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International Tax

Newsletter

 

This e-newsletter gives you an overview of international tax developments being reported globally by KPMG member firms in the Europe and Africa regions between 1 March and 31 March 2014.

Albania Czech Republic Greece Lithuania Poland South Africa United Kingdom
Belarus Estonia Hungary Luxembourg Portugal Spain  
Belgium European Union Ireland Netherlands Romania Switzerland  
Botswana France Israel Nigeria Russia Tunisia  
Bulgaria Germany Latvia OECD Slovakia Uganda  


For a full summary of global tax developments, visit kpmg.com/TaxNewsFlash.

To contact the International Tax Team email internationaltax@kpmg.com.

  Tax area concerned Relevant date/case reference Description of measures and publication link
(Considerations in italic where necessary)
Albania
Tax legislation adopted and regulatory update VAT 10 March 2014 Changes to the VAT reimbursement procedures in Albania were published in the official gazette on 10 March 2014.
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Belarus
KPMG publications Various tax issues 2014 KPMG in Belarus has prepared a “tax card” that provides an easy-to-read overview of the tax system in Belarus for 2014.
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Belgium
Tax legislation adopted and regulatory update Tax accounting March 2014 The Commission for Accounting Standards announced that it has withdrawn its advice (126/17) on the determination of the acquisition value of assets acquired for free or below market value, following a judgment of the Court of Justice of the European Union (CJEU).
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Botswana
Proposed legislation Budget 2014/2015 Botswana’s 2014-2015 budget includes proposals to expand the tax revenue base and simplify the tax regime.
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Bulgaria
Tax legislation adopted and regulatory update Company registration 18 March 2014 Amendments to Ordinance No. 1 concerning Bulgaria’s commercial register were published in the official state gazette.
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Transfer pricing 2013 Bulgaria’s corporate income tax return for 2013 includes a new Appendix 4 — which taxpayers are to use to report to the tax authorities: (1) transactions between related parties; and (2) transactions with entities established in jurisdictions with a preferential tax regime.
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Czech Republic
Proposed legislation Various tax areas March/April 2014 The Ministry of Finance’s legislative plan is expected to be made available for public comments in March or April 2014. According to discussions with the Ministry, it appears that most of the changes would relate to the regulation of certain concepts introduced by the new Civil Code (especially trusts and the superficiary right to construct) and to the mandatory implementation of VAT directives.
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Estonia
Tax legislation adopted and regulatory update Tax compliance   31 March 2014 The due date for individual income tax returns in Estonia, for the 2013 tax year, is 31 March 2014.
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European Union
Tax legislation adopted and regulatory update Savings Taxation Directive 2017 The Council of the EU formally adopted a directive amending the 2003 EU Savings Taxation Directive. The amended directive will broaden the scope of the current rules in order to close “certain loopholes.”
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March 2014 The European Commission provided a discussion of FAQs concerning the EU Savings Taxation Directive.
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Excise tax 1 January 2014 The European Commission posted updated (as of 1 January 2014) indirect tax rates for excise duties on alcohol, tobacco, and energy.
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Proposed legislation Customs March 2014 The EC Taxation and Customs Union Directorate-General currently is in the process of drafting a new implementing act for the Union Customs Code (UCC).
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FTT March 2014 The European Commission posted an update of the status of the proposed financial transaction tax.
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France
Tax legislation adopted and regulatory update Large energy consumers aid C-164/12 (23 January 2014) The European Commission announced its approval for aid provided to on-shore wind power in France, and that it has opened an in-depth inquiry into tax reductions for large energy consumers.
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Germany
Administrative and case law VAT March 2014 Decisions concerning indirect tax or VAT from Germany’s federal tax court concern the following topics:
Restriction of pre-financing obligation for standard VAT accounting
Requirement for a separate VAT exemption
Higher VAT rate under EU law – effect on the input VAT deduction
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Treaty override and cross-border interest payments March 2014 A “treaty override” provision, with respect to cross-border payments of interest on a loan made a German partnership to the lending partner (in Italy), may be unconstitutional, pending a determination by Germany’s federal constitutional court.
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Greece
Tax legislation adopted and regulatory update Tax compliance 28 March 2014/31 March 2014 In Greece, the deadline for filing tax returns for taxes withheld in January 2014 is 28 March 2014 and for remitting the payment of withholding tax is 31 March 2014, with respect to:
Dividends
Interest
Royalties
Fees for technical services, administration fees, consulting fees and other fees for such services, when the beneficiary of the income is an individual or non Greek company or legal form.
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Hungary
Tax legislation adopted and regulatory update Finance lease 15 March 2014 A new Hungarian Civil Code is effective 15 March 2014, and introduces a new concept of finance lease.
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Ireland
Tax legislation adopted and regulatory update Tax treatment of termination payments March 2014 The European Commission issued a release announcing that it has officially asked Ireland to amend the Irish tax termination payments because this treatment is alleged to discriminate against individuals who work in group companies in other EU Member States.
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Corporate income tax March 2014 A paper concluded that subsidiaries of U.S. multinationals operating in Ireland have an effective tax rate of 2.2 percent. However, some believe the evidence supporting this paper was “fatally flawed” because, in part, the concepts of place of incorporation and proper locus of income for corporation tax purposes were conflated.
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R&D March 2014 Ireland’s Department of Finance in 2013 undertook a comprehensive review of the Irish R&D tax credit regime, to determine that the R&D tax credit provides “value for money” for taxpayers.
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Other BEPS March 2014 The OECD released a draft discussion of its report on tax challenges of the digital economy. Now, the question posed in Ireland is: What could the proposals outlined in the report mean for businesses in Ireland?
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Israel
Tax legislation adopted and regulatory update Trusts March 2014 Israel’s tax authority in early March 2014 published guidance providing certain relief with respect to the taxation of Israeli resident beneficiary trusts.
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Proposed legislation FATCA March 2014 The Bank of Israel published draft guidance for banking corporations to prepare for the implementation of the FATCA provisions, whether or not an intergovernmental agreement is signed with the United States before July 1, 2014.
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Latvia
KPMG publications Various tax issues 2014 KPMG in Latvia has prepared a “tax card” that provides an easy-to-read overview of the tax system in Latvia for 2014.
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Lithuania
Tax legislation adopted and regulatory update Tax compliance 2014 Various tax forms—affecting individual and corporate taxpayers in Lithuania, and excise tax reporting—have been updated and revised.
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KPMG publications Various tax issues 2014 KPMG in Lithuania has prepared a “tax card” that provides an easy-to-read overview of the tax system in Lithuania for 2014.
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Luxembourg
Tax legislation adopted and regulatory update State aid March 2014 The European Commission has called on Luxembourg to submit information to help in determining whether certain tax practices or regimes favor certain companies, in breach of EU state aid rules.
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Other Savings Taxation Directive March 2014 If the EU Member States agree to update the Savings Taxation Directive, what changes would apply for investments in Luxembourg?
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Netherlands
Administrative and case law Transfer pricing March 2014 A January 2014 decision of the Dutch district court of Zeeland/West-Brabant concerned a Swiss captive-insurance company (without employees), taxing most of its profits back in the hands of a related Dutch taxpayer and with 50 percent penalties being imposed. No appeal was filed, and the decision is now final.
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Nigeria
Tax legislation adopted and regulatory update VAT 12 March 2014 - 11 April 2014 It has been announced that Nigeria’s Federal Inland Revenue Service has scheduled a nationwide VAT and withholding tax “verification exercise” beginning 12 March 2014 through 11 April 2014.
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Transfer pricing 2014 The transfer pricing division of Nigeria’s Federal Inland Revenue Service has requested companies to submit copies of their group’s transfer pricing documentation.
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Tax accounting 2014 Taxpayers need to be aware of the implications of adopting the IFRS by Nigeria’s Federal Inland Revenue Service.
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OECD
Tax legislation adopted and regulatory update BEPS   2 April 2014 The OECD announced a one-hour webcast, on 2 April 2014, as an update on the OECD's BEPS initiative.
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Proposed legislation BEPS 14 April 2014 The OECD released a discussion draft on Action Item 1 (Tax Challenges of the Digital Economy) of the BEPS Action Plan.
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2 May 2014 The OECD released two discussion drafts on Action Item 2 (Neutralise the effects of hybrid mismatch arrangements) of the BEPS Action Plan.
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9 April 2014 The OECD released a discussion draft concerning Action 6 (Prevent Treaty Abuse) under the BEPS Action Plan.
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Transfer pricing 11 April 2014 The OECD was requested by the G8 at its Lough Erne Summit “…to find ways to address the concerns ... on the quality and availability of the information on comparable transactions that is needed to administer transfer pricing effectively.”
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Poland
Tax legislation adopted and regulatory update Transfer pricing July 2013 Poland’s Ministry of Finance issued guidelines expanding on the rules for restructurings of business activities between related parties.
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Proposed legislation VAT 1 April 2014 The exemption from VAT for passenger cars and other motor vehicles will no longer apply, effective 1 April 2014, under draft amendments to Poland’s VAT law.
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Anti-avoidance legislation March 2014 Poland’s cabinet in March 2014 approved changes that are aimed at streamlining the tax proceedings and improving the tax collection process.
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Portugal
Tax legislation adopted and regulatory update Transfer pricing 2014 Changes to Portugal’s corporate income tax law, enacted for 2014, also included amendments to the transfer pricing rules.
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Romania
Tax legislation adopted and regulatory update Various tax areas February 2014 New law (no. 8/2014) in Romania, intended to align Romanian tax law with EU law, was published in the official journal in late February 2014.
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Russia
Proposed legislation Controlled foreign company rules for companies and individuals Tax residency criteria for legal entities One month after official publication (1 January
2015 – in part relating to taxation of individuals)
The Ministry of Finance of Russia has unveiled a draft law introducing controlled foreign company (CFC) rules for Russian tax resident individuals and companies. A CFC is a company resident in a “black list” of jurisdictions adopted by the Russian Ministry of Finance. As of now, it is not clear whether the existing “black list” of jurisdictions will be used for that purpose or whether the new expanded list will be adopted. The draft law also introduces the definition of a Russian tax resident for companies. The draft law is currently undergoing a public discussion and has not yet been formally submitted to the Russian parliament.
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Slovakia
Tax legislation adopted and regulatory update Cost deductibility 2014 Over recent months, tax audits in Slovakia have focused on and challenged taxpayer treatment of the deductibility of costs relating to expired goods inventories.
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South Africa
Tax legislation adopted and regulatory update Tax residency 2014 Changes to the rules in South Africa for determining a company’s residency status warrant taxpayer attention.
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KPMG publications Various tax areas 2014/2015 KPMG in South Africa has prepared a “tax guide” that includes, among other discussions, an analysis of tax changes for individual and corporate taxpayers, as presented in the 2014 budget speech (February 2014).
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Spain
Tax legislation adopted and regulatory update Corporate debt refinancing/ restructuring 9 March 2014 New provisions in Spain — enacted as Royal Decree-Law 4/2014, with an effective date of 9 March 2014 — relate to the refinancing and restructuring of corporate debt.
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Administrative and case law Hydrocarbons retail sales tax February 2014 The CJEU in late February 2014 issued a judgment, finding that Spain’s tax on retail sales of certain hydrocarbons (also referred to as the “tax on healthcare cent”) is contrary to EU law.
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Switzerland
Tax legislation adopted and regulatory update Principal companies June 2014 The Swiss cantons have received instructions from the Swiss federal tax authorities to approach all principal companies within their jurisdictions to discuss implementation of new guidelines for the taxation of principal companies (referred to as circular 8).
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March 2014 Guidelines issued by the Swiss federal tax administration concern the taxation of “principal companies” and could affect principal company structures.
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VAT March 2014 Tour operators that conduct business in Switzerland, with bookings completed through a Swiss entity, may benefit from VAT savings.
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Tunisia
Tax legislation adopted and regulatory update Free trade zones March 2014 Companies established in one of two free trade zones (parcs d’activités economiques) in Tunisia are exempt from most taxes and customs duties and also may benefit from special tax rates.
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Uganda
Tax legislation adopted and regulatory update Tax collection 2013/2014 The Uganda Revenue Authority announced that the half-year revenue performance (i.e., tax collection) for the financial year 2013/2014 registered the largest ever deficit of USh 246.93 billion (approximately US$99 million).
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United Kingdom
Tax legislation adopted and regulatory update Tax incentives / State aid 27 March 2014 The European Commission announced that it has approved the UK video games tax relief plan.
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Various tax areas March 2014 The European Commission announced that it has approved the UK video games tax relief plan.
Corporation tax treatment of VAT repayments related to overpaid output tax on supplies made in the course of the trade
Real Estate Investment Trust Regulations 2014 were published
Amendments to the Unauthorised Unit Trust (Tax) Regulations 2013
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FATCA January 2014 HM Revenue & Customs updated "FATCA guidance" (referred to in the United Kingdom as the “Implementation of The International Tax Compliance (United States of America) Regulations 2013”) to reflect IRS guidance issued in January 2014.
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Proposed legislation Finance Bill 2014 The UK Finance Bill 2014 was published 27 March 2014, and has already had its "first reading" and is scheduled for its "second reading" on 1 April 2014.
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Budget 2014 The UK Chancellor delivered his budget speech to Parliament, setting out in detail how the government will proceed with respect to the economy and concerning taxation.
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Treaties DTT March 2014 Representatives of the governments of the United Kingdom and Germany on 17 March 2014 signed a Protocol to the existing UK-Germany income tax treaty. A second Protocol to the income tax treaty between the UK and Belgium was signed on 13 March 2014.
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KPMG publications Budget 2014 Following the UK Chancellor's 2014 budget speech, on 19 March 2014, KPMG in the United Kingdom has produced a 50-page commentary that describes the key tax measures.
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