Belgium International-CFC: The government proposes stricter rules on taxing undistributed income of controlled foreign companies, shifting from anti-avoidance to targeting passive income in the EU Anti-Tax Avoidance Directive. Double taxation can be avoided upon profit distribution or capital gain realization. Reporting CFC existence is required in corporate tax returns. Expected approval by year-end, with rules effective for assessment year 2024, starting from financial years ending on or after 31 December 2023.
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Costa Rica Rates-National/ Federal: On December 7, 2023, Costa Rica’s Tax Authority released Executive Decree No. 44276-H, outlining the income tax brackets for the 2024 tax year. Corporations with an annual gross income exceeding CRC 120,582,000 will be subject to a 30% corporate income tax rate.
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Czech Republic Rates-Special tax rate: On 14 December 2023, Czech President Mr. Petr Pavel signed a law implementing the global minimum tax rule in line with EU Directive 2022/2523. The law, effective from 31 December 2023, introduces a 15% minimum tax for qualifying multinational groups and includes a domestic top-up tax and safe harbor rules. The undertaxed payment/profit rule applies from 31 December 2024.
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Denmark Rates-Special tax rate: On 13 December 2023, Denmark has gazetted Law No. 1535/2023, which incorporates the provisions of the global minimum tax Directive into its domestic law, effective from 31 December 2023. The law introduces measures like the Income Inclusion Rule (IIR), Undertaxed Profit Rule (UTPR), and Qualified Domestic Top-Up Tax (QDTT) to ensure a minimum 15% effective tax rate for Danish entities in foreign groups.
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Germany Rates-Special tax rate: On 27 December 2023, the German Official Gazette released a law enacting EU Council Directive 2022/2523, which incorporates global minimum tax rule for multinational enterprise (MNE) groups and large domestic groups within the European Union. The law applies a minimum tax rate of 15% to MNE groups with annual consolidated revenue exceeding €750 million in at least two of the past four fiscal years.
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Hungary Rates-Special tax rate: On 30 November 2023, Hungary published Law No. LXXXIV of 2023 for global minimum tax requirements in the official Gazette No. 171. The law incorporates Pillar 2 Global Minimum Tax (GloBE) rules and introduces a refundable R&D tax credit to support research and development activities.
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Kazakhstan Liability to Tax: Kazakhstan’s banking sector is at an important juncture with the proposed introduction of a super profit tax. The proposed tax reform in Kazakhstan focuses on introducing a super-profit tax on banks’ earnings from government securities. This initiative, highlighted in President Tokayev’s address, aims to redistribute bank profits in favour of state interests and encourage greater involvement in business lending.
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Latvia Rates-Surcharges: On 9 December 2023, Latvia’s Saeima (parliament) approved the 2024 state budget. It has introduced an annual corporate income tax surcharge of 20% for credit institutions and consumer credit providers. The measures entered into force on 1 January 2024.
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Luxembourg Credits-Investment Tax Credits: On 19 December 2023, Luxembourg’s Chamber of Deputies approved Bill 8276, reforming the global investment tax credit. The changes include raising the credit from 8% to 12%, eliminating the EUR 150,000 limit, and granting a 14% credit for investments in assets under special depreciation. The 12% credit applies to tangible depreciable assets excluding buildings, livestock, and mineral deposits.
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Nigeria Mitigation of penalties: On 3 December 2023, Nigeria’s Federal Inland Revenue Service (FIRS) announced a temporary waiver of penalties and interest on outstanding tax liabilities. The waiver is conditional on the complete settlement of the outstanding principal by 31 December 2023.
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Portugal Rates-Reduced rates: Portugal’s Budget Law for 2024, approved on 29 November 2023, closely resembles the October 2023 draft with additional amendments. Key tax measures include a new 12.5% corporate tax rate for eligible innovative start-ups.
Computation of taxable income: Extending the special assistance program for electricity and gas expenses through the tax years 2023 and 2024, granting a heightened deduction of 20% (totaling 120%) for these costs.
Incentives-Infrastructure: Introduction of accelerated depreciation at a rate of 4% for properties allocated by employers as permanent housing for employees.
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Saudi Arabia Incentives: Saudi Arabia has introduced a 30-year tax incentive package for multinational companies establishing regional headquarters (RHQ) activities in Saudi Arabia. The comprehensive tax plan includes a 0% corporate and withholding tax rate for approved RHQ activities, aiming to enhance Saudi Arabia’s attractiveness to multinational corporations and contribute to its goal of being among the world’s top 10 city economies by 2030.
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Switzerland Rates-Special tax rate: The Swiss Federal Council has confirmed the implementation of the OECD/G20 minimum tax rate, starting from 1 January 2024, to safeguard against the erosion of the tax base. The decision follows a public vote in June 2023, supporting a special tax regime for large corporate groups. The minimum tax, set at 15%, will be applied as a national supplementary tax to large multinational enterprises with a turnover exceeding EUR 750 million.
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