The global tax landscape is a fluid entity - an ever changing and increasingly complex environment which has seen the arrival of a number of significant tax-related reforms over the past 12 months. Among the litany of global legislative shakeups is the implementation of the AOA for Permanent Establishments in Germany; the ratification of the Foreign Account Tax Compliance Act (FATCA) in Brazil; the introduction of a new withholding tax scheme to the collection of CGT liabilities in Australia; and the release of a new US model income tax treaty by the US Treasury Department.
BRAZIL
Marco Antônio Gomes Behrndt
Machado, Meyer, Sendacz e Opice Advogados
"Brazil’s corporate tax framework changed significantly as a result of Law
12,973, which came into effect in January 2015 and was designed to act as a bridge
between the 2008 accounting standards aligned to IFRS and the corporate tax
basis. An important change provided by the law refers to the assessment of
goodwill paid in M&A transactions qualifying as a business combination and
implemented between independent parties; it now derives from a mechanism
inspired by the IFRS approach, whereby a purchase price allocation is initially
implemented so that goodwill is assessed on a residual basis. Though enjoyment
of goodwill tax amortisation was maintained, the law set new, more restrictive
boundaries to be observed by taxpayers."
UNITED STATES
Peter A. Barnes
Caplin & Drysdale
"Gridlock in Congress prevented any major tax legislation from being enacted
over the past year, but important developments emerged in regulations and court
decisions. Most notably, new regulations severely restrict the ability of US
companies to ′invert′ in a tax-efficient manner and thereby shift their
ownership to a foreign parent. Proposed regulations also include sweeping changes
to the rules for >
CANADA
David Bunn
Deloitte
"After nearly 10 years of Conservative governments, the Liberal Party of Canada
won a majority government in the autumn of 2015. The first budget of the new
government was announced in March 2016, and of note was the government’s
confirmation of its intention to move forward with a number of initiatives to
address the OECD’s base erosion and profit shifting (BEPS) project. These plans
include adopting the country-by-country reporting standard for transfer pricing
documentation for years beginning after 2015."
MEXICO
Alejandro Barrera
Basham, Ringe y Correa, S.C.
"For the last four years, the Mexican government has passed a number of
strategic reforms designed to make the economic environment in Mexico more
appealing and competitive for foreign and domestic investors. An increase in
investments would naturally result in higher tax revenues. However, these
reforms have not brought the expected results. The pace of economic growth is
slower than the government had expected. Therefore, the government was
compelled to backpedal on some of the previous reforms."
COLOMBIA
Juan Manuel Idrovo
BDO
"The last two important tax reforms enacted in Colombia have shown that the
country is becoming very proactive and is working intensely to align its
legislation and tax procedures with the tools that current international tax
law has to offer, especially those that have been applied by more economically
developed countries, most of them if not all, members of the OECD. In fact,
Colombia has expressed its intention to become the next Latin American member
of the OECD, after Mexico and Chile. Recently, Colombia was approved by the
15th OECD committee of the 23 that have to evaluate the country’s compliance
with all the requirements to be accepted as a full member."
CHILE
Joseph Courand
Deloitte
"The tax reform enacted on 29 September 2014 is the most relevant development
experienced by our tax legislation in the last 30 years. Indeed, the tax reform
introduced deep changes to the Chilean tax system with a view to increasing
government revenues and reducing income inequality. In February 2016, the tax
reform was amended in order to simplify the coexistence of the two tax regimes
that the tax reform created. Among the most relevant changes are the creation
of two tax regimes, the inclusion of general anti-avoidance rules, tightening
of thin capitalisation rules, the inclusion of controlled foreign corporations
rules, and broadening the application of VAT on the transfer of real estate."
UNITED KINGDOM
Peter Jackson
Taylor Wessing LLP
"UK tax legislation continues to be responsive to the ongoing BEPS project
being undertaken by the OECD. Diverted Profits Tax (DPT) at a rate of 25
percent was introduced with effect from 1 April 2015 aimed at counteracting
artificial diversion of taxable income from the UK. In 2016, new legislation
will apply to deny treaty relief for abusive royalty payment arrangements and
to hybrid mismatch arrangements to reflect revised OECD transfer pricing
guidelines. The stick of these reforms as driven by BEPS is counterbalanced by
the carrot of further reductions in the rate of UK corporation tax with a new
rate of 19 percent applicable from 1 April 2017, reducing to 17 percent from 1
April 2020."
IRELAND
Lorraine Griffin
Deloitte
"Ireland’s most recent Finance Act, which was enacted on 21 December 2015,
introduced an OECD-compliant ‘Knowledge Development Box’ and also legislated
for country-by-country reporting. At the time of writing, the EU’s own
anti-avoidance package, which contains certain BEPS-related provisions, is
being considered. This may lead to further legislative changes. Encouraging
entrepreneurship is also high on the Irish tax agenda. This has seen measures
targeted towards more closely equalising the tax treatment of employed and
self-employed individuals being introduced. Finance Act 2015 also introduced an
enhanced capital gains tax entrepreneur’s relief for individuals who propose to
sell their business at some point."
NETHERLANDS
Mario van den Broek
RSM Netherlands
"In some areas, the Netherlands has followed OECD recommendations which have
led to changes in local tax laws. In other areas the Netherlands has taken a more
critical approach. To date there have been several key developments. First, as
per 1 January 2016, additional transfer pricing documentation requirements
apply to MNEs with entities in the Netherlands, in particular the obligation to
include a master file and local file in the administration of the Dutch entity
and in certain situations the obligation to file a country-by-country report."
GERMANY
Dr Thomas Schänzle
PwC
"There is certainly a trend toward further
internationalisation, as taxation in Germany is increasingly linked to tax
treatment abroad. For example, a matching principle has been introduced under
which participation exemption for dividends is denied if the underlying
payments are deducted abroad. Another example is the introduction of dual
consolidated loss rules for German tax groups. This development is not a direct
result of BEPS but goes along with the main objectives of BEPS to avoid double
deduction or double non-taxation. In the context of BEPS, however, a far
reaching measure is expected to be introduced this year, restricting the
deductibility of expenses if not taxed or deducted at the recipient’s level."
ITALY
Luca Bosco
Studio Tributario e Societario
"The Italian government has implemented a wide-ranging tax initiative aimed at
enhancing the competiveness of the Italian corporate tax regime, in order to
stimulate the economy and attract foreign investors, as well as introducing tax
provisions to tackle abusive conduct that fall fully within the OECD BEPS
Action Plan recommendations. In this spirit, for corporates the changes have
included a cut of the CIT rate by 3.5 percent starting in 2017, the potential
to exempt the profits of foreign permanent establishments of Italian entities
and the introduction of a patent box regime compliant with the OECD’s specific
recommendation in BEPS Action 5."
AUSTRALIA
Gaibrielle Cleary
Mazars
"The key developments in tax laws fall into three broad areas. First, there are
a range of new tax concessions for small business entities, including a lower
corporate tax rate, a CGT roll-over for restructures and an increase to the
threshold for obtaining deductions for depreciating assets acquired. Second,
incentives have been introduced to encourage investments in start-up companies.
These principally include special concessions for employee share schemes and
proposed tax offsets and CGT exemptions for investments in innovation start-up
companies."
MALAYSIA
Yeo Eng Ping
EY
"Recent Malaysian tax changes have focused on increasing tax collections,
reducing perceived leakages and improving enforcement, while promoting
investments. Some recent highlights include, firstly, the introduction of a
Goods and Services Tax (GST) at the rate of 6 percent, on 1 April 2015. Also, a
‘principal hub’ incentive now provides concessionary tax rates from 0 percent
to 10 percent. New transfer pricing disclosures have been unveiled, which will
require companies to indicate in their income tax return forms whether transfer
pricing documentation has been prepared."
ISRAEL
Ofir Levy
Yigal Arnon & Co.
"A number of major developments have recently taken place in Israeli tax law.
First, Israel has increased taxpayers’ reporting duties and imposed a duty on
financial institutions to report about foreign residents. Second, the country
has expanded information exchanges between the Israeli Tax Authority and other
jurisdictions, now that Israel has joined the OECD’s Convention on Mutual
Administrative Assistance in Tax Matters and signed the FATCA Agreement with
the IRS. Third, firms now face increased enforcement and heavier penalties, as
has been done with regard to money laundering."
SOUTH AFRICA
Peter Dachs
ENSafrica
"Some of the recent key developments in respect of South Africa’s tax law
relate to issues identified by the OECD’s Base Erosion and Profit Shifting
Action Plans. South Africa’s Davis Tax Committee released its first interim
report on various BEPS deliverables towards the end of 2014. There is a key
focus on transfer pricing practices, interest deductions in respect of highly
geared transactions, hybrid mismatches and improving the quality of information
to be provided to the South African Revenue Service (SARS). Trusts are also
under scrutiny with future legislative amendments likely to affect the taxation
thereof as well as income derived from trusts."
KENYA
Michael Koome Mburugu
PKF Kenya
"Capital gains tax was reintroduced by the Finance Act 2014 which came into
effect on 1 January 2015. Capital gains realised on the transfer of property is
taxable at a rate of 5 percent on net gains. The Excise Duty Act 2015 has
introduced a wide range of changes to the excise tax regime with the most
significant change being excise on specific units of measurement and not ad
valorem rates. Excise duty at 10 percent is now charged on money transfer
service fees and other fees charged by financial service providers. The Tax
Procedures Act 2015 was introduced to simplify the administration of tax by
unifying the value added tax (VAT), excise duty and income tax procedures."
(Financier World Wide - BR - 01.05.2016)
(Notícia na íntegra)