the Senate on 16 January 2016. The Finance Bill includes a number of changes (previous coverage), including an increase in the Business levy from 0.2% to 0.6% and the Green fund levy from 0.1% to 0.3%, as well as a reduction in the value added tax (VAT) rate from 15% to 12.5% and an increase in the VAT registration threshold to TDD 500,000. One key measure, the end of the moratorium on property tax, was not included in the Finance Bill. It is expected to be included in future legislation.

The measures of the Finance Bill generally apply from 1 January 2016, although the reduction in the VAT rate applies from 1 February 2016.

Treaty Changes (5)

Austria-Belgium

Responsive image

Protocol to the Tax Treaty between Austria and Belgium to Enter into Force

According to a recent update from the Austrian Federal Ministry for Europe, Integration and Foreign Affairs, the protocol to the 1971 income and capital tax treaty with Belgium will enter into force on 1 March 2016. The protocol, signed 10 September 2009, is the first to amend the treaty. It replaces Article 26 (Exchange of Information), bringing it in line with the OECD standard for information exchange.

The protocol applies from 1 January 2017.

Belarus-India

Responsive image

Protocol to the Tax Treaty between Belarus and India has Entered into Force

The protocol to the 1997 income and capital tax treaty between Belarus and India entered into force on 19 November 2015. The protocol, signed 3 June 2015, is the first to amend the treaty. It replaces Article 27 (Exchange of Information), bringing it in line with the OECD standard for information exchange.

The protocol applies from the date of its entry into force.

Cyprus-Ethiopia

Responsive image

Tax Treaty between Cyprus and Ethiopia Signed

On 30 December 2015, officials from Cyprus and Ethiopia 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.

Cyprus-Georgia

Responsive image

Tax Treaty between Cyprus and Georgia has Entered into Force

The income and capital tax treaty between Cyprus and Georgia entered into force on 4 January 2016. The treaty, signed on 13 May 2015, is the first of its kind directly between the two countries, although the 1982 income and capital tax treaty between Cyprus and the former Soviet Union had applied but was terminated.

Taxes Covered

The treaty covers Cyprus income tax, corporate income tax, the special contribution for the Defense of the Republic, capital gains tax, and immovable property tax. It covers Georgian income tax, profit tax and property tax.

Withholding Tax Rates

  • Dividends - 0%
  • Interest - 0%
  • Royalties - 0%

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; and
  • Gains from alienation of movable property forming part of the business property of a permanent establishment in the other State

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.

Effective Date

The treaty applies from 1 January 2017.

Tajikistan-United Kingdom

Responsive image

Tax Treaty between Tajikistan and the UK has Entered into Force

According to a recent update from HMRC, the income and capital tax treaty between Tajikistan and the United Kingdom entered into force on 16 March 2015. The treaty, signed 1 July 2014, is the first of its kind directly between the two countries, although the 1985 income and capital tax treaty between the UK and the former Soviet Union had applied in respect of Tajikistan but was terminated.

Taxes Covered

The treaty covers Tajik income tax, tax on profit, and tax on immovable property. It covers UK income tax, corporation tax, and capital gains 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 no agreement is reached, the company will not be entitled to the benefits of the treaty aside from those covered in Articles 21 (Elimination of Double Taxation), 22 (Non-Discrimination) and 23 (Mutual Agreement Procedure).

Withholding Tax Rates

  • Dividends -
    • 5% if the beneficial owner is a company directly holding at least 10% of the paying company's capital, or is a pension scheme;
    • 15% if paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 (Income from Immovable Property) by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempted from tax;
    • Otherwise 10%
  • Interest - 10%, although an exemption applies when the beneficial owner is a bank, or is a pension scheme and the interest is not derived from the carrying on of a business by the pension scheme or through an associated enterprise
  • Royalties - 7%

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 shares deriving more than 50% of their value directly or indirectly from immovable property situated in the other State (exemption for shares regularly traded on a stock exchange); and
  • 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 other property by a resident of a Contracting State may only be taxed by that State.

Limitation on Benefits

The beneficial provisions of Articles 10 (Dividends), 11 (Interest), 12 (Royalties) and 20 (Other Income) will not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims or other rights in respect of which the dividends, interest, royalties or other income are paid was to take advantage of those Articles by means of that creation or assignment. The limitation is included in each of those Articles.

Double Taxation Relief

Both countries generally apply the credit method for the elimination of double taxation. However, the UK will exempt dividends paid by a Tajik company to a company resident in the UK if the conditions for an exemption under UK law are met. Exemption may also apply for profits of a permanent establishment in Tajikistan of a UK company if the conditions for an exemption under UK law are met.

MFN Clause

The protocol to the treaty, signed the same date, includes the provision that if any agreement between Tajikistan and an OECD member state (member as of 1 July 2014) provides for an exemption or lower rate of tax on dividends than the rate under paragraph 2 of Article 10 (Dividends) of the Tajikistan-UK treaty, then such exemption or lower rate will automatically apply for dividends governed by that paragraph.

Effective Date

The treaty applies in Tajikistan in respect of withholding taxes from 1 April 2015, and for other taxes from 1 January 2016. In the UK, the treaty applies:

  • From 1 April 2015 in respect of withholding taxes;
  • From 1 April 2015 in respect of corporation tax; and
  • From 6 April 2015 in respect of income tax and capital gains tax.

The provisions of Article 24 (Exchange of Information) apply from the date of the treaty's entry into force, 16 March 2015.

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

Crosss Border Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment Streams.

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