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Worldwide Tax News

Approved Changes (1)

Kenya

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Kenya Publishes Guidelines for Withholding Tax on Natural Resource Income

On 20 February 2015, the Kenya Revenue Authority published Guidelines for Withholding Tax on Natural Resource Income. The withholding tax was introduced with effect from 1 January 2015. Key aspects of the guidelines include:

  • Natural resources include minerals, sand, quarries, fish, timber, etc.
  • Natural resource income includes an amount including a premium or such other like amount paid as consideration for the right to take natural resources from land or sea; or an amount calculated in whole or in part by reference to the quantity or value of natural resources taken from land or sea.
  • Both resident and non-residents making a payment of natural resource income to a resident or non-resident are required to withhold the tax before the payment is made, with an exemption for payment made to persons exempt from income tax
  • The withholding tax rate is 5% when paid to a resident, and 20% when paid to a non-resident

The tax should be declared and paid using the withholding tax return available in Kenya's iTax system by the 20th of the month following the month it is withheld.

Click the following link for the full guidelines on the Kenya Revenue Authority website.

Proposed Changes (2)

Romania

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Romania Planning Several Tax Reductions

On 18 February 2015, the Romania government introduced draft measures to reduce or repeal a number of the country's taxes. The proposed changes include:

  • Reducing the standard value added tax (VAT) rate from 24% to 20% from 1 January 2016, and a further reduction to 18% from 1 January 2018,
  • Repealing the 16% dividend tax on domestic companies from 1 January 2016,
  • Repealing the 1% special constructions tax from 1 January 2016,
  • Reducing the social security contributions rates from 15.8% to 13.5% for employer contributions, and from 10.5% to 7.5% for employee contributions from 1 January 2017, and
  • Reducing the corporate income tax rate from 16% to 14% from 1 January 2019

The measures are part of Romania's Plan for Fiscal Relaxation 2016-2020, and are subject to change before being adopted.

Singapore

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Singapore Issues 2015 Budget

On 23 February 2015, the Singapore Ministry of Finance issued the 2015 budget including several proposed tax measures. Key tax measures include:

Corporate Income Tax

  • The 30% corporate tax rebate is extended through 2017, but the SGD 30,000 rebate cap per year is reduced to SGD 20,000
  • The PIC cash bonus for qualifying PIC investments will not be extended beyond 2015
  • A new International Growth Scheme will be introduced that provides a reduced tax rate of 10% on incremental income from qualifying internationalization activities
  • The Approved Headquarter incentive will be withdrawn from 1 October 2015
  • Several other schemes and incentives will be extended and revised, such as the Mergers & Acquisitions scheme, the Double Tax Deduction for Internationalization scheme, the Angel Investors Tax Deduction (“AITD”) scheme, and others

Personal Income Tax

  • New progressive personal income tax rates and brackets will be introduced with effect from year of assessment 2017, including:
    • the rate on taxable income over SGD 160,000 up to 200,000 will be increased from 17% to 18%
    • the rate on taxable income over SGD 200,000 up to 240,00 will be increased from 18% to 19%
    • a new bracket for income over SGD 240,000 up to 280,000 will be subject to a 19.5% rate
    • a new bracket for income over SGD 280,000 up to 320,000 will be subject to a 20% rate, and
    • the rate on income over SGD 320,000 will be increased from 20% to 22%
  • A 50% personal income tax rebate capped at SGD 1,000 will be introduced for year of assessment 2015.

Click the following links for more information:

Singapore Budget 2015 website

Budget annex outlining all changes

Treaty Changes (3)

Guernsey-Lesotho

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TIEA between Guernsey and Lesotho has Entered into Force

The tax information exchange agreement between Guernsey and Lesotho entered into force on 3 January 2015. The agreement, signed 3 July 2013, is the first of its kind between the two jurisdictions.

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

Hong Kong-Vietnam

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Protocol to the Tax Treaty between Hong Kong and Vietnam has Entered into Force

The protocol to the 2008 income tax treaty between Hong Kong and Vietnam entered into force on 8 January 2015. The protocol, signed 13 January 2014, replaces Article 25 Exchange of Information to bring it in line with the OECD standard for information exchange. It is the first protocol to amend the treaty.

The protocol applies in Hong Kong from 1 April 2016, and applies in Vietnam from 1 January 2016.

Italy-Switzerland

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Italy and Switzerland Sign Tax Treaty Protocol and Roadmap for other Tax and Financial Issues

On 23 February 2015, officials from Italy and Switzerland signed a protocol to amend the 1976 income and capital tax treaty between the two countries. The protocol will be the second to amend the treaty, and will bring it in line with the OECD standard for information exchange. The protocol must be ratified before entering into force, and once in force will apply from the date of its signing, 23 February 2015.

The officials also signed a roadmap for other financial and tax issues. The roadmap includes:

  • Implementation of automatic exchange of information
  • Regularization of past assets through a voluntary disclosure program,
  • Further amendments to the tax treaty including lowering withholding tax rates on dividends and interest payments, amending the abuse provision and adding an arbitration clause
  • Reviewing the taxation of frontier (cross-border) workers
  • Removal of Switzerland form Italy's black lists and including Switzerland in Italy's white lists
  • Engaging in regular exchanges on other issues of mutual interests beginning with the proposed EU financial transactions tax, cross-border financial services and tax competition

Click the following links for the Roadmap on the Way Forward in Fiscal and Financial Issues published by the Italian government, and a   factsheet on the protocol and roadmap published by the Swiss government.

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