The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (5)

Brazil

Responsive image

Brazil Converts Program for Reduction of Tax Litigation (PRORELIT) into Law

Brazil's Provisional Measure (PM) 685/2015 was converted into Law 13,202/2015 as published in the Official Gazette on 9 December 2015. PM 685, published 22 July 2015, established the Program for Reduction of Tax Litigation (PRORELIT), a special program to resolve tax disputes (previous coverage). PM 685 also introduced a new requirement that corporate taxpayers disclose tax-planning schemes. However, the disclosure requirement was omitted from the final law.

Denmark

Responsive image

Denmark Passes Legislation for CbC Reporting

The Danish parliament reportedly passed legislation on 18 December 2015 that includes transfer pricing documentation requirements in line with the guidance developed as part of Action 13 of the OECD BEPS Project, including a Master File, Local File and Country-by-Country (CbC) report. The main aspects of the requirements are summarized as follows.

CbC Report Filing Requirement

Danish multinational groups with consolidated revenue of at least DKK 5.6 billion (~USD 822 million) are required to submit the CbC report to the Danish tax authority. If the ultimate parent is a Danish tax resident, the parent submits the report. If the ultimate parent is not a Danish tax resident, a Danish subsidiary of the group is required to submit the report if it has been designated as the reporting entity, or the CbC report is not available from the parent entity's jurisdiction of residence because:

  • The parent is not required to submit a CbC report in the jurisdiction;
  • There is no adequate exchange of information arrangement between Denmark and the parent's jurisdiction of residence for the exchange of the CbC report; or
  • The Danish tax authorities are otherwise unable to obtain the report.

Master File and Local File Requirements

Denmark's current documentation requirements are already largely in line with the new OECD guidance. However, additional information is required concerning tax agreements, intangible assets, and financing.

Effective Date

The new rules will be implemented through a change to the Danish executive order concerning transfer pricing documentation. The rules will apply for tax years beginning on or after 1 January 2016 for groups where the ultimate parent is resident in Denmark, and for tax years beginning on or after 1 January 2017 for groups where the ultimate parent is not resident in Denmark. The first CbC report will be due no later than 12 months following the end of the year concerned.

Ireland

Responsive image

Ireland Enacts Finance Act 2015 including CbC Reporting Requirements

On 21 December 2015, Ireland's President Michael D. Higgins signed into law the Finance Act 2015, which includes measures proposed in the 2016 budget. One of the main measures is the introduction of Country-by-Country (CbC) reporting requirements.

CbC Reporting

CbC reporting requirements are introduced based on the guidance developed as part of Action 13 of the BEPS Project. Under the CbC reporting requirement,  ultimate parent entities of MNE groups with consolidated annual revenue exceeding EUR 750 million are required to submit a CbC report if tax resident in Ireland. The requirement applies for fiscal years commencing on or after 1 January 2016, with the report due within 12 months following the last day of the fiscal year concerned.

The CbC report must include the following information on an aggregate basis for each jurisdiction in which the group operates:

  • Revenue;
  • Profit or loss before income tax;
  • Income tax paid;
  • Income tax accrued;
  • Stated capital;
  • Accumulated earnings;
  • Number of employees; and
  • Tangible assets other than cash or cash equivalents

The CbC report must also include:

  • The identification of each constituent entity of the MNE group concerned,
  • The jurisdiction of tax residence of such constituent entity and, where different from such jurisdiction of tax residence, the jurisdiction under the laws of which such constituent entity is organized, and
  • The nature of the main business activity or activities of such constituent entity.

The Revenue Commission will issue regulations concerning the implementation of the CbC reporting requirements, including the filing requirements of local entities when a foreign ultimate parent entity is not required to file a CbC report, the manner and form in which a CbC report is to be provided, and other matters.

Other Measures

Other key measures of the Finance Act 2015 include:

  • A new knowledge development box regime that is in line with the modified nexus approach of Action 5 of the OECD BEPS Project, with a beneficial rate of 6.25%; and
  • Implementation of the anti-abuse amendment to the EU Parent-Subsidiary Directive, so that the benefits of the Directive will not be granted to an arrangement or series of arrangements that are not genuine and are only made to obtain the benefits of the Directive.

Effective Date

The measures of Finance Act 2015 generally apply from 1 January 2016.

Italy

Responsive image

Italian Parliament Approves 2016 Budget Law including CbC Reporting Requirements

The Italian parliament reportedly approved the 2016 Budget Law on 22 December 2015. The Budget Law includes Country-by-Country (CbC) reporting requirements in line with the guidance developed as part of Action 13 of the OECD BEPS Project.

Under the requirements, the ultimate parent entity of an MNE group that is tax resident in Italy will be required to file the CbC report if:

  • It is required to file a group consolidated financial statement; and
  • Its consolidated annual group revenue is at least EUR 750 million.

If the ultimate parent entity is not an Italian tax resident, the local entity will be required to file the report if:

  • The ultimate parent is resident in a jurisdiction that has not implemented CbC reporting requirements;
  • The ultimate parent is resident in jurisdiction that does not have adequate information exchange with Italy for the exchange of CbC reports; or
  • The Italian tax authorities are otherwise unable to obtain the CbC report.

Penalties of EUR 10,000 to EUR 50,000 will apply for failing to comply with the CbC reporting requirements.

Detailed implementation rules for the CbC reporting requirements will be issued via an implementing decree within 90 days after the Budget Law is promulgated by the president and published in the Official Gazette.

Additional details of the Budget Law and the CbC reporting requirements will be published once available.

Netherlands

Responsive image

Dutch Tax Plan for 2016 Approved by Parliament including CbC Reporting Requirements

Following approval by the House of Representative, the Dutch Senate approved the legislation for the Tax Plan for 2016 on 22 December 2015. The legislation includes the Tax Plan 2016 Bill and the Other Tax Measures 2016 Bill.

Transfer Pricing Documentation Requirements

One of the main measures is the introduction of transfer pricing documentation requirements in line with the guidance developed as part of Action 13 of the OECD BEPS Project. Under the requirements, the ultimate parent entity of a multinational group resident in the Netherlands or a designated surrogate parent entity must file a Country-by-Country (CbC) report if consolidated group revenue in the previous year exceeds EUR 750 million (previous coverage). When required, the report is due within 12 months following the close of the tax year.

The transfer pricing documentation requirements also include Master File and Local File requirements. The Master File and Local File must be submitted when consolidated group revenue in the previous year exceeds EUR 50 million.

Other Measures

Some of the other main measures in the legislation include:

  • EU Parent-Subsidiary Directive amendments concerning hybrid mismatches and anti-abuse are implemented into Dutch law, including the provisions that that the participation exemption will not be granted for dividends if deductible for the distributing subsidiary, or the holdings giving rise to the dividends are held with the main purpose of avoiding taxation;
  • The 10-year exit tax deferral period after which the tax claim is forfeited if the shareholdings are not disposed of or the company has not distributed more than 90% of its reserves is abolished (applies from 15 September 2015); and
  • A step-up in the value of assets to the fair market value is allowed when acquired by a Dutch company resulting from a cross border merger or division where the target of the merger or division is not resident in the Netherlands and the assets do not include shares of a Netherlands-based company.

Click the following link for previous coverage of the other measures.

Effective Date

Aside from the measure regarding the forfeiture of the exit tax claim, the measures in the Tax Plan for 2016 legislation apply from 1 January 2016.

Treaty Changes (5)

Bahrain-Bangladesh

Responsive image

Tax Treaty between Bahrain and Bangladesh Signed

On 22 December 2015, officials from Bahrain and Bangladesh signed 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.

Belgium-Dominica

Responsive image

TIEA between Belgium and Dominica has Entered into Force

According to an update from the Belgian government, the tax information exchange agreement with Dominica entered into force on 24 November 2015. The agreement, signed 26 February 2010, is the first of its kind between the two countries. It applies for criminal tax matters from the date of its entry into force, and for other matters from 1 January 2016.

Germany-Philippines

Responsive image

Tax Treaty between Germany and the Philippines has Entered into Force

According to a release from the Philippine government, the income and capital tax treaty with Germany entered into force on 20 December 2015. The treaty, signed 9 September 2013, replaces the 1983 income and capital tax treaty between the two countries.

Taxes Covered

The treaty covers German income tax, corporation tax, trade tax and capital tax. It covers Philippine income taxes on individuals, corporations, and estates and trusts, and the stock transaction tax.

Service PE

The treaty includes provisions that a permanent establishment will be deemed constituted if a resident of one Contracting State furnishes services in the Other State through employees or other engaged personnel for a period or periods aggregating more than 6 months within any 12-month period.

Withholding Tax Rates

  • Dividends -
    • 5% if the beneficial owner is a company directly holding at least 70% of the paying company's capital;
    • 10% if the beneficial owner is a company directly holding at least 25% of the paying company's capital;
    • Otherwise 15%
  • Interest - 0% for interest paid in connection with the sale of commercial or scientific equipment on credit, or in connection with the sale of goods by an enterprise to another enterprise on credit, otherwise 10%
  • Royalties - 10%

Article 10 (Dividends) includes the provision that a Contacting State may impose a branch profits remittance tax of up to 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 the alienation of shares or similar rights in a company, the assets of which consist directly or indirectly principally of immovable property situated in the other State; and
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State

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

Double Taxation Relief

The Philippines applies the credit method for the elimination of double taxation.

Germany generally applies the exemption method, including for dividends when the beneficial owner is a German company that directly owns at least 10% of the capital of the Philippine payer and the dividends were not deducted by the payer. However, Germany applies the credit method for dividends not meeting the previous conditions, as well as for interest, royalties, and certain other items of income in accordance with German tax law.

Effective Date

The tax treaty applies from 1 January 2016.

The 1983 income and capital tax treaty between the two countries is terminated, but continues to apply for all tax cases that occurred prior to the entry into force of the new treaty.

Seychelles-Singapore

Responsive image

Tax Treaty between Seychelles and Singapore has Entered into Force

On 18 December 2015, the income tax treaty between Seychelles and Singapore entered into force. The treaty, signed 9 July 2014, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Singapore income tax, and Seychelles business tax, income and non-monetary benefits tax, and petroleum tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise of one Contracting State furnishes services in the other State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 365 days within any 15-month period.

Withholding Tax Rates

  • Dividends - 0%
  • Interest - 12%
  • Royalties - 8%

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; and
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State

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.

Effective Date

The tax treaty applies in Seychelles from 1 January 2016. It applies in Singapore in respect of withholding taxes from 1 January 2016 and in respect of other taxes from 1 January 2017.

Article 25 (Exchange of Information) applies in both countries from the date of its entry into force for requests concerning tax periods beginning on or after 1 January 2016.

Slovak Republic-Untd A Emirates

Responsive image

Tax Treaty between Slovakia and the U.A.E. Signed

According to an announcement from the Slovak government, officials from Slovakia and the United Arab Emirates signed an income tax treaty on 21 December 2015. 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.

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