World Tax Brief: April 2017

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UK Corporate income tax rate: The corporate income tax rate in the UK has been reduced to 19% from the current 20% rate starting from 1st April 2017, in order to support investment, growth and job creation. Further, the main rate of corporation tax will be cut again to 17% by 2020, by far the lowest in the G20 and benefiting over 1 million businesses.
Incentives: According to the Chancellor’s announcement in the Autumn Statement that the government introduced the new corporation tax relief for museums and galleries. The relief will be reduced to 20% for non-touring exhibitions and 25% for tour exhibitions. The relief will be capped at £ 500,000 of the qualifying expenses per exhibition.
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US Corporate income tax rate: President Donald Trump has proposed a significant reduction of corporation tax rates to 15% from the current 35% rate. Under the Trump tax scheme, the United States would be bound by the fourth-lowest tax rate of developed nations between Germany and Poland. He also proposes a 10% tax on more than $ 2.6 trillion in the revenue that US companies have stored offshore. This would allow companies to bring money from overseas to the US with a slightly lower, one-off tax.
Alternative minimum tax:  The President also proposes the abolition of the so-called alternative minimum tax. The decade-long tax, which has been enacted to ensure that the rich pay their fair share, costs Trump 31 million dollars in 2005.
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Turkey Incentives: Turkey has introduced a new law on the reshuffle of certain public claims and the amendment of certain laws and cabinet regulations. The law allows legitimate taxpayers to benefit from tax relief if they fulfil certain conditions. The new tax relief is intended to promote the compliance level of taxpayers and allow them to benefit from a 5% tax deduction from their annual tax.
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China Corporate tax rate: The government of China plans new tax cuts to reduce the burden on businesses, support innovation and stabilise growth. On 19 April 2017, tax cuts were approved at a State Council executive meeting, after the government announced measures to decrease business costs in the first quarter.
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Brazil Withholding tax: Recently, the Brazilian tax Authorities published a withholding tax guideline ( Solução De Consulta No. 153/2017 of 2 March 2017) in order to confirm that the triggering event for the specified transaction tax the import of services should be considered when the income will be economic or legal Be available to the foreign creditor.
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Dominican Republic Incentives:  The Directorate General of Internal Taxation has recently introduced the expansion of fiscal support for the agricultural sector, which frees them from the payment of advances on income tax, the payment of the tax on assets and the inclusion of income tax on payments by the state.
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Germany Refund: Recently, the German tax administration has published an updated guidance on the tax refund procedure for non-residents to claim a refund of withholding tax on portfolio dividends. According to the new procedure, as from 1 January 2017, the income from dividends subject to a residual tax rate of 15% under an agreement.
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Hong Kong Filing return: The Inland Revenue Department of Hong Kong has recently published a list of major changes in profit tax return form [BIR51] for the year of 2016/17.
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Australia Sanctions for tax evasion: The Australian Government has introduced a new Diverted Profits Tax (DPT) Bill on 9 February 2017 into the House of Representatives. If passed, the Bill will allow the Commissioner of Taxation to tax the diverted profits of certain entities at a rate of 40%. The DPT will apply to multinationals with annual global income of AUD 1 billion or more. The DPT will apply to income years commencing on or after 1 July 2017 whether or not a relevant transaction was entered into before that date.
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Mexico Incentives: Government introduced general rules on R&D tax credit within the official gazette on 28 February 2017, this rule governs Mexico’s R&D (research and development) tax credit. Accordingly, taxpayers may claim a credit against the income tax liability equal to 30% of the investments and expenses for technological R&D in Mexico and is attributable to the income tax due for the respective fiscal year (FY). Taxpayers calculate the credit based on the incremental expenses and investments made in the current year as compared to the previous three tax years. Taxpayers have to submit their applications between 1 April and 31 May for the fiscal year 2017.
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India Computation of taxable income: The Supreme Court of India in the case of: McDowell & Company Ltd. v. CIT (Civil Appeal No. 3893 of 2006), held that the waiver of interest by financial institutions is computable from the hands of the Amalgamating Company regarding the benefit of section 72A of the Income Tax Act.
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Kenya Corporate tax rate: Kenya’s Cabinet Secretary for Finance has presented the budget for 2017 and proposed to implement the modifications for the corporate tax rate to promote the development of real estate. Accordingly,  the corporation tax rate has been reduced to 20% against corporation tax rates of 30%.
Withholding taxes: Under the budget proposal, dividends paid to non-residents by enterprises operating in Special Economic Zones will be exempt from withholding tax in order to ensure that foreign investors get a good return on their investment. Withholding tax on interest payable to non-residents by special economic zone enterprises will be reduced to 5%.
Incentives: The budget has proposed a 150% deduction incentive to the fishing sector and a 100% investment deduction for the special economic zone on buildings and machinery.
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Thailand Liability to Tax: The Revenue Department of Thailand plans to introduce a new tax on e-commerce in April 2017 to control cross-border e-commerce transactions. Currently, a foreign operator which carries on e-commerce business but does not enter Thailand or does not have any employee, agent or representative and/or server located in Thailand, were not regarded as carrying on business in Thailand and therefore are not subject to income tax in Thailand.
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