Cyprus Local file: On 6 July 2023, the Cyprus Tax Department released a new circular (6/2023) entitled “Simplification measures for persons exempt from the obligation to maintain a Cyprus local file”. The Circular clarifies that persons exempt from preparing a Cyprus Local File must maintain minimum documentation for their controlled transactions.
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Applicable methods: On 7 July 2023, the Cyprus Tax Authority released Circular 7/2023, focusing on transfer pricing for intra-group back-to-back financing transactions. The Circular specifies that starting from the tax year 2023, the Comparable Uncontrolled Price (CUP) method will be regarded as the suitable approach for documenting arm’s length pricing for such back-to-back financing transactions.
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Hong Kong Filing deadlines: On 29 June 2023, the Inland Revenue Department (IRD) published a Circular Letter announcing an extension of the deadline for “D” code profit tax returns. Accordingly, the deadline for filing 2022/23 profits tax returns with accounting date code ‘D’ to 29 August 2023 instead of the initial date of 15 August 2023.
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Ireland Compliance with BEPS standards: On 17 July 2023, the Irish Revenue issued eBrief No. 165/23 on European Union (EU) tax dispute resolution mechanisms. The purpose of this new manual is to provide guidance on the dispute resolution procedures contained in the Regulations.
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Digital economy transactions-General: On 5 July 2023, the Irish Revenue issued eBrief No. 155/23, which provides guidance for platform operators for the exchange of information on income generated through digital platforms (DAC7).
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Kenya Restriction on interest deduction: On 3 July 2023, the Kenya Revenue Authority published the Finance Act 2023, following its presidential assent on 26 June 2023. The Act 2023 introduces changes to the interest restriction rule, which previously limited deductible interest to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), irrespective of the loan source.
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Luxembourg CbC reporting requirement-General rule: On 19 July 2023, the Luxembourg Parliament adopted Bill no. 8158 to implement public Country-by-Country (CbC) reporting in compliance with Directive (EU) 2021/2101.
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Mexico Compliance with BEPS standards: On 3 July 2023, OECD published the updated position of signatories’ countries regarding the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Accordingly, MLI entered into force for Mexico on 1 July 2023.
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Morocco Information exchange-Multilateral: On 20 July 2023, the Moroccan House of Representatives made the decision to postpone the approval of the Multilateral Competent Authority Agreement on Automatic Exchange of Country-by-Country Reports (CbC MCAA).
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Nigeria Filing deadlines: On 10 July 2023, the Executive Chairman of the FIRS, Muhammad Nami, issued a Public Notice extending the deadline for filing companies’ income tax returns and paying the related tax liabilities. The new deadline is set for 31 August 2023, applicable to companies with returns falling due between 30 June and 31 August 2023.
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Pakistan Related party definition: On 26 July 2023, the Federal Board of Revenue in Pakistan (FBR) issued Circular No. 2 of 2023, expanding the definition of “associate party” for the purpose of anti-avoidance and arm’s length principle.
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Papua New Guinea Information exchange-Multilateral: On 26 July 2023, the OECD published their updated list of signatories for the Multilateral Competent Authority Agreement (MCAA) on the Exchange of Country-by-Country Reports (CbCR), showing that Papua New Guinea joined the agreement on 14 March 2023.
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Romania CbC reporting requirement-General rule: On 21 June 2023, the Romanian Government issued guidance to implement of the EU Public Country-by-Country (CbC) reporting Directive in the Official Gazette. The guidance outlines key points for reporting in the Country-by-Country (CbC) report.
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Singapore Information exchange-Multilateral: On 20 July 2023, the Inland Revenue Authority of Singapore (IRAS) updated the list of jurisdictions participating under MCAA on the exchange of CbC reports. Aruba has been incorporated into the updated list, applicable for fiscal years commencing on or after 1 May 2021.
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Turkey Main corporate income tax rate: On 15 July 2023, the Turkish Revenue Administration published Law No. 7456 in Official Gazette. Accordingly, the corporate income tax rate for non-financial sector companies has been raised from 20% to 25%.
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Uganda Digital economy transactions-General: On 11 July 2023, the Ugandan Parliament passed a new tax law including a 5% digital service tax (DST) on income earned in Uganda by non-resident providers of digital communications services such as Twitter and Meta’s (META.O) Facebook.
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UK CbC reporting requirement-Deadlines: On 5 July 2023, the House of Commons in the United Kingdom (UK) made a significant decision by accepting Statutory Instrument No. 752/2023 to amend tax regulations on BEPS country-by-country (CbC) notification requirement.
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Vietnam Compliance with BEPS standards: On 28 July 2023, Vietnam gazetted the “Notice No. 12/2023/TB-LPQT of 21 June 2023” regarding entry into force for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). The MLI will be entered into force for Vietnam on 1 September 2023.
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