The Ministry of Finance published a draft version of the 2nd Tax Law Amendment Act 2014 on 1 October 2014, and submitted it for professional review.
The 2nd Tax Law Amendment Act 2014 is the introduction of the Law on Mutual Assistance in Fiscal Criminal Matters between EU Member States. The key element of the 2nd Tax Law Amendment Act 2014 provides for minor amendments and clarifications to other tax laws. It also provides for clarifications regarding the deductibility of interest and royalty payments.
The 1st Tax Law Amendment Act 2014 had introduced that, with effect from 1 March 2014, interest and royalties paid to a resident or non-resident corporate entity that is directly or indirectly part of the same group or directly or indirectly controlled by the same shareholder are no longer deductible if the income of the recipient is either not taxed or subject to a tax rate of less than 10%.
The 2nd Tax Law Amendment Act 2014 explains that for determining the effective tax rate of 10%, any refunds or credits granted to the receiving entity or its shareholders must be taken into account.
