61 new tax treaties effective from 1 January 2018 and corporate tax reforms in Argentina and Belgium

Treaty news

​Cyprus - Saudi Arabia
Cyprus and Saudi Arabia signed an income tax treaty on 3 January 2018 in Riyadh. Further developments will be reported as they occur.
 
Czech Republic - Korea (Rep.)
On 12 January 2018, the Czech Republic - Korea (Rep.) Income Tax Treaty was signed. Once in force and effective, the new treaty will replace the former Czechoslovakia - Korea (Rep.) Income Tax Treaty (1992). When effective, the maximums rate of withholding tax will be:

• 5% for dividends and interest payments;
• 10% for patents and trademarks;
• 0% for copyright;
• 0% for technical and service fees; and
• residence state taxation of capital gains.
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Both states provide for the ordinary credit method to avoid double taxation. Subject to Korean domestic law, Korea grants an underlying corporation tax credit.
 
New tax treaties
Sixty-one tax treaties and nine protocols became effective on 1 January 2018. 

Local tax news

​Argentina - Amendments to the Income Tax Law 
On 29 December 2017 amendments to the Income Tax Law were gazetted. The main changes are the following:

• the corporate tax rate is reduced from 35% till 30% for fiscal years 2018 and 2019. In 2020 the rate will be 25%;
• "low tax jurisdictions" are defined as jurisdictions taxing corporate profits below 60% of the Argentinian corporate tax rate;
• previously no withholding tax was applicable on dividends payable by resident entities. From 1 January 2018 withholding tax at the rate 7% is introduced;
• new thin capitalization rules were implemented. Deduction of interest is limited to 30% of EBITDA. It is possible to carry deductions back up till 3 years and carry them forward up till 5 years to allocate interests that were not deductible when accrued. This thin capitalization rules do not apply to financial entities. 
  
  

Belgium - Corporate Income Tax Reform 
The amendments to the corporate tax law were published on 29 December 2017. The most important changes are the following:
 
(a) The corporate income tax rate is reduced from 33% to 29% in 2018 and to 25% in 2020; 
(b) The surcharge tax is reduced from 3% to 2% in 2018 and abolished from 2020.