Sweden: Financial services-Restriction on interest deduction: On 3 May 2018, draft legislation has been submitted to the Swedish parliament which includes safe harbour rule and limit to interest deduction. Under the proposed rules, the deductibility of net interest expense would be limited to 30% of EBITDA. Under the safe harbour rule, no limitation would be imposed on a group with a net interest expense below SEK 5 million (approx. EUR 485 thousand).
See the story in Regfollower
Australia: Parent company: On 8 May 2018, the Treasurer presented the 2018-2019 Budget. The definition of significant global entities (SGEs) is to be broadened for income years commencing on or after 1 July 2018. Significant Global Entity (SGE) will be extended to include multinational groups which are headed by trusts, partnerships and a wider range of private companies.
See the story in Regfollower
Local file: Recently, the Australian Taxation Office (ATO) has published the timeline for submitting Australian local files for the year ended 31 December 2017 (“Year 2” Australian Local Files) or later. Specifically, taxpayers wishing to submit “Part A” to their local file, rather than answering certain questions on the International Dealings Schedule (IDS), have until 14 September 2018 to submit Part A.
See the story in Regfollower
US: Advance pricing agreement (APA): On May 11, 2018, the IRS’s Advance Pricing and Mutual Agreement Program (APMA) issued a new template that taxpayers must use when requesting an advance pricing agreement (APA). Taxpayers with pending APA requests should contact their assigned APMA team leader(s) about whether to use this template in their cases.
See the story in Regfollower
CbC reporting requirement: On April 26, 2018, the Internal Revenue Service issued a Memorandum of Understanding (MOU) between the Competent Authorities of the United States (US) and Indonesia, which includes an announcement of the temporary suspension of Indonesia’s secondary CbCR filing requirements for US corporations resident in Indonesia for financial years beginning on or after 1 January 2016.
See the story in Regfollower
CbC reporting requirement: On 18 May 2018, IRS released a new guidance for filing the CbC Form 8975 by U.S. multinational enterprises (MNEs). The new guideline outlined the requirements to attach the Schedule A to the submission of Form 8975, procedures for Mailing Page 1 of Paper-Filed Form 8975 to the Ogden Mailbox and instructions for amending Form 8975.
See the story in Regfollower
Netherlands: Requirements-OECD Guidelines: On 11 May 2018, the Dutch Ministry of Finance published a new transfer pricing decree (No 2018-6865 of 22 April 2018), which contained provisions of the OECD Action Plan on Basic Erosion and Profit Shifting (BEPS) (2015) and the OECD transfer pricing guidelines (2017). The new decree replaces the decree No. IFZ 2013 / 184M published on 14 November 2013.
See the story in Regfollower
South Africa: BEPS related compliance-Penalty for non-compliance: On 11 May 2018, the South African Revenue Service (SARS) released a notice concerning penalties which provides taxpayer fails to submit returns (CbC report, Master File, Local file) by the deadline will be subject to a fixed penalty up to ZAR 16,000 per month of delay.
See the story in Regfollower
Pakistan: Main corporate income tax rate: On 27 April 2018, Pakistan Minister of Finance presented the 2018/2019 Budget to parliament. According to proposed Budget, the corporate income tax rate will be reduced from 30% to 29% for the 2018/19 tax year, followed by an additional 1% reduction per year until reaching 25% from the 2022/23 tax year.
See the story in Regfollower
Malta: Treaty Application: On 27 April 2018, Malta ratified the BEPS MLI with the publication of Legal Notice 142 of 2018 under the Official Gazette No. 19,984. The MLI will enter into force on the first day of the month following the expiration of three calendar months from the date of deposit of the Commence ratification by Malta.
See the story in Regfollower
Finland: Comparability analysis: On 30 April 2018, the tax administration published a guideline no.A72/200/2018 on profit distribution for a permanent establishment (PE). The guidelines clarify that, upon request, a foreign company has to specify how it has allocated profits to a Finnish PE. The amendments came into effect on May 1, 2018 and will be applied to assessments for the tax year 2018.
See the story in Regfollower
Russia: CbC reporting requirement-General requirement: As per the Order No.MMV-7-17/123 published on 8 May 2018 and the Order No.MMV-7-17/124 released on 26 April 2018, the CbC report and notification must be submitted electronically in XML format and signed by a qualified electronic signature.
See the story in Regfollower
APAs-Bilateral-Multilateral: The procedure for the implementation of bilateral and multilateral Advanced Pricing Agreements (APAs) is officially published on 3 May 2018. The adoption of the procedure should provide a practical framework for the conclusion of APA involving one or more foreign competent authorities. The procedure is scheduled to enter into force on 4 June 2018.
See the story in Regfollower
Italy: Transfer pricing rule-Legislative provisions: On 14 May 2018, the Ministry of Economy and Finance published final transfer pricing rules for the application of the arm’s length principle. New regulations include definitions for affiliates, control, independent companies, controlled and uncontrolled transactions, and financial indicators.
See the story in Regfollower
Latvia: Master file-Local file: Recently, the Latvia Cabinet of Ministers has approved a draft law for the introduction of Master and Local file requirements in line with BEPS Action 13. The new documentation requirements are to apply to reporting periods from 2018 as proposed.
See the story in Regfollower
Norway: CbC reporting requirement: According to the revised budget proposal for 2018 published on 15 May 2018, a Norwegian company will only have to submit a CbC report if the parent company is established in a country that has entered into a TIEA with Norway.
See the story in Regfollower
Taiwan: Information exchange-Multilateral: On 1 May 2018, Ministry of Finance has issued a notice containing a list of jurisdictions with which Taiwan has an agreement for the exchange of information, but not for the exchange of Country-by-Country (CbC) reports.
See the story in Regfollower
Kenya: CbC reporting requirement: Kenya introduced the Country-by-Country reporting requirements under the draft income tax bill 2018. The ultimate parent entity or a constituent entity which is not the ultimate parent entity of a multinational enterprise group that is resident for tax purposes in Kenya shall file a country-by-country report with the Commissioner if the group has more than one billion revenue in the previous year.
Timing: CbC report must be filed within the twelve months after the last day of the reporting financial year of the multinational enterprise group.
See the story in Regfollower