Worldwide Tax News
Argentina Sets Minimum and Maximum Basis for Employee Social Security Contributions
On 19 September 2017, Argentina published Resolution 176-E/2017, which sets the minimum and maximum basis for employee social security contributions. Effective 1 September 2017, the minimum basis is monthly salary of ARS 2,520.60 and the maximum basis cap is monthly salary of ARS 81,918.55. The employer social security contribution is generally 23% of gross salary or 27% if engaged in service activities, while the employee contribution is fixed at 17% of gross salary, subject to the minimum and maximum basis.
Czech Republic Publishes Law and Decree on CbC Reporting
On 19 September 2017, the Czech Republic published Act No. 305/2017 amending Act no. 164/2013 on International Cooperation in Tax Administration and related acts for the purpose of Country-by-Country (CbC) reporting, as well as the Decree 306/2017 on the CbC report content and instructions. The Act, which was approved by parliament on 16 August 2017 (previous coverage), transposes Council Directive (EU) 2016/881 to require CbC reports for MNE groups meeting the standard EUR 750 million threshold. The Decree provides the standard CbC reporting tables, as well as general instructions on the purpose of CbC reports, period covered, data sources, etc., and specific instructions on the information required in each CbC report table.
Click the following link for the 19 September edition of the Official Gazette (Czech language) in which Act No. 305/2017 and Decree 306/2017 were published.
Greece Clarifies Cases Subject to Tax Audit in 2017
The Greek Public Revenue Authority has published a decision dated 15 September 2017 concerning which cases may be subject to an audit for income tax purposes in 2017. The decision is in relation to the Supreme Administrative Court ruling that the retroactive application of rules extending the statute of limitations within which a tax assessment may be issued is unconstitutional (previous coverage). The decision provides that cases may be subject to audit in relation to tax periods beginning in (from) the following years, subject to conditions:
- 2001, if an income tax return was not filed;
- 2006, if additional information has become available;
- 2008, if involving tax evasion; and
- 2011, 2012, and 2013, based on standard five-year statute of limitations.
Click the following link for the decision (Greek language).
Swiss Voters Reject Increased VAT Rate to Fund Pension Reforms
In a public referendum held 24 September 2017, Swiss voters rejected pension reforms that would have included a 0.3% increase in the standard value added tax (VAT) rate to fund retirement benefits. Without the increase, the standard rate will be reduced to 7.7% from 1 January 2018 as previously announced.
Dutch Tax Plan for 2018 - Individual Income Tax Measures
The Dutch Budget and Tax Plan for 2018 were presented to parliament on 19 September 2017 (previous coverage). Individual income tax measures include:
- Tax brackets and rates (individuals younger than 66) will be as follows:
- up to EUR 20,142 - 36.55% (including social security)
- over EUR 20,142 up to 33,394 - 40.85% (including social security)
- over EUR 33,994 up to 68,507 - 40.85%
- over 68,507 - 51.95%
- The deemed employment of non-executive directors for wage tax purposes will be abolished;
- For the purpose of determining excessive severance payment (subject to 75% tax rate), revocable stock options granted in the year before the year of termination will be included in order to prevent the use of such options to circumvent the 75% rate;
- Adjustments will be made for the wage tax liability of qualifying non-residents (at least 90% from the Netherlands) by removing the social security contribution component in calculating rebates in order to ensure that excessive rebates are not provided (if entitled to additional rebate, it will be corrected with the final tax return); and
- Various tax credit/rebate adjustments will be made.
Subject to approval in parliament, the measures will apply from 1 January 2018.
Trinidad and Tobago Planning Temporary Land Tax
According to recent reports, the Ministry of Finance of Trinidad and Tobago is planning to introduce a temporary land tax that would be levied at flat rates on the value of land from 1 October 2017 to 30 September 2019, with the rate depending on the nature of the land's use. Details of the tax will likely be included as part of the 2017/18 National Budget, which is to be presented the beginning of October.
Big Six U.S. Tax Reform Plan Expected Soon
The U.S. tax reform plan that has been under development by the so-called "Big Six" group of Republican leaders from the House and Senate is expected to be released on 27 September 2017. Preliminary aspects of the plan for corporate reform reportedly include:
- Reducing the corporate tax rate to 20%;
- Setting a 25% top tax rate for pass-through entities;
- Introducing a reduced repatriation tax rate in the range of 3.5% to 8.75% payable over a period of eight years;
- Changing to a territorial tax system;
- Allowing immediate expensing of new machinery and inventories; and
- Repealing the alternative minimum tax.
With respect to individual reform, the plan is expected to follow the basic principles put forward by the Trump administration, such as simplifying the rate structure, doubling the standard deduction, reducing the top rate, etc. However, there has been disagreement on how much rates should be reduced, whether the estate tax should be repealed, and whether the mortgage interest deduction and state and local tax deductions should be disallowed.
Additional details will be published once the Big Six plan is unveiled.
TIEA between Belize and the Czech Republic has Entered into Force
The tax information exchange agreement between Belize and the Czech Republic entered into force on 14 September 2017. The agreement, signed 12 February 2016, is the first of its kind between the two countries. It applies on the date of its entry into force for criminal tax matters and for other matters for any taxable period beginning on or after 1 January 2018.
TIEA between Guernsey and Uruguay to Enter into Force
The pending tax information exchange agreement between Guernsey and Uruguay will enter into force on 6 October 2017. The agreement, signed 2 July 2014, is the first of its kind between the two jurisdictions. It applies on the date of its entry into force for criminal tax matters and for other matters for taxable periods beginning on or after that date or, where there is no taxable period, all charges to tax arising on or after that date.
Tax Treaty between Macedonia and Malta to be Negotiated
On 19 September 2017, officials from Malta and Macedonia met to discuss bilateral relations and cooperation, including the negotiation of an income tax treaty. Any resulting treaty would be the first of its kind between the two countries, and must be finalized, signed, and ratified before entering into force.