France - Finance Bill 2020
On 27 September 2019, the government presented the Finance Bill for 2020. The corporate income tax reduction path for companies with an annual turnover of EUR 250 million or higher is proposed as follows:
India - Taxation Laws (Amendment) Ordinance 2019 – announced During a press conference on 20 September 2019, the Finance Minister announced that the Taxation Laws (Amendment) Ordinance 2019 has been brought in to make certain amendments in the Income-tax Act.
With effect from fiscal year (FY) 2019-20, domestic companies are provided with an option to pay income tax at 22% provided that they will not avail any exemption/incentive. The effective tax rate is 25.17% inclusive of surcharge and cess.
ANTI TAX AVOIDANCE
El Salvador - list of countries and territories with preferential tax regimes for 2020 – published
Guide N. DG-001/2019 was issued by the tax authorities on 18 September 2019 which includes a list of countries and territories considered to be tax havens or territories with preferential tax regimes.
The payments made from El Salvador to entities domiciled in the listed countries are to be taxed with 25% withholding tax. However, certain exceptions apply, e.g. for payments made to persons located in countries with which El Salvador has a tax treaty or a convention on mutual assistance and technical cooperation between tax authorities, etc.
Norway - Black lists of jurisdictions for CFC purposes updated
On 26 September 2019, the updated variant of blacklisted jurisdictions was published. A black list apply for the determination of when to apply CFC taxation, i.e. to decide what countries fit the definition of having a low tax level. The new lists are effective from 1 January 2020. According to the amendments, Hong Kong, Oman and Serbia have been removed from the black list.
United States - Corrections issued for regulations issued on GILTI and FTC
The US Treasury Department and the US Internal Revenue Service (IRS) have issued a document (C2-2019-12437) to correct the final and temporary regulations (TD 9866) concerning global intangible low-taxed income (GILTI) under section 951A of the US Internal Revenue Code (IRC), the foreign tax credit (FTC), the treatment of domestic partnerships for purposes of determining the subpart F income of a partner, and the treatment of income of a controlled foreign corporation (CFC) subject to a high rate of foreign tax under IRC section 951A.
Treaty between Finland and Lithuania – MFN clause on royalties activated
On 10 September 2019, the Finnish tax authorities published Statement No. 67/2019, announcing that the conditions for the activation of the most favoured nation (MFN) clause contained in article 12(7) of the Finland - Lithuania Income and Capital Tax Treaty (1993) have been met.
The MFN clause applies as of 1 January 2019. The MFN clause modifies the wording of article 12 paragraph 2 and 3 as follows:
”Royalties shall not be taxable in the contracting state in which they arise. The term "royalties" as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any copyright and patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience."