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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 June and 30 June 2014.

Albania Germany Netherlands Switzerland
Andorra Greece Nigeria Tanzania
Bulgaria Hungary Poland Turkey
Cyprus Ireland Russia Uganda
Czech Republic Kenya Rwanda Ukraine
European Union Luxembourg Slovakia United Kingdom
Finland Macedonia South Africa
France Morocco Sweden

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

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  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 Transfer pricing 24 April 2014 New provisions in Albania’s tax law introduce transfer pricing concepts and define related parties, controlled/uncontrolled transactions, and advance pricing agreements.
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KPMG publications Various tax areas 2014 A report providing information to those considering investing or doing business in Albania includes an overview of the Albanian tax system.
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Andorra
Tax legislation adopted and regulatory update Exchange of information June 2014 Andorra agreed to an OECD declaration that commits countries to end rules allowing bank secrecy for tax purposes.
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Bulgaria
KPMG publications Various tax areas 2014 KPMG in Bulgaria has prepared a “tax card” that provides the 2014 tax rates for corporate income tax, withholding tax, and VAT among other items.
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KPMG in Bulgaria has prepared a report that examines various laws and rules for those considering making investments in Bulgaria.
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Cyprus
Treaties DTT 1 January 2015/ 1 January 2014 The network of income tax treaties in Cyprus includes two new agreements. The income tax treaty between Cyprus and Spain has an entry into force date of 1 January 2015. The income tax treaty between Cyprus and the UAE was effective 1 January 2014.
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KPMG publications Holding companies 2014 The Cyprus holding company regime is intended to provide tax advantages for those incorporating a Cyprus holding company.
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Czech Republic
Proposed legislation Income tax June 2014 The Ministry of Finance released for comments a draft amendment to the income tax law of the Czech Republic.
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European Union
Tax legislation adopted and regulatory update Tax-to-GDP ratio 2012 The European Commission released a report about tax trends in the European Union, revealing that in 2012, the overall tax-to-GDP ratio in the 28 EU Member States was 39.4 percent of GDP in 2012—up from 38.8 percent of GDP in 2011.
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Excise tax March-December 2013 The European Commission issued a report reflecting efforts over a 10-month period (March-December 2013) to counter smuggling and fraud with respect to goods subject to excise tax in the European Union.
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VAT 16 June 2014 The European Commission announced that a VAT Expert Group has adopted an opinion on a “definitive VAT regime” for the VAT treatment of business-to-business supplies of goods.
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State aid 11 June 2014 The European Commission announced that it has opened three investigations to examine whether tax rulings (“comfort letters”) issued by the tax authorities in Ireland, the Netherlands, and Luxembourg—with regard to the corporate income tax to be paid by certain multinational corporations—comply with the EU rules on state aid.
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VAT 1 January 2015 The European Commission issued a reminder that the VAT rules for telecommunications, broadcasting, and electronic services in the EU will change effective 1 January 2015.
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Transfer pricing 4 June 2014 The European Commission adopted a “communication” that includes guidelines on three aspects of the treatment of transfer pricing transactions.
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Customs 2 June 2014 The European Commission announced the release of forms relating to customs enforcement of intellectual property rights.
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Proposed legislation Parent-Subsidiary Directive 20 June 2014 The EU's Council of Economic and Finance (ECOFIN) Ministers reached an agreement on a revised version of the European Commission’s proposed amendments to the EU Parent-Subsidiary Directive. The revised text contains measures to combat the use of hybrid loans.
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Finland
Tax legislation adopted and regulatory update Reporting requirements for construction services 1 July 2014 New reporting requirements apply beginning 1 July 2014 for any business purchasing or supplying construction services in Finland.
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France
Tax legislation adopted and regulatory update Transfer pricing June 2014 There are new transfer pricing reporting requirements for certain entities in France, and a public consultation concerning the information return required to be filed, in order to report transfer pricing information, has just been announced by the French tax authorities.
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Germany
Administrative and case law VAT June 2014 A decision concerning indirect tax or VAT from Germany’s federal tax court concerns the withdrawal if a car from Germany and subsequent transport to a non-member country.
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Income tax June 2014 Germany’s federal tax court issued decisions in cases concerning:
The tax authority’s treatment of a loss carry forward in the merger of a profit corporation into a loss corporation
Requalification of interest in light of an income tax treaty’s “equal treatment article”
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Greece
Tax legislation adopted and regulatory update Transfer pricing 1 January 2014 Guidance issued in Greece concerns the content of taxpayers’ transfer pricing documentation files and summary information sheets for tax years beginning 1 January 2014 and later.
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Hungary
KPMG publications Tax accounting 2014 A report from KPMG in Hungary examines depreciation, assets used in production, and additional capital contribution from an accounting perspective.
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Ireland
Proposed legislation Transfer pricing June 2014 KPMG in Ireland has prepared a summary of some of the most frequently asked questions that relate to the general principles of transfer pricing and the new transfer pricing rules (in the Finance Act 2010) in Ireland.
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BEPS May 2014 Ireland’s Department of Finance in late May 2014 launched a public consultation on BEPS in an Irish context and what this could possibly mean for the future of Ireland’s tax regime.
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Kenya
Proposed legislation Budget 2014-2015 Kenya’s budget for 2014-2015, presented 12 June 2014, includes several tax proposals.
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Luxembourg
Tax legislation adopted and regulatory update Functional currency regime   16 June 2014 Luxembourg’s tax authorities issued guidance establishing a framework for rules with respect to the functional currency regime that is available under Luxembourg tax law.
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Macedonia
KPMG publications Various tax areas 2014 A report providing information to those considering investing or doing business in Macedonia includes an overview of the Macedonian tax system.
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Morocco
Proposed legislation Solar power facilities 2019 The Moroccan government has committed to a national “green” agenda, which includes reducing its reliance on expensive fossil fuel imports (the country lacks fossil fuel reserves of its own) and increasing its production and use of renewable energy sources—including solar power and concentrated solar power in particular.
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Netherlands
Tax legislation adopted and regulatory update Exchange of information 1 January 2014 Recent guidance provides that the Dutch tax and customs administration will exchange, with the tax authorities of other countries, information about Dutch resident companies whose main activities involve the intra-group receipt and payment of foreign interest, royalties, and rental or lease payments.
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Pension law 2015 The Upper House of the Dutch Parliament in late May 2014 passed a bill that would amend the pension law in the Netherlands.
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Dividend taxation June 2014 The European Commission has requested that the Netherlands to end what is perceived to be the discriminatory taxation of dividends received with respect to shares held by insurance companies established in other EU Member States or in a European Economic Area country (Norway, Lichtenstein, and Iceland).
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Administrative and case law VAT 12 June 2014 The Court of Justice of the European Union (CJEU) on 12 June 2014 issued a judgment concluding that discount cards sold to consumers, in order to provide for price reductions, did not fall within the scope of “securities” or “other negotiable instruments” for the purposes of the exemption from VAT.
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Tax consolidation SCA Group Holding, C-39/13, C-40/13, and C-41/13 The CJEU issued a judgment in a case on referral from the Netherlands, and concluded that Dutch law is not compliant with EU law—i.e., the freedom of establishment—in denying tax consolidation (fiscal unity).
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Withholding tax 5 June 2014 The CJEU rendered its judgment in cases concerning withholding tax imposed on profit distributions made by Dutch companies to their parent companies resident on Curaçao.
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Treaties Bilateral tax agreement 10 June 2014 New bilateral rules for the avoidance of double taxation between the Netherlands—including Dutch jurisdictions located in the Caribbean—and Curaçao were announced and presented on 10 June 2014 to the Dutch parliament for approval.
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Nigeria
Administrative and case law Advance rulings June 2014 Nigeria’s Federal High Court held that an advance ruling from the tax authority is not binding, so that the tax authority could subsequently reverse its position and determine that income derived by non-resident companies is subject to both corporate income tax and withholding tax in Nigeria.
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Poland
Proposed legislation CFCs May 2014 Legislation that would amend both the corporate income tax and individual income tax laws in Poland and that proposes rules on the taxation of controlled foreign corporations had its first reading in the Sejm in May 2014.
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Russia
Proposed legislation Controlled foreign company rules for companies and individuals, tax residency criteria for legal entities, beneficial ownership concept One month after official publication, but not earlier than 1st January 2015 The RF Ministry of Finance has prepared a new version of the de-offshorization draft law to be submitted to the RF Government (the draft law). The draft law introduces into the RF Tax Code rules on the taxation of controlled foreign companies (CFC), tax residency criteria for companies, the taxation of income from the indirect transfer of ownership of Russian companies that own real estate (through the sale of shares in companies, more than 50 percent of whose assets directly or indirectly consist of real estate located in Russia), and also the concept of “beneficial owner” of income, which was not included in the previous version of the draft law.
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Rwanda
Proposed legislation Custom duties 2014 Tax provisions included in Rwanda’s 2014 budget, presented 12 June 2014, include the following proposals:
An increase in the excise duty rate on telephone airtime, increased from 8 percent to 10 percent
Reduced customs duty rates on wheat, sugar, rice, cement, motor vehicles and other products
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Slovakia
Tax legislation adopted and regulatory update Tax audits June 2014 Tax professionals in Slovakia report there has been a tendency of the tax authorities to impose “preliminary measures” during routine tax audits.
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Proposed legislation Thin capitalization rules June 2014 The Slovak Ministry of Finance is currently weighing the possibility of re-introducing thin capitalization rules into Slovak tax law.
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South Africa
Treaties IGA (FATCA) 9 June 2014 Representatives of the governments of South Africa and the United States signed on 9 June 2014 an intergovernmental agreement intended to improve international tax compliance and to implement the FATCA.
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Sweden
Proposed legislation Taxation of corporate financing activities 1 January 2016 Proposals for changes to the tax treatment of corporate financing activities have been considered by the Corporate Taxation Committee and were summarized in a 12 June 2014 final report that is now being circulated to agencies, organizations, and other stakeholders.
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Switzerland
Tax legislation adopted and regulatory update FATCA 1 July 2014 In the last couple of months, most institutions affected by FATCA— financial institutions as well as non-financial companies—were still scrambling to become FATCA-compliant and considering steps for compliance with FATCA once it becomes effective on 1 July 2014.
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Treaties Free trade agreement 1 July 2014 A free trade agreement between Switzerland and China will enter into force on 1 July 2014.
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Tanzania
Proposed legislation Budget 2014 Tax proposals included in Tanzania’s 2014 budget, presented 12 June 2014, would replace the current VAT law with a new VAT regime.
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Turkey
Tax legislation adopted and regulatory update VAT 1 May 2014 All VAT general communiqués previously issued by the tax administration in Turkey have been repealed and replaced by a single communiqué.
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Uganda
Proposed legislation Budget 2014 The 2014 budget—presented in Uganda on 12 June 2014—reflects that the overall performance of the Uganda economy as measured by the real GDP at market prices is estimated to have grown by 5.7 percent for the financial year 2013/14 which is a 0.1 percent decrease compared to the revised growth of 5.8 percent that was recorded in the prior year.
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Ukraine
Tax legislation adopted and regulatory update FATCA 5 June 2014 There were 146 financial institutions in Ukraine that self-registered on the IRS FATCA website, prior to 5 June 2014, as participating financial institutions, not covered by the intergovernmental agreement.
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United Kingdom
Tax legislation adopted and regulatory update FATCA 30 June 2014 The UK government published a regulatory update for implementing the FATCA intergovernmental agreement between the UK and the United States. These regulations are effective 30 June 2014 and replace the original 2013 regulations.
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Proposed legislation Finance Bill 1-2 July 2014 The UK Finance Bill is scheduled to have its "report" stage in the House of Commons on 1 and 2 July. The government has published amendments on several Finance Bill clauses ahead of the bill’s report stage.
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Corporate transparency 16 April 2014 The department of Business Innovation & Skills on 16 April 2014 published a response paper on corporate transparency, which discusses proposals that would potentially affect limited liability partnerships.
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Taxation of authorized contractual schemes June 2014 HM Revenue & Customs published draft guidance on the tax treatment of investments in tax-transparent “authorised contractual schemes”.
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Publication Number: 131491