Get an immediate FREE trial of Orbitax's International Tax Research & Compliance Expert (ITRCE) software for 7 days.

The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (2)

Brazil

Responsive image

Update - Brazil's New Progressive Capital Gains Tax Rates Effective Date

As previously reported, Brazil recently passed legislation introducing a progressive capital gains tax of 15% to 22.5%. The progressive rates were originally introduced in Provisional Measure 692/2015 and were to apply from 1 January 2016. However, in the final legislation the president vetoed the provision for that effective date due to constitutional issues. Under Brazil's Federal Constitution, the new rates could only apply from 1 January 2016 if the provisional measure had been converted into law in 2015. Because of this, the new rates are to apply from 1 January 2017.

Note - The previous report on the legislation has been amended to reflect this.

United Kingdom

Responsive image

Scotland Act 2016 Passed by UK Parliament and Receives Royal Assent

The Scotland Act 2016 was passed by the UK Parliament on 23 March 2016 and received Royal Assent the same day. The Act provides for the devolution of several powers to the Scottish Parliament. The powers devolved concern:

  • Setting Scottish income tax rates and  thresholds;
  • Assigning a portion of UK value added tax to the Scottish budget;
  • Administration of the Universal Credit and certain other benefits of the welfare system; and
  • Certain other areas.

While the various sections of the Act generally enter into force on the date the Act was passed or two months after that date, most of the tax-related provisions require additional regulations from Treasury and the welfare provisions require regulations from the Secretary of State.

Click the following link for additional information on Scotland Act 2016 on the Parliament.UK website.

Proposed Changes (1)

Israel

Responsive image

Committee of Israel's Knesset Approves Making Tax Evasion a Predicate Offense of Money Laundering

On 29 March 2016, the Constitution, Law, and Justice Committee of Israel's Knesset (parliament) approved legislation making intentional tax evasion a predicate offense of money laundering. If approved by the full Knesset, it would result in greater penalties for tax evasion, including prison sentences of up to 10 years and the possible confiscation of assets. The greater penalties would apply for income tax evasion exceeding ILS 1 million in a single year or ILS 2.5 million over four years, as well as underpayment of value added tax exceeding ILS 170,000 in a single year or ILS 480,000 over four years.

Treaty Changes (4)

Cyprus-Hong Kong

Responsive image

Tax Treaty between Cyprus and Hong Kong to be Negotiated

According to a recent update from the Hong Kong Inland Revenue Department, officials from Cyprus and Hong Kong will meet 29-31 March 2016 for the first round of negotiations for an income tax treaty. Any resulting treaty would be the first of its kind between the two country jurisdictions, and would need to be finalized, signed and ratified before entering into force.

India-Korea, Rep of

Responsive image

Update - New Tax Treaty between India and South Korea

The new income tax treaty between India and South Korea was signed 18 may 2015. Once in force and effective, the new treaty will replace the 1985 tax treaty between the two countries, which is currently in force.

Taxes Covered

The treaty covers Indian income tax, including any surcharge thereon, and Korean income tax, corporation tax, and the special tax for rural development.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services in a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 183 days within any 12-month period.

Withholding Tax Rates

  • Dividends - 15%
  • Interest - 10%
  • Royalties - 10%
  • Fees for technical services (managerial, technical or consultancy) - 10%

Capital Gains

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 alienation of movable property forming part of the business property of a permanent establishment in the other State;
  • Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally (more than 50%) of immovable property situated in the other State; and
  • Gains from the alienation of shares, other than the above, in a company resident in the other State if the alienator held directly or indirectly 5% of the capital of the company at any time during the 12-month period preceding the alienation

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

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Limitation on Benefits

Article 28 (Limitation on Benefits) includes the general provision that no person will be entitled to the benefits of the treaty if its affairs were arranged with the main purpose or one of the main purposes of avoiding taxes to which the treaty applies.

In addition, Article 28 includes the provision that a resident of a Contracting State will not be entitled to the benefits of Articles 10 (Dividends), 11 (Interest), 12 (Royalties and Fees for Technical Services), 13 (Capital Gains) and 22 (Other Income), if:

  • The resident is directly or indirectly controlled by one or more person that are not resident of that Contracting State; or
  • It was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims, or other rights in respect of which the income is paid was to take advantage of those Articles by means of that creation or assignment.

Entry into Force and Effect

The treaty will enter into force once the ratification instruments are exchanged, and will apply in India from 1 April of the year following its entry into force and in South Korea from 1 January of the year following its entry into force.

The 1985 tax treaty between the two countries will cease to have effect on the dates the new treaty is effective.

Latvia-Japan-Singapore-South Africa-Switzerland-Vietnam

Responsive image

Latvia Provides Update on Tax Treaty and Protocol Negotiation Status

On 1 March 2016, the Latvian Ministry of Finance published an update on the status of current tax treaty and protocol negotiations. According to the update, Latvia has initialed an income tax treaty with Vietnam and a protocol to the 2002 income and capital tax treaty with Switzerland. In addition, negotiations are underway for tax treaties with Japan and South Africa, as well as a protocol to the 1999 income tax treaty with Singapore.

The treaties will be the first of their kind between Latvia and the respective countries, and the protocols will be the first to amend the respective treaties. All will need to be finalized, signed and ratified before entering into force.

Slovak Republic-Egypt

Responsive image

Slovakia Intends to Negotiate Tax Treaty with Egypt

On 19 March 2016, Slovakia expressed its intent to negotiate an income tax treaty with Egypt during a meeting between officials from the two countries on strengthening bilateral relations. Any resulting treaty would be the first of its kind between the two countries, and would need to be finalized, signed and ratified before entering into force.

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

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

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