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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 April and 30 April 2014.

Angola Estonia Iceland Namibia Poland Turkey
Belgium European Union Ireland Netherlands Russia Ukraine
Croatia France Lithuania Nigeria Slovakia United Kingdom
Cyprus Germany Luxembourg Norway Sweden  
Czech Republic Greece Malta OECD Switzerland  

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)
Angola
Tax legislation adopted and regulatory update Transfer pricing 24 March 2014 As part of tax reform in Angola, a transfer pricing regime was introduced by Presidential Decree no. 147/13 (1 October 2013) establishing the requirements for transfer pricing documentation. More recently, Order no. 599/14 (24 March 2014) sets out the list of “major taxpayers” and their requirements to prepare a transfer pricing report.
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Belgium
Tax legislation adopted and regulatory update Economic zones April 2014 Parliament approved legislation providing employers that invest in certain economic zones, a partial exemption from withholding tax on wages paid to new employees hired following such an investment.
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VAT 4 April 2014 Belgian VAT authorities published new guidance on “e-invoicing.”
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Fairness tax 2014 Belgium’s tax authorities have issued guidance in the form of a circular letter, concerning how to calculate the “fairness tax” as applicable from assessment year 2014.
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Treaties DTT 1 April 2014 A Protocol amending the Belgium-Canada income tax treaty was signed in Brussels.
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Croatia
Tax legislation adopted and regulatory update Employment of disabled persons April 2014 A new law establishes the required percentages of persons with disabilities who must be employed.
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Various tax areas March 2014 Changes to the tax law of Croatia, effective in March 2014, include amendments to various tax laws.
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Cyprus
Tax legislation adopted and regulatory update Tax compliance March 2014 Guidance (circular 2014/3) issued in March 2014 addresses the tax return requirements of a company that is incorporated in Cyprus but is not a tax resident of Cyprus.
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Tax compliance/ Corporate income tax 30 June 2014 The Inland Revenue Department announced that the due date for filing electronically the corporate income tax return (I.R.4) for tax year 2012 has been extended to 30 June 2014.
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Czech Republic
Tax legislation adopted and regulatory update Tax compliance April 2014 The Czech Minister of Finance cancelled plans to unify by 2015 the collection of individual income tax and public insurance contributions.
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KPMG publications Various tax areas 2014 The 2014 edition of KPMG’s “tax card” provides a quick reference tool for the most common tax rates and amounts in the Czech Republic.
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Estonia
Tax legislation adopted and regulatory update VAT April 2014 A supply arising from bitcoin trading is subject to VAT at the rate of 20 percent because the provision of services related to alternative payment instruments is not an exempt financial service under Estonian VAT law.
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Treaties IGA 11 April 2014 An intergovernmental agreement between Estonia and the United States to implement the U.S. legislation known as FATCA was signed on 11 April 2014.
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European Union
Tax legislation adopted and regulatory update Tariff treatment under GSP April 2014 The European Commission posted a guide on how to interpret and use the rules of origin that determine whether or not goods produced in “beneficiary countries” are eligible for preferential tariff treatment under the EU Generalized System for Preferences for developing countries.
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Pension rights April 2014 The European Parliament approved an EU Directive designed to improve the acquisition and preservation of supplementary pension rights.
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VAT 30 June 2014 Business eligible to recover VAT paid to many EU member countries will need to file a claim by 30 June 2014. In many cases, VAT paid in 2013 may not be recoverable if the required documentation is not filed with the respective EU authority by this date.
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Customs 1 July 2014 The European Commission announced the launch of a database search engine that allows businesses and organizations to make timely contacts with national customs services pending the “suspensions in preparation” for 1 July 2014.
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VAT 1 January 2015 The place-of-supply rules relating to where VAT is both collected and remitted for certain services will be changing within the European Union, effective 1 January 2015.
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VAT 2015 The European Commission released explanatory notes intended to help businesses prepare for the new VAT rules for telecom, broadcasting, and electronic services that will be effective in 2015.
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Proposed legislation Customs 1 May 2016 Customs provisions would allow duty-free imports of goods used in production, repair, or modification activities within the aircraft, aerospace, and vehicle industry sectors, effective 1 May 2016.
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Administrative and case law FTT United Kingdom v. Council, C-208/13 (30 April 2014) The Court of Justice of the European Union (CJEU) issued a judgment, rejecting a legal action filed by the United Kingdom government for the annulment of the EU Council’s decision to authorize enhanced cooperation in the area of financial transaction tax.
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Withholding tax Emerging Markets Series of DFA Investment Trust Company, C-190/12 (10 April 2014) The CJEU concluded that the free movement of capital precludes rules—such as applied in Poland—under which a tax exemption is not extended to outbound dividends paid to an investment fund established in a non-EU Member State, provided there is an obligation of mutual administrative assistance between the two countries which enables the national tax authorities to verify information provided by the investment fund.
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France
Proposed legislation Interest deductibility April 2014 The French tax authorities issued draft guidelines (subject to consultation) on the newly enacted rules that limit interest deductions on loans between related parties.
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Corporate income tax 2014 New French Prime Minister announced, during a speech to parliament, proposals to reduce or cut the corporate tax burden.
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Administrative and case law Withholding tax Emerging Markets Series of DFA Investment Trust Company, C-190/12 (10 April 2014) What are the implications in France of a recent judgment of the CJEU in a tax case involving withholding tax on dividends paid by EU companies to a non-EU investment fund?
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Capitalization of foreign banks’ branch April 2014 The French high court issued several decisions affirming the judgments of a lower court of appeals that re-assessments made with respect to French branches of foreign banks, based on a “deemed” thin capitalization standard, were not supported by law.
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Germany
Proposed legislation Various tax areas April 2014 Pending tax legislation in Germany proposes, among other measures, to:
simplify the loss deduction rules for limited partners of a partnership
repeal tax-related exceptions for “carried interest”
revise certain employee-related tax provisions
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Administrative and case law Indirect tax/VAT April 2014 Court decisions concerning indirect tax or VAT were recently released by Germany’s federal tax court.
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Greece
Tax legislation adopted and regulatory updated Method for remitting capital gains tax realized on bonds by non-residents within 2012 and 2013 Filing/Remittance deadline 25 June 2014 Under a new Circular issued by the Greek Ministry of Finance, the tax (40 percent for 2012; 33 percent for 2013) due on capital gains realized by foreign beneficiaries (individuals or legal entities with no permanent establishment in Greece) during 2012/2013 must be paid by such beneficiaries directly where there was no Greek intermediary, or where there was a Greek intermediary but the relevant transfers of bonds were made through omnibus accounts. Such individuals or legal entities may request the application of the beneficial provisions of a double tax treaty, if applicable. A certificate issued by the foreign intermediary for the payment evidencing the amount of capital gains realized must be submitted with the tax return. The foreign beneficiaries must appoint a tax representative in Greece and acquire a Greek tax registration number.
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Iceland
KPMG publications Various tax areas 2014 KPMG in Iceland has produced a report that examines the tax system of Iceland.
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Ireland
Tax legislation adopted and regulatory update R&D April 2014 To claim R&D tax credits and satisfy Irish Revenue’s science and accounting tests, it is critical to maintain appropriate documentation to support technical work and related expenditure.
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FATCA April 2014 The FATCA obligations outlined in the IGA signed by Ireland with respect to registration, due diligence, reporting, etc., only extend to Irish entities that are classified as “financial institutions” under Ireland’s IGA.
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Lithuania
Tax legislation adopted and regulatory update VAT April 2014 Supplemented commentary relating to the VAT law in Lithuania is intended to provide guidance for taxpayers engaged in “mixed activities” as well as new practical cases related to derivatives.
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Luxembourg
Proposed legislation Various tax areas 2015-2017 Various tax measures were announced by the Luxembourg Finance Minister during the “state of the nation” address.
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Malta
Tax legislation adopted and regulatory update VAT 1 January 2014 New regulations in Malta implement rules relating to the rate of interest on late payments of VAT.
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Namibia
Tax legislation adopted and regulatory update Tax system 2014 The Namibian tax system is source-based. Any amount of cash received by or accruing to any person from a source within (or deemed to be within) Namibia is subject to tax in Namibia, unless the receipt is of a capital nature.
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Netherlands
Tax legislation adopted and regulatory update Interest on employer-provided home loans 1 January 2015 The interest rate reduction that employers apply to staff loans granted for the purchase or refurbishment of an employee’s principal residence is currently untaxed. In response to parliamentary questions, the Dutch Minister of Finance stated that the untaxed interest rate reduction would be amended as of 1 January 2015.
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Environment-related tax 2014 There are various environment-related tax changes in 2014 in the Netherlands.
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Fiscal investment institutions April 2014 The Dutch Deputy Minister of Finance published guidance for fiscal investment institutions that includes two additional approvals—one for real estate investment funds and one for investment funds using separate share classes.
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Savings plan April 2014 A new voluntary savings plan, introduced for the portion of an individual’s income exceeding a cap of €100,000, has been approved by the lower house.
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Administrative and case law State profit share April 2014 The Dutch Supreme Court in an April 2014 decision provided guidance on the treatment of “tariff income” for Dutch state profit share purposes.
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Nigeria
Tax legislation adopted and regulatory update VAT April 2014 Nigeria’s Federal Inland Revenue Service requires companies operating in multiple locations and that file their VAT returns centrally to comply with the attribution principle.
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Norway
KPMG publications Various tax areas 2014 KPMG in Norway has produced a booklet providing a survey of the Norwegian tax system for 2014.
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OECD
Tax legislation adopted and regulatory update VAT/GST April 2014 The OECD announced that the governments of 86 countries have endorsed a new set of OECD guidelines for the application of VAT or GST rules.
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Proposed legislation Transfer pricing 11 April 2014 The OECD requested comments by 11 April 2014 with respect to a discussion draft concerning transfer pricing comparability data and developing countries.
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19 May 2014 The OECD announced there will be a public consultation on transfer pricing documentation and country-by-country reporting on 19 May 2014, in Paris.
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April 2014 The OECD announced:
Andrew Hickman (formerly of KPMG) has been appointed the new head of the OECD transfer pricing unit
A recording of the recent webcast is available on the OECD website.
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Poland
Proposed legislation APA April 2014 Poland’s Council of Ministers in March 2014 approved guidelines with respect to draft legislative proposals to amend the APA program.
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Administrative and case law Withholding tax Emerging Markets Series of DFA Investment Trust Co. v. Dyrektor Izby Skarbowej w Bydogszczy, C-190/12 (10 April 2014) The CJEU issued a judgment concluding that Poland (an EU Member State) may not deny a tax exemption for dividends paid by Polish companies to an investment fund established in a non-EU Member State (here, the United States) if there is an agreement for mutual administrative assistance in place between the two countries.
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Russia
Treaties IGA April 2014 It is being reported by the Russian press that negotiations between Russia and the United States for an IGA to implement the provisions under the U.S. FATCA law have been suspended.
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Slovakia
Tax legislation adopted and regulatory update Withholding tax 1 March 2014 The Slovak Ministry of Finance published a “white list” of countries for purposes of determining the rate of withholding tax on cross-border payments—i.e., payments made by Slovak tax residents to taxpayers of other countries.
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Changes to the income tax law in Slovakia introduce a “qualified” withholding tax rate of 35 percent for certain payments made by Slovak tax residents to taxpayers of non-treaty partner countries as of 1 March 2014.
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Transfer pricing March 2014 The Slovak Financial Directorate issued a “methodical guideline” concerning transfer pricing methods.
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Sweden
Treaties IGA April 2014 The U.S. Treasury Department has indicated that Sweden has agreed in substance to an IGA with the United States under the FATCA legislation.
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Switzerland
Tax legislation adopted and regulatory update Stamp duty April 2014 The Swiss federal tax authorities recently increased their focus on the stamp duty relating to insurance premiums.
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Indirect tax/VAT April 2014 Indirect taxes (notably VAT) have been identified as an area of risk for trading companies. For instance, trading companies may be involved in complex supply chains that have indirect tax consequences (e.g., VAT registration obligation, and input VAT credits refunded after months/years by the local authorities).
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Proposed legislation Corporate income tax April 2014 The executive authority of the Swiss Canton of Vaud—where may multinational entities have their international global or regional headquarters—announced a plan for a decrease in the corporate tax rate.
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KPMG publications Income tax 2014 A KPMG report compares income tax rates in 130 countries and in all 26 Swiss cantons.
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Turkey
Tax legislation adopted and regulatory update Financial audit rules April 2014 There are changes to the rules in Turkey concerning when companies must be subject to independent financial audit.
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KPMG publications Various tax areas March 2014 KPMG in Turkey has prepared a guide that aims to provide a general outline of the Turkish tax environment in which foreign investors may consider investing and doing business in Turkey.
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Ukraine
Tax legislation adopted and regulatory update Bio-energy &  bio-fuel sector April 2014 Ukraine’s energy strategy focuses on developing the bio-energy and bio-fuel sector, and therefore provides certain tax relief or tax benefits for producers.
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United Kingdom
Tax legislation adopted and regulatory update Senior accounting officers rules April 2014 HM Revenue & Customs updated the Senior Accounting Officer Guidance Manual—guidance concerning the liability of senior accounting officers for performing certain functions or acts.
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Tax compliance 6 July 2014 UK companies have until 6 July 2014 to submit Form 42—the UK tax return for unapproved employment-related share incentives—for any reportable events for the tax year ended 5 April 2014.
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Proposed legislation CFC 2014 HM Revenue & Customs published draft guidance concerning one of the amendments to the CFC exemption rules contained in the 2014 Finance Bill, i.e., the amendment that prevents the exemption applying to a loan if it is connected with an arrangement that has a main purpose of artificially diverting, into a CFC, profits that are currently received by a UK group company.
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Anti-avoidance 5 December 2013 The UK Finance Bill 2014 contains a new “double tax” relief anti-avoidance provision, which would apply from 5 December 2013.
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Administrative and case law Transfer of losses Felixstowe Dock and Railway Co. Ltd. v. HM Revenue & Customs, C-80/12 (1 April 2014) The CJEU issued a judgment finding that UK tax law provisions requiring that a “link company” must be established in the UK for companies to be entitled to consortium group relief infringes on the freedom of establishment.
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