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Approved Changes (3)

Brazil

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Brazil Extension of Bad Credit Write-Off Limit Provisions Converted into Law

On 20 January 2015, Brazil published Law 13,097/2015 which converts into law Provisional Measure 656/2014. One of the key aspects of the law is changes in bad credit write-off limits for taxpayers using the actual taxable income method to determining their tax base. The limits are as follows:

  • Unguaranteed debt up to BRL 15,000 per transaction if outstanding for over 6 months whether or not judicial action has been taken for recovery
  • Unguaranteed debt up to BRL 100,000 per transaction if outstanding for over 1 year and administrative collection procedures have been taken
  • Unguaranteed debt exceeding BRL 100,000 per transaction if outstanding for over 1 year and judicial action has been taken for recovery
  • Guaranteed debt up to BRL 50,000 per transaction whether or not judicial action has been taken for recovery or the guarantee was executed
  • Guaranteed debt exceeding BRL 50,000 per transaction if outstanding for over 2 years and judicial action has been take for recovery or the guarantee was executed
  • No limit applies when:
    • the debtor is insolvent and the insolvency has been declared by a court,
    • the debtor is bankrupt and the taxpayer has reported its credit in the bankruptcy process, or
    • the debtor is undergoing judicial reorganization (no limit on amounts exceeding the amount accepted for payment in the recovery plan)

In general, the new bad credit write-off limits apply for debts in default from 8 October 2014. However, the limits in regard to insolvent and bankrupt debtors, and those undergoing a judicial reorganization also apply for debt in default prior to that date.

Czech Rep

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Czech Republic Publishes Overview of Key VAT Changes for 2015

On 12 January 2015, the Czech General Tax Directorate published an overview of key amendments to the VAT Act that are in force from 1 January 2015. Key changes include:

  • The introduction of the Mini One Stop Shop for VAT payers to register when supplying B2C telecommunications, broadcasting, and electronic services to individual persons located in the EU
  • The introduction of the 10% reduced VAT rate for certain infant foods, certain pharmaceuticals including vaccines, books and certain other printed materials as long as advertising does not exceed 50% of the publication's content, and certain inputs for the production of some gluten-free food products and food products for sufferers of Phenylketonuria
  • The reverse charge mechanism is extended for certain goods when the value of supplies exceeds CZK 100,000, including:
    • Corn, oilseeds and sugar beet;
    • Metals, including precious metals;
    • Mobile phones;
    • Integrated circuits, such as microprocessors and central processing units;
    • Portable automatic data processing devices, such as notebooks, tablets, etc.; and
    • Videogame consoles

A planned reduction in the VAT registration threshold from CZK 1 million in supplies in the previous 12 months to CZK 750,000 was canceled.

Senegal

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Senegal's Increased Minimum Tax Cap

In October 2014, Senegal approved the Amended Finance Law for 2014. Included in the Law is an increase in the maximum cap for the country's annual minimum tax (Impôt minimum forfaitaire), which is levied at a rate of 0.5% on annual turnover of the previous year. The cap is increased from CFA 5 million to CFA 20 million, and applies with retroactive effect from 1 January 2014.

Proposed Changes (1)

United Kingdom

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UK Policy Paper Published Including Draft Legislation for Devolving Income Tax and Other Powers to Scotland.

On 22 January 2015, the UK Government published Scotland in the United Kingdom: An enduring settlement, a policy paper including draft legislation devolving more powers to the Scottish Parliament.

Some of the key measures covered include:

  • The Scottish Parliament will have the power to set the rates of Income Tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers without restriction, but the tax will continue to be collected and administered by HMRC
  • The receipts raised in Scotland by the first 10 percentage points of the standard rate of Value Added Tax (VAT) will be assigned to the Scottish Government’s budget, and it is proposed the that the first 2.5 percentage points of the reduced rate also be assigned to the Scottish Government's budget - VAT rates will continue to be set at a UK-wide level
  • Substantial elements of the UK welfare system are to be devolved to Scotland, including certain administrative power in regard to the Universal Credit, as well as powers over a number of other welfare benefits including benefits for carers, disabled people and those who are ill,  the Regulated Social Fund, Discretionary Housing Payments, and the power to create new benefits

Other areas include that UK legislation will state in law that the Scottish Parliament and Government are permanent and given powers over how they are elected and run, and the role the Scottish Parliament and Government will have in regard to UK broadcasting and communications, transport, energy, managing the Crown Estate and others.

The draft legislation in the policy paper will be brought forward in a new Scotland Bill in the next session of the UK Parliament and will be finalized in the coming months.

Click the following link for the policy paper - Scotland in the United Kingdom: An enduring settlement.

Treaty Changes (1)

Belgium-Czech Rep

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Protocol to the Tax Treaty between Belgium and the Czech Republic has Entered into Force

On 13 January 2015, the protocol to the 1996 income and capital tax treaty between Belgium and the Czech Republic entered into force. The protocol, signed 15 March 2010, brings the Exchange of Information article (26) of the treaty in line with the OECD standard for information exchange.

The protocol applies from 1 January 2016.

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