BEPS newsCyprus- Legislation implementing Anti-Tax Avoidance Directive is adopted
On 5 April 2019, the parliament adopted a law implementing the Anti-Tax Avoidance Directive (2016). Rules are applied from 1 January 2019. (i) Interest deductibility limitation rule The interest limitation rule limits the otherwise deductible exceeding borrowing costs up to 30% of EBITDA. Safe-harbour threshold is EUR 3 million. Exceeding borrowing costs may be carried forward to future tax years for up to 5 years. (ii) CFC rule The CFC rule provides that the undistributed income of a CFC resulting from non-genuine arrangements must be included and taxed at the level of the Cyprus controlling entity. An entity is regarded as a CFC if it is an exempt foreign permanent establishment (PE) or a foreign company in which a Cyprus tax resident company holds, directly or indirectly, more than 50% of the share capital, voting rights or profit distributions, and whose actual corporate tax burden is lower than 50% of the tax that would have been charged on the company or PE under the applicable Cyprus corporate tax system. 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 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. |
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October 2019
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