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Approved Changes (2)

Nicaragua

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Nicaragua Introduces New Export Free Trade Zone Incentives

Nicaragua has published Law No. 917/2015 in its Official Gazette, which introduces a new tax incentives scheme for export free trade zones. Under the scheme, qualifying companies operating in a zone will be eligible for the following incentives:

  • A 10-year income tax exemption holiday, which may be extended a further 10 years, and a 60% income tax exemption once the holiday period expires; and
  • An exemption from the following:
    • Capital tax;
    • Stamp duty;
    • Indirect and excise taxes;
    • Export taxes on products made domestically;
    • Capital gains and transfer taxes on the alienation of immovable property, subject to certain conditions; and
    • Import duties on Raw materials, machinery, equipment, spare parts, samples, molds, and accessories required for operations in the zone

Similar incentives apply for operators of export free trade zones. In order to qualify, companies and operators must be approved by the National Free Zone Commission.

Taiwan

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Taiwan Repeals Capital Gains Tax on Share Trading

On 17 November 2015, Taiwan's legislature repealed the 15% capital gains tax (CGT) for active traders with share transactions exceeding TWD 1 billion. The tax was approved in 2013 and was to apply from 1 January 2015, but was delayed to 1 January 2018 to allow additional time for Taiwan's Ministry of Finance to review its implementation.

The 15% CGT would have been in addition to the securities transaction tax of 0.3% for company shares and 0.1% for corporate bonds and other government approved securities. As originally planned, taxpayers would have the option to pay an additional  0.1% securities transaction tax on the value of the share trades exceeding TWD 1 billion or the 15% CGT on the gain.

The repeal of the 15% CGT does not affect the current securities transaction tax.

Proposed Changes (1)

New Zealand

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New Zealand Legislation Proposes the Introduction of a Residential Land Withholding Tax and GST on Cross Border Online Services

On 16 November 2015, the New Zealand government introduced the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. The main measures of the bill are summarized as follows.

Residential Land Withholding Tax

A Residential Land Withholding Tax (RLWT) is proposed that applies for offshore sellers (vendors) of New Zealand residential property that is acquired and sold within 2 years (bright-line test - previous coverage). The applicable rate is the lower of:

  • 33% (28% if vendor is a company) of the gain; or
  • 10% of the current purchase price.

For the purpose of the tax, offshore non-individuals (including companies) are defined as a non-natural person that:

  • Is registered outside New Zealand;
  • Is constituted under foreign law;
  • Has a member that is an offshore person;
  • Has an executive or director that is an offshore person; or
  • Is a company and 25% percent or more of the company’s shareholder decision-making-rights are held directly or indirectly by offshore persons.

Subject to approval, the RLWT will apply from 1 July 2016 for property purchased on or after 1 October 2015.

GST on Online Services

The levying of GST at the rate of 15% is proposed for cross border supplies of online "remote" services and intangibles by offshore suppliers. The main aspects of the measure include:

  • Offshore suppliers of services would be required to register and return GST on remote services purchased by New Zealand-resident consumers;
  • To ensure compliance costs are minimized, offshore suppliers will not be required to return GST on supplies to New Zealand GST-registered businesses, nor will they be required to provide tax invoices, although the supplier and recipient may agree to have GST charged for the purpose of claiming input GST, in which case the supply will be zero-rated;
  • Offshore suppliers would be required to register and return GST if their supplies of services to New Zealand residents exceed NZD 60,000 in a 12-month period;
  • A broad definition of “remote” services is proposed, which includes both digital services (such as video, music and software downloads) and more traditional services (such as legal and accounting services received remotely); and
  • In some situations, an electronic marketplace may be required to register instead of the principal offshore supplier.

Subject to approval, the new measure is to apply from 1 October 2016.

The measure does not affect the current non-taxation of low-value imported goods that are below the “de minimis” threshold of NZD 400. This issue will be considered with a public consultation document to be released in April 2016.

Student Loans

This measure deals with the exchange of student loan information between New Zealand and Australian tax authorities, and has no impact on corporate taxation.

Click the following links for the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill and its commentary, the related media statements and the regulatory impact statements.

Treaty Changes (5)

Argentina-Belgium

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SSA between Argentina and Belgium to Enter into Force

According to a recent update from the Belgian government, the pending social security agreement between Argentina and Belgium will enter into force on 1 January 2016. The agreement, signed 3 March 2010, is the first of its kind between the two countries and generally applies from the date of its entry into force.

B Virgin Isl-Guernsey

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Protocol to the TIEA between British Virgin Islands and Guernsey Signed

A protocol to the 2013 tax information exchange agreement between the British Virgin Islands and Guernsey was signed by Guernsey on 8 October 2015 and by the British Virgin Islands on 5 November 2015. The protocol is the second to amend the agreement. It amends Article 11 (No Prejudicial or Restrictive Measures) by replacing paragraph 1 of that article.

The protocol will enter into force once the ratification instruments are exchanged.

Belgium-Austria

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Belgium Approves Protocol to the Tax Treaty with Austria

On 12 November 2015, Belgium's Chamber of Representatives approved the pending protocol to the 1971 income and capital tax treaty with Austria. The protocol, signed 10 September 2009, replaces Article 26 (Exchange of Information), bringing it line with the OECD standard for information exchange.

The protocol will enter into force on the first day of the third month following the exchange of the ratification instruments, and will apply from 1 January of the year following its entry into force.

Jersey-Spain

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TIEA between Jersey and Spain Signed

On 17 November 2015, officials from Jersey and Spain signed a tax information exchange agreement. The agreement is the first of its kind between the two countries, and will enter into force after the ratification instruments are exchanged.

Jordan-Untd A Emirates

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Tax Treaty between Jordan and the U.A.E. under Negotiation

Officials from Jordan and the United Arab Emirates met 17-19 November 2015 for the fifth round of negotiations for an income tax treaty. The treaty will be the first of its kind between the two countries, and must be finalized, signed and ratified before entering into force.

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