Indonesia Incentives:
On 6 April 2015, the government grants regulation (GR) No. 18 of 2015 (GR 18/2015) regarding the income tax incentive facilities available for investments in specified business sectors and regions. This regulation is applicable to corporate taxpayers making new investments and also expanding their existing businesses. The tax incentives available under GR 18/2015 are:
– Reduction of taxable income of up to 30% of the amount of total investment in the form of tangible assets, including land, which are used for the main business activity, at 5% per year over a period of 6 years from the start of commercial production.
– Carry-forward of losses for more than 5 years but less than 10 years, with the following provisions: additional extension of 1 year provided that: the new investments in specified business sectors are conducted in industrial areas and/or in bonds zones.
– The taxpayer spends a minimum of IDR 10 billion in capital investment for economic and/or social infrastructure at the business locations ; and at least 70% of raw materials and/or components used must be locally produced, starting from the 4th year;
Kenya E-filing:
The Kenya Revenue Authority (KRA) has issued a public notice clarifying the scope of filing tax returns in the recently rolled-out eTax system. Accordingly, taxpayers who are nil filers for pay-as-you-earn is required to file their tax returns, for the month of May 2015 and henceforth, in the eTax system. Further, KRA has informed taxpayers that it will not accept or consider paper/manual tax returns.
Russia Participation relief:
According to section 2 of article 23 and section 4 of article 25.14 of the Tax Code, as amended by Federal Law No. 376-FZ, Russian taxpayers have to notify the tax authorities about their participating interests in foreign companies (if these interests exceed 10%) or structures without the status of legal entities between 15 May 2015 and 15 June 2015. If they acquire participating interests after that period, they must notify the authorities within 1 month of the date of acquiring the participating interests.
Poland Thin Capitalization rules:
With effect from 1 January 2015, the thin capitalization threshold of 3:1 is lowered to a debt-to-equity ratio of 1:1. However, the amount of the debt is compared to the amount of the borrower’s equity instead of the share capital, as it was provided under the previous rules. The application of the thin capitalization rules is extended to include indirectly related parties. As such, interest is also not deductible when the loans are granted by indirect shareholders owning at least 25% of the share capital. Previously, the deductibility limitation applied only to direct shareholders.
United States Incentives on Research and development:
The US House of Representatives has passed legislation that would simplify and strengthen the research and development tax credit and included the provision in the US tax code. Companies conducting their development programs will be able to estimate their tax liability and will not be burdened by the constant uncertainty regarding whether or not the R&D Tax Credit will be extended. The R&D credit has been temporarily since 1981.
United Kingdom Capital gains tax:
The UK HMRC has published new valuation rules in respect of the valuation of shares for capital gains tax (CGT), corporation tax and income tax purposes. The rules which apply from 6 April 2015 are in the Market Value of Shares, Securities and Strips Regulations 2015 (SI 2015/616). For most CGT purposes the valuation is to be based on the figure half way between the lower and higher prices on the relevant day.
Incentives:
For R&D incentives an immediate write-off of the qualifying expenditure is allowed. Also for SMEs, there is a special rule growing the allowable deduction for expenditure on research and development expenditure to 230%, subject to certain conditions. The allowable deduction was 225% before 1 April 2015. If the additional deduction creates a loss, this may be surrendered in exchange for a cash repayment equal to 14.5% of the “surrender able loss”. The 14.5% rate takes effect for qualifying expenditure incurred after 1 April 2014. Immediately before that time, the relevant rate was 11%.
Egypt Other Incentives:
From 1 July 2015, an assessed interest deduction will apply. Consequently, 50% of the interest amount calculated over: the cash increases of the paid-in capital of existing capital companies and cash capital contributions of newly established capital companies will be deductible from the corporate tax base. For the use of the deduction, the annual weighted average interest rate applied to Turkish commercial loans provided by banks, which is announced annually by the Central Bank of Turkey, will be used. Companies operating in the finance, banking and insurance sectors will, nevertheless, not benefit from this deduction.
Spain Dividends:
A dividend paid by a Spanish company to its resident and non-resident shareholders normally attracts a withholding tax at the rate of 19%. However, for the 2015 tax period, this withholding tax is increased to 20%.However, the withholding tax may be reduced or eliminated by an applicable income tax treaty or the Parent-Subsidiary Directive.