Brazil: | CbC reporting requirement: According to NI 1,722/2017 published in the Official Gazette on 17 July 2017, transitional provisions apply if a legal entity which is resident in Brazil for tax purposes and which is not the ultimate controlling company of a multinational group has not designated a substitute entity for filing the CbC report on behalf of the group. See the story in Regfollower |
Belgium: | Main corporate income tax rate: On 26 July 2017, the Belgian Federal Government announced a major reform of the Belgian corporate tax system. The corporate income tax rate will drop from the current 33.99% to 29.58 % in 2018 and 2019 (i.e., 29% with 2% surtax) and to 25% in 2020 (without surtax). See the story in Regfollower CbC reporting requirement-Timing: According to Belgian law enterprises that meet the country-by-country (CbC) thresholds requirement will have to provide the first CbC reporting notifications to the tax authorities by 30 September 2017. See the story in Regfollower |
Malawi: | Transfer pricing documentation-Requirement: On 3 July 2017 the Malawi revenue authority published Gazette Notice No 36 of 2017 regarding Taxation (Transfer Pricing Documentation) Regulations 2017. Taxpayers are required to place contemporaneous documentation that verifies that the conditions in its controlled transactions for the relevant tax year are consistent with the arm’s length principle. Transfer pricing documentation-Language: Documentation shall be submitted in the English language. Transfer pricing documentation-Timing: The documentation shall be submitted to the Commissioner General within forty five days of the written request being duly issued by the Commissioner General. Transfer pricing documentation-Penalty for documentation failure: An initial penalty not exceeding the Malawi Kwacha equivalent of 1,400 USD at the prevailing exchange rate. Subsequent penalties not exceeding the Kwacha amount equivalent of 2,100 USD at the prevailing exchange rate to for each period of one month where the failure continues. See the story in Regfollower |
Hong Kong: | BEPS related compliance-Master file: According to proposal on consultation report published on 31 July 2017, Master and Local Files are not required to be prepared if the taxpayers meet either one of the two sets of exemptions which are now based on the size of the business (including turnover of less than HKD 200m, assets of HKD 200m and 100 employees) and Inter-company Transaction amounts (e.g. HKD 220m for tangible goods, HKD 44m for services). See the story in Regfollower |
Russia: | BEPS related compliance-Master file & Local file: According to draft law submitted to State Duma on 20 July 2017 concerning the introduction of amendments to the Tax Code of the Russian Federation, a fine of RUB100,000 for failure to provide transfer pricing (TP) documentation for a master file and a local file. The initial penalty exemption period is extended to 2020, including for CbC reporting and notification penalties. The Law will enter into force from 1 January 2018 and apply to financial periods of a multinational group commencing from that date. See the story in Regfollower |
France: | Main corporate income tax rate: On 4 July 2017, the Prime Minister of France confirmed in his opening speech to the National Assembly that the Government would cut the corporate tax from 33 percent to 25 percent by 2022 with the hope of attracting Businesses. See the story in Regfollower |
Greece: | BEPS related compliance-Penalty for non-compliance: Pursuant to Law 4484/2017 published in the Government Gazette on 1 August 2017, penalties for non-compliance with the CbC reporting requirements have been doubled to €20,000 and €10,000 for non-submission and for late submission respectively. See the story in Regfollower |
Pakistan: | CbC reporting requirement-General rule: Pakistan has introduced Country-by-Country (CbC) reporting requirement in the draft guidelines on CbC reporting requirement released on 5 June 2017 for domestic entities with consolidated group revenue of at least €750 million for the preceding fiscal year. CbC reporting requirement-Profits and tax paid: As per the draft guidelines, the CbC reporting should contain gross income, profit/loss before tax, income tax paid. CbC reporting requirement-Employees: As per the draft guidelines, the CbC reporting should contain the average number of employees in each entity. CbC reporting requirement-Assets: As per the draft guidelines, the CbC reporting should contain the tangible assets and real estate interests. CbC reporting requirement-Timing: As currently proposed, the CbC report is applicable for financial years ending on or after 1 July 2017. CbC reporting requirement-Penalty for non-compliance: As per the draft guidelines released on 5 June 2017, any reporting financial institution or reporting entity who fails to furnish information or a CbC report to the Board shall pay a penalty of PKR2,000 for each day of default subject to a minimum penalty of PKR25,000. BEPS related compliance-Master file: Every taxpayer, being a constituent entity of an MNE group and having a turnover of more than one hundred million Rupees, shall keep and maintain a master file. BEPS related compliance-Local file: Every taxpayer having a turnover of more than fifty million Rupees shall keep and maintain a local file. See the story in Regfollower |
Korea (Rep.): | Main corporate income tax rate: According tax reform proposal announced on 2 August 2017, the corporate income tax rate will increase to 25% for the tax base exceeding KRW200 billion, effective for the fiscal year beginning on or after January 1, 2018. A 10% local income tax surcharge is also charged on the current and proposed corporate income tax rates. Special rules for hybrid instruments or entities: According tax reform proposal announced on 2 August 2017, for hybrid financial instruments, the deductibility of interest payments made to foreign related parties will be limited. Restriction on interest deduction: According tax reform proposal announced on 2 August 2017, a domestic corporation would be able to deduct net interest expense up to 30% of the domestic corporation’s adjusted taxable income. See the story in Regfollower |
Ireland: | Documentation-Requirement: On August 3, 2017, the Irish Revenue published Revenue e-Brief No. 74/17, which contains guidance for taxpayers on complying with Ireland’s transfer pricing documentation requirements. There is no requirement for documentation to be kept in a standard form. See the story in Regfollower Adjustments-MAP: The Irish Revenue has published Revenue e-Brief No. 73/17 on 1 August 2017 that explains the procedure through which taxpayers can request mutual agreement procedure (MAP) assistance in Ireland, in cases where a company considers it has been subject to double tax. See the story in Regfollower |
New Zealand: | BEPS related compliance: The Finance Minister and Revenue Minister have announced the Government’s final decisions on proposals to address base erosion and profit shifting (BEPS) on 3rd August 2017. It is expected that the BEPS measures will be included in a tax bill to be introduced by the end of the year, for enactment by July 2018. See the story in Regfollower |
US: | CbC reporting requirement-Timing: As per IRS latest bulletin updated on 11 August 2017, parent entities of U.S. multinational enterprise (MNE) groups with $850 million or more of revenues in a previous annual reporting period can now file Form 8975, Country-by-Country Report, with their annual income tax return. See the story in Regfollower Competent authority arrangement (CAA) with Belgium: The competent authority arrangement (CAA) for exchange of country-by-country report has been concluded between U.S. and the Belgium on 20 July 2017. The arrangement is on the basis of a double tax convention (DTC). The Competent Authorities intend to exchange the CbC Reports automatically through a common schema in Extensible Markup Language (XML). See the story in Regfollower Competent authority arrangement (CAA) with Brazil: The competent authority arrangement (CAA) for exchange of country-by-country report has been concluded between U.S. and Brazil on 20 July 2017. The arrangement is on the basis of a tax information exchange agreement (TIEA). See the story in Regfollower Competent authority arrangement (CAA) with Isle of Man: The competent authority arrangement (CAA) for exchange of country-by-country report has been concluded between U.S. and Isle of Man on 20 July 2017. The arrangement is on the basis of a tax information exchange agreement (TIEA). The Competent Authorities intend to exchange the CbC Reports automatically through a common schema in Extensible Markup Language (XML). See the story in Regfollower Competent authority arrangement (CAA) with Jamaica: The competent authority arrangement (CAA) for exchange of country-by-country report has been concluded between U.S. and Jamaica on 20 July 2017. The arrangement is on the basis of a double tax convention (DTC). See the story in Regfollower Competent authority arrangement (CAA) with Malta: The competent authority arrangement (CAA) for exchange of country-by-country report has been concluded between U.S. and Malta on 20 July 2017. The arrangement is on the basis of a double tax convention (DTC). See the story in Regfollower |
Latvia: | Main corporate income tax rate: The Latvian parliament passed a new corporate tax law on 28 July 2017. Under the new law, CIT rate will increase from the current 15% to 20%. The law will enter into force on 1 January 2018. See the story in Regfollower |
Malaysia: | Intangible property-Hard to value intangibles: According to recent updated guidelines, taxpayers entering into controlled transactions involving intangibles must now consider the performance of development, enhancement, maintenance, protection and exploitation (DEMPE) functions in allocating profits according to the guidance provided by the IRB. BEPS related compliance-Master file: Under the new guidelines, companies required to submit a CbC report under the Income Tax (Country-by-Country Reporting) Rules 2016 must also file a master file upon request including an organizational structure, the description of the business and industry conditions, pricing policies, application of transfer pricing method and financial information. Documentation-Penalty for documentation failure:Â A penalty of 35% will be imposed if taxpayers do not prepare contemporaneous transfer pricing documentation. 25% will be imposed for failure to prepare pricing documentation in accordance with the requirements of the Guidelines. The penalty rate will increase by 20% as compared to the last penalty rate imposed for the previous offence but limited to a sum not exceeding 100% of the amount of tax undercharged. See the story in Regfollower |
Taiwan: | BEPS related compliance-Master file: According to the draft amendment to the transfer pricing guidelines for public consultation released on 27 July 2017 the reporting structure of the master file should be line with the Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) project. Taxpayers are required to complete the master file when filing the corporate income tax return and submit it to the competent tax authority within 12 months after the fiscal year end. BEPS related compliance-Local file: Taxpayers are required to prepare a Local File when total annual revenue exceeds TWD 500 million. The local file is required to be completed with the annual income tax return and the taxpayer must submit it to the tax authority within one month after receipt of the tax authority’s request. BEPS related compliance-Penalty for non-compliance: According to draft amended guidelines, an enterprise that fails to submit the required documents shall be subject to a penalty of no less than NT$3,000 but no more than NT$30,000. See the story in Regfollower |
UK: | CbC reporting requirement-Timing:Â For MNE groups that are US headquartered voluntarily filing in the United States (US) for a period covering a reporting period that begins before 30 June 2016 must make the additional notification in the UK to confirm that the CbC report has been filed in the US to discharge the requirement to locally file a CbC report in the UK. See the story in Regfollower |
Bulgaria: | BEPS related compliance-CbC reporting requirement: According to Tax and Social Security Procedure Code (“TSSPC”) which is promulgated in issue 63 of the State Gazette of 4 August 2017. An ultimate parent company of a MNE Group, that is a tax resident in Bulgaria, is required to submit CbC reports to the National Revenue Agency (NRA) if the consolidated group revenue exceeds BGN 100 million (BGN 1,466,872,500 for a Bulgarian subsidiary or a permanent establishment) for in the year preceding the reporting fiscal year. CbC reporting requirement-Penalty for non-compliance: The penalty for failure to submit a CbC report will start from BGN 100,000 to BGN 200,000 (BGN 200,000 – BGN 300,000 if repeated violation). In case of an incomplete or incorrect CbC report, it will start from BGN 50,000 to 150 000 (BGN 100,000 – BGN 250,000 if repeated violation). Failure to fulfill the notification requirements will entail from BGN 50,000 to BGN 150,000 (BGN 100,000 – BGN 200,000 if repeated violation). See the story in Regfollower |
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