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Approved Changes (2)

Thailand

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Thai Cabinet Extends 7% VAT Rate an Additional Year

The Thai Ministry of Finance has announced that on 15 August 2017, the Thai Cabinet approved Royal Decree No. 90/2560(2017), which extends the reduced VAT rate of 7% until 30 September 2018. Thailand's standard rate is 10%, but was reduced to 7% (including local tax) as part of special economic measures taken after the 1997 Asian financial crisis. Each October, the rate is scheduled to revert back to 10% unless the reduced rate is extended.

United Kingdom-European Union

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UK Publishes Policy Paper on Enforcement and Dispute Resolution following Brexit

The UK Department for Exiting the European Union has published a policy paper that sets out the UK's position with regard to enforcement and dispute resolution following its exit from the European Union.

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Executive summary

1. In leaving the European Union, we will bring about an end to the direct jurisdiction of the Court of Justice of the European Union (CJEU). The UK and the EU need therefore to agree on how both the provisions of the Withdrawal Agreement, and our new deep and special partnership, can be monitored and implemented to the satisfaction of both sides, and how any disputes which arise can be resolved.

2. The UK wants to:

  • maximise certainty for individuals and businesses;
  • ensure that they can effectively enforce their rights in a timely way;
  • respect the autonomy of EU law and UK legal systems while taking control of our own laws; and
  • continue to respect our international obligations.

3. The UK will take steps to implement and enforce our agreements with the EU within our domestic legal context. This will include providing for the appropriate means by which individuals and businesses can rely on and enforce rights contained in any agreements. This will be underpinned by the creation of international law obligations which will flow from our agreements with the EU. The UK has a long record of, and remains fully committed to, complying with international law.

4. There are a number of existing precedents where the EU has reached agreements with third countries which provide for a close cooperative relationship without the CJEU having direct jurisdiction over those countries. There are a variety of ways in which the parties to those agreements have reassured each other on both the implementation of, and enforcement and dispute resolution under, the agreements.

5. The UK will engage constructively to negotiate an approach to enforcement and dispute resolution which meets the key objectives of the UK and the EU, underpinning the deep and special partnership we seek.

Proposed Changes (1)

Singapore

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Singapore Summary of Responses to Public Consultation on Draft Goods and Services Tax (Amendment) Bill 2017

On 23 August 2017, the Singapore Ministry of Finance issued a release on the summary of responses to the public consultation on the Draft Goods and Services Tax (Amendment) Bill 2017 (previous coverage).

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1. The Ministry of Finance (MOF) conducted a public consultation exercise on the draft Goods and Services Tax (Amendment) Bill 2017 from 12 May to 4 June 2017. The draft Bill provided for six changes to ease business compliance, clarify existing legislation or improve tax administration.

2. Most of the feedback received focused on the following tax changes:

  • Extend customer accounting to prescribed supplies commonly used in GST fraud
  • Provide for electronic record keeping requirements and additional requirement for invoice details for selected businesses
  • Provide for basis to implement an “opt-out” approach for digital tax notices

3. MOF received a total of 41 suggestions, of which 30 suggestions are accepted, with consequent revisions to be made to the draft text of the Bill. The remaining suggestions are not accepted, as they are inconsistent either with the legislative drafting conventions or the policy objectives of the proposed legislative changes.

4. MOF would like to thank all individuals and organisations who have taken the time and effort to provide their inputs.

Treaty Changes (5)

Belgium-Andorra-Ethiopia-France-Germany-Kenya-Netherlands-Switzerland-Ukraine

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Belgium Updates Tax Treaty Negotiation Status

Belgium's Federal Public Service (FPS) Finance has published an updated status list for planned and ongoing tax treaty negotiations, including negotiations for:

  • A new tax treaty with Andorra (would be the first treaty) - date for the first round of negotiations to be determined;
  • A new tax treaty with Ethiopia (would be the first treaty) - first round of negotiations scheduled for 11 to 15 September 2017;
  • A new tax treaty with France (would replace the 1964 treaty) - fifth round of negotiations held 2 February 2017, date for next round to be determined;
  • A new tax treaty with Germany (would replace the 1967 treaty) - date for the first round of negotiations to be determined;
  • A new tax treaty with Kenya (would be the first treaty) - third round of negotiations scheduled for 13 to 17 November 2017;
  • Revisions to the 2001 treaty with the Netherlands (uncertain if amending protocol or new treaty) - seventh round of negotiations scheduled for the week of 6 November 2017;
  • A protocol to the treaty with Switzerland (would be the second to amend the 1978 treaty) - date for the first round of negotiations to be determined; and
  • A protocol to the treaty with Ukraine (would be the first to amend the 1996 treaty) - first round of negotiations held 13 to 16 June 2017, date for next round to be determined.

Click the following link for the negotiation status list (French and Dutch language).

Moldova-Germany

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Moldova Approves Pending SSA with Germany

The Moldovan Cabinet of Ministers reportedly approved the ratification of the pending social security agreement with Germany on 23 August 2017. The agreement, signed 12 January 2017, is the first of its kind between the two countries and will enter into force after the ratification instruments are exchanged.

Ukraine-Ireland

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Ukraine Clarifies Taxation of Computer Program Royalties under Tax Treaty with Ireland

The Ukraine State Fiscal Service (SFS) has recently published an individual consultation letter (1653/6/99-99-01-02-02-15/IPK) on the withholding tax treatment of payments from Ukraine to Ireland for the use of or the right to use computer programs. The letter notes that the standard domestic withholding tax rate on royalties is 15%, while the standard rate as provided in the 2013 income and capital tax treaty with Ireland is 10%, with a reduced rate of 5% for royalties paid in respect of any copyright of scientific works (and certain others). Because payments for computer programs are not specifically covered in the treaty, the SFS looked to domestic law to determine how the payments should be treated, and in particular, the Law of Ukraine on Copyright and Related Rights, which provides that objects of copyright include works in the field of science, literature, and art. Based on the Law, the SFS concluded that computer programs are considered scientific works, and therefore payments for the use of or the right to use should be subject to withholding tax as per the provisions of the treaty, with the standard eligibility requirements that the recipient of the income is resident in Ireland and is the actual beneficial owner.

United States-Australia

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U.S. Publishes CbC Exchange Arrangement with Australia

The U.S. IRS has published the bilateral competent authority arrangement signed with Australia on the exchange of Country-by-Country (CbC) reports. The agreement was signed by Australia and the U.S. on 14 July and 1 August 2017, respectively, and is effective from the later date of signature.

The arrangement provides that pursuant to the provisions of Article 25 (Exchange of Information) of the 1982 income tax treaty between the two countries, each competent authority will automatically exchange CbC reports received from each reporting entity resident for tax purposes in its jurisdiction, provided that, on the basis of the information provided in the CbC report, one or more constituent entities of the MNE group of the reporting entity are resident for tax purposes in the jurisdiction of the other competent authority, or are subject to tax with respect to the business carried out through a permanent establishment situated in the other jurisdiction.

With respect to fiscal years beginning on or after 1 January 2016, CbC reports are to be exchanged as soon as possible and no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates. With respect to fiscal years beginning on or after 1 January 2017, reports are to be exchanged no later than 15 months after the last day of the fiscal year.

Untd A Emirates-Argentina-Gambia-Eq. Guinea

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U.A.E. Ratifies Pending Tax Treaties with Argentina, Gambia, Equatorial Guinea

According to recent reports, the United Arab Emirates published in the Official Gazette on 23 August 2017 the federal decrees for the ratification of the pending income and capital tax treaties with Argentina, Gambia, and Equatorial Guinea. The treaty with Argentina was signed 3 November 2016, the treaty with Gambia was signed 25 July 2015, and the treaty with Equatorial Guinea was signed 19 October 2016. The treaties are all the first of their kind between the United Arab Emirates and the respective countries, and will enter into force after the ratification instruments are exchanged. Details of each will be published after their entry into force.

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