Dominican Republic | Filing returns: The Dominican tax authorities allotted new regulation (General Notice No.12-17) in order to improve the tax filing procedures for the annual corporate income tax return (Form: IR-2) and appendices. |
Ecuador | Refund: The Internal Revenue Service has published a Procedure in the Official Gazette to request an income tax refund. Accordingly, as from 1 January 2017, a tax refund mechanism is available to recover the excess of income tax advance payments made, provided that the amount exceeds the income tax levied and the general or sectoral average income tax burden of the taxpayer according to the procedure defined by the tax administration. |
Ghana | Capital gains Tax: The Minister of Finance has proposed on 2017 Budget, the exemption from capital gains tax on gains realised from the sale of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission. |
India | Withholding tax rates: The Ahmedabad Bench of the Income-tax Appellate Tribunal in the case of: Uniphos Environtronic (P.) Ltd. v. DCIT [2017] 79, held that higher tax rate not applied when the tax is withheld under tax treaty. In that case, the court has been observed that the taxpayer had deducted the tax at source at the rates prescribed in respective tax treaties between India and Germany at the prescribed rate of 10%. Where the tax has been deducted on the strength of the beneficial provisions of the tax treaties, in that case, the provisions of Section 206AA of the Act cannot be invoked because Section 90(2) of the Act provides that the provisions of the Act shall apply to the extent they are more beneficial to the taxpayer. Therefore, the taxpayer is eligible to avail a beneficial rate of tax. |
Portugal | Filing Return: Portugal recently updated the corporate tax return form (Form 22) on 29 March 2017 with the order No. 2608/2017 of February 8, 2017. The new order brought some legal changes and includes instructions for filing the corporate tax return. |
Russia | Groups: On 3 March 2017, the Government published Guidance clarifying the taxation of CFC profits in determining the corporate tax base of a consolidated tax group (CTG). Mentioning to article 278.1, section 1 of the Tax Code (TC), the Ministry of Finance stated that the corporate tax base of a CTG is the sum of all income received by the members of the CTG, reduced by all expenses incurred by them. The MoF also held that the provisions of article 278.1 of the TC apply exclusively in the course of determining the tax base of a CTG, which is subject to corporate income tax at the standard rate of 20%, as stipulated under article 284, section 1 of the TC. |
Saudi Arabia | Corporate Income Tax: Saudi Arabia issued the Regulations for implementation of Zakat under Ministerial Resolution No. 2082 on 9 March 2017, The regulations applies to all commercial activities established for profit and are carried out by Saudi resident and Gulf Cooperation Council nationals. The new regulations replace all previous directives, resolutions, instructions and circulars issued by the General Authority for Zakat and Tax (GAZT) of Saudi Arabia. According to the regulations, the zakat base has to be higher than the adjusted profit for the year and will be charged at the rate of 2.5% of the assessable funds irrespective of whether the zakat payer follows the Hijri or Gregorian calendar as their fiscal year. Gain and loss from revaluation of financial securities at their market values also be considered for the calculation of Zakat. According to the new rules Government’s share in a commercial venture would also be subject to zakat. |
UK | Special rate of corporation tax: HMRC publishes a tax information and impact note on 22 March 2017. Amendments are made to the existing rules which apply tax at 45% to restitution interest payable by HMRC. The measure will amend Part 8C of The Corporation Tax Act 2010 (CTA 2010) to remove charitable companies and the income of policyholders of with-profits funds from the scope of the 45% rules. They will bring a corporate beneficiary, in receipt of restitution interest sought on its behalf, within the scope of the rules. Local Business Rates: The government is to give more support to businesses whose local rate bills have increased following the evaluations affecting English business rates from April 2017. The support includes a limit on the amount of the annual rate increase for businesses losing the Small Business Rate Relief amounting to the greater of GBP 600 or the real terms transitional relief cap. A hardship fund will also be created to allow local authorities to give discretionary relief to individual cases, and pubs with a rateable value up to GBP 100,000 will receive a one year discount of GBP 1,000 from their business rates. |
Uruguay | Liability to Tax: Uruguay has issued Decree No. 40/017 providing some criteria or condition for determining low or no taxation jurisdictions on 13 February 2017. Accordingly, countries or jurisdictions will be deemed to charge low or no taxes if: the entity is subject in its country of residence to a tax rate of less than 12% on the activities, assets, or economic rights used or located as the case may be in Uruguay; and a tax information exchange agreement or an income tax treaty with an information exchange clause is not in force between Uruguay and the entity’s country of residence. |
Vietnam | Incentives: Vietnam’s tax authority recently updates and published following corporate tax incentives schemes: (i) No CIT incentive tax rate applicable for investment projects located in industrial parks; and (ii) A company generating income from agricultural and fishery processing is not entitled to multi-CIT incentive schemes simultaneously. |
South Africa | Dividends tax: Government has been announced in the February 2017 Budget that the rate of the dividends tax will be increased to 20% with effect from 22 February 2017 (the increase and effective date have yet to be legislated). |
Bolivia | Corporate income tax rate: Bolivia has increased 3% rate from 22% to 25% to the income tax on the profits of companies in the financial sector. |
Colombia | Corporate income tax rate: A new tax reform law has been enacted in Colombia and accordingly, the CREE (CREE is the Spanish acronym for the “fairness tax”) tax and the CREE surcharge are no longer applicable from 1 January 2017. In addition, with respect to the CREE surcharge, as it has been abolished as from the tax year 2017, advance payments corresponding to such amount must not be settled or paid by taxpayers when filing the CREE tax return for the tax year 2016. Sanctions for non-compliance: Colombia has recently published new tax penalties regime and under this new law, taxpayers may benefit from a reduction of the penalty for late submission of tax returns, provided that (i) the taxpayer has not incurred any penalties due to late submission of other tax returns in the preceding 2 years; and (ii) DIAN has not issued an administrative decision on the late submission of the tax return. If conditions (i) and (ii) are met, the taxpayer is required to pay only 50% of the tax penalty resulting from the application of the formula provided under article 641 of the TC. |
Costa Rica | Corporate income tax rate: Costa Rica has been updated the Law N° 9428. This Law provides the corporation flat tax which establishes an applicable progressive rate from 15% to 50%. Thus, the tax considers whether the entity is registered as a taxpayer or not. Also, if registered it considers the gross amount accrued by the entity during the tax period. Late payment interest: Ministry of Finance has published a Resolutions which recognised an interest rate of 11.73% applicable for late payment and refunds of taxes, surcharges and penalties. |
World Tax Brief: March 2017
06 April, 2017