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Approved Changes (2)

Isle Of Man

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Isle of Man Releases 2015-2016 Budget

On 17 February 2015, the Isle of Man Treasury released the 2015-2016 Budget. The two key tax measures in the Budget are summarized as follows

Individual Tax Liability Cap

The maximum income tax liability cap for individuals is increased from £120,000 to £125,000 for taxpayers newly electing for the cap from the 2015-2016 tax year. For taxpayers who have already made the election for the tax cap, the £120,000 cap will continue to apply. An election for the cap to apply has been required from the 2014-2015 tax year, and the election applies for 5 years.

Tax on Income from Land and Property

The tax on income from local land and property is increased from 10% to 20% from 6 April 2015.  The tax applies to corporate taxpayers deriving income from land or property situated in the Isle of Man, including from:

  • Mining and Quarrying
  • Landfill
  • Property Development
  • Commercial Property Letting
  • Rental income

For taxpayers with an accounting period spanning 6 April 2015, the profits for that period will be apportioned by the number of days in each period and the 10% or 20% rates will apply accordingly. When such profits from land and property are distributed, the distribution will carry a credit against income tax in the recipient's assessment. When the credit exceeds the recipients tax liability, a refund will be provided if the recipient is an individual taxpayer, but no refund will be provided if the recipient is a corporate taxpayer.


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Italian Court Rules Additional Tax Surcharge on Oil and Energy Companies Unconstitutional

On 9 February 2015, the Italian Constitutional Court ruled that the additional tax surcharge imposed on oil and energy companies is unconstitutional. The energy tax surcharge initially applied at a rate of 5.5% from 2008, was increased to 6.5% in 2010, and further increased to 10.5% from 2011 to 2013. Since 2014, the rate has been 6.5%.

The main reasons for the Court's decision include:

  • The discriminatory treatment of companies in the oil and energy sector,
  • The surcharge was imposed on overall taxable income instead of on the assumed extra profits,
  • The economic conditions at the time the surcharge was introduced have changed and energy companies no longer necessarily have the extra ability to pay the surcharge, and
  • Although the law for the surcharge prohibited passing on the surcharge to customers, it's seen as impossible to adopt mechanism to ensure that the surcharge is not being passed on

Based on the Court's decision, the surcharge is repealed effective 12 February 2015, the day after the decision was published in the Official Gazette. The decision does not have retroactive effect.

Proposed Changes (2)

European Union

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European Commission to Propose Tax Transparency Package in March

On 18 February 2015, the European Commission announced that it has launched its work on measures to combat tax avoidance and aggressive tax planning. The work includes a proposal for the automatic exchange of information (AEOI) concerning tax rulings given my EU Member States, as well as other tax transparency measures. According to the announcement, the key objective is to ensure that companies are taxed where their economic activities generating the profits are performed and cannot avoid paying their fair share through aggressive tax planning.

The first package of proposed measures including the tax ruling AEOI will be proposed in March, and a second package of measures will be proposed later in 2015.

Click the following link for the Commission Press Release.


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Taiwan Considering Consolidation of Housing and Property Taxes Including an Increased Rate for Non-Residents

According to recent reports, the Taiwan Ministry of Finance is currently considering plans to consolidate the country's housing and property taxes, and apply an increased tax rate for non-resident investors in order to curb speculation. The tax rate for residents would be 17% if the property is held for at least 2 years, while the rate for non-residents would be 30%. It is unclear if any reduced rate would apply for non-residents who hold properties for longer periods of time.

Draft legislation is expected to be introduced into parliament after the lunar new year, and the changes are intended to apply in 2016.

Treaty Changes (2)

China-Korea, Rep of

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New SSA between China and South Korea has Entered into Force

According to a recent notice published by the Chinese Ministry of Human Resources, the 2012 social security agreement between China and South Korea entered into force on 16 January 2013. The agreement, signed 29 October 2012, replaces the 2003 social security agreement between the two countries.

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


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TIEA between Macau and Sweden has Entered into Force

The tax information exchange agreement between Macau and Sweden entered into force on 15 January 2015. The agreement, signed 29 April 2011, is the first of its kind between the two jurisdictions and is in line with the OECD standard for information exchange.  

The agreement applies for criminal tax matters from the date of its entry into force, and for other matters in respect of tax periods beginning on or after that date.


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