Below you will find extracts from our latest monthly newsletter. The complete newsletter is distributed to our clients on a monthly basis.


August 2014

Albania
New Transfer Pricing Rules Issued

On 4 June 2014, the amendments to the Law on Income Taxes and the Law on Taxation Procedures entered into force. Also, on 18 June 2014, the Ministry of Finance issued the Regulation on Transfer Pricing, which provides detailed instructions on the transfer pricing procedure.


Persons are deemed to be related parties if
  • one of the persons participates directly or indirectly in the management, control or capital of the other person; or
  • the same person(s) participates directly or indirectly in the management, control or capital of both persons.

Persons are deemed to participate directly or indirectly in the management, control or capital of another person if they directly or indirectly own 50% or more of the share capital of that other person.


Further, the Regulation requires that taxpayers prepare and file sufficient and appropriate documentation and analysis to certify that the conditions in their controlled transactions are consistent with the arm's length principle.


Based on the Law, taxpayers engaging in controlled transactions, which in aggregate, within the reporting period, exceed ALL 50 million are required to prepare and file the Annual Controlled Transactions Notice to the Regional Tax Directorate.


The new Transfer Pricing rules are in line with the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration (2010). In cases where there are differences, the Albanian laws will prevail.


India
Budget 2014/15

The Budget for fiscal year 2014/15 was presented on 10 July 2014. Among other proposals, the dividend distribution tax is to be levied on the gross amount instead of amount paid net of taxes.


Russia
Proposal to Exclude Malta from Blacklist

Foreign dividends are tax exempt in Russia in accordance with the participation exemption. The participation exemption is applicable if on the day of the decision to distribute dividends the recipient have owned, for at least one year, at least 50% of the shares of the distributing company and the subsidiary paying the dividends is not resident in a country or territory on the blacklist provided by the Ministry of Finance.


On 4 August 2014, the Russian Ministry of Finance published a draft order amending the blacklist of offshore jurisdictions. In particular, the Ministry of Finance proposed to exclude Malta from the blacklist.

June 2014

Brazil
Taxation of Fees for Services and Technical Assistance

On 20 June 2014, the Internal Revenue Service published Interpretative Ruling (Ato Declaratorio Interpretativo) No. 5/2014, the Ruling. By issuing the Ruling, the tax authorities have recognised that the payments made by Brazilian sources to foreign beneficiaries in consideration for the rendering of services and technical assistance, whether or not involving transfer of technology, are subject to application of the tax treaties signed by Brazil, as follows:


  • payments fall within the article on royalties when the corresponding protocol establishes that technical services and technical assistance are subject to the same tax treatment as royalties;
  • payments fall within the articles that deal with independent professional services and independent workers when the technical services or technical assistance involves technical skills of a person or group of persons, provided that the corresponding tax treaty allows the taxation in Brazil and except when the above applies; or
  • payments fall within the scope of the article on business profits, except when the above applies.

The Ruling revoked Interpretative Ruling No. 1/2000, whereby the tax authorities took the position that the amounts paid for the rendering of technical services without the transfer of technology would not fall within the scope of the article on business profits, as these payments are defined as mere "revenue" of the foreign beneficiary under domestic law. As a result, according to the previous understanding of the Internal Revenue Service, such payments would fall within the scope of the article on other income. In regard to "other income", the tax treaties signed by Brazil generally diverge from the OECD Model by allowing taxation at source.


Egypt
Tax Amendments

On 1 June 2014, the Minister of Finance announced that Egypt will shortly enact major tax changes to the Income Tax Law 91 for 2005. Among others, a 10% withholding tax rate is introduced on gross distributions of dividends to resident and non-resident corporate entities. Distributions of dividends are exempt from tax under the existing Income Tax Law. The dividends tax rate is reduced to 5% if the following conditions are met:

  • the ownership in the distributing entity exceeds 25% of the share capital or the voting rights; and
  • the participation is held for, at least, 2 years.

Further, a participation exemption regime is introduced for resident parent and holding companies whereby 90% of the dividends received from resident and non-resident subsidiaries are exempt from tax if the following conditions are met:

  • a 25% minimum participation is held in the share capital or voting rights of the distributing entity; and
  • the participation is held for at least 2 years from the date of acquisition. In case the exemption is claimed before the requirement of minimum ownership period is met, a commitment to keep this minimum level of participation for a 2-year period would be sufficient to apply the exemption.

Non-resident companies will be subject to tax on gains from the disposal of shares in resident companies at the rate of 10%. A 6% withholding tax rate is to be levied on the capital gains by the financial intermediaries on account of the final tax liability.


Also, a General Anti-Avoidance Rule (GAAR) is to be introduced. Under this rule, a transaction is disregarded for tax assessment purposes when its main reason or one of its main reasons is to avoid taxes whether by eliminating or by deferring the tax liability. The transaction may take the form of a contract, agreement, promise or any other document providing for binding commitments. The transaction may also be carried out in one step or more than one step, multiple step transaction. The tax assessment should be based on the economic substance of the transaction.


The burden of proof, in order to demonstrate that the main purpose or one of the main purposes of the transaction is to obtain a tax benefit, is borne by the tax authority. However, the taxpayer is required also to show that the transaction is not tax driven

May 2014

France
New Tax Measures Approved by Parliament
On 29 April 2014, the Parliament approved the new tax measures announced on 8 April 2014.
French lawmakers voted for a EUR 50 billion savings plan designed to meet deficit-reduction targets according to the EU-mandated limits. The 2014-2017 "Stability Programme" was passed by 265 votes to 232 in the National Assembly, the lower house of parliament.

Accordingly, the standard rate of corporate income tax would be gradually reduced to 28%, from the current rate of 33.33%, in 2020 starting from 2016. Further, the temporary surtax on the corporate income tax would be abolished in 2017. In addition, the social solidarity tax on companies would be reduced and completely abolished within 3 years.

Italy
New Tax Measures
On 24 April 2014, Law Decree No. 66/2014, containing urgent measures for competitiveness and social justice, was published in the Official Gazette No. 95, following the approval by the Council of Ministers on 18 April 2014. The Law Decree entered into force on 24 April 2014 and will be presented to the Parliament.

Among others, with effect from 1 July 2014, the withholding tax rate applicable to qualifying dividends and interest, and certain capital gains, will be increased from 20% to 26%. With regard to dividends, the reduced withholding tax of 1.375% will continue to apply to qualifying dividends paid to a company resident and subject to corporate income tax in another EU country or EEA country that allows an adequate exchange of information.

Further, with effect from the tax year following the one ongoing on 31 December 2013, the IRAP standard rate will be decreased from 3.9% to 3.5%.

April 2014

Spain
Expert Committee Issues Report for Reform of the Tax System
The Expert Committee for the Tax Reform presented its report for the tax reform of the Spanish tax system on 13 March 2014.

Among others, the report includes a gradual reduction of the corporate income tax rate from 30% to 20% (i.e. first phase to 25% and second phase to 20%). The report also proposes a provision/rule according to which interest is not deductible if the amount of debt exceeds 50% of the total assets of the entity. Further, the report introduces a subject-to-tax test to apply the exemption method under which the participated company shall be subject to a minimum 10% tax on income obtained in the foreign country. In addition, the business activity test would be removed.

March 2014

Estonia
New Countries Included In "White List"
On 9 February 2014, the Government expanded the "white list" (Regulation No. 11 of 11 January 2000) to include Bahrain, Mexico, Thailand, Turkmenistan and Uzbekistan. These countries are, therefore, automatically not treated as low-tax jurisdictions. The reason for this amendment was that the treaties with these countries came into force during 2013 and became effective from 1 January 2014. The amendment of the "white list" is effective retrospectively from 1 January 2014, and, thus, brings the number of "white-listed" countries to 57.

United States
List of Boycott Countries Reissued
The US Treasury Department has reissued its list of the countries that require cooperation with or participation in an international boycott as a condition of doing business. The countries listed are Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and Yemen.

The list is dated 14 February 2014 and was published in the Federal Register on 24 February 2014. The new list is unchanged from the list dated 20 November 2013.

The listed countries are identified pursuant to Section 999 of the US Internal Revenue Code (IRC), which requires US taxpayers to file reports with the Treasury Department concerning operations in the boycotting countries. Such taxpayers incur adverse consequences under the IRC, including denial of US foreign tax credits for taxes paid to those countries and income inclusion under Subpart F of the IRC in the case of US shareholders of controlled foreign corporations that conduct operations in those countries.

Venezuela
Tax Unit Increase
The value of the tax unit was increased according to resolution SNAT/2014/0008 published in the Official Gazette 40,359 of 19 February 2014.

Amounts in the Venezuelan tax laws, among others brackets for taxes, are expressed in tax units. These amounts are adjusted on a yearly basis when the tax unit's value is set. The new value will apply for the tax year of 2014 and is increased from the previous VEF 107 to VEF 127.

February 2014

France
Finance Law 2014
On 19 December 2013, the French parliament adopted both the Finance Law for 2014 and the amended Finance Law for 2013. Among others, the temporary corporate income tax surcharge, introduced in 2011, was increased from the former rate of 5% to 10.7% with effect for fiscal years ending on or after 31 December 2013.

In addition, the deduction of interest expenses is further limited from the former 85% to 75% on deductions exceeding EUR 3 million. Also, for tax years ending on or after 25 September 2013, the deduction of interest paid to a related company will be denied if the tax paid by the lender on the received interest is lower than a quarter, 25%, of the tax that would have been paid under French tax law.

Guatemala
Transfer Pricing Provisions Suspended
By means of Decree 19/2013 published in the Official Gazette on 20 December 2013, the application of transfer pricing provisions, which entered into force on 1 January 2013, was provisionally suspended. Transfer pricing provisions will be applicable again as from 1 January 2015.

Lithuania
Corporate Income Tax Law Amendments
On 12 December 2013, the Parliament adopted amendments to the Law on Corporate Income Tax. The amendments entered into force on 30 December 2013. Among others, the amendments introduce a restriction on the carry-forward of ordinary losses incurred in 2014 and subsequent tax periods. Accordingly, only 70% of such losses may be carried forward. The restriction does not apply to losses incurred in the tax periods prior to 2014.

January 2014

Dominican Republic
Corporate Income Tax Rate Reduction
On 9 November 2012, major income tax amendments were introduced through Law 253-12.

Among others, the corporate income tax rate is reduced from 29% to 28% for taxable year 2014. In addition, for taxable year 2014, the withholding tax levied on royalty and fee payments is reduced from the rate of 29% to 28%.

Slovak Republic
Income Tax Amendments
On 17 December 2013, the amendments to the Income Tax Act were signed by the President. Consequently, the amendments are applicable with effect from 1 January 2014. Among others, the corporate income tax rate is reduced from the current rate of 23% to 22%. Further, the possibility to carry forward the tax losses is reduced from 7 years to 4 years. Also, the amount that can be used in a year will be capped at one quarter of the tax losses to be carried forward.

Ukraine
Transfer Pricing News
On 25 December 2013, the Government approved a list of low tax jurisdictions for transfer pricing purposes. Transactions with residents of the low tax jurisdictions are treated as controlled transactions for transfer pricing purposes, provided that the threshold of UAH 50 million per annum is exceeded for the transactions concluded with one party.
Belize, British Virgin Islands, Cayman Islands, Cyprus, Ireland, Liechtenstein, Luxembourg, Malta, Seychelles, Singapore, Switzerland and the United Arab Emirates are included in the list.

December 2013

El Salvador
Tax havens list for 2014
A 25% withholding tax is applicable on any payment to residents of countries considered to be tax havens or territories with preferential tax regimes. The tax administration issues the list of countries and will update it on a yearly basis. On 25 September 2013, the list for 2014 was published by means of Guide No. DG-001/2013. The list classifies the countries or territories in three different categories as follows.

Low-tax countries or territories includes the following jurisdictions: Albania, Andorra, Barbados, Bosnia and Herzegovina, Botswana, Bulgaria, Czech Republic, Cyprus, Delaware (US), Florida (US), Georgia, Gibraltar, Hong Kong, Ireland, Kuwait, Labuan (Malaysia), Latvia, Lebanon, Liechtenstein, Lithuania, Macau, Macedonia, Malta, Mariana Islands, Mauritius, Micronesia, Moldova, Montenegro, Oman, Qatar, Paraguay, Romania, San Marino, Serbia, Singapore, Slovenia, Switzerland (in certain cases), Taiwan, and Uzbekistan.

No-tax countries or territories includes the following jurisdictions: Anguilla, Antigua and Barbuda, Aruba, Azores Islands, Bahamas, Bahrain, Bermuda, British Virgin Islands, Brunei, Campione d'Italia, Cayman Islands, Cook Islands, Curaçao, Dominica, Grenada, Guernsey, Isle of Man, Jersey, Liberia, Luxemburg (only in certain cases), Maldives, Marshall Islands, Monaco, Montserrat, Nevada (US), Norfolk Islands, Qeshm (Iran), Samoa, Saint Martin, St. Helen and Tristan Da Cunha, St. Kitts and Nevis, St. Vincent and the Grenadines, St. Lucia, Seychelles, Turks and Caicos, United Arab Emirates, US Virgin Islands, Vanuatu, and Wyoming (US).

Tax havens by the OECD include the following jurisdictions: Nauru and Niue.

Additionally, the Guide indicates that the list is not comprehensive so other countries or territories may also be considered as having preferential tax regimes or being tax havens under the criterion established in article 62-A of the Tax Code.

November 2013

Mexico
Tax Reform Package 2014
On 31 October 2013, the Chamber of Deputies approved the tax reform package for 2014. Among others, a 10% withholding tax will be introduced on dividends paid by Mexican companies to non-residents. The withholding tax will only be applicable to profits generated as from 2014. Further, the corporate income tax will not be reduced as previously proposed; instead the tax will remain at the rate of 30%.


Panama
Extended TP Deadline
Originally, Panamanian corporate taxpayers engaged in transactions with related foreign entities with a tax year ending on 31 December has to file their transfer pricing reports at the latest on 30 June the following year. However, Resolución No. 201-14244, published in the official gazette on 21 October 2013 extends the deadline to 31 December 2013 for transfer pricing documentation for the tax year 2012.


Spain
Losses Carry Forward Limitation
Law 16/2013 of 29 October 2013 adopting tax and financial measures were published in the Official Gazette on 30 October 2013. Among others, the limitation on the amount of losses to be carried forward for large companies is extended. Previously, for taxable years 2012 and 2013 companies with a turnover exceeding EUR 20 million and up to EUR 60 million will only be able to compensate 50% of the losses of the previous years. Further, companies with a turnover equals or exceeds EUR 60 million will only be able to compensate 25% of the losses of the previous years.

According to the law, the limitation is extended to apply also for tax years 2014 and 2015.

October 2013

Costa Rica
New Income Tax Brackets for Taxable Year 2013-14
The income tax brackets for taxable year 2013-14 have been amended by the Ministry of Finance. Accordingly, for the taxable year between 1 October 2013 and 30 September 2014 the corporate income tax rate of 30% is levied on companies with taxable income exceeding CRC 100.5 million. For companies with taxable income between CRC 49.9 million and CRC 100.5 million the tax is levied at the rate of 20%. Companies with taxable income up to CRC 49.9 million are taxed at the rate of 10%.


Slovenia
Corporate Income Tax Law Amendments
The Parliament adopted amendments to the Corporate Income Tax Law on 24 September 2013. The law entered into force on 5 October 2013 and will apply from 1 January 2014. Among others, the previously announced reduction of the corporate income tax rate is abandoned. Consequently, the corporate income tax remains at the rate of 17%. Further, the definition of related parties for the purpose of the thin capitalisation rules will also include sister companies.

September 2013

France
2013 List of NCSTs
The Government published a Ministerial Decree updating the list of non-cooperative states or territories, NCSTs, on 28 August 2013. The list is effective from 1 January 2013. The Philippines have been removed from the list and Bermuda, British Virgin Islands and Jersey have been added to the list. However, the removal of a state or territory from the list takes effect immediately, whereas the inclusion of a state or territory thereon takes effect from the following calendar year.

A major consequence of being a non-cooperative state or territory is exclusion from some of the tax benefits of French tax law.

Due to this, dividend payments from a NCST will not benefit from the French participation exemption regime and therefore be subject to taxation. Further, a 75% withholding tax is levied on dividend, interest, royalties and fee payments when paid to a NCST. Payments to a NCST will only be deductible once it is proved that the related operations were not motivated by tax avoidance. Also, additional transfer pricing documentation will be obligatory when interacting with NCSTs.

Further information is found in Comtax® in the Commentary database for France under the heading Anti-avoidance.

August 2013

Australia
Amended GAAR into Effect
On 2 July 2013, the bill amending the general anti avoidance rule, GAAR, received Royal assent. The new law is effective from 1 July 2013 and aim to target schemes in which the taxpayer obtains a tax benefit that would not, or might reasonably have been expected not to occur, if the scheme had not been entered into. The previous provision could only target schemes that, in comparison with any alternative scheme the taxpayer might reasonably be expected to have entered into, had resulted in a tax benefit. The comparison requirement lead to that many taxpayers successfully argued in Federal Court cases that they would not have entered into any other agreement resulting in a higher tax burden and thus the GAAR was not applicable. The new provisions are applicable for transactions entered into on or after 16 November 2012.


Croatia
EU Member State
On 1 July 2013, Croatia became the 28th EU Member State. Consequently, dividends paid to qualifying companies within EU Member States are exempt according to the Parent-Subsidiary Directive (90/435).


Serbia
Rulebook on Transfer Pricing Introduced
On 12 July 2013, the 'Rulebook on Transfer Pricing and Methods Applies for Determining Prices in Related Party Transactions in Accordance with the Arm's Length Principle' was published in the Official Gazette of the Republic of Serbia.

The Rulebook introduces the requirement for companies to submit transfer pricing documentation when submitting the tax return. Further, according to the Rulebook, taxpayers are required to apply the most appropriate transfer pricing method for each type of transaction, recommended to be one of the five transfer pricing methods authorised by the OECD. However, any other method may be used if proven to be the most appropriate.

The Rulebook also allows a company to make negative transfer pricing adjustments in transactions with a related company, if it has obtained higher income or has had lower expenses in other transactions with the same related company. The new Rulebook is intended to bring transfer pricing practices in Serbia more in line with the OECD Guidelines. The Rulebook came into effect on 20 July 2013.

June 2013

Hungary
New Decree on Transfer Pricing Documentation
On 18 June 2013, the Ministry of Finance issued the 20/2013 Decree, clarifying the transfer pricing documentation requirements. According to the decree, the documentation requirements only apply to transactions of an annual value exceeding HUF 50 million. Transfer pricing documentation is not required to be prepared for transactions covered by an advance pricing agreement. However, transfer pricing documentation presenting the applied allocation key is always required for cost sharing transactions. Further, the arm's length profit margin for service providers providing low value added services to related companies is now between 3% and 10%. A definition of such services is also provided in the decree.


Puerto Rico
Tax Burden Redistribution and Adjustment Act
The "Tax Burden Redistribution and Adjustment Act" to be discussed by the Senate was presented by the House of Representatives on 29 April 2013.

Among others, the act proposes a reduction of the flat surtax deduction that is currently applicable at the rate of $750,000 to a progressive deduction not exceeding $250,000.

Further, the act will increase the period in which net operating losses may be carried forward. The current period of seven years will be increased to ten years. In addition, losses incurred between the years 2005 and 2012 will be possible to carry forward for twelve years, an increase of two years. The act also proposes that the deduction of losses will be limited to 90% of the company's net income for tax years beginning as from 2013.


Spain
Amended Tax Return Deadlines and Forms
As approved by the Ministry of Economy and Finance on 14 May 2013, new tax return forms and deadlines have been determined. According to Order HAP/864/2013, the corporate income tax return shall be filed on Form 200 within 25 days after the beginning of the sixth month following the end of the tax year. Consolidated corporate tax returns shall be filed on form 220 no later than the deadline for filing the controlling company's tax return.

May 2013

Czech Republic
Case Law Clarifying the Applicability of CUP
The Supreme Administrative Court has recently published a decision, (No. 1 Afs 101/2012-31) clarifying the applicability of the Comparable Uncontrolled Price Method, CUP. The company resident in the Czech Republic sold fish and fish products to both related and unrelated companies. During a tax audit, the authorities challenged the prices in transactions with a related company in Slovakia since the margin, 1.17%, was significantly lower than the margins in transactions with unrelated companies in Hungary, Germany and France. For example, the margin in transactions with the German company was 11.62%. The Slovakian company on the other hand achieved a margin of 59% on resale of the fish.

Thus, the tax authorities applied the internal CUP, i.e. the prices in comparable transactions that the Czech company had carried out with unrelated companies. The Czech company argued that external CUP should be applied, taking into account differing market conditions in Germany and Slovakia that would explain the price differences. However, this view was rejected by the Supreme Administrative Court and thus upward adjustments were made and penalties were levied.


Israel
Budget Proposal 2013-2014
The Minister of Finance submitted the 2013-2014 Budget to the Parliament on 6 May 2013. Among others, the proposed Budget includes an increase of the standard corporate income tax from the current rate of 25% to 26%.


Poland
CFC Regime Proposal
The Ministry of Finance published, on 2 May 2013, the draft Bill of the amendments to the Corporate Income Tax Acts introducing the concept of the controlled foreign company (CFC).

A non-resident company is deemed controlled by the polish resident company if it is located in a listed low-tax jurisdiction.

However, if the non-resident company is located in any other jurisdiction it is considered controlled only once the following control test criteria are met.

  • The polish resident company holds, for a period of minimum 30 days, at least 25% of the capital or the voting rights.
  • At least 50% of the income in the non-resident company is passive income exempt from tax or subject to tax at a rate at least 25% lower than the corporate income tax rate in Poland.

However, the CFC legislation will not apply to companies within the EU Member States or European Economic Area.

If the Bill is approved and enacted, the amendments will come into force on 1 January 2014.

April 2013

Ireland
Finance Act 2013 Enacted
The Finance Bill 2013 was enacted on 27 March 2013 as the Finance Act 2013. According to the Act, the rate of capital gains tax is increased to 33%. The new tax rate applies to disposals made after 5 December 2012.


Nicaragua
Law on Transfer Pricing Introduced
Law No. 822, which was published in the Official Gazette on 17 December 2012, introduces transfer pricing provisions in Nicaragua. The law contains inter alia a definition of the concept of 'related party', a list of applicable transfer pricing methods and documentation provisions. The tax authority will have the right to make transfer pricing adjustments and recharacterise transactions between related companies if the prices have resulted in lower taxation or tax deferral. The transfer pricing provisions will be effective from 1 January 2016.

March 2013

Algeria
Transfer Pricing Documentation Requirements Clarified
According to a decision published in the Official Gazette No. 4 of 20 January 2013, transfer pricing documentation requirements apply to joint stock companies and partnerships with total annual revenue of at least DZD 100 million, all Algerian subsidiaries that are members of a foreign group and companies within a group in which one of the companies has an annual revenue of at least DZD 100 million. Taxpayers failing to meet the documentation requirements will be subject to a penalty of 25% of the restated transferred profits. The documentation requirements apply to transactions carried out from 1 January 2010.


India
Budget 2013-14
On 28 February 2013, the Minister of Finance presented the budget for the fiscal year 2013-14 to the Parliament.

Among others, the budget includes a proposal to increase the surcharge levied on corporate income. The surcharge is currently levied at the rate of 5% on income exceeding INR 10 million. According to the budget, the surcharge will be levied at the rate of 10% on income exceeding INR 100 million. The surcharge levied on foreign companies, currently levied at the rate of 2% on income exceeding INR 10 million, will be increased to 5% on income exceeding INR 100 million.

Further, the surcharge levied on dividend distribution tax will also be increased from the current rate of 5% to 10%.

However, the increase in surcharges will only be in force for one year.

In addition, the withholding tax levied on royalty and fee payments is proposed to be increased from the current rate of 10% to 25%.


Switzerland
Safe Haven Interest Rates 2013
The Federal Tax Administration issued two circulars on 25 February 2013 stating the safe haven rates that apply to loans between related companies.

In case of interest payments from loans in CHF financed through equity and received by related companies, the minimum rate is 1.5%. If the loans are financed through debt, the maximum interest rate is the prime costs plus 0.5% on amounts not exceeding CHF 10 million. On amounts exceeding CHF 10 million, a mark-up on at least 0.25% is required. However, the minimum interest rate in all cases is 1.5%.

The maximum rates for interest payments on real estate loans given by related companies are from 1.5% up to 2.75% depending on the type of loan. In case of interest payments by a Swiss trading or production company on operational loans the rate is at the highest 3.75%. If the paying company is a Swiss holding or administration company the rate is 3.75%.

The minimum rate for interest payments from related companies on loans denominated in foreign currencies are, if financed though equity, 1.75% for the EUR currency and 1.75% for the USD currency. If the loans are financed through debt the interest rate must be at least the prime costs plus a mark-up of 0.5%. However, the minimum rate in all cases is 1.75%.

February 2013

Congo, Rep of
Corporate Income Tax Amendments
The Government enacted the budget for 2013 on 29 December 2012 and the amendments apply from 1 January 2013. Among others, the corporate income tax rate is reduced by 1 percentage point, from 34% to 33% for taxable profits exceeding F.CFA 1,000. Further, capital gains from shares of resident companies in Congo sold by non-residents are subject to a new tax at a rate of 20%.

In addition, a group taxation regime is introduced for resident companies owning at least 95% in other resident companies. For further information, see the Comtax Systems in the Commentary database for Congo under the subheading Group taxation.


Ivory Coast
Corporate Income Tax Amendments
The Finance Law 2013, published in the Official Gazette on 9 January 2013, is applicable from 1 January 2013. According to the law, the minimum tax of 0.5% is amended and may not be less than F.CFA 3 million, previously 2 million, nor more than F.CFA 35 million, previously 30 million.


United States
List of Boycott Countries Reissued
On 7 February 2013, the US Treasury Department reissued its list of the countries that require cooperation with or participation in an international boycott as a condition of doing business. The countries listed are Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates and the Republic of Yemen.

The new list is unchanged from the list dated 6 November 2012.

The listed countries are identified under US Internal Revenue Code Section 999, which stipulates that US taxpayers who do business with the Government or any corporation or national of these countries are subject to adverse tax consequences under the IRC including the denial of US foreign tax credits for taxes paid to these countries.

January 2013

Colombia
Tax Reform
The tax reform bill submitted by the Government to the Congress in October 2012 became Law No. 1607 of 2012 and is effective from 1 January 2013. Amongst others, the corporate income tax rate is reduced from the rate of 33% to 25%. In addition, the tax levied on capital gains is reduced from 33% to 10% both for residents and non-residents.

Further, the law introduces a new general anti-avoidance rule were tax authorities may disregard transactions that lack economic substance or business purpose.


Latvia
Transfer Pricing Rules Amendments
The amendments to the transfer pricing documentation provisions in the Taxes and Duties Act is effective from 1 January 2013. According to the provisions, companies with annual turnover exceeding LVL 1 million and transactions with related companies of annual value over LVL 10,000 are required to prepare documentation in line with the OECD Transfer Pricing Guidelines. The documentation must be submitted to the tax authorities within 30 days from request.


Morocco
Budget Law 2013
The budget bill for 2013, presented to the Parliament on 20 October 2012, became Law on 31 December 2012 and applies from 1 January 2013.

Among others, the law increases the withholding tax levied on dividend payments from the rate of 10% to 15%.

In addition, a solidarity contribution tax is introduced for a 3-year period between the years 2013 to 2015. The tax is applicable to companies with an annual net income exceeding MAD 15 million at the following rates:

  • 0.5% on income between MAD 15 million and MAD 25 million.
  • 1.0% on income exceeding MAD 25 million and up to MAD 50 million.
  • 1.5% on income exceeding MAD 50 million and up to MAD 100 million.
  • 2.0% on income exceeding MAD 100 million.

December 2012

Dominican Republic
Corporate Income Tax Amendments
On 9 November 2012, major income tax amendments were introduced through Law 253-12.

Among others, the corporate income tax will be levied at the rate of 29% for taxable year 2013. The tax rate is reduced to 28% for taxable year 2014 and from taxable year 2015 and onwards the tax rate will be further reduced to 27%.

With effect from 10 December 2012, interest payments to non-residents are subject to withholding tax at the rate of 10%. On other payments to non-residents the withholding tax is levied at the rate of 29% for taxable year 2013. For taxable year 2014, the withholding tax rate is reduced to 28% and from taxable year 2015 the tax rate is further reduced to 27%.


Greece
Advance Pricing Agreement Introduced
A draft tax law was submitted by the Greek Ministry of Finance to the parliament on 14 December 2012. The draft includes, inter alia, regulations introducing advance pricing agreements. The law will apply from 1 January 2013.


Malaysia
Thin Capitalisation Rules Postponed
The rules regarding thin capitalisation was scheduled to be implemented by the end of December 2012. However, on 11 December 2012, the Tax Analysis Division of Ministry of Finance issued a statement informing that the implementation of the rules has been deferred to 31 December 2015.

November 2012

Belgium
Tax Plans For 2013
The tax plans for 2013 were presented to the Parliament on 30 October 2012. Among others, the tax plans proposes a restriction of the notional interest deduction.

Currently, resident companies can make a notional interest deduction based on the share capital and the withhold earnings at the end of the previous year and is calculated by multiplying the share capital by a fixed percentage. If a part of the notional interest deduction is not used one year it is possible carry it forward for 7 years.

According to the tax plans, the carry forward of the unused notional interest deduction will be abolished as of assessment year 2013. Under a transitional regime, the carry forward for unused notional interest deduction available on 31 December 2011 or a taxable period ending in the assessment year 2012 can be carried forward for 7 years. However, if the unused deduction exceeds EUR 1 million, the carry forward will be restricted to 60% for the excess part. In addition, the carry forward period for the unused deduction up to EUR 1 million will be extended.


Brazil
Transfer Pricing Rules in Back-To-Back Transactions
The Federal Revenue Service published Private Ruling 9/2012 in the Official Gazette on 13 November 2012. According to the ruling, transfer pricing rules apply in situations where a Brazilian company purchases goods from a company abroad and immediately sells it to another Brazilian company without importing the goods itself.

This type of transaction can be referred to as a back-to-back transaction; goods are not transferred between a Brazilian company and a foreign related company, instead the two related companies are both located in Brazil. The ruling also clarifies that the profit margin in a back-to-back transaction must be in line with the profit margin that would apply in a transaction between unrelated companies.


Russia
Cyprus Removed From Black List
Foreign dividends are tax exempt in Russia in accordance with the participation exemption. The participation exemption is applicable when the Russian company owns at least 50% of the shares in the distributing company and the subsidiary is not listed on the black list provided by the Ministry of Finance.

Decree No. N 115n issued by the Ministry of Finance on 21 August 2012 and registered by the Ministry of Justice on 25 October 2012, removes Cyprus from the Russian black list of offshore jurisdictions. Consequently, dividends paid by Cypriot companies to Russian companies will be tax exempt once they fulfil the participation exemption conditions.

The Decree will enter into force with effect from 1 January 2013.

October 2012

Costa Rica
New Income Tax Brackets
The Ministry of Finance amended the income tax brackets for the taxable year 2012-13, i.e. taxable years from 1 October 2012 to 30 September 2013.

Consequently, the corporate income tax rate is levied at the rate of 10% on taxable income up to CRC 47,451,000; previously the bracket was CRC 45,500,000. Further, the tax is levied at the rate of 20% on income between 47,451,001 and 95,447,000; previously CRC 91,600,000. The standard income tax rate of 30% is levied on income exceeding CRC 95,447,000.


Slovenia
Corporate Income Tax Law Amendments
The Government proposed amendments to the corporate income tax law on 27 September 2012.

Currently, losses may be carried forward with no time limit. However, the carry forward of losses from previous tax years is proposed to be limited to 50% of the tax basis.


Ukraine
Advance Pricing Agreements Procedure Introduced
On 22 August 2012, Article 39 of the Tax Code was approved by the Cabinet of Ministers. The ruling introduces a procedure for large tax payers to conclude advance pricing agreements, APAs, with the State Tax Service. The possibility to apply for an APA will be available for taxpayers with revenue of an amount exceeding HRN 500 million or taxes paid of HRN 12 million.

The ruling will be effective from 1 January 2013.

September 2012

Chile
Tax Reform
On 8 August 2012, the Chamber of Deputies approved a new bill submitted to the Congress by the Government, Bill 8488-05 of 2 August 2012, concerning tax amendments.

The new bill replaced Bill 8269-05 submitted on 3 May 2012. According to the new bill, the rate of the business income tax will be increased to 20% from the current rate of 18.5% for income arising in 2013. Consequently, tax will be levied at the rate of 18.5% for the income arising in 2012. The previous bill proposed a tax increase to 20% for income arising in 2012.


Netherlands
Tax Plan 2013
On 18 September 2012, the Tax Plan for 2013 was presented by the Minister of Finance to the Lower House of Parliament. The plan will be applicable from 1 January 2013 once approved.

Among other proposals, the thin capitalisation rules will be abolished since the regime will become needless due to existing restrictions on interest deduction possibilities and the proposed restriction of interest deductibility for participations.

The proposed restriction of interest deductibility applies to situations where a parent company owns at least 5% of the capital or voting rights in a subsidiary. Further, the restriction applies to interest expenses in excess of EUR 1 million on loans related to participations.

Consequently, there is a safe harbour of loans up to EUR 1 million that falls outside the scope of the rule.


Romania
Tax Code Amendments
Government Ordinance No. 15 amending the Tax Code was published on 29 August 2012. Among others, the rules regarding losses are amended with effect from 1 October 2012. Accordingly, losses of entities ceasing to exist as a result of divisions or mergers are now possible to carry forward up to seven years by the newly formed taxpayer.

July/August 2012

Barbados
Budget 2012
The Minister of Finance and Economic Affairs delivered the financial statements and budgetary proposals on 26 June 2012. Once approved, the budget will apply from 1 August 2012.

Effective for tax years 2012 and 2013, the income tax rate for International Business Companies will be reduced. However, only the tax rate applicable to taxable income exceeding 30 millions of BBD will be affected. The tax rate, currently levied at the rate of 1%, will be reduced to 0.5% with effect from 1 August 2012. The tax rate will be further reduced to 0.25% with effect from 1 January 2013.


Ecuador
List of Tax Havens Updated
In Ecuador, domestic companies are subject to tax on their worldwide income. There is a general income tax exemption in respect to income derived abroad and subjected to income tax in the other State. However, the exemption is not applicable to income derived in tax havens.

The General Director of the Internal Revenue Service published an updated list of preferential tax regimes on 30 July 2012 that adds jurisdictions to the previous list that was published in Resolution 2008-182.

Accordingly, Estonia, Bulgaria, Macedonia, Montenegro and Serbia are considered tax havens due to their low corporate income tax rate. Further, the United States is added to the list. However, this only applies to the states of Delaware, Florida, Nevada and Wyoming due to the treatment of limited liability companies that are owned by non-residents and not subject to US federal income tax.


United States
Iraq Added to List of Boycott Countries
On 13 August 2012, the US Treasury Department reissued its list of the countries that require cooperation with or participation in an international boycott as a condition of doing business. The countries listed are Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and the Republic of Yemen.

Consequently, Iraq is added to the new list of countries that is otherwise unchanged from the list of February 2012.

The listed countries are identified under US Internal Revenue Code Section 999, which stipulates that US taxpayers who do business with the Government or any corporation or national of these countries are subject to adverse tax consequences under the IRC including the denial of US foreign tax credits for taxes paid to these countries.

[2014-09-10] The Comtax® Entity Manager is now launched

The tool allows you to, within a couple of minutes, create organisational charts with various entity types, adding your own information and having it all exported to Microsoft® PowerPoint.


The tool is an online application with seamless login procedure from the Comtax® toolbar.

[2013-08-05] Tax calendar now in Comtax

The toolbar is enhanced with a new user friendly feature, the Tax Calendar. The calendar gives you the dates and periods on tax deadlines for all countries in one window i.e. Tax year, Income tax return deadline and Transfer Pricing deadlines.


The comprehensive overview of deadlines gives the user easy access to important dates in any country.

[2013-02-04] Transfer Pricing Overview - a new feature in Comtax

The Anti-Avoidance function is now enhanced with a separate Transfer Pricing Overview.


This overview displays all countries' transfer pricing rules in one comprehensive window which enables a quick and effective information search.

[2012-10-18] Comtax - now including Transfer Pricing

The Comtax tools are now upgraded with Transfer Pricing information. The information is found in the Database and in the Commentary section under the Anti-avoidance heading.


It is also covered by the 'Anti-avoidance finder' in the toolbar. The 'Anti-avoidance finder' is the smart chart that gives you an overview of all countries' anti-avoidance rules.


The transfer pricing information covers the following standard headings for each country:


  • Arm's length principle,
  • Transfer pricing methods,
  • Definition of related companies,
  • Documentation requirements,
  • Business restructuring,
  • Interaction between customs valuation and transfer pricing,
  • Dispute resolution.

[2012-04-03] Anti-Avoidance Finder - a new feature in Comtax

The Anti-Avoidance Finder instantly gives you a quick overview of applicable anti-avoidance rules for each country.


The function was introduced with the latest update and is found under the new toolbar button called Anti-Avoidance.

[2011-09-05] Historical corporate tax rates in Comtax

As of today a new section has been introduced in the Database, called Historical corporate tax rates.


The rates are found both in comprehensive charts for each year and in one chart covering the effective corporate tax rates for all years. In the comprehensive charts you will find all surtaxes and in-depth footnotes that together with the statutory tax rates generate the effective corporate tax rate.

[2011-05-04] Ratefinder - a new feature in Comtax

Ratefinder will immensely facilitate your database search and allows you - with a few clicks only - to gain a total overview of one country's tax rates situation in relation to all other countries.


Click to read more

[2010-11-29] Product enhancement, Comtax Basic 2010 now online

The widely used Comtax Basic 2010 is now online. Thus no installation is needed to immediately reach the tax calculation tool with information for 129 countries/entities. With your login details you can run the program from any computer with internet access.


To learn more about Comtax Basic please view presentation at Comtax Basic 2010 online.

[2010-03-29] Fee transaction now available in Comtax

Alongside the previous payments of dividends, interest and royalties we now offer all our users details of management and technical service fees transactions to and from 129 countries


Click to read more

[2010-01-18] An enhanced Comtax Basic is available!

Follow the link below to read about the new Basic version, Comtax Basic 2010.


Products

[2010-01-04] New country added in the Comtax System!

Information about Bosnia and Herzegovina is inserted in the Database.

[2009-09-04] Future tax rates in the Comtax System 11.2

As of today a list called Future tax rates is introduced in the Database.


Future tax rates covers the approved future corporate tax rates, and displays the rate, effective date and also comments. This new information will hopefully make e.g. calculations of deferred tax somewhat easier.

[2009-06-30] Product enhancement, version 11

The June 2009 update release brings the new version 11.1 of the Comtax System.


Version 11.1 contains improved systematisation that will present more complex and extensive calculations faster.

[2009-06-15] Version 10 discontinued

As of July 1, 2009, technical support and updates will be discontinued for the Comtax System version 10.

[2008-12-12] Version 11 is released

The new enhanced successor to version 10 is now available to all users.


For more information see under Products or contact us directly for a personal presentation.

[2014-02-11] IBFD and Comtax announce strategic partnership to better meet international tax planning needs

IBFD, the leading provider of cross-border tax expertise, and Comtax, a provider of unique tax planning tools, announce they have reached an agreement for a long-term strategic partnership.


Due to the complementarity of their respective strengths, IBFD, with its unmatched database of international tax information, and Comtax, with its market-leading tax planning tools, believe that joining forces will provide clients with the best of both worlds: detailed treaty- and country-related information, covering a large number of jurisdictions worldwide, and a sophisticated tool matched to market needs to assist in effective tax structuring.


Maarten Goudsmit, Publishing Director of IBFD, says: “This agreement with Comtax will provide IBFD Tax Research Platform users with the opportunity to get seamless access to the most powerful and reputable online tax structuring tool in the market. I am convinced that this agreement will be the start of intensified cooperation between our organizations on the development of more decision support tools in the future.”


Bernt Persson, Managing Director of Comtax, says: “This strategic partnership with IBFD will strengthen the quality of Comtax product offerings, providing a seamless link to the best tax database in the world. Through integrating Comtax tax planning tools and IBFD’s tax database we will increase the effectiveness and value for the international tax professional. We are looking forward to a long and fruitful cooperation with IBFD to the benefit of our customers.”


Comtax® Basic is designed to assist tax professionals to simplify their workflow in order to find the most optimal route and structure for cross-border transactions. This tax planning tool provides you with quick answers on how to best structure your intra-group transactions regarding dividend repatriation, fees, royalties and financing.


The IBFD Tax Research Platform is the front-end access to all IBFD products, allowing you to view all information related to your subscriptions at once. Within the Platform, the contents of your subscriptions are clearly arranged in different information collections, such as News, IBFD's various levels of country descriptions (e.g. Country Key Features, Country Surveys and Country Analyses), Treaties, Topical Analyses, EU Law and Case Law.


For more information, contact Sorrel Hidding, Head of Marketing: +31-20-554 0142 / s.hidding@ibfd.org


About IBFD
IBFD is a leading provider of cross-border tax expertise, with offices in Amsterdam, Beijing, Washington and Kuala Lumpur. IBFD serves Fortune 500 companies, governments, international consultancy firms and tax advisors. Renowned as the authoritative centre for cross-border tax expertise, IBFD utilizes its Knowledge Centre and global network of tax experts to remain at the forefront of global tax information.
www.ibfd.org


About Comtax
Since 1985, Comtax has provided multinational companies, law firms, tax consultants and leading banks worldwide with unique tax planning tools in order to meet international tax compliance requirements and use internal and external resources more efficiently.
www.comtaxit.com

[2009-03-11] International Tax Planning with Comtax

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway


This article was published in INTERTAX Volume 37, Issue 3, page 197-206.


kluwerlawonline.com

[2007-12-19] Steuerplanung mit Comtax

Prof. Dr. Wolfgang Kessler, Freiburg i. Br. and Torben Petersen, Stuttgart


This article was published in Internationales Steuerrecht, 22/2007, Seite 815-818. (only available in German)


rsw.beck.de

[2000-07-07] Computer-assisted international tax planning

Jonathan S. Schwarz


This article was published in Taxation Practitioner Tax Planning and Technology Supplement October 1999.




As with any other business acquisitions, the tax consequences for both purchaser and seller need to be considered in any cross-border acquisition. Given the possibility of double or multiple taxation - or indeed nontaxation - acquisitions in the international context are particularly tax sensitive. Where more than one tax system is involved and the number of combinations arising from different locations of the target company, the purchaser and seller, and indeed any third-party provider of finance, complexity increases exponentially as the various systems interact with each other.

In considering optimum tax structure, the following short and long-term issues require consideration.


Acquisition strategy

This typically involves an examination of the vendor's tax liability on the sale of the company. Secondly, transfer and registration taxes on the acquisition must be evaluated.


Financing the acquisition

Optimising the cost of financing, so that interest and other financing costs can be offset against taxable income, is usually more complex than domestic transactions. Not only are there issues as to ensuring maximum deductibility, but the question arises as to which country these expenses are best incurred.


Operational issues

The acquisition will need to be structured to provide the best overall after-tax return in all countries concerned. This includes possibly stepping up or increasing capital or other depreciation allowances, as well as capital gains for subsequent disposal, the preservation of existing tax benefits, such as losses or allowances of the target business. Income flows, such as royalty and interest payments, as well as distribution of profits, will take into account the impact of withholding taxes and double taxation in the cross-border context.


Ultimate disposal

Long-term planning will consider the possibility of minimising capital gains on ultimate disposal. At the same time, future group reorganisation should not be impeded by inflexible structures.


In the context of a cross-border transaction, the number of tax rules and the permutations and combinations can be daunting; where a number of options are available, analysing them can be time-consuming and costly. Recent developments in IT and communication technology have made it possible for vast amounts of data to be gathered. Tax data on the Internet and on CD-ROM enable detailed information to be gathered from around the world. In most cases, tax planners are limited to searching databases for specific information.


Despite advances in technology, there are few programs that assist in dealing with data once gathered. Even simple tasks -such as sorting tax rates from highest to lowest - are found in only a few programs. Ratefind is an example of a simple program that sorts withholding taxes. Programs that ntelligently apply tax rules in order to assess or predict the outcome of particular transactions or even to assimilate the information in comprehensible form are even rarer. This has remained the role of the planner. The task of converting the rules into mathematical formulae is still left to the individual planner or firm. Arithmetical analysis is of particular importance in international planning, as the number of factors affecting the overall after-tax result is so large. A proprietary system, DTT World Tax Planner, is used in-house by Deloitte & Touche. COMTAX, the international tax planning software which deals with cross-border income flows is, to the writer's knowledge, the only one of its kind on the market. A recently released sister program, GAINTAX, is specifically designed to assist in cross-border mergers and acquisitions.


The GAINTAX system enables models to be developed of cross-border share sales and purchases. It applies tax rules by converting them to arithmetical format. Calculations are made on cross-border gains in order to determine the consequences for the various parties. The program, which combines a database with a spreadsheet, calculates the nominal tax treatment on the disposal of shares in a company located in one country by a corporate vendor located in another country where the target company is located, as well as in the seller's country, and the combined tax result.


The Calculations are based on the assumption that the net gain on the share sale is 100, both in the country of the target company and the seller's jurisdiction. The taxation in both jurisdictions in shown separately and combined order to give an overall picture. Tax rates and amounts after tax are always expressed as a percentage an therefore the calculation will always produce results in percentages, rather than by reference to actual figures. It is implicit that thte transaction is taxable - the program does not deal with tax-deferred transactions such as share-for-share reorganisations.


Transactional taxes, such as stamp duty, are not included in the calculation. However, a database provides details of stamp duty. The program can thus be used in dealing with the acquisition strategy, from the perspective of both purchaser and seller. The seller can obtain an instant model of the consequences of a sale. The purchaser will also have an immediate appreciation of the tax issues facing the vendor. Ion each case, this will take into account the location of the target company, the purchaser and the seller. The system allows for a number of variables which impact on the tax position:

  • The tax position of the seller - that is, whether it has other profits or losses, in which case the gain would not be taxable in the seller's country;
  • The percentage shareholding by the seller in the target company; and
  • The holding period over which the shares have been owned by the seller.

One factor which the first release of gains tax does not address is the distinction between shares in companies whose value is based on immovable property. A number of jurisdictions impose tax on the sale of shares in such circumstances. Within an individual project, it is, however, possible to amend the various tax rates. This enables the user to apply additional information in order to improve the model. It also assists in longer-term planning to test the effect of changes in tax rates, whether they are domestic or treaty rates on potential ownership structures.


Planning tax-efficient cross-border financing for the acquisition can also be modelled using the sister program, COMTAX. COMTAX will calculate the effect of cross-border interest payments, either within a corporate group or to a lending financial institution. Again, the project database can be amended to take into account factors such as the spread chargeable in a jurisdiction in order to comply with arm's length pricing requirements.


Operational cash-flow including royalties, as well as repatriation of profits, can be tested using the COMTAX system. Account can be taken of the tax position of various companies within the multinational group, limits on deductibility for transfer pricing reasons and changes in tax rates, or indeed changer from one method of eliminating double taxation to another. These operational issues are important in deciding which country is most attractive for establishment of an acquisition vehicle.


The other critical tax factor in determining the location of an acquisition vehicle is in relation to ultimate disposal of the target company. By simulating a future disposal by the acquisition vehicle, the most appropriate location can be chosen by correlation the results of models developed in relation to operational aspects with models testing the capital gains issues on ultimate disposal. Both programs provide 'optimisation' functions, which suggest alternatives in descending order of tax efficiency.


Is there a role left for the human international tax planner? Emphatically yes. The system does not answer every question. Structures developed still need to be examined by local counsel in each jurisdiction. Treaties need to be checked for their precise application in the specific circumstances. In my experience, the best use of programs such as COMTAX and GAINTAX is in generating ideas early on in the planning stage, testing revisions and debugging the final structure. The ability to model the tax problems of the other side in any joint ventures as it is with acquisitions. Going into negotiations well-armed with information on possible scenarios for the other parties is often invaluable in bringing the parties together quickly.

[2013-09-20] Transfer Pricing Planning with Accuracy and Control

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway


This article Transfer Pricing Planning with Accuracy and Control was published in Intertax (2013) Volume 41 Issue 10 pp. 542-550.


ASSOCIATED FILES:
TAXI41-10_Rainer-Zielke.pdf (1298kB)

[2010-02-10] Shareholder Debt Financing and Double Taxation in the OECD

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway


This article Shareholder Debt Financing and Double Taxation in the OECD: An Empirical Survey with Recommendations for the Further Development of the OECD Model and International Tax Planning was published in Intertax (2010) Volume 38 Issue 2 pp. 62-92.


kluwerlawonline.com

[2009-06-04] Taxation of Capital Gains in the European Union, Norway, and Switzerland

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway


This article Taxation of Capital Gains in the European Union, Norway, and Switzerland: An Empirical Survey with Recommendations for EU Harmonization and International Tax Planning was published in Intertax (2009) Volume 37 Issue 6/7 pp. 382-405.


kluwerlawonline.com

[2009-03-11] International Tax Planning with Comtax

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway


This article was published in INTERTAX Volume 37, Issue 3, pp. 197-206.

kluwerlawonline.com

[2009-02-26] Internationale Steuerplanung mit Gesellschafter-Fremdfinanzierung...

Prof. Dr. Rainer Zielke, Halden, Norway


This article, Internationale Steuerplanung mit Gesellschafter-Fremdfinanzierung in der Europäischen Union, Norwegen und der Schweiz, was published in Steuer und Wirtschaft (StuW), 1/2009 (only available in German).


shop.otto.schmidt.de

[2008-05-29] Internationale Steuerplanung mit der Schweiz ab 2008

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Halden, Norway


This arcticle was published in Internationale Wirtschafts-Briefe (IWB), Heft 10 on 28.05.2008 (only available in German).


www2.nwb.de

[2007-12-21] Internationale Steuerplanung nach der Unternehmensteuerreform 2008

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen


This article was published in Der Betrieb 21.12.2007, Heft 51/52, Seite 2781-2791. (only available in German)


der-betrieb.de

[2007-12-19] Steuerplanung mit Comtax

Prof. Dr. Wolfgang Kessler, Freiburg i. Br. and Torben Petersen, Stuttgart


This article was published in Internationales Steuerrecht, 22/2007, Seite 815-818. (only available in German)


rsw.beck.de

[2006-12-11] Internationale Steuerplanung zur Optimierung der Konzernsteuerquote

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen


This article was published in Der Betrieb, 48/2006, pages 2585-2640. (only available in German)


der-betrieb.de

[2006-10-11] Thin Capitalization and Double Taxation in the European Union

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen


This article was published in Recht der Internationalen Wirtschaft (RIW) 8/2006, pages 600-610. (only available in German)


ASSOCIATED FILES:
Zielke_ThinCapEU.pdf (350112 kb)



With this study Zielke proves, that the tax differential of 28.8 percentage points within the European Union (EU) represents a considerable incentive to cross border thin capitalization and that the prevailing conceptions to regulate thin capitalization in the EU are empirically evident not suitable to achieve tax revenue effects, since the bilaterally hardly coordinated treatment of requalified interests in thin capitalization cases leads to legal uncertainty and to potential double taxation in 198 of 600 treaty cases in the EU.


Dr Zielke not only points out that this potential double taxation offends against sec. 293 EU treaty, but suggests the following solutions: 1. harmonization of (corporate) income taxes in the EU in combination with the abolition of thin capitalization regulations in the EU; 2. alternatively harmonization of thin capitalization regulations that ensure a cross border concatenation of qualifications on OECD level or EU level, i. e. as part of a EU Model convention.


The study is based on Comtax tax assessment simulations. With Comtax the tax burden of cross border thin capitalisations may be simulated and analysed, that are accepted by both, one or none of the concerned countries.

[2005-01-25] Taxation of outbound dividends

Wiersholm, Mellbye & Bech, Oslo, Norway


www.wiersholm.no


Tuesday 23 November 2004 the EFTA-court delivered its judgement in the Fokus Bank-case (E-1/04). The Court agreed with Fokus Bank that discriminative dividend tax rules - the denial of an imputation credit to non resident shareholders - are contrary to the rules on the free movement of capital, set out in EEA art 40. The Court also agreed with Fokus Bank that discriminative procedural rules are contrary to the EEA-agreement.


ASSOCIATED FILES:
tax_od.pdf (98694 kb)

[2004-10-28] Thin Capitalisation in the European Union after the Lankhorst Hohorst Case

Anette Karlqvist, LL.M. and Henrik Spirén, LL.M., Comtax AB, Helsingborg, Sweden


Thin capitalisation legislation is a highly debated topic. The debate started with the judgement from the European Court of Justice (ECJ) in the Lankhorst Case. The main issue in this judgement is that the ECJ found the thin capitalisation legislation in Germany to be in breach with the freedom of establishment rules in the EC Treaty. The reason behind the discrimination was that the German legislation in fact only was applicable when the lending company was a non-resident company.


In this article thin capitalisation legislation is discussed and analysed in the light of the ECJ's judgement. Starting point is three different ways to amend existing legislation to be in accordance with the judgement. The different solutions are found in three countries, Germany, Spain and the United Kingdom.


ASSOCIATED FILES:
IURnr8-04Article.pdf (170 kb)

[2004-07-01] Austrian Tax Reform Act 2005: Groundbreaking Changes to the Corporate Income Tax System

Dr. Robert Schneider, SchneideR'S Rechtsenwalts - KEG, Austria


In May 2004, the Austrian Parliament enacted the Tax Reform Act 2005, which will come into force as of 1 January 2005. As the second state of the tax reform announced by the governing coalition last year, the Act will have a significant impact, not only on the taxation of Austrian resident individuals, but also - and predominantly - on corporations. The corporate income tax rate will be reduced from 34% to 25% and a new group taxation system will be introduced that allows foreign losses to be offset against Austrian profits.


ASSOCIATED FILES:
2005 Tax Reform Act.pdf (92 kb)

[2004-06-04] The Norwegian Tax Reform 2004

John S. Gulbrandsen - Wiersholm, Mellbye & Bech, Oslo, Norway


The Norwegian government delivered a White Paper on a new tax reform to the King in Council on Friday 26 March 2004. The White Paper contains the Government's proposals for new tax rules and builds upon the report of the Skauge Commitee which was published last year (Norwegian Offical Reports 2003:9).


The White Paper describes and discusses, the proposed new tax rules. Once it has been through Parliament, new legislation will be proposed in a tax reform bill. According to the current plan, the bill will be submitted to Parliament in the autumn of 2004 in connection with proposals for the 2005 budget.


This special edition of wiersholm.info is dedicated entirely to the White Paper, and contains a brief description of those proposals that we consider are likely to be most relevant for our clients.


ASSOCIATED FILES:
WiersholmInfo.pdf (5626 kb)