On December 7, 2022, the United States and Croatia signed a new income tax treaty.
The treaty closely follows the US Model.
The treaty will enter into force after the United States and Croatia have notified each other that they have completed their requisite domestic procedures.
EU member states have reached agreement to implement a minimum tax rate for large businesses at the EU-level.
The measure is aimed at limiting the race to the bottom in corporate tax rates. The profit of the large multinational and domestic groups or companies with a combined annual turnover of at least EUR 750 million will be taxed at a minimum corporate tax rate of 15 percent.
The ambassadors of EU member states have advised the Council to adopt the measure. A written procedure for the formal adoption will be launched. An EU directive in this regard is likely to be transposed into member states’ national law by the end of 2023.
The Australian Government is consulting stakeholders on draft legislation to implement a new tax treaty with Iceland.
The new tax treaty was signed on October 12, 2022. The Government has released draft legislation to implement the new treaty. The draft legislation and accompanying explanatory memorandum also includes minor technical amendments to notes of the International Tax Agreements Act 1953.
The Australia‑Iceland tax treaty will enter into force once both countries have completed their domestic requirements to bring the new tax treaty into force, including amending Australia’s domestic law.
The OECD has released key documents as part of its two-pillar solution to reform international tax rules to address the tax challenges arising from globalization and digitalization.
Under Pillar One, the OECD has released a public consultation document on the Draft Multilateral Convention (MLC) Provisions on Digital Services Taxes (DSTs) and other Relevant Similar Measures.
Under Pillar Two, the OECD has released an implementation package relating to Pillar Two Global Anti-Base Erosion (GloBE) Rules, which provide a coordinated system to ensure that multinational enterprises (MNEs) with revenues above EUR 750 million pay at least a minimum level – at an effective rate of 15 percent – on the income arising in each of the jurisdictions in which they operate.
As per a new OECD report, almost 50,000 exchanges of tax information have taken place to date in respect of 23,000 tax rulings.
Released on December 14, this is the sixth annual peer review of the implementation of the BEPS Action 5 minimum standard on tax rulings, which aims to provide tax administrations with the necessary information concerning their taxpayers to efficiently tackle tax avoidance and other BEPS risks.
The new peer review results show that 73 jurisdictions are fully in line with the BEPS Action 5 minimum standard, with the remaining 58 jurisdictions receiving a total of 61 recommendations to improve their legal or operational framework to identify the relevant tax rulings and exchange information.
The United Arab Emirates has issued the federal law on taxation of corporations and businesses.
The Federal Decree-Law No. 47) of 2022 on the Taxation of Corporations and Businesses provides the legislative basis for the introduction and implementation of a federal corporate tax regime in the UAE.
Under the regime, corporate tax will be levied at a headline rate of nine percent on taxable income exceeding AED 375,000. Taxable income below this threshold will be subject to a zero percent corporate tax rate.
The new corporate tax regime is effective for financial years starting June 1, 2023.
Members of the European Parliament (MEPs) have adopted their opinion to the EU Commission’s proposed legislation aimed at clamping down on shell companies.
In their opinion, MEPs amended the Commission proposal, notably by slightly lowering the thresholds below which a company is exempt of the reporting requirements of the directive, and by providing for penalties to be levied also on companies with zero or low revenue. They stated that companies subject to the reporting requirements should be obliged to provide more detailed information.
To allow a better distinction between legitimate shell companies and those existing for tax purposes, MEPs also amended the information sharing requirements between member states to ensure a better quality and completeness of data being exchanged.
The opinion shall now be transmitted to the EU Council for its consideration while adopting the directive.
UK government has published written responses received from stakeholders on the proposed mandatory disclosure rules (MDR).
The rules require taxpayers and advisers to report information to the tax authorities on certain prescribed arrangements and structures which could facilitate tax evasion. Tax authorities in implementing jurisdictions will then share this information with the tax authorities in other implementing jurisdictions where the taxpayer is resident.
Many of the responses received provided general comments on the draft regulations and the approach set out in the consultation document, before responding to specific questions raised in the consultation.
The regulations implementing MDR is likely to come into force in the first half of 2023. The rules are intended to replace similar EU rules, known as DAC6, which were implemented in the UK prior to EU Exit through the International Tax Enforcement (Disclosable Arrangements) Regulations 2020.