South Korea- Tighten Thin Capitalization Rules
Under revised thin capitalization rules of South Korea proposed for 2015, overseas multinational companies performing business would have to pay a higher tax. The existing thin capitalization rules reject the South Korean unit of a foreign
See MoreChile: Amendments in tax bill propose new corporate tax system
The Government has published a bill to adjust the proposals in the original tax reform legislation. The amendments to the tax reform bill are given below: A new corporate income tax system would build under which taxpayers could be able to choose
See MoreAustralia – Reduces safe harbor for thin capitalization
Australia recently reduced the safe harbor rule for thin capitalization limit from 75% to 60%, corporate groups may want to consider what steps to take with respect to their thin capitalization positions. With effect from 1 July 2014 the permitted
See MoreRussia: Revised draft changes related to introduction of CFC rules
The Ministry of Finance has released a revised version of the draft law regarding introduction of CFC rules. The important changes of the revised draft law are given below: • Concepts regarding “Beneficial owner” and “actual right to receive
See MoreRussia: Applicability of thin capitalization rules under certain conditions
The Ministry of Finance has issued Letter No. 03-08-05/9669 on May 6, 2014 that clarifies the application of thin capitalization rules to the interest paid by a Russian company (borrower) to another Russian company (lender) under a controlled loan
See MoreSlovak Republic: Thin capitalization rules has considered related-party debt
The Ministry of Finance is currently considering the chance of re-initiating thin capitalization rules into Slovak tax law. With the help of an internal document the Ministry of Finance highlights that low capitalization expresses an effective tax
See MoreColombia: issues regulations on thin capitalization provisions
The Colombian government issued Decree 627 on 26 March 2014. This Decree regulates the thin capitalization rules (article 118-1 of the Tax Code) that were brought in as part of the recent tax reforms and takes effect from the date of publication.
See MoreRussian Appeal Court rules on thin capitalization
Russia’s Arbitration Court of Appeal issued a decision on 24 February 2014 holding that a loan from a foreign related company of United Bakers Pskov LLC1 was subject to the thin capitalization legislation. This ruling by the Court was made on the
See MoreColombia: Thin capitalization provision
Under the Decree 3027 of 27 December 2013, the thin capitalization provisions interest is fully deductible up to a debt to equity ratio of 3:1. This applies to domestic and foreign loans from related or unrelated
See MoreNorway reduces corporate tax rate and enacts interest deductibility restrictions
On 13 December 2013, the newly proposed Norwegian interest deduction limitation rules were adopted by the Norwegian Parliament and the reduction of the corporate income tax rate from 28 to 27 % was adopted. The interest deduction limitation rules
See MoreRussia-Applicable fields for applying thin capitalization rules
The Ministry of Finance has published Letter No. 03-08-05/23521 regarding the applicability of the thin capitalization rules to interest payments made by a Russian company on a loan granted by a Russian bank issued on June 21, 2013. For example, a
See MoreRussia- Court rules for establishing thin capitalization to a sister company loan
Russia’s Federal Arbitration Court of the North-West region has issued Ruling No. А52-4072/2012 on September 18, 2013 concerning the establishment by a sister company of thin capitalization rules to a loan issued. Russian court practice already
See MoreAustralia: Liabilities classification for Thin Capitalization
As a consequence of changes to Australia’s thin capitalization rules taxpayers may need to review their thin capitalization position. Now every entity must have to consider whether their liabilities are debt or non-debt and the effect on the
See MorePoland – Changes to transfer pricing documentation, thin capitalization rules
Legislation to expand the scope of Poland’s corporate income tax law is intended to be effective in 2014. The provisions of the legislation released on February 18, 2013 include changes to the transfer pricing documentation and thin capitalization
See MoreImplementation of Malaysian thin capitalization has been deferred
The Ministry of Finance announced on 11 December 2012 that the implementation of the thin capitalization rules has been deferred until the end of December
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