| Japan | Main corporate tax rate: The parliament (National Diet) on 29 March 2016 passed the tax reform for 2016. Accordingly, The main corporation tax rate is to be reduced to 29.97% from 1 April 2016 to 31 March 2018, then to 29.74% from 1 April 2018 onwards. |
| Finland | Statute of limitations on tax audit: The Government of Finland proposed that, the deadlines for appeal procedures may be increased whether the Tax Administration may correct a mistake within 3 years of the year of ordinary assessment. Under certain circumstances, the time limit may be extended by 1 year or even to 6 years. In the case of tax fraud, the right to make a re-assessment remains during the criminal proceedings. The taxpayer must submit the appeal within 3 years from the beginning of the calendar year following the end of the assessment. Appeal to the local administrative court must be made within 60 days after the decision of the rectification board is handed down. If the proposal is enacted, it will be effective from January 2017.
E-filling: The Government also proposed that from 2017, tax returns must be filed electronically. Hard-copy returns are also permitted only in exceptional circumstances. |
| Singapore | Corporate Income Tax Rebate: To help companies, especially Small and Medium Enterprises (SMEs), the Corporate Income Tax rebate will be raised to 50% for YA 2016 and YA 2017, subject to a cap of $20,000 rebate per YA.
Incentives: -Under the 2016 budget the following tax incentives were announced by the Minister for Finance: (i) The cash payout rate will be lowered from 60% to 40% for qualifying expenditure incurred from 1 August 2016. All other conditions of the scheme remain unchanged. The PIC scheme, which has been extended for YA2016 to YA2018, will expire thereafter. It will not be available from YA2019. (ii)To support firms to automate, drive productivity and scale up, qualifying projects may be eligible for an IA of 100% on the amount of approved capital expenditure, net of grants under the Automation Support Package. This IA is in addition to the existing capital allowance for plant and machinery. The approved capital expenditure is capped at $10 million per project. (iii)Extending the Double Tax Deduction (“DTD”) for Internationalization scheme as to support businesses in their internationalization efforts, the DTD for Internationalization scheme will be extended for another four years from 1 April 2016 to 31 March 2020. (iv)To support more the Mergers & Acquisitions (M&A) scheme the existing cap for qualifying M&A deals will be doubled from $20m to $40m, these changes will apply to qualifying M&A deals made from 1 April 2016 to 31 March 2020. Anti-avoidance rule: From 25 March 2016 an anti-avoidance mechanism will be introduced for intellectual property rights (IPR) transfers. This will be included under section 19B of the ITA to empower the comptroller to make the proper adjustments. E-filing: Mandatory electronic filing (e-filing) will be introduced for the following companies: From YA 2018: companies with turnover of more than SGD 10 million in YA 2017; From YA 2019: companies with turnover of more than SGD 1 million in YA 2018; and From YA 2020: all companies. |
| India | Main corporate tax rate: On 29 February 2016, in the 2016 Union Budget India introduce a new corporate tax rate of 29% (instead of 30%) for domestic companies whose total turnover or gross receipts do not exceed INR 50 million.
Flow-through Income: A new pass-through taxation regime has been introduced for a securitization trust set-up in accordance with the SARFAESI Act. Income of a securitization trust shall continue to be exempt and any income from such a trust would be taxable in the hands of the investors. Capital gains tax: The Finance Bill also introduces a new exemption from capital gains tax if long term capital gains are invested in units of a specified fund for promoting the start-up India Action Plan. The exemption is subject to a lock-in of 3 years and a maximum invested amount of INR 5,000,000 (USD 72,993). Additionally, long term capital gains earned by a non-resident on shares of a company in which the public are not substantially interested shall be taxable at a rate of 10%. Sanctions for incorrect corporate returns: The Bill proposes to rationalize the penalty provisions with respect to the concealment of income and/or disclosure of inaccurate information. The penalty for concealment of particulars or furnishing of inaccurate particulars has been refurbished, with a penalty of 50% for under reporting and 200% for misreporting. |
| Canada | Incentives: The Finance Ministry has presented Budget 2016 on 22nd March 2016 under the budget a new incentive has been proposed in relation to electric vehicle charging stations, electrical energy storage and emissions trading programs. This budget also proposes that the small business tax rate remains at 10.5% after 2016. |
| United Kingdom | Main corporate tax rate: The March 2016 Budget announced that the corporate tax rate for 2020/21 would be further reduced to 17%.
Capital gains: The rate of capital gains tax is to decrease from 28% to 20% for higher rate taxpayers; and to decrease from 18% to 10% for basic rate taxpayers. Entrepreneurs’ relief will be extended to long term investors in unlisted companies, providing a 10% rate of CGT for gains on newly issued shares in unlisted companies purchased on or after 17 March 2016, provided they are held for at least three years from 6 April 2016, subject to a separate lifetime limit of £10 million of gains. Treatment of losses: For losses earned on or after 1 April 2017 businesses will be able to use carried forward losses against profits from other income streams or use losses from other companies within a group. In the case of profits in excess of GBP 5 million the amount of profit that can be offset through losses carried forward will be restricted to 50%. The government will also reduce the amount of profit that banks can offset with pre-2015 losses from 50% to 25% from 1 April 2016. Small business: The rate of tax payable in relation to loans to participators by a close company will be increased from 25% to 32.5% from April 2016 for loans, advances and arrangements made on or after 6 April 2016. |
| Poland | Incentives for Industries: The Council of Ministers published a bill introducing amendments to the Corporate Income Tax Law regarding tax incentives for the development of research and development (R&D) activities on 7 March 2016. According the bill micro and small and medium-sized enterprises (SMEs) will be permitted to deduct 50% of all qualifying expenses, whereas large companies will be permitted to deduct 50% of payroll expenses of employees involved in R&D activities, and 30% of the other qualifying expenses. |
| Iceland | Filling return: Tax return filling for legal entities has been amended by Law No. 124/2015 as adopted by the parliament on 28 December 2015. From now the deadline for filing tax returns is 31 May for legal entities with turnover exceeding ISK 600 million and assets exceeding ISK 300 million. |
| Ecuador | Management Fees: On 24 February 2016, New Resolution SCVS-INAF-DNF-16-006 was published in the Official Gazette, issued by the Supervisory Body of Companies, Securities and Insurances, established the amounts for the year 2016 of the annual contribution need to be paid by companies and other entities subject to the control of this supervisory body, according to the specified rates. |
| Luxembourg | Main corporate tax rate: The government of Luxembourg released an outline of the proposals on 29 February 2016 for tax reform in 2017. The most significant measure for corporate taxpayers is an expected decrease of the rate of corporate income tax. The corporate income tax rate would phase-down from the current rate of 21% to 19% in 2017, and then to 18% in 2018. For companies in Luxembourg City, this rate reduction would provide for a “global” tax rate of 27.08% in 2017 and 26.01% in 2018.
Incentives: Agricultural businesses may deduct 30% for initial investments of up to EUR 250,000 and 20% on any excess. |
| Denmark | Participation exemption: The Ministry of Taxation submitted a law proposal (L 123) to the parliament on 23 February 2016. Accordingly, the rules on the participation exemption are enhanced by amending the definition of subsidiary shares. Accordingly, the participation exemption applies if the subsidiary is resident in a jurisdiction that exchanges information in tax matters with the Danish tax authorities.
Withholding tax on dividend: The general withholding tax on dividends paid by Danish companies to foreign entities is reduced to 22% (currently, 27%). The proposal requires that the current 27% rate violates the freedom of establishment under article 49 of the Treaty on the Functioning of the EU (TFEU) as the rate imposed on companies resident in other EU/EEA states is higher than the corporate income tax rate on Danish companies. Anti-avoidance rule: A new anti-avoidance rule in respect of investment funds and unit trusts is introduced in order to prevent foreign investors to avoid Danish withholding taxes. The amendment has retroactive effect from 23 February 2016. |
| Russia | CFC Rule: The president of Russia has signed Federal Law No. 32-FZ on February 15, 2016 that amends the СFC provisions. This Law has published on 15 February 2016 and will enter into force on 1 January 2017. The law establishes that the profit/loss of a CFC may be determined based on either its financial statements or according to the rules provided by Chapter 25 of the Tax Code. However, the first option is available only if one of the following criteria is met: if the CFC resides in a state with which Russia has signed an international agreement on tax matters, except for states which do not ensure exchange of tax information with Russia; or if an audit report of the financial statements is made and the audit report does not contain a negative conclusion. |
| Peru | Submission of return: The Peruvian tax administration published on its website the guidelines (cartilla de instrucciones) for filing the corporate and individual income tax returns for tax year 2015. The guidelines are available as from March 2016. The guidelines clarify the main concepts regarding income tax and provide guidance on the assessment of the tax, applicable tax rates, and requirements to be met when filing the tax return. |
| Venezuela | Incentives: On 28 March 2016, Decree 2,287 (the Decree) was published in the Official Gazette. The Decree establishes an income tax exemption for income derived from agriculture, forestry, livestock, poultry, fisheries, aquaculture and fish farming activities (the exempt activities). |
