Austria CFC rule: On 11 July 2018, the Federal Council of Austria adopted the text of the Annual Tax Act 2018 as approved by the National Council (lower house) on 4 July. For the first time, Austria has introduced a comprehensive CFC regime. Accordingly, as from 2019, foreign companies may be considered CFCs where an Austrian company itself or with associated companies holds directly or indirectly more than 50% of the capital or voting rights of the foreign company or is entitled to more than 50% of the profits of the foreign company (associated means 25% direct or indirect ownership or entitlement to profits).
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Puerto Rico Submission of return: On 16 July 2018, the Secretary of State published an extended deadline for the submission of annual reports for 2017. The due date extended from 18 July 2018 to 17 October 2018 for the submission of the 2017 Annual Reports.
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Poland Transfer Pricing Rules: On 16 July 2018, Poland published a bill amending the country’s transfer pricing rules in line with the results of the BEPS project and the OECD Transfer Pricing Guidelines 2017 in order to improve the taxation of large multinational companies. The changes should apply in general from 1 January 2019.
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Colombia Late payments of tax due: The Colombian Tax Authority (DIAN) has updated the late payment interest rate for July 2018. According to Administrative Regulation 0820 of 2018, the effective monthly interest rate for late payment of taxes has been set at 28.05% and valid from 1 to 31 July 2018.
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China Carry forward-Ordinary losses: On 11 July 2018, the Ministry of Finance of China has published a Circular 76/2018, extending the current 5-year loss carry forward period to 10 years for High-and-New Technology Enterprises (HNTEs) and Technology-based Small and Medium-sized Enterprises (TSMEs). This Circular is retroactively effective to 1 January 2018.
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Incentive for small business: On 11 July 2018, the State Administration of Taxation (SAT) of China has published Circular 77/2018 to extend the tax incentive for small and low-profit enterprises. The incentive provides for a 50% reduction in taxable income with a reduced tax rate of 20%. From 1 January 2018 to 31 December 2020, the annual taxable income of small and low-profit enterprises will be raised from CNY 500,000 to CNY 1 million.
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Ukraine Thin capitalization rules: On 4 July 2018, the President of Ukraine submitted to Parliament a bill for amendments to the Tax Code regarding the tax on capital withdrawal. The draft law amends the tax law to replace the current corporate income tax system with a tax on distributed profits. The draft law proposed tax rates including 15% on profit distributions; 20% for operations that correspond to profit distributions; and 5% on debt securities to related parties where total non-resident related-party debt does not exceed 3.5 times equity (10 times for banks) and 20% if total non-resident related-party debt exceeds 3.5 (10) times equity or such payments are made to a resident of a low-tax jurisdiction.
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Russia CFC rule: Recently, the Russian lower house of parliament considering the Bill No. 442400-7, which includes various measures. The Bill adjust the CFC rules so that a person will not be recognized as a controlling person of a foreign organization if their participation in the foreign organization is realized exclusively: (a) through direct and/or indirect participation in one or several public (listed) companies that are Russian organizations; or (b) through direct and/or indirect participation in other foreign organizations whose shares are traded on one or more foreign exchanges, located in an OECD member state, provided that: The share of direct and/or indirect participation in such other foreign organization does not exceed 50%; and  The proportion of ordinary shares that are listed amounts to more than 25% of the authorized capital of such other foreign organization.
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Italy Incentives for industry/manufacturing: The Italian tax authority during 2018 issued guidance to clarify application of the existing tax rule of Research and Development (R&D) tax credit for eligible Italian companies and Italian permanent establishments of foreign companies investing in (R&D). The credit is available from the fiscal year in progress on 31 December 2014 and up to the fiscal year in progress on 31 December 2020.
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Ecuador Submission of return: The tax authority of Ecuador (SRI) issued a resolution to extend the deadline for filing the tax compliance report from 1 July 2018 to 28 July 2018, based on the ninth digit of tax identification number.
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Ireland Interest-loan: On 16 July 2018, Irish revenue authority published a Tax and Duty Manual concerning loans applied in acquiring an interest in a company. The contents of Tax and Duty Manual Part 08-05-02 – Loans applied in acquiring an interest in a company are no longer relevant.
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India Central management and control: On 22 June 2018, the Central Board of Direct Taxes (CBDT) has issued a final Notification No. 29/2018, dealing with special transitional provisions for a foreign company said to be a resident in India on account of Place of Effective Management (POEM). Section 115JH of the Income-tax Act of 1961 provides, in part, that the central government may address exceptions, modifications, and approvals of the rules for computation of income, the treatment of unabsorbed depreciation, the application of loss carryforwards and offsets, and rules relating to tax collection. This guidance would be effective retroactively from 1 April 2017.
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Norway Late payments of tax due: The Ministry of Finance (Mof) has published a regulation to set the late payment interest rate for the second half of 2018 (from 1st July 2018 to 31st December 2018). The interest rate is set at 8.50% from 1st July 2018 to 31st December 2018, which is unchanged from the previous period. The Ministry of Finance has furthermore set standard compensation for collection costs in Norwegian kroner at 380 kroner.
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Hungary Incentive for small business: Tax The government of Hungary presented a new tax package on 19 June 2018 for corporate and business tax. The deduction allowance for investment in start-ups will be capped at HUF 20 million. Further, a deduction for providing work-place kindergartens/childcare will be allowed, provided that at least 80% of the children are children of employees.
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Thailand Incentives for industry/manufacturing: On 19 June 2018, the Thai Cabinet approved a change in tax incentive in response to BEPS Action 5 for the International Headquarters (IHQs). The changes limit the types of qualifying license/royalty income to only those resulting from technological research and development activities in Thailand, regardless of whether the research and development activities are performed by the IHQs or other parties contracted by the IHQs.
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Peru Taxation of capital gains: On 3 November 2017, the tax Administration in Peru issued report no. 039-2017-SUNAT/7T0000, clarifying the exchange rate applicable to capital gains arising from the transfer of shares. The report refers to a transaction as part of which a non-resident entity sells shares issued by a Peruvian entity to another Peruvian entity. The price of the transaction is set using a foreign currency.
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