The first reading of the draft Bill on the amendment of the Corporate Income Tax Act, which was submitted to the Parliament on 31 October 2016, took place in the Parliament on 4 November 2016. According to the bill, withdrew the full exemption accessible to all investment funds, but granted relief to certain classes of income earned by FIO and SFIO.
As predetermined in the Bill, the existing CIT exemption for entities such as investment funds and similar collective investment institutions will be replaced with tax exemptions for revenues produced by opened-end investment funds and specialized opened-end investment funds that meet particular criteria (FIO andSFIO) from:
- Interest;
- Dividend and other revenues from participation in the profits of legal persons;
- Transfer of receivables, foreign currencies, shares (shares of stock) and other securities, including any derivative; and
- financial instruments and the exercising of any rights vested therein.
In addition, the amended bill also introduces changes to the general anti-avoidance rules (GAAR) passed in July 2016. In this respect, the amendment introduces a provision that tax rulings issued prior to the entrance of the GAAR into force (i.e., 15 July 2016) will not offer protection if a tax benefit resulting from the ruling is obtained after 1 January 2017. The amendments are scheduled to take effect as of 1 January 2017.
