World Tax Brief: August 2019

Hungary	Incentive on small business: On 12 July 2019, the Hungarian Lawmakers approved the 2020 budget. The budget reduced the rate of small enterprise tax (KIVA) from 13% to 12% and cancel the simplified entrepreneurial tax (EVA). Payment procedures: On 12 July 2019, Hungarian lawmakers approved budget 2020. The budget removes the advance tax payments for companies that generate annual sales of more than HUF 100 million (end-of-year increase), so that these companies pay their taxes due with their annual tax return can settle instead of the last month of the year. See the story in Regfollower
Ireland	CFC: On 22 July 2019, Ireland has published a new Tax and Duty Manual, Part 35b-01-01 in respect of the Controlled Foreign Company (CFC) rules that were introduced by Finance Act 2018 and take effect from 1 January 2019. See the story in Regfollower
Argentina	Payment procedures: On 12 July 2019, the Federal Administration of Public Revenues (AFIP) of Argentina has published General Resolution No. 4522/2019. The resolution modifies the determination of advance payment and deductible procedures of the income tax for the corporation. The provisions of this general resolution will come into force on the day of its publication in the Official Gazette and will be applicable for advances corresponding to 2019 and subsequent fiscal periods. See the story in Regfollower
Indonesia	Incentive: On 26 June 2019, the Indonesian government issued a Government Regulation (PP) No. 45 of 2019, which amended Regulation No. 94 of 2010 (GR-94) on the calculation of taxable income and the repayment of income taxes in the current year to stimulate investment in specific industries, support programs for job creation and research and development activities. See the story in Regfollower CFC: On 26 June 2019, the Ministry of Finance published a new regulation (No.93/PMK.03/2019(PMK-93) on the controlled foreign corporation (CFC) rules for fiscal year(FY) 2019 which amended the regulation No.107/ PMK.03/2017(PMK-107), concerning the determination of deemed dividends from CFCs as well as the calculation of the deemed dividend amount. See the story in Regfollower
Algeria	Filing return: The Algerian tax agency has recently published a guideline on electronic tax declaration and payment procedures. See the story in Regfollower
France	GAAR: On 3 July 2019, the tax authorities published a guidelines regarding the new general anti-abuse rule (GAAR). The new GAAR, which applies from 1 January 2019, targets provisions that focus on tax-driven abuses of law. According to the guidance, the new GAAR applies to transactions or actions whose primary purpose is to obtain a tax benefit that violates the subject matter or purpose of the applicable tax law. See the story in Regfollower Computation of taxable income: Recently, France has published interest rates for entities whose financial year ended between 30 June 2019 and 29 September 2019, which are used to determine the deductibility of interest payments to shareholders. The portion of interest payments exceeding the given rates is generally not deductible unless documentation is provided demonstrating that the interest rate applied is at arm’s length. See the story in Regfollower
Greece	Main corporate tax rate: Recently, the Greek Prime Minister has announced that the government wants to introduce a wide range of tax cuts in order to boost the economy. Accordingly, the Prime Minister proposed a reduction in corporate tax from 28% to 24%. Withholding tax on dividend: The Prime Minister also proposed a reduction in the dividends withholding tax rate from 10% to 5%. See the story in Regfollower Filing return: On 1 July 2019, the tax authority published the Circular E.2123 explaining the application of the limitation period in the event of late filing of a tax return. The new Circular amends Circular 1165/2018 in relation to the limitation period of 15 years which applies to the late filing of a tax return after the expiry of the original limitation period of 5 years. See the story in Regfollower
Bangladesh	Residence rules: On 30 June 2019, the national Parliament of Bangladesh passed the budget for 2019-20 fiscal year. The proposals were enacted by the Finance Act, 2019 and became effective as of 1 July 2019. Accordingly, a trust, a fund or any other entity may be treated as a resident of Bangladesh if its control and management of affairs are situated wholly in Bangladesh in that year. Reduced rates: Under the Budget, the reduced tax rate of 12% (10% for green building certification) for readymade garments is extended until 30 June 2020. The reduced tax rate of 15% for the textile sector is extended until 30 June 2022. See the story in Regfollower
India	Main corporate tax rate: On 5 July 2019, the Finance Minister presented the Finance Bill of financial year 2019-20. Under the bill, the standard corporate tax rate will be maintained at 30%, while the maximum income threshold for the reduced corporate tax rate of 25% will be raised from 2.5 INR billion to 4 billion INR. See the story in Regfollower
Australia	Thin cap rule: On 4 July 2019, the Treasury Laws Amendment Bill 2019 was introduced in the Australian House of Representatives. Schedule 1 to this Bill amends the ITAA 1997 to tighten Australia’s thin capitalization rules. See the story in Regfollower
Oman	Incentive: Recently, Oman has introduced a tax incentive for every new investor looking to build a tourism project in Musandam. According to the new regulation, in the first 10 years of the project, investors receive exemption from tourism and local tax and 15% corporation tax. See the story in Regfollower
Ecuador	Payment procedures: On 5 July 2019, the Ecuadorian Internal Revenue Service issued Executive Decree No. 806 of 25 June 2019. The decree introduces new schedule for advance income tax payments. The payment of advance income increases to five installments (July, August, September, October and November) from two installments (July and September) for the corporation, especially micro and small taxpayers. See the story in Regfollower
Brazil	Incentives: On 17 June 2019, the Minister of Mines and Energy signed Regulation No 252, which regulates the process of setting priority projects in the oil, gas and biofuel sectors for issuing incentive debentures. The regulation will help unlock investment in oil, natural gas and biofuels. See the story in Regfollower
Colombia	Thin cap rule: On 26 June 2019, the Government of Colombia published a Decree 1146 of 2019, concerning the new thin capitalization rules which amended the previous law 1943 of 2018. The new law effective from 1 January 2019. See the story in Regfollower
Hong Kong	Relief from double taxation: The Hong Kong Inland Revenue Department has published a revised version of Departmental Interpretation and Practice Notes (DIPN) No. 28 on provisions relating to foreign tax deduction. The main revisions to DIPN No. 28 concern the enactment of section 16(2J), which provides that with effect from the year of assessment 2018/19, the unilateral relief from double taxation would not apply in relation to any tax paid in a territory by a person in respect of the profits referred to in section 16(1)(c) if: the territory is a DTA territory; and under section 50, tax payable in the territory by a Hong Kong resident person in respect of the profits is to be allowed as a credit against tax payable in Hong Kong by the resident person in respect of the profits. See the story in Regfollower