The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (3)

China

Responsive image

China Issues Notice on New Rating System for Export Tax Rebates

On 7 January 2015, China's State Administration of Taxation issued Notice 2015 No. 2, which introduces a rating system aimed at optimizing the country's export tax rebate service/process. Under the system, taxpayers seeking export rebates are assigned one of four ratings.

Based on the rating, export rebate claims will either be simplified or require additional documentation. Class 1 taxpayers may claim rebates electronically without submitting original invoices, Class 2 and 3 will need to submit original invoices and addition documentation if requested, and Class 4 will need all original documentation as well as proof that the transactions have been settled.

Classes 1, 3 and 4 are based on a number of prescribed factors such as net assets/rebate amount, whether or not any rules have been broken and the administrative result, customs and foreign exchange compliance, and the tax payers grade (A, B, C, D) under the grading system for compliance introduced in 2014. If a taxpayer does not fit the prescribed factors of Class 1, 3, or 4, they will be assigned as Class 2.

The new system applies from 1 March 2015.

Jamaica

Responsive image

New Penalty for Late Filing of Jamaican Tax Return

Jamaica has introduced a new penalty for the late filing of income tax returns equal to JMD 5,000 per month with a maximum cap of JMD 1 million. The penalty applies in regard to 2014 tax returns which are due by 15 March 2015. However, the Jamaican tax authority is also considering applying the new penalty for tax returns from previous years that are outstanding as of 1 October 2014.

Spain

Responsive image

Transfer Pricing Changes under Spanish Tax Reform for 2015

The Spanish Tax Reform for 2015 includes changes in regard to the country's transfer pricing rules. The main changes include:

  • The definition of related parties for shareholders is changed from 5% shareholdings to 25% shareholdings
  • The hierarchy of acceptable methods is abolished and all appropriate methods will be accepted as long as they comply with the principle of fair competition
  • The revenue limit for simplified documentation is increased from €10 million to €45 million
  • When no TP adjustment is made, the penalties for incomplete information is reduced from €1,500 to €1,000 per item of information, and reduced from €15,000 to €10,000 per collection of information which is omitted, inaccurate or false - when an adjustment is made, the penalty is still 15% of the adjustment and at least double of what the above non-adjustment penalties would be
  • Advanced Pricing Agreements may be applied retroactively up to 4 years

The changes apply from 1 January 2015.

Proposed Changes (2)

China

Responsive image

China Proposes Binding Advanced Tax Rulings and Tax Payment Deferral for Tax Disputes

China's State Council has reportedly released a discussion draft of the revised Tax Collection and Administration Law. Proposed in the draft is the introduction of an advance tax ruling procedure that would result in a binding ruling. Also proposed is a change allowing the deferral of tax payment when an appeal is initiated until it is completed.

Additional details will be published once available.

Hong Kong

Responsive image

Hong Kong to Extend Profits Tax Exemption to Offshore Private Equity Funds

Hong Kong's Financial Secretary John Tsang has announced that the country will introduce a bill to extend the profits tax exemption for offshore funds to private equity funds. The offshore fund tax exemption currently applies only for certain specified transactions including transactions in securities, futures contracts, foreign exchange contracts, etc., but not for shares in private companies. In addition, the transactions must be carried out or arranged by a specified person licensed by the Securities and Futures Commission (SFC) of Hong Kong, a license which most Hong Kong based private equity advisors are not required to have.

The legislation will expand the exemption scope to include shares in private companies incorporated outside Hong Kong. It is also expected that the legislation will waive the SFC license requirement, and will also provide exemption for the profits of certain special purpose vehicles registered in or out of Hong Kong that are owned by a qualifying offshore private equity fund.

Treaty Changes (4)

Cayman Islands-Poland

Responsive image

TIEA between the Cayman Islands and Poland has Entered into Force

The tax information exchange agreement between the Cayman Islands and Poland entered into force on 11 December 2014. The agreement, signed 29 November 2013, is the first of its kind between the two jurisdictions and applies from the date of its entry into force.

Germany-Uruguay

Responsive image

SSA between Germany and Uruguay to Enter into Force

The social security agreement between Germany and Uruguay will enter into force 1 February 2015. The agreement, signed 8 April 2013, is the first of its kind between the two countries and generally applies from the date of its entry into force.

Indonesia

Responsive image

Indonesia Deposits Ratification Instrument for Mutual Assistance Convention

On 21 January 2015, Indonesia deposited the ratification instrument for the Council of Europe-OECD Convention on Mutual Administrative Assistance in Tax Matters and amending protocol. The convention and protocol, signed by Indonesia on 3 November 2011, will enter into force in the country on 1 May 2015.

Kyrgyzstan-Lithuania

Responsive image

Update - Tax Treaty between Kyrgyzstan and Lithuania in Force

The income tax treaty between Kyrgyzstan and Lithuania entered into force on 20 June 2013, and applies from 1 January 2014. The treaty, signed 15 May 2008, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Kyrgyzstan tax on profits and other revenue of legal persons, and individual income tax. It covers Lithuanian profit tax and income tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services within a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 183 days in any 12 month period.

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company directly holdings at least 20% of the paying company's capital, otherwise 15%
  • Interest - 10%
  • Royalties - 10%
  • Capital Gains - generally exempt, except for gains from the alienation of immovable property, gains from the alienation of movable property forming party of the business property of a permanent establishment, and gains from the alienation of shares directly or indirectly deriving more than 50% of their value from immovable situated in a Contracting State

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Effective Date

The treaty applies from 1 January 2014.

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

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

Get an immediate FREE trial of Orbitax ITRCE

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