World Tax Brief: July 2019

Slovenia	Corporate income tax rate: On 18 June 2019, the Ministry of Finance proposed changes to corporation tax rates. As a result, the CIT rate increased by one percentage point from 19% to 20% from 2020 onwards. In addition, a minimum corporation tax rate of at least 7% has been introduced. See the story in Regfollower
China	Computation of taxable income: Recently, the Ministry of Finance (MoF) has announced an update regarding pre-tax deduction policy for insurance enterprise handling fees and commission expenses. The announcement provides that insurance companies may deduct up to 18% of their premium income for such expenses, with the excess allowed to be carried forward. See the story in Regfollower
Canada	Tax incentives: On 21 June 2019, the government passed three federal bills into law. Among other changes, the law increased the tax credit for mineral exploration by 15% and introduced a temporary increase in the cost of capital for zero emission vehicles for the first year of 100%. See the story in Regfollower
Indonesia	Tax incentives: The Indonesian Ministry of Finance has proposed amendments to the SEZ scheme and tax cuts for certain sectors. Under the SEZ, the government plans a 50% tax exemption for five years, followed by a 25% tax exemption for two years for the investment cap of IDR 20 billion. The tax reduction scheme will boost investment in seven industrial sectors, including food and beverages, textiles, automobiles, electronics and chemicals. Options for tax cuts include tax holidays, tax breaks or a tax rate reduction of up to 20%. See the story in Regfollower
Uruguay	Tax incentives: Uruguay has issued a new software development incentive under Decree No 96/2019, which amends the software development exemption incentive effective from 1 January 2018, to comply with BEPS Action 5. The decree applies retroactively from 1 January 2018. See the story in Regfollower
Netherlands	Group treatment: Recently, the Dutch Ministry of Finance announced the introduction of a public consultation on the drafting of a new system for consolidating corporate tax groups, replacing the current system of fiscal unity. This system was recently amended due to compatibility issues with the EU through emergency measures law. The repair measures essentially limit certain benefits by applying certain aspects of Dutch tax law as if there were no fiscal unity. See the story in Regfollower
Kenya	Taxation of capital gains: On 13 June 2019, the Finance Minister proposes Budget for the Financial Year 2019/20 to the parliament. The budget proposed the Capital Gains Tax to be increased from 5% to 12.5%. There is no indication that indexation will be introduced. Incentive on industry/manufacturing: The investors who operate plastic recycling facilities in the first five years are offered a reduced corporate tax rate of 15%. Withholding tax: The scope of qualified services subject to withholding tax is to be extended. The withholding tax, which is also levied on services provided by the head office of its permanent establishment in Kenya, is introduced when those services are deemed to be taxable under a tax treaty. See the story in Regfollower
Uganda	Tax incentives: On 13 June 2019, the Ministry of Finance presented the Budget for 2019/20 to the Parliament of the Republic of Uganda. The budget introduces a reduction in the minimum investment to USD 50 million from USD 100 million for industrial park developers. The measures also proposes to decline the minimum investment threshold to USD 10 million from USD 15 million for foreign investors and to USD 2 million from USD 5 million for domestic investors in relation to the tax holiday for industrial park and free zone operators and other businesses outside industrial parks and free zones, as well as an addition of the holiday period from 5 years to 10 years. See the story in Regfollower
Tanzania	Reduced corporate tax rates: On 13 June 2019, the Minister of Finance presented the budget for the financial year 2019-20 with proposals for tax changes to come into force on 1 July 2019. The budget proposed a reduced tax rate of 25% from 30% for new investors involved in the production of sanitary pads for 2 years. Computation of taxable income: The budget introduced a presumptive tax regime for taxpayers with an annual turnover of TZS 4 to 100 million, who will not be required to submit financial statements to the Tanzania Revenue Authority for determining income tax with a view of lessening the tax compliance burden. See the story in Regfollower
Pakistan	Corporate income tax rate: On 11 June 2019, the finance minister has presented the budget for the financial year 2019/2020 to the parliament. Accordingly, the corporate tax rate has now been set at 29% for two years instead of 1% a year as currently planned. Tax incentive: With this budget, the tax credit for the harmonizing, modernization and replacement of plant and machinery, which was extended until tax year 2021, will be reduced from 10% to 5% and will subsequently be abolished from 30 June 2019. However, industrial undertakings that have already claimed this tax credit but could not fully adjust the credit against tax payable will still be entitled to carry forward the unabsorbed available credit of prior years. Withholding tax: Introduced a 15% withholding tax on royalty payments to resident persons. The dividends tax rate also increased from 15% to 25% for dividends received from companies that are either exempt or don’t pay any tax because of tax credits and allowances available to them. See the story in Regfollower
Greece	Filing return: Recently, the Ministry of Finance has issued a decision and extended the deadline for filing the corporation tax return for 2018. The deadline is extended until 29 July 2019. See the story in Regfollower
Spain	Submission of return: On 17 May 2019, Spain approved the corporate income tax and non-resident income tax returns for the tax periods started between 1 January 2018 and 31 December 2018. This Regulation also contains instructions on the reporting and payment procedure. See the story in Regfollower
Hungary	Incentive on small business: On 31 May 2019, the Ministry of Finance announced the Government-approved Action Plan for the Protection of the Economy. To help small businesses, the small business tax rate (KIVA) will be reduced from 13% to 12% from 1 January 2020. In addition to the tax cut the government has introduced tax preferences for small businesses (KATA and KIVA). Advance payments due: In order to reduce the administrative burden on companies and improve their liquidity, the government will abolish the advance corporation tax payments on companies. See the story in Regfollower
Slovak Republic	Tax incentives: On 29 May 2019, the Slovak Government approved a bill to update the income tax law. The law introduced tax incentives for the car manufacturing industry. Treatment of losses: The bill also changes the deduction conditions for losses of small and medium-sized enterprises (SMEs). The proposed changes are expected to enter into force on 1 January 2020. See the story in Regfollower
Vietnam	PE rules: On 13 June 2019, the National Assembly approved the Law on Tax Administration. The law introduced a new taxation regime for Foreign Service providers including e-commerce business. According to the articles 27.3 and 42.4, both banks and foreign suppliers having no permanent establishment in Vietnam are required to file and pay tax in Vietnam. See the story in Regfollower