Costa Rica

Interest limitation rule: On 4 December 2018, Costa Rica passed a tax reform bill which includes several tax reform measures. Under the law, an interest limitation rule applies which interest expenses that exceed 20% of the taxpayer’s earnings before interest, taxes, depreciation and amortization (EBITDA) are not deductible for corporate income tax.
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Argentina Capital gains tax rate: On 4 December 2018, Argentina enacted Law 27,430 (the Act), which contains proposals for the implementation of the tax reform. The law introduced the taxation of indirect transfers of assets located in the country, pointing out that transfers within the same economic group are not taxable.
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India CbC reporting requirement-Timing: On 26 December 2018, India’s Ministry of Finance released a Circular, which provides for an extension of the deadline for non-parent constituent entities in India to submit a Country-by-Country (CbC) report. For accounting years ended 31 December 2017, the Board has approved a deadline extension to 31 March 2019 for accounting years ending up to 28 February 2018.
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Bulgaria Restriction on interest deduction: On 27 November 2018, Bulgaria published a Bill on amendment and supplement to the Corporate Income Tax Act in the Official Gazette. The law introduces new Art.43a-rule for limiting interest deduction in accordance with the EU Anti-Tax Avoidance Directive (ATAD). Under this, 30% limitation will be applicable if the sum of the borrowing expenses exceeds EUR 3 million (approx. USD 3,407,000).
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Sweden Penalty for documentation failure: On 3 December 2018, the tax authority issued Declaration No. 202 251680-18 / 111, on the relevance of Transfer Pricing documentation in the event of a tax surcharge for providing incorrect information.
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Saudi Arabia Master file-Information: Under the draft law published on 10 December 2018, taxpayers with controlled transactions in excess of SAR6 million during the fiscal year will need to prepare Master File containing information on the global business operations and transfer pricing policies of the Multinational Enterprise Group to which the taxable person belongs.

CbC reporting requirement-General Rule: As per the draft By-Laws published on 10 December 2018, Saudi Arabian taxpayers that are members of an MNE Group with consolidated group revenue exceeding SAR3.2 billion will be subject to CbC reporting in the Kingdom of Saudi Arabia, and will be required to notify GAZT regarding the submission of the CbC report within 120 days of the end of the Reporting Year.
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Luxembourg Restriction on interest deduction: On 18 December 2018, the Luxembourg Parliament passed draft law No 7318 (the Law) implementing the EU Anti-Tax Avoidance Directive (ATAD), which sets out limitation to interest deductibility, the provisions on controlled foreign companies ( CFC) and hybrid mismatches (i.e. hybrid instruments or entities allowing for double non-taxation) rules between EU Member States.
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Japan Restriction on interest deduction: On 14 December 2018, Japan’s ruling coalition party has approved a package of tax reform proposals for 2019. According to tax reform package, the earnings stripping rules are to be amended, which includes a reduction in the deductible interest payments cap from 50% of adjusted taxable income to 20% of adjusted taxable income.
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Puerto Rico Main corporate income tax rate: On 10 December 2018, Puerto Rico Governor Ricardo Rosselló signed into law Bill No. 1544 as Law No. 257 of 10 December 2018. Under the reform bill, the regular corporate tax rate has been reduced from 20% to 18.5% starting from taxable year after 31 December 2018.  Moreover, in the case of taxpayers whose business volume is $3MM or more, the tax rate will be 23%.
Control: The bill introduced new rules for the determination of a controlled group, which generally includes a 50% ownership of one entity by another or 50% common ownership by a third entity.
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Peru Intra-group services: On 30 December 2018, the Peruvian Minister for Economic Affairs issued Supreme Decree 337-2018-EF and Supreme Decree 339-2018-EF, which contains provisions on the deduction of expenses for intra-group services and the definition of accrual.
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