Local tax newsLuxembourg - Amendments to Direct Taxation with Retroactive Effect are Presented
On 5 March 2019, the Budget 2019 was presented by the Minister of Finance to the parliament. The amendments which will apply retroactively from 1 January 2019, are summarized below. (i) The standard corporate income tax rate will be reduced from 18% to 17%. As a result the combined corporate income tax rate including the surcharge for the employment fund and the municipal business tax will be reduced from 26.01% to 24.94%. (ii) From 1 January 2019, Luxembourg has implemented the interest deduction limitation of the EU ATAD 1. The maximum deduction is equal to 30% of the EBITDA or EUR 3 million. (iii) The Bill clarifies the possibility to reduce the tax liability at fiscal unity level by making losses and accruing tax credits before or during the period of tax consolidation. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. Local tax newsSlovak Republic - New TP documentation guidance published
The Ministry of Finance published updated guidance on the content of TP documentation on 6 February 2019. The scope of obligation to submit TP documentation depends on the category of taxpayer. It can be: (1) the full TP documentation, (2) the basic TP documentation and (3) the simplified TP documentation. The full TP documentation consists of a Master File and a Local File and is required for cross-border transactions of taxpayers that maintain accounting in accordance with IFRS Standards, or for significant cross-border transactions, where the value of the transaction or group of interrelated transactions exceeds EUR 10 million or where the counterparty is a resident of a non-treaty jurisdiction, and in the case of requests for obtaining an APA and initiating a MAP. The basic TP documentation consists of a simplified Master File and Local File. The basic TP documentation is required for taxpayers whose revenues exceed EUR 8 million or the value of the transaction or group of transactions in a year exceeds EUR 1 million. The simplified TP documentation is replaced by a specific overview return. The overview return contains a summary of the transactions with related parties. This simplified set of TP documentation should be submitted when the full or basic TP documentation is not required. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. BEPS newsOn 20 December 2018, the Income Tax Act 2010 (Amendment No. 3) Regulations 2018 were published. The Regulations implemented the EU Anti-Tax Avoidance Directive as following:
Interest limitation rules The deduction of net interest expenses is limited to the higher of 30% of the taxpayer's EBITDA or EUR 3,000,000. The excess interest expense may be carried forward indefinitely and the unused interest capacity may be carried forward for a maximum of 5 years. CFC regime To qualify as a CFC the following conditions should be met: (i) the resident itself or together with its associated enterprises should hold a direct or indirect participation of more than 50% of the voting rights, capital, or rights to the profits of the entity, and (ii) the actual tax paid on the profits by the entity or PE is lower than the difference between the tax that would have been charged on the entity or PE according to the Income Tax Act and the actual tax paid by the entity or PE on its profits. The CFC's accounting profits not exceeding EUR 750,000 and non-trading income not exceeding EUR 75,000 or the CFC's accounting profits not exceeding the 10% of its operating costs for that tax year are excluded from the scope of these rules. The Regulations are effective to accounting periods beginning on or after 1 January 2019. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. |
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