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Approved Changes (3)

European Union

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TAXE Committee Publishes Reports on EU IP Regimes, Tax Rulings, Exchange of Information and other Tax Issues

On 16 October 2015, the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE Committee) published six reports covering issues faced by EU Member States. The studies were prepared by Policy Department A of the Directorate General for Internal Policies at the request of the TAXE Committee, and include the following.

Intellectual Property Box Regimes - Tax Planning, Effective Tax Burdens and Tax Policy Options

This report provides an overview of the 12 IP Box regimes in place in Europe by the end of 2014, evaluates the IP box regimes on the basis of the EU State Aid rules and the EU Code of Conduct for business taxation, and discusses options to reform the taxation of IP income in order to counter profit shifting and tax base erosion.

EU State Aid Law and National Tax Rulings

This report provides an overview of selected issues that arise in the application of State aid law in the area of tax rulings in general, and sets out how tax rulings can be subject to State aid scrutiny if they lead to beneficial tax treatment of a particular undertaking that is not in line with the normal application of national tax law.

Overview of Legislation Practices Regarding Exchange of Information between National Tax Administrations in Tax Matters

This report provides an overview of recent developments in the area of information exchange (including on the concept of 'automatic exchange') and explains the content and function of the legal sources delimiting each other. The report also deals with the legal protection of taxpayers, especially with the protection of personal data and commercial, industrial, business and professional secrets, and emphasizes the necessity of an international tax secret as an EU minimum standard.

Overview of Existing EU and National Legislation on Topics covered by TAXE Mandate

This report deals with the current state of advance tax rulings, advance pricing agreements and other tax arrangements, and how they are meant to develop. It provides an overview of the features of tax rulings in general, as well as specifics on the tax rulings practices in the 28 Member States.

Nominal vs. Effective Corporate Tax Rates applied by Multinational Enterprises

In the context of the OECD BEPS Project and reform at the EU level, this report explains a number of significant aggressive tax planning techniques and mechanisms used by MNEs and provides an overview of their use, as well as an overview of the basic structure of the international tax system and the factors undermining it.

Selected International Third-Country Tax-Governance Issues

This report looks at issues EU Member States will face as they move towards a more transparent tax environment and push for better tax compliance, and the impact on promoting good governance in third countries. In particular, the report provides an overview of some of the megatrends that will affect tax systems, trends in tax levels and structures, and an examination of some of the challenges that EU tax policy makers face and how EU governments are responding to those challenges.

Honduras

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Honduras Sets Deadline for 2014 Transfer Pricing Return

The Honduras Executive Directorate of Revenue recently announced that new regulations for the Transfer Pricing Law entered into force on 18 September 2015. The regulations require that a transfer pricing return disclosing related party transactions for the 2014 tax year be submitted within three months of the regulation's entry into force (due by 18 December 2015).

For the 2015 tax year and subsequent years, the transfer pricing return is due with the income tax return (due by 30 April).

New Zealand

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New Zealand Publishes GST Guide - Working with GST

New Zealand's Inland Revenue recently published GST guide (IR375) - Working with GST. The guide provides a detailed overview of various aspects of New Zealand's goods and services tax regime, including:

  • An explanation of the GST regime;
  • How to complete and file GST returns;
  • Canceling GST registration;
  • Adjustments;
  • Supplies;
  • Taxpayer rights and obligation; and
  • Others

Under New Zealand's GST regime, The standard rate of GST is 15%. Suppliers of taxable goods or services in the country are required to register for GST when revenue for such supplies exceeds NZD 60,000 in a 12-month period, including non-residents. However, services provided by non-residents are generally subject to reverse charge (recipient of services accounts for GST).

Click the following link for the GST guide.

Proposed Changes (2)

Italy

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Italy's Cabinet Approves 2016 Budget Measures

On 15 October 2015, the Italian Cabinet approved the budget measures for 2016. Some of the key measures include:

  • Reducing the corporate tax rate from 27.5% to 24% in 2017, with the possibility of an initial reduction in 2016;
  • Introducing an accelerated depreciation deduction of 140% for plant and machinery purchased between October 2015 and the end of 2016;
  • Maintaining the 22% standard VAT rate instead of increasing to 24% in 2016 as previously planned;
  • Reducing the social security charges exemption from EUR 8,000 to EUR 4,000 per new employee under the job growth incentive, and reducing the period the incentive applies from 3 years to 2 years; and
  • Increasing the EUR 1,000 limit for cash transactions to EUR 3,000.

The budget measures must be presented to parliament for approval and to the European Commission to determine if the conditions for Italy's commitments under the EU Stability and Growth Pact are met. It is expected that the Italian parliament will approve the measures before the end of the year, although the Commission's approval is uncertain.

South Africa

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South Africa Publishes Comments Received during Public Consultation on Draft 2015 Taxation Laws Amendment Bill and Tax Administration Laws Amendment Bill

On 15 October 2015, South Africa's National Treasury published a draft public response document on the drafts of the 2015 Taxation Laws Amendment Bill (TLAB) and the Tax Administration Laws Amendment Bill (TALAB). The document provides a summary of the main written comments received on the TLAB and TALAB during the public consultation that was launched on 22 July 2015 (previous coverage), as well as the issues raised during the public hearings held by the Standing Committee on Finance in September.

The main issues that received the most comments include:

  • Deleting the tax credit for withholding taxes imposed by other countries on services provided from South Africa;
  • Measures to close a loophole that allows for the avoidance of estate duty;
  • Tax relief for certain collateral transactions;
  • Changes to the tax treatment of insurance companies (both short-term and long-term insurers) due to the Solvency Assessment and Management (SAM) regulatory initiative;
  • Procedures when legal professional privilege is asserted;
  • Reduced assessments;
  • The period of limitations for issuance of assessments; and
  • Liability of third party appointed to satisfy tax debts.

Click the following links for the draft response document and the response presentation made to the Standing Committee on Finance on 15 October 2015. A final version of the response document will be published by the date the final drafts of the 2015 TLAB and TALAB are introduced.

Treaty Changes (4)

Brazil-Korea, Rep of

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SSA between Brazil and South Korea to Enter Into Force

The social security agreement between Brazil and South Korea will enter into force on 1 November 2015. The agreement, signed 22 November 2012, is the first of its kind between the two countries and will generally apply from the date of its entry into force. An administrative arrangement for the implementation of the agreement, signed 9 January 2013, will also enter into force and apply from 1 November 2015.

China-OECD

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China Deposits Ratification Instrument for Mutual Assistance Convention

On 16 October 2015, China deposited the ratification instrument for the OECD-Council of Europe Convention on Mutual Administrative Assistance in Tax Matters as amended by the 2010 protocol. China signed the convention as amended on 27 August 2013.

According to the OECD overview of signatories to the convention, the convention will enter into force in China on 1 February 2016.

Colombia-Brazil

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Tax Treaty between Colombia and Brazil to be Negotiated

Officials from Brazil and Colombia met on 9 October 2015 to discuss the negotiation of an income tax treaty. Any resulting treaty would be the first of its kind between the two countries, and would need to be finalized, signed and ratified before entering into force.

Denmark-Untd A Emirates

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Tax Treaty between Denmark and the U.A.E. to be Negotiated

Officials from Denmark and the United Arab Emirates met on 30 September 2015 to discuss the negotiation of an income tax treaty. Any resulting treaty would be the first of its kind between the two countries, and would need to be finalized, signed and ratified before entering into force.

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