The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (2)

Algeria

Responsive image

Algeria's Finance Law 2016 Published

Algeria's Finance Law 2016 was published in the Official Gazette on 31 December 2015. Some of key measures, which apply from 1 January 2016, are summarized as follows.

Reinvestment Requirements for Incentives

The requirement that taxpayers reinvest profits exempted from corporate tax or tax on business activities under an incentive regime are relaxed. Instead of being required to reinvest all exempted profits, only 30% of the exempted profits must be reinvested within a 4-year period following the year the incentive ends.

Consumption Tax on Imported Goods

If imported goods are exempt from VAT and Customs duties under incentives introduced in the Finance Law 2015 and similar goods are produced locally, then consumption tax at a rate of 5% to 30% will apply.

Foreign Investment Restrictions

Certain requirements under the foreign investment restrictions introduced in 2009 (minimum 51% domestic ownership among others) are relaxed. These include:

  • The requirement that conformity with the 51% domestic ownership rule must be demonstrated when making a change in the commercial registration no longer applies for changes in:
    • Capital structure that does not affect the minimum ownership rule;
    • Activity of the company;
    • Company's address;
    • Members of the board of directors; and
    • Certain other changes; and
  • Foreign funding will be allowed for contributions in an Algerian investment project, subject to government approval and certain conditions.

Reduced Tax Rate for Mining Companies not Adopted

The measure that would have extended the 23% reduced corporate tax rate to the mining sector was not adopted in the final legislation.

Ukraine

Responsive image

Ukraine Issues Guidance on Changes Resulting from the 2016 Budget

Ukraine's State Fiscal Service recently issued a guidance letter clarifying changes implemented as part of the 2016 Budget (previous coverage), including changes to corporate tax reporting and advance payment requirements, and certain deductions. The changes are generally effective from 1 January 2016.

New Tax Reporting Requirements

Under the new requirements, taxpayers must file a quarterly tax return within 40 days following the end of each quarter. However, an annual tax return is instead required within 60 days following the end of the tax year for:

  • Newly created corporate taxpayers;
  • Agricultural producers; and
  • Corporate taxpayers with annual income of UAH 20 million (~USD 800,000) or less in the preceding tax year.

The provision that annual tax returns are due by 1 June is removed.

Advance Corporate Tax Payments

The requirement to estimate and make monthly advance tax payments based on the previous year's income is abolished. However, taxpayers required to file quarterly returns must make an advance payment for the fourth quarter of the year by 31 December. The advance payment is equal to two-ninths of the corporate tax due for the first three quarters of the year, and the calculated amount should be included in the tax return for the third quarter.

Property Tax Deduction

Property tax is made deductible for corporate income tax purposes. However, a taxpayer is not allowed to carry forward any excess property tax paid not used to offset corporate tax liabilities in the current tax period.

Dividends Received Deduction

Dividends received are made deductible from taxable income if received from entities that are required to make advance corporate tax payments on the dividend payments.

Proposed Changes (1)

Romania

Responsive image

Romania Issues Draft Order on Transfer Pricing Documentation Preparation and Submission Requirements

Romania's Ministry of Finance recently issued a draft order for transfer pricing documentation preparation and submission requirements.

Transaction Thresholds

Under the draft order, documentation should be prepared by large taxpayers with aggregate transactions with related parties that equal or exceed the following thresholds, excluding VAT:

  • EUR 200,000 for interest registered for financial services;
  • EUR 250,000 for the provision of services; and
  • EUR 350,000 for transactions consisting of the acquisition/sale of tangible or intangible goods.

For the purpose of determining if the thresholds are met for non-EUR transactions, the exchange rate is the exchange rate of the National Bank of Romania on the last day of the fiscal year concerned.

Preparation and Submission Requirements

For large taxpayers with transactions meeting the above thresholds, transfer pricing documentation should be prepared by the annual tax return deadline. If requested by the tax authorities, the documentation should be should be submitted within 10 days of request, but no sooner than 10 days after the deadline for preparation.

For large taxpayers not meeting the thresholds and other taxpayers with related party transactions, transfer pricing documentation is to be prepared upon request by the tax authorities. The documentation should be submitted within 30 to 60 days of the request, with the possibility for a 30-day extension.

If a taxpayer fails to submit documentation for a transaction by the applicable deadline or the documentation is incomplete, the tax authorities will proceed to make an estimation of the appropriate transfer price and make any necessary adjustments.

Effective Date

The draft order must be finalized and published in the Official Gazette before entering into force, and is to be effective from 1 January 2016.

Treaty Changes (4)

Chile-Uruguay

Responsive image

Tax Treaty between Chile and Uruguay Initialed

On 21 January 2016, officials from Chile and Uruguay initialed an income tax treaty. The treaty is the first of its kind between the two countries, and will enter into force after the ratification instruments are exchanged.

Additional details will be published once available.

France-Germany

Responsive image

Protocol to the Tax Treaty between France and Germany has Entered into Force

The 2015 protocol to the 1959 income and capital tax treaty between France and Germany entered into force on 24 December 2015. The protocol, signed 31 March 2015, is the fourth to amend the treaty. Key amendments are summarized as follows.

Persons Covered

A new paragraph is added to Article 1, specifying that the treaty only applies to persons resident in one or both of the Contracting States, and the meaning of the term "resident of a Contracting State" is amended.

Capital Gains

Article 7 of the treaty, which covers certain capital gains, is replaced in line with Article 13 of the OECD Model, including that the following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
  • Gains from the alienation of shares or comparable rights deriving more that 50% of their value directly or indirectly from immovable property situated in the other State, excluding immovable property used directly for its own business activities

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Dividends

Article 9 of the treaty, which covers dividends, is amended with the addition of a new provision that the beneficial withholding tax rates on dividends provided by the treaty will not apply for dividends paid out of income or gains from immovable property if:

  • Paid by an investment vehicle that distributes most of the income or gains annually;
  • The income or gains from immovable property are tax exempt; and
  • The beneficial owner of the dividends directly or indirectly holds 10% or more of the capital of the investment vehicle paying the dividends.

In such a case, the dividends may be taxed at the rate provided by the domestic laws of the source State.

Double Taxation Relief

Article 20, which covers the elimination of double taxation, is amended with the addition of a new paragraph with the provision that Germany will apply the credit method for certain items of income in accordance with German tax law.

In regard to France, the income covered by Article 20 is changed from "profits and other positive income" to "items of income", and a provision is added that the Article does not cover income that is exempt under French domestic law.

Tax Collection Assistance

Article 23, which covers the assistance in the collection of taxes, is replaced, bringing it in line with Article 27 of the OECD Model.

Mutual Agreement Procedure

Articles 25 and 25(a), which cover mutual agreement procedure and arbitration respectively, are replaced with a new single Article 25 in line with Article 25 of the OECD Model.

Effective Date

The protocol applies from 1 January 2016.

Responsive image

OECD Announces that Over 30 Countries to Sign Multilateral Agreement for the Exchange of CbC Reports

The OECD has issued a press release that over 30 countries are to sign the Multilateral Competent Authority Agreement for the exchange of Country-by-Country (CbC) reports on 27 January 2016.

---

22/01/2016 - Ministers and top tax officials from more than 30 countries will sign an international agreement at the OECD on Wednesday 27 January 2016 that will significantly advance the fight against corporate tax avoidance.

OECD Secretary-General Angel Gurría and French Finance Minister Michel Sapin will brief the media at 17:00 at the OECD, after which Mr. Sapin and representatives of more than 30 countries will sign the Multilateral Competent Authority Agreement (MCAA).

This is the first signing ceremony for adhesion to the MCAA, which will facilitate automatic exchange of Country-by-Country reporting called for in the OECD/G20 Base Erosion and Profit Shifting Project.

The MCAA will enable consistent and swift implementation of new transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan, ensuring that tax administrations obtain a complete understanding of the way multinational enterprises (MNEs) structure their operations, while also ensuring that the confidentiality of such information is safeguarded.

---

Additional details will be published once available.

Qatar-Turkey

Responsive image

Tax Treaty Negotiations between Qatar and Turkey Concluded

Officials from Qatar and Turkey have concluded income tax treaty negotiations with the initialing of a treaty on 21 January 2016. The treaty must be signed and ratified before entering into force, and once in force and effective, will replace the 2001 income tax treaty between the two countries, which currently applies.

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

Translate Documents

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, 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