China signs FTA with Maldives

On 7 December 2017, witnessed by President Xi Jinping and Maldivian President Abdulla Yameen Abdul Gayoom, China International Trade Representative and Vice Minister of Commerce Fu Ziying and Maldivian Minister of Economic Development Mohamed Saeed, on behalf of their own government, signed the Free Trade Agreement (FTA) between the Government of the People’s Republic of China and the Government of the Republic of Maldives at the Great Hall of the People. China-Maldives FTA is the …

China, Georgia FTA enters into Force

On 1 January 2018, the Free Trade Agreement (FTA) between China and Georgia entered into force and implemented. China-Georgia FTA is the first FTA China has signed with Eurasian countries as well as the first Free Trade Agreement China has initiated and achieved since the Belt and Road Initiative was put forward. The negotiation on China-Georgia FTA was launched in December 2015, and the agreement was signed in May 2017. After the agreement has gone …

US: IRS updates information concerning country-by-country (CbC) reporting

On 18 January 2018, the IRS issued a release announcing updates and information regarding country-by-country (CbC) reporting requirements in the United States. Under the update list, IRS publishes new content on Country-by-Country (CbC) reporting which is now available on CbC Reporting FAQs pages. A status update of jurisdictions with recently signed Competent Authority Arrangements for the exchange of CbC reports. In addition, IRS issues a reminder for U.S. multinational enterprises (MNEs) filing paper versions of …

Vietnam considers special tax for sweet drinks

The Ministry of Finance is proposing to levy a special consumption tax of 10% on sweet drinks to combat child and adult obesity rates. It is part of a ministry proposal to revise five tax laws, including a value-added tax (VAT), special consumption tax, corporate income tax, personal income tax and natural resources protection tax. In August last year, the ministry issued a proposal to place excise tax on sweetened drinks. This time, the authority …

US: Government signs joint statement on exchange of country-by-country tax reports with France

On January 12, the IRS announced on its website that the US and French competent authorities would like to sign a joint statement to spontaneously exchange CbC reports submitted by their respective taxpayers. The Competent Authorities desire to exchange CbC Reports pursuant to the Convention and subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged under the Convention. The Competent Authorities are …

Pakistan: Government has withdrawn sales tax and customs duty on cotton imports

On 5 January 2018, the Economic Coordination Committee (ECC) of the Cabinet approved withdrawal of sales tax and customs duty on import of cotton effective from 8 January 2018. The ECC also granted approval for issuance of GoP Sovereign Guarantee for Rs39,000 million for construction of two 660 MW coal power projects at Jamshoro. The approval has been granted after third party evaluation of the project and authentication of the projected demand and supply data …

Hong Kong signs AEOI agreement with France

According to an announcement published on 15 January 2018, Hong Kong has signed an agreement with France on the automatic exchange of financial account information in tax matters (AEOI). The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Multilateral Convention) will be the main platform for Hong Kong to exchange CbC Reports with other jurisdictions. For this, the Government introduced the Inland Revenue (Amendment) (No. 5) Bill 2017 into the LegCo on 18 …

US: IRS issues additional guidance for computing the “transition tax” on foreign earnings

On 19 January 2018, the Treasury Department and the Internal Revenue Service issued additional guidance (Notice 2018-13) for computing the “transition tax” on the untaxed foreign earnings of foreign subsidiaries of U.S. companies under the Tax Cuts and Jobs Act. On Dec. 29, 2017, the Treasury Department and the IRS provided initial guidance on computing the transition tax in Notice 2018-07. Additional notice describes regulations that the Treasury Department and the IRS intend to issue, …

UK: Research on knowledge and use of VAT partial exemption

HMRC commissioned a telephone survey of almost two thousand VAT registered businesses representing 17 different industry sectors. The aim was to explore their knowledge and use of VAT partial exemption and to gain information on rates of VAT recovery in those industrial sectors. The survey was carried out in 2016 and the findings were included in a report published on the UK government website in January 2018. VAT incurred on goods and services used to …

UK: Research on small producers and importers of soft drinks

The introduction of an industrial levy on the production and import of sugary drinks was announced in the 2016 Budget and is to come into force in April 2018. In connection with the planned levy on sugary drinks HMRC commissioned research on small producers and importers of soft drinks to find out how they operate in the market for sugary drinks and the potential act the planned soft drinks levy would have. The research looked …

IMF report recommends further reforms in Ethiopia

On 17 January 2018 the International Monetary Fund (IMF) issued a report following the conclusion of consultations with Ethiopia under article IV of the IMF’s articles of agreement. Ethiopia’s average annual GDP growth has been around 10% in the past decade buoyed by government investment in agriculture and infrastructure. GDP growth for 2016/17 is estimated at 9%, following severe drought conditions in the previous year. Foreign direct investment grew by 27.6% in 2016/17 with investment …

Jamaica: TAJ revised the income tax return forms and due date

Tax Administration Jamaica wishes to advise that the deadline to file Final Income Tax Returns forms for the year of assessment 2017 has been extended until 15 March 2018. TAJ also stated that the revisions are improvements which will allow the forms to capture salient and relevant information, while maintaining the functionality of the online filing process. Similarly, any income tax due for the year of assessment 2017 and the first quarterly instalment of estimated …

Greece: Tax Authority publishes a Circular POL.1209/2017 on tax evasion

The Independent Public Revenue Authority has issued the Circular POL.1209/2017 on December 20, 2017. With the help of POL 1209/2017, the Authority gives supplementary instructions on the submission of complaints about tax evasion fraud in income tax. As stated in the circular, it has been accepted tax evasion of income arises when tax deductible income is hidden and not simple accounting differences, unrelated to such concealment. Again, in case of petition submission, it will be …

Malaysia: IRBM updates the rules for CbC reporting

The Inland Revenue Board (IRB) has recently published an amendment to the country-by-country (CbC) rules. Among the changes, the amended CbC rules include revised measures regarding entities having cross-border transactions with other constituent entities. The rules also define the constituent entities by including ultimate holding entity, constituent entity, surrogate holding entity and a permanent establishment in Malaysia.

EU Finance Ministers to review tax haven blacklist

It is reported that the EU Economic and Finance Ministers (ECOFIN) will at their meeting on 23 January 2018 remove some countries from the EU’s blacklist of tax havens following commitments made by the countries to improve their tax policy. It has been suggested that countries to be removed from the blacklist may include Panama and South Korea. The EU Finance Ministers agreed on a blacklist of 17 tax haven countries at their meeting in …

UK: Increase in average length of tax investigations of large companies

It was reported on 15 January 2018 that recent figures from HMRC indicated an increase in the length of time taken to conduct tax investigations of large companies in the UK. In the year to 31 March 2017 the average length of time for investigations into large companies was 34 months, up from 31 months in the previous year. This reflects the strengthened approach by HMRC to tax avoidance by large corporates and an unwillingness …

World Bank presents proposals for improving tax collection in the Dominican Republic

A report issued by the World Bank on 17 January 2018 entitled Gearing up for a More Efficient Tax System in the Dominican Republic presents proposals for raising the level of tax collection. The report notes that tax is lost to a greater extent than other countries in the region through fiscal evasion, fraud and poor management of the country’s Transfer of Industrialized Goods and Services Tax (ITBIS). Economic growth in the Dominican Republic is …

IMF report comments on the economic position of Croatia

On 16 January 2018 the International Monetary Fund (IMF) published a report following the conclusion of consultations with Croatia under article IV of the IMF’s articles of agreement. Croatia experienced its third year of positive economic growth in 2017 with the help of strong tourism and private consumption combined with positive effects from the economic growth of its trading partners and improved confidence. Economic growth is projected to remain at similar levels in the short …

Panama signs agreement for exchange of financial account information

On 15 January 2018 Panama signed the CRS Multilateral Competent Authority Agreement (CRS MCAA), the agreement for implementing the automatic exchange of financial account information under the Multilateral Convention on Mutual Administrative Assistance. Panama is therefore committed to the automatic exchange of financial account information under the OECD/G20 Common Reporting Standard (CRS). Exchanges of information under the standard are to begin in September 2018. The signing of the agreement will allow Panama to engage in bilateral exchange relationships with the other signatories of the …

Philippines: DoF releases the second package of the tax reform bill

The Philippines Department of Finance (DOF) released the second package of the tax reform on 9 January 2018, as part of the country’s broader Comprehensive Tax Reform Program (CTRP). Under the Package Two, the DOF aims to lower the CIT rate from 30% to 25% and changes to make incentives more performance-based, targeted, time-bound, and transparent. The DOF plans to submit a revenue-neutral proposal for the corporate tax reforms to the House of Representatives by …

IMF report comments on economic position of Tanzania

On 10 January 2018 the International Monetary Fund (IMF) completed the final review of Tanzania’s economic performance under a program supported by the Policy Support Instrument (PSI). Recently Tanzania’s economy has had a mixed performance and although GDP growth is high there have been signs of a weakening of economic activity. Tax revenue collections have been lower than expected. There are also short term risks from slow implementation of the budget, a difficult business environment …

Spain amends the CbC reporting rules to align with EU Directive

On 30 December 2017, Royal Decree 1074/2017 amending the corporate tax rules and other provisions was published in the Official Journal. Royal Decree 1074/2017 amends, among other things, the Spanish CbCR rules in order to better align them with EU Directive 2016/881. In particular, the Royal Decree clarifies that Spanish companies or resident in Spain PEs belonging to a multinational group are not subject to Spanish CbCR reporting requirements if: (i) the multinational group has …

Hong Kong publishes a bill to implement transfer pricing documentation

On 29 December 2017, Inland Revenue (Amendment) (No. 6) Bill 2017 published in order to sets out rules on transfer pricing documentation including country-by-country reporting, and contains other measures to implement the minimum standards under BEPS.  Under the Bill, Hong Kong constituent entities of a group will be required to prepare a master file for each accounting period beginning on or after 1 April 2018. Exemption thresholds for master file remain the same as previously …

US: IRS issues guidance for computing the “transition tax” on foreign earnings

On 29 December 2017, the Treasury Department and the Internal Revenue Service issued Notice 2018-07, which provides guidance for computing the “transition tax” under recent tax legislation enacted on Dec. 22, 2017. In general, newly-issued Section 965 of the Internal Revenue Code provides for transitional taxation of untaxed foreign profits of foreign subsidiaries of US companies by treating these earnings as repatriated. Foreign income in the form of cash and cash equivalents is taxed at …

US: The Nation’s tax season will begin 29 January 2018

On January 4, 2018, the Internal Revenue Service announced that tax collection will begin on Monday, January 29, 2018, and taxpayers are reminded of certain tax credits that the refunds will not be available until the end of February. The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers …