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Approved Changes (3)

China

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China Approves Plans for Three New Free Trade Zones

China's Politburo has approved plans for three new free trade zones in the country; the Guangdong FTZ, the Fujian FTZ and the Tianjin FTZ. The new zones are an extension of the pilot project for increased liberalization of controls on foreign investment and foreign currency exchange that started with the Launch of the Shanghai FTZ in 2013.

The dates for the launch of the new zones have not yet been announced.

European Union

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European Parliament Passes Resolution Setting its Tax Work Agenda

On 25 March 2015, the European Parliament issued passed the resolution for its agenda for parliamentary work on tax. The main work will focus on tackling tax evasion and avoidance, and aggressive tax planning. Other recommended areas of work include:

  • Simplifying national tax systems to reduce the administrative burden on individuals and companies,
  • Doing away with obstacles that hinder cross-border activity,
  • Encouraging more EU member states should join the eleven countries introducing a Financial Transaction Tax (FTT),
  • Introducing a Common Consolidated Corporate Tax Base (CCCTB) for EU companies and - as a second step - for all other companies too,
  • Taking action against harmful tax incentives on income from patent boxes (intellectual property rights),
  • Improving transparency around tax rulings, since they create opportunities for tax avoidance and tax competition,
  • Improving access for national parliaments to content of tax rulings,
  • Acting against selective tax benefits for certain companies,
  • Having the European Commission prepare a blacklist, before July 2015, of tax havens and countries whose tax practices distort competition,
  • Suspending or revoking the banking or advisory licenses of accountants, law firms and other financial advisors convicted of tax fraud,
  • Shifting tax burdens away from labor to other forms of taxation, and
  • Improving VAT collection

Mauritius

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Mauritius Budget 2015 Presented

On 23 March 2015, the Mauritian Minister of Finance and Economic Development Seetanah Lutchmeenaraidoo presented the country's Budget 2015. The key tax related measures of the budget are as follows:

Corporate Tax

  • Exemption from corporate income tax and tax deduction at source for 8 years is introduced for SMEs (turnover not exceeding MUR 10 million) registered after 1 January 2015
  • The alternate minimum tax is abolished for all sectors
  • The 50% accelerated allowance for green technology equipment is made permanent
  • Accelerated depreciation for manufacturing is extended to 30 June 2018, including:
    • 100% allowance for equipment costing MUR 50,000 or less
    • 30% reducing balance depreciation for industrial premises for manufacturing
    • 50% straight line depreciation for manufacturing plant and machinery
    • 50% straight line depreciation for research and development
    • 50% straight line depreciation for electronic and high-precision machinery including computer hardware and software
  • The special levy on banks is extended to June 2018

Value Added Tax

  • The VAT registration threshold is increased from MUR 4 million to MUR 6 million
  • A VAT cash accounting scheme is introduced for SMEs
  • Machinery and equipment used in the exploration and production of petroleum products will be exempt from VAT
  • A partial reverse charge mechanism is introduced where government bodies must remit directly a percentage of the VAT due on contracts exceeding MUR 300,000

Administration

  • The standard financial year-end is changed from 31 December to 30 June; returns are still due within 6 months of a company's year-end
  • The maximum penalty for late return filing is reduced from MUR 20,000 to MUR 5,000
  • The late tax payment penalty is reduced from 5% to 2%
  • The interest penalty for late tax payment is reduced from 1% per month to 0.5%
  • The Annual fee payable to the Registrar of Companies will be reduced from MUR 2,500 to MUR 500 for SMEs
  • Private SMEs will be allowed to prepare and file financial statements on a cash basis
  • Large companies (turnover exceeding MUR 100 million) are required to submit a yearly electronic statement detailing all payments for purchased goods and services exceeding MUR 100,000.

Personal Income Tax

The personal income tax exemption thresholds for all individual taxpayers are increased by MUR 10,000.

Proposed Changes (1)

New Zealand

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New Zealand Planning to Expand Taxation of Online Sales

New Zealand is currently working to implement changes to bring more online sales of goods and services under the scope of GST, including the introduction of GST registration requirements for foreign online suppliers. Currently an NZD 400 de minimis amount applies, but even purchases exceeding the amount are often not reported and taxed under the current system.

New Zealand is currently part of an OECD working group on the taxation of online sales. Although the government would prefer to wait for the final report from the group, Prime Minister John Key has stated that government is considering implementing its own online consumption tax policy without waiting for the OCED report.

Treaty Changes (3)

Algeria-Zimbabwe

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Tax Treaty between Algeria and Zimbabwe under Negotiation

Officials from Algeria and Zimbabwe met 24 to 26 March 2015 for the negotiation of an income tax treaty. Any resulting treaty will be the first of its kind between the two countries, and must be finalized, signed and ratified before entering into force.

Bulgaria-United Kingdom

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Tax Treaty between Bulgaria and the UK Signed

According to an announcement by the Bulgarian Ministry of Finance, a new income and capital tax treaty was signed by officials from Bulgaria and the United Kingdom on 26 March 2015. The new treaty will enter into force after the ratification instruments have been exchanged. Once in force and effective, it will replace the 1987 income and capital tax treaty between the two countries, which is currently in force.

Additional details will be published once available.

India-Slovak Republic

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Indian Ministry of Finance Clarifies Application of the Tax Treaty Signed with Czechoslovakia in Respect of Slovakia

On 23 March 2015, India's Ministry of Finance Central Board of Direct Taxes issued Notice 25/2015 clarifying that the 1986 income tax treaty with the former Czechoslovak Socialist Republic applies in respect of the Slovak Republic. The treaty was signed 27 January 1986, entered into force 13 March 1987, and generally applies from 1 January 1985.

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