UK | Incentives: On 20 July 2016 the UK publishes updated statistics on claims for creative industry tax relief. The statistics include data for the film tax relief, high-end television tax relief, animation tax relief and video games tax relief for periods up to 2015/16. See the story in Regfollower Sanctions for tax evasion: The UK government issued a discussion document on strengthening tax avoidance sanctions and deterrents on 17 August 2016. Furthermore, the penalty regime would be similar to that introduced in the Finance Bill 2016 for offshore evasion. See the story in Regfollower Interest rates for late payment: The HMRC announced on 5 August 2016 that interest rates for late payment will be reduced with effect from 15 August 2016 for quarterly installment payments, and 23 August 2016 for non-quarterly installment payments. See the story in Regfollower |
Cyprus | Incentives: The Council of Ministers approved a package, on 27 July 2016, of tax incentives intended to boost innovative and start-up companies. The incentives include the package of an exemption of up to 50% of the taxable income of the investor for investments made in innovative and start-up companies. But the exemption is limited to EUR 150,000. However, the discount may be allocated and distributed up to 5 years later. The investment can be made both directly into a company and via an investment fund. See the story in Regfollower |
Pakistan | Capital Gains: The President of Pakistan has circulated the Income Tax (Amendment) Ordinance, 2016 to further amend the provisions regarding valuation of immovable properties under the Income Tax Ordinance 2001 (the Ordinance). Under the new amendments, the period of limitations for withholding tax has been reduced from five years to three years. Also, the tax is not withheld on the first sale or transfer of immovable property acquired or allotted under certain circumstances. Changes have been also made to the holding period threshold- gain realized on the disposal of immovable property is exempt from capital gains taxation if held for five years (increased from the previously applicable two-year period). See the story in Regfollower Incentives: The government has decided to zero-rate for the local suppliers of textile, leather, carpets, surgical and sports sectors from 2016-17. The government will also abolish 3% and 5% sales tax on different stages which would be replaced with zero percent sales tax in the budget. See the story in Regfollower |
Denmark | Permanent Establishment: The Danish Assessment Board gave its ruling on 16 August 2016, in the case of SKM2016.353.SR on the correct profit allocation to a permanent establishment (PE) in the form of a construction company. Accordingly, the Board disagreed with the taxpayer’s view that no profit had to be attributed to the PE. Instead, the Board decided that an arm’s length price should have been determined for both the functions attributable to the PE as well as the assets transferred to the PE. See the story in Regfollower |
Russia | CFC: On 27th May 2016, The Finance Ministry has issued a Letter No. 03-01-23/30779 for clarifying the responsibility of taxpayers to notify the tax authorities about CFCs. On the basis of section 3.1 of article 23 of the Tax Code, taxpayers have to notify the tax authorities regarding CFCs in relation to which they are recognized as controlling persons and this notification need to be submitted by 20 March of the year following the year. See the story in Regfollower |
Israel | Central management and control: The Israeli budget plan proposed for 2017-2018 introduces significant changes with respect to international taxation. An amendment to section 1 of the Israeli Tax Ordinance (ITO) would introduce a rebuttable presumption that the management and control of businesses incorporated outside of Israel would be viewed as being located in Israel if: (a) Israeli residents for tax purposes are the controlling persons, the beneficiaries of or are entitled to 50% or more of its income or profits, directly or indirectly; and (b)The applicable effective tax rate for all of its profits, if not viewed as Israeli resident, is 15% or less and one of the following applies: (1) the body of persons is a resident of a country with which Israel does not have a double tax treaty; or (2) its country of residence, if not viewed as a resident of Israel, is a country that does not levy tax on income generated outside of the country. See the story in Regfollower Incentives: The Finance Ministry has publishes a draft proposals as part of the proposed Economic Arrangements Law 2017–2018 on 31st July 2016 which introduces, a 12% rate is applicable for a company qualifying as a “preferred technological business” if the company invests at least 7% of its total expenses in R&D, or at least 20% of the workforce is employed in development, or a venture capital investment was previously made in the company or the company reached average annual growth of 25% in sales or in the number of employees for a period of 3 years. A 6% rate applies for a company qualifying as a “special preferred technological business” with combined revenues of over NIS 10 billion. See the story in Regfollower |
Mauritius | Incentives: The budget for 2016 – 2017 was provided on 29 July 2016 to the National Assembly by the Minister of Finance and Economic Development. According to the budget following incentives are available: (i)A five-year tax holiday for certain entities including those holding licenses to operate or provide services as treasury management centers, asset and fund managers, international law firms, investment banking and corporate advisory entities, overseas family corporations; (ii)Extension and expansion of existing provisions that allow certain manufacturing companies to offset their tax liabilities with 5% of their investments in new plant and machinery; (iii)An enhanced investment tax credit of 15% for capital investment made by a company in its subsidiary engaged in certain activities; (iv)A five-year tax holiday for foreign high-net-worth individuals investing a minimum of U.S. $25 million in Mauritius Repeal of customs duty on approximately 368 tariff lines, with a goal to make Mauritius a “duty-free island”; and (v) Reduced excise tax on certain hybrid motor cars. See the story in Regfollower |
Greece | Filing Return: On 22 July 2016, the Public Revenue Authority published Circular POL 1114 (the Circular) providing clarifications concerning the filing of an amending tax return following the expiry of the statute of limitation period. Accordingly, the Public Revenue Authority explains in the Circular that an amending tax return can be either: a “supplementary” tax return, resulting in an increase in the taxpayer’s tax liability. The filing of such a return is mandatory for the taxpayer; or the “recalling” of a tax return, resulting in a decrease in the taxpayer’s tax liability. The filing of such a return, which is optional for the taxpayer, will be possible until the announcement of the launch of an audit procedure or until the expiry of the statute of limitation period, during which period the tax authorities can impose taxes/fines. See the story in Regfollower |
Ukraine | Taxability of other income: The Ministry of Finance (MoF) issued Guidance Letter No. 31-11130-09-10/21370 dated on July 25, 2016, explaining the corporate income tax treatment of dividends paid by Ukrainian residents. According to the letter, dividends received by the companies registered as unified taxpayers are subject to advance payments of corporate income tax, as the Tax Code does not provide an exemption for such dividends. Dividends paid to individuals, non-profit organizations and ultimate shareholders (up to the amount of the dividends received by the distributing company from its subsidiaries) are exempt from corporate income tax. See the story in Regfollower |
Argentina | Incentives: On 1 August 2016, Law 27,264 establishing a special tax regime for micro, small and medium-sized enterprises was published in the Official Gazette. The Law has been in force since 10 August 2016. See the story in Regfollower |
Finland | Setting off Losses: The Ministry of Finance of Finland published its proposal for Budget 2017 on 12 August 2016. Accordingly, the possibility of setting off losses is broadened for corporate tax purpose. See the story in Regfollower |
World Tax Brief: August 2016
28 August, 2016