Albania Liability to Tax: Albania’s Parliament approved Law no. 36/2023, to foster tech and innovation start-ups. The law supports “digital nomads” foreign professionals using technology provide their professional services on behalf of entities without an Albanian office. Digital Nomads will be granted a tax residence exemption in the Republic of Albania for a duration of 12 months. During this period, they will not be classified as tax residents.
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Argentina Payment of tax-Advance payments due: Argentine tax authority (AFIP) has introduced General Resolution 5391/2023, implementing a 15% advance income tax payment for certain companies in 2023. This applies to entities with taxable income of at least ARS 600 million in the FY 2022, and that have not determined tax due to carried forward losses.
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Canada Liability to Tax: Canadian Deputy Prime Minister and Minister of Finance announced that Canada will proceed with its own Digital Services Tax (DST) starting from 1 January 2024, as initially planned. Despite the consensus among 138 countries and jurisdictions to extend the freeze on digital services tax implementation for another year, Canada remains committed to implementing its DST without delay.
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Czech Republic Rates-National/Federal: On 14 July 2023, the Ministry of Finance of the Czech Republic released a statement indicating that the Chamber of Deputies, the lower house of parliament, has given its initial approval to the government’s recovery package. The package includes significant measures, such as raising the corporate income tax rate from 19% to 21%.
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Germany Rates-Special tax rate: The German Ministry of Finance has released a draft law to enact the global minimum tax directive for multinational and large domestic groups. The draft law includes Pillar 2 provisions from EU Directive 2022/2523, covering income inclusion rule (IIR) and undertaxed payment/profit rules (UTPR), and a qualified domestic minimum top-up tax (QDMTT).
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Hong Kong Tax Compliance-Submission of returns: The Inland Revenue Department has extended the filing deadline for 2022/23 Profits Tax returns (Accounting Date Code ‘D’) from 15 August 2023 to 29 August 2023 due to genuine operational difficulties.
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Ireland Rates-Special tax rate: The Irish Government released second feedback statement on the transposition of the OECD Pillar Two global minimum tax rules in line with EU Council Directive 2022/2523 of 14 December 2022. The consultation period will run untill 21 August 2023.
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Kenya Liability to Tax: The Finance Act 2023 introduces a branch/PE repatriation tax of 15%, which is applied in addition to the tax already levied on the branch’s income. The Act also lowers the corporate income tax rate for branches to 30% (from 37.5%) starting from the 2024 year of income.
Thin capitalization rules: The Finance Act 2023 introduces changes to the interest restriction rule, the interest restriction of 30% of EBITDA will now only be applicable to loans obtained from non-resident lenders.
Rates-Withholding rates: The government imposed a withholding tax (WHT) on income earned by resident and nonresident persons from digital content monetization. Residents and nonresidents are subject to 5% and 20% withholding tax respectively.
Rates- Reduced rates: The Finance Act 2023 introduces a lower CIT rate of 15% for companies engaged in local assembly of motor vehicles during the initial 5 years of operation.
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North Macedonia Incentives-Small business: The government of North Macedonia has re-submitted the draft amendments to the parliament related to the tax laws. The previous version of draft suggested eliminating the tax exemption for companies earning up to MKD 3 million. However, this particular provision has been omitted in the latest draft. Consequently, the tax exemption for companies with income below MKD 3 million would remain in effect under the new proposal.
Tax Compliance-Submission of returns: The windfall profits tax return should be submitted by September 25, 2023, and the payment is required to be paid within a 30-day period.
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Panama Mode for Filing – E-filing: Panama has officially published Resolution No. 201-4370/2023 in the Official Gazette, that introduces updated forms for filing income tax returns. The Resolution clarifies that taxpayers with a total income exceeding PAB 11,000 are required to have their tax returns countersigned by a certified public accountant. This process can be facilitated using the e-Tax 2.0 system.
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Switzerland Treatment of losses-Carry forward: The Swiss Federal Council has recently made an announcement indicating that there is an ongoing parliamentary consideration of a proposal to extend the period for carrying forward losses from 7 years to 10 years. The primary objective of this proposal is to provide support for companies that have been impacted by the COVID-19 pandemic.
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Turkey Rates-National/Federal: On 15 July 2023, the Turkish Revenue Administration published Law No. 7456 in Official Gazette, which increases standard corporate tax rate from 20% to 25% and for companies in the financial sector increases from 25% to 30%. New rates apply from 2023.
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Uganda Liability to Tax: Uganda’s parliament has passed the draft Finance bill 2023, which includes a 5% digital services tax (DST) on income earned by non-residents from providing digital services in Uganda. The tax covers services from platforms like Facebook, Twitter, Amazon, and Netflix.
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United Kingdom Rates-Special tax rate: The UK Finance (No.2) Act 2023 was enacted on 11 July 2023, that incorporates provisions to adopt the OECD BEPS Pillar Two income inclusion rule (IIR) within the UK. This legislation includes two components: the multinational top-up tax (MTUT) and the domestic top-up tax (DTT). Both components will apply to large multinational enterprises (MNEs) for accounting periods beginning on or after 31 December 2023.
Rates-National/Federal: The Finance Act 2023 sets the main corporate tax rate at 25% and the small profits tax rate at 19% for the financial year beginning 1 April 2024. However, these rates were already scheduled to apply from 1 April 2023 as outlined in the Finance Act 2021.
See the story in RegfollowerIncentives: HMRC has published an analysis of the scale of non-compliance in the research and development (R&D) tax relief schemes and the approach taken to enforcing taxpayer compliance. The UK has two R&D tax relief schemes, a scheme for small and medium enterprises (SMEs) and the R&D expenditure credit scheme (RDEC) for large companies and other companies not eligible for the SME relief. The government has consulted on merging the schemes, but a final decision has not yet been taken. In the past three years, HMRC has more than doubled the staff involved with R&D compliance.
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Vietnam Rates-Special tax rate: The government of Vietnam has declared that it will implement the 15% global minimum tax rules under Pillar Two in 2024. The rules will include the introduction of a qualified domestic minimum top-up tax (QDMTT) and the income inclusion rule (IIR).
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