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Approved Changes (1)

European Union-Belgium-Finland-France-Guernsey-Ireland-Jersey-Latvia-Luxembourg-Malta-Netherlands-Slovak Republic-United Kingdom

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EU Special Committee on Tax Rulings Publishes Country Responses to Information Request

On 26 June 2015, the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE Committee) published the responses of jurisdictions to the Committee's request for information tax ruling practices made in April 2015. The TAXE Committee was formed earlier in the year to investigate the tax rulings of EU Member States that are seen as unfair, especially those given for large multinationals.

A few response letters were quite extensive, including over 200 pages from Guernsey, Luxembourg and the Netherlands, while most others were 10 pages or less. Click the following links for the responses published from each country:

The TAXE Committee will hold a meeting on 2 July 2015 with Commission President Jean-Claude Junker and Tax Commissioner Pierre Moscovici to discuss the country responses and other tax ruling issues.

Proposed Changes (2)

European Union

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EU Joint Transfer Pricing Forum Considering Coordinated Implementation of BEPS Transfer Pricing Reporting Requirements in the EU

According to recent reports, members of the EU Joint Transfer Pricing Forum have agreed to some level of coordination for the implementation in the EU of the new transfer pricing reporting guidelines developed under Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) Project. The coordination was discussed during a 25 June 2015 Forum meeting, which focused mainly on the implementation of the country-by-country reporting requirements, although implementation of the master file and local file requirements was discussed as well. The Forum discussion follows a public consultation launched by the EU Commission on an EU-wide implementation of the Action 13 guidelines, which will end 13 September 2015 (previous coverage).

EU countries that have already begun the process of implementing the new guidelines include Poland, Spain and the UK.

Singapore

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Singapore Launches Public Consultation on Changes to the Income Tax Act

On 26 June 2015, the Inland Revenue Authority of Singapore published the following notice requesting comment on proposed amendments to the Income Tax Act.

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The Ministry of Finance is conducting a public consultation on the draft Income Tax (Amendment) Bill 2015 from 26 June to 24 July 2015 to invite interested parties to provide feedback on the Bill.

Proposed Amendments

2. The proposed amendments to the Income Tax Act (“ITA”) mainly relate to the changes announced in the 2015 Budget Statement. The key changes include:

a) Extend and enhance the Merger & Acquisition (“M&A”) scheme for five years till 31 March 2020 to provide greater support to SMEs in their strategic acquisitions. The M&A allowance rate was increased from 5% to 25%, with the acquisition cost cap lowered from $100 million to $20 million. The total amount of the M&A allowance remains unchanged at $5 million;

b) Introduce a new International Growth Scheme, to provide more targeted support for internationalisation activities undertaken by larger Singapore companies via a concessionary tax rate of 10% for five years till 31 March 2020;

c) Enhance the Double Tax Deduction for Internationalisation scheme to cover qualifying manpower expenses incurred for Singaporeans posted to new overseas entities;

d) Enhance progressivity of the personal income tax rate structure by increasing the marginal tax rates for resident individual taxpayers with chargeable income exceeding $160,000, and introducing a new 22% tax rate, with effect from YA 2017; and

e) Extend the 250% tax deduction for qualifying donations for three years from 1 January 2016 to 31 December 2018, to instill a culture of giving. The tax deduction rate will be further enhanced to 300% for qualifying donations made in 2015 as part of the SG50 jubilee celebration.

3. The Income Tax (Amendment) Bill 2015 also provides for refinements to existing tax policies and tax administration arising from on-going reviews of Singapore’s income tax system. These refinements include 16 changes, such as to:

a) Exempt from tax the deemed withdrawals from Supplementary Retirement Scheme (“SRS”), of up to $400,000, upon death or on the ground of terminal illness. This is to ensure parity on the amount of SRS savings that could have been withdrawn tax-free had the amount been withdrawn over the full 10-year period. The change ensures that the SRS member is not unduly disadvantaged in the event of death or terminal illness;

b) Align the personal income tax rate for individual non-tax-residents to the new top marginal tax rate of individual tax residents of 22%.

Consultation Details

4. The public can access the detailed consultation documents for the draft Income Tax (Amendment) Bill 2015 on the Ministry of Finance's website (www.mof.gov.sg) and the REACH consultation portal (www.reach.gov.sg). Respondents may send their comments to the Ministry of Finance directly via the website, email, fax or post.

Ministry of Finance

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Treaty Changes (4)

Argentina-Georgia

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MOU on Exchange of Information Signed between Argentina and Georgia

On 23 June 2015, officials from Argentina and Georgia signed a memorandum of understanding on information exchange. The MOU is the first of its kind between the two countries and was signed along with a number of other agreements in order to increase cooperation.

Colombia-France

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Tax Treaty between Colombia and France Signed

On 25 June 2015, officials from Colombia and France 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.

Guernsey-Italy

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TIEA between Guernsey and Italy has Entered into Force

The tax information exchange agreement between Guernsey and Italy entered into force on 10 June 2015. The agreement, signed 5 September 2012, is the first of its kind between the two jurisdictions and is in line with the OECD standard for information exchange. It applies for criminal tax matters from the date of its entry into force, and for other tax matters for tax periods beginning on or after that date.

Seychelles-OECD

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Seychelles Deposits Ratification Instrument for Mutual Assistance Convention

On 25 June 2015, Seychelles deposited the ratification instrument for the OECD-Council of Europe Convention on Mutual Administrative Assistance in Tax Matters as amended by the 2010 protocol. The convention as amended was signed by Seychelles on 24 February 2015, and will enter into force in the country on 1 October 2015.

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