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International Tax

Newsletter

 

This e-newsletter gives you an overview of international corporate tax developments being reported globally by KPMG member firms in the Europe and Africa regions between 1 November and 30 November 2013.

Andorra France Netherlands South Africa
Austria Germany Nigeria Spain
Belgium Hungary Norway Sweden
Croatia Ireland OECD Ukraine
Cyprus Lithuania Poland United Kingdom
Czech Republic Luxembourg Romania  
European Union Malta Serbia  
Finland Mauritius Slovakia  

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

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

  Tax area concerned Relevant date/case reference Description of measures and publication link
(Considerations in italic where necessary)
Andorra
Treaties Mutual administrative assistance November 2013 The OECD announced that Andorra is the 60th country to sign the OECD agreement for mutual administrative assistance in tax matters.
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Austria
Tax legislation adopted and regulatory update M&A November 2013 The Austrian Ministry of Finance published opinions regarding two issues concerning mergers and acquisitions and specifically relating to dividends paid out by Austrian corporations.
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Belgium
Tax legislation adopted and regulatory update Withholding tax November 2013 The European Commission determined to bring an action before the Court of Justice of the European Union (CJEU) with respect to the Belgian withholding tax imposed on certain interest payments made to foreign investment companies or foreign financial institutions.
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Croatia
KPMG publications Various taxes 2013 The KPMG member firm in Croatia has prepared a tax guide providing an overview of the Croatian tax system.
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Cyprus
Tax legislation adopted and regulatory update VAT   20 August 2013 The rules for VAT with respect to services provided to persons established in Cyprus were clarified with the issuance of guidance (Circular 178 (20 August 2013)).
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Czech Republic
Tax legislation adopted and regulatory update Employees’ taxation and insurance premiums 2014 Employers will need to prepare for changes to rules relating to the taxation and insurance premiums for employees—changes that are effective in 2014.
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European Union
Tax legislation adopted and regulatory update Customs/ common nomenclature 2014 The European Commission on 31 October 2013 released the 2014 version of the “common nomenclature” (i.e., tariff and statistical nomenclature and on the common customs tariff).
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Proposed legislation   Corporate income tax/Parent-Subsidiary Directive 31 December 2014 The European Commission proposed changes to EU corporate tax law that would be intended to address tax avoidance in Europe. The proposal would close “loopholes” in the EU Parent-Subsidiary Directive used by some companies to escape taxation (i.e., by exploiting differences in the way intra-group payments are taxed across the EU to avoid paying tax).
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Customs duties 1 January 2014 The European Commission has proposed to continue an exemption from customs duties for jet fuel imports, beginning 1 January 2014.
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Finland
Administrative and case law Withholding tax September 2013 Finland’s Supreme Administrative Court concluded in a September 2013 judgment that the Finnish tax administration must pay interest on refunds of withholding tax collected in contradiction to EU law.
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France
Tax legislation adopted and regulatory update Transfer pricing 30 November 2013 The French National Assembly on 5 November 2013 passed legislation (intended to counter tax fraud and to address certain financial and economic crimes) that includes new reporting requirements for companies that are already subject to the French transfer pricing documentation rules.
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Proposed legislation Finance Bill/anti-avoidance 2014 The French National Assembly passed an amended “second package” under the Finance Bill for 2014. The bill contains measures concerning:
the definition of “abuse of law”
tax optimization plans or schemes
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Finance Bill/ transfer pricing/accounting rules/MAP 2014 Transfer pricing provisions included in the Draft Finance Bill for 2014 provide for:
an enhanced penalty related to transfer pricing documentation
information on rulings from foreign tax authorities
analytical accounts and consolidated accounts
transfer of functions and risks
effect of MAP request
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Finance Bill 2014 Tax proposals in legislation currently pending before the French Parliament would generally implement the government’s initial package of the 2014 Finance Bill. However, there are changes to the government’s initial tax proposals.
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Other Tonnage tax 6 November 2013 The European Commission announced the launch of an investigation to consider whether the French tonnage tax regime complies with EU state aid rules.
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Germany
Administrative and case law VAT November 2013 Germany's federal tax court changed its position on the rules for organizational integration of companies into VAT groups.
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Corporate income tax November 2013 Germany’s federal tax court held that the tax authorities may require taxpayers to identify the recipients of payments that are deducted as businesses expenses. Otherwise, the deduction can be denied.
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Hungary
Treaties Mutual administrative assistance November 2013 The OECD announced that Hungary is the 61st country to sign the OECD agreement for mutual administrative assistance in tax matters.
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Ireland
Tax legislation adopted and regulatory update R&D November 2013 The R&D tax credit in Ireland is not limited to research in the laboratory. Quite often, the R&D tax credit may apply for work that a company might consider to be a day-to-day activity—such as developing a new product, devising or making improvements to a production process, or trying out a new material to reduce costs.
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Lithuania
Tax legislation adopted and regulatory update Tax compliance 2013 onwards In Lithuania, corporations reporting on controlled and controlling entities / persons are to use an amended Form FR0438 when filing data for the tax period starting in 2013 and for subsequent periods.
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Luxembourg
Tax legislation adopted and regulatory update VAT November 2013 Guidance from the Luxembourg tax authorities specifies the scope of a VAT exemption applicable with respect to the management of investment funds.
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Treaties DTT November 2013 An income tax treaty between Luxembourg and Laos has been ratified by both signatory countries, and is pending the exchange of instruments of ratification before the treaty can enter into force.
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Malta
Proposed legislation Budget/ various taxes 2014 Malta’s Minister of Finance presented the budget for 2014.
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Mauritius
Proposed legislation Budget/ corporate income tax 2014 The Vice Prime Minister and Minister of Finance and Economic Development delivered the 2014 budget speech.
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Netherlands
Tax legislation adopted and regulatory update Transfer pricing 27 November 2013 The Dutch Deputy Minister of Finance issued a new decree that generally unifies and clarifies prior transfer pricing guidance, and withdraws and cancels prior decrees from 2001 and 2004. The new decree is effective 27 November 2013.
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VAT 1 January 2014 Entrepreneurs subject to VAT but not “established”―for VAT purposes―in the Netherlands must file their VAT returns / EC sales lists electronically (and not on paper forms) beginning 1 January 2014.
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Proposed legislation Annuity-related provisions 1 January 2014 The Dutch lower house passed the Tax Plan 2014—including provisions to repeal an annuity exemption and to provide rebate rules for the surrender of existing annuity entitlements.
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Administrative and case law Withholding tax November 2013 The Supreme Court of the Netherlands in a November 2013 decision concluded that a Finnish investment fund was not entitled to a refund of withholding tax on dividends distributed to it by companies in the Netherlands, despite the fact that the Finnish investment fund was not able to claim a credit in Finland for the withholding tax on the dividend distributions.
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VAT 1 November 2013 The Dutch Supreme Court on 1 November 2013 made a request of the CJEU for a preliminary ruling concerning the VAT treatment of the management of real estate companies.
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Nigeria
Tax legislation adopted and regulatory update Transfer pricing 2012 Nigeria’s Federal Inland Revenue Service, in implementing the transfer pricing regulations issued in 2012, has released two transfer pricing forms—a transfer pricing declaration form and a transfer pricing disclosure form—and has established an office within the tax administration specifically to address transfer pricing issues.
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Norway
Proposed legislation Budget 2014 Norway’s new government presented its “adjustments” to the 2014 budget—but the proposal to limit interest deductions on related-party loans, for the most part, will move forward from the prior budget proposals and will be implemented with an effective date of 2014. Read more

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OECD
Tax legislation adopted and regulatory update Transparency and exchange of information November 2013 The OECD Global Forum—a multilateral framework within which work in the area transparency and exchange of information has been conducted by both OECD and non-OECD economies since 2000—released a progress report in conjunction with the forum’s November 2013 meeting.
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Country-by-country reporting November 2013 The OECD's Action Plan on BEPS—a significant development in respect of multilateral initiatives for modifying international tax rules—covers 15 specific actions, one of which would aim to enhance tax transparency through greater country-by-country reporting.
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Tax avoidance November 2013 A report from an OECD task force focuses on how developing countries can effectively address tax avoidance and evasion and new ways to raise resources for domestic development.
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Proposed legislation Transfer pricing November 2013 The OECD reported on the two-day public consultation on transfer pricing topics. According to the OECD release, the topics discussed included public comments concerning the:
revised discussion draft on transfer pricing aspects of intangibles
White paper on transfer pricing documentation
The BEPS Action Plan requirement to adopt a system of country-by-country reporting of selected company financial data to tax administrations
the appropriate scope of other transfer pricing aspects of the BEPS Action Plan
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12-13 November 2013 The OECD has posted the final agenda for the 12-13 November 2013 public consultation on transfer pricing matters.
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KPMG publications Transfer pricing November 2013 KPMG professionals attended and participated in the OECD two-day public consultation on transfer pricing topics. The KPMG member firm in the UK prepared a report summarizing the discussions during the OECD public consultation.
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Poland
Administrative and case law Dividend taxation November 2013 The Advocate General of the CJEU issued an opinion concluding that different tax treatment for dividend payments made to investment funds in a third country (rather than to domestic investment funds) constitutes a restriction on the free movement of capital. Yet, the Advocate General found that this restriction may be justifiable if to protect the effectiveness of fiscal supervision.
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Income tax (benefits-in-kind) November 2013 Poland’s Supreme Administrative Court has referred an issue concerning the taxation of benefits-in-kind to the Constitutional Tribunal.
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Treaties DTT 30 October 2013 An income tax treaty between Poland and Canada entered into force on 30 October 2013.
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Romania
Tax legislation adopted and regulatory update Various taxes 1 January 2014 New tax law changes effective in Romania beginning 1 January 2014 are intended to broaden the tax base in areas such as property taxation and excise taxes, and to align Romanian tax provisions to EU law.
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Individual income tax October 2013 Prior rules that imposed an individual income tax rate of 85 percent on management severance payments have been amended, and now limit this 85 percent rate with respect to only certain severance payments.
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Serbia
Treaties DTT 31 October 2013 An income tax treaty between Serbia and Canada entered into force on 31 October 2013.
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Slovakia
Proposed legislation Budget/ various taxes 2014-2016 The Slovak government in October 2013 approved a draft budget for 2014-2016 that includes proposals to:
extend a “special levy” on business undertakings for entities in certain sectors until 2016
reduce the rate of corporate income tax to 22 percent beginning in 2014
introduce a “tax licence” providing a fixed fee (or minimum tax) that a company would pay even if it declares zero profit or reports a loss
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South Africa
Tax legislation adopted and regulatory update VAT 1 November 2013 South Africa’s tax authorities issued a ruling concerning the VAT treatment of supplies made and received by short-term insurers.
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Proposed legislation Withholding tax 1 January 2015 Legislative proposals in South Africa provide for a withholding tax on interest, imposed at a rate of 15 percent and to be effective 1 January 2015—i.e., with respect to interest that is paid or that becomes due and payable on or after that date.
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Royalties’ taxation (coal & mining companies) 1 March 2014 The effects of a 2008 law, concerning the taxation of royalties, for coal mining companies in South Africa have been subject to substantial debate and legislative changes.
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Spain
Tax legislation adopted and regulatory update Various taxes 30 October 2013 A law in Spain introduces certain environmental tax measures and includes other corporate income tax and excise tax provisions.
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Sweden
Administrative and case law Transfer pricing November 2013 Sweden’s Supreme Administrative Court denied the Swedish tax agency’s request for leave to appeal an issue concerning interest deductions in five tax cases. At issue was whether market rates of interest on intercompany loans were in accordance with the arm’s length principle.
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Ukraine
Tax legislation adopted and regulatory update VAT November 2013 Ukraine’s tax authority issued guidance concerning VAT, including the following provisions:
supplies of software products—basically, clarifying that the application of the VAT exemption on the supply of software products does not require the company to be registered as a software industry company
refunds of VAT—clarifying the procedure of VAT refunds
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United Kingdom
Administrative and case law Income tax (treatment of LLCs) Anson v. HM Revenue & Customs Commissioners The UK Supreme Court has granted leave for an appeal in a case concerning whether an individual taxpayer is subject to UK tax on distributions from a Delaware LLC.
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Corporate income tax Versteegh Ltd. v. Commissioners for HMRC The UK First Tier Tribunal found that the receipt of shares, from a borrower in an interest-free loan agreement between UK companies, was taxable income.
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Dividend taxation Prudential Assurance Company Ltd. v. HM Revenue and Customs (2013) EWHC 3249 (Ch) (October 2013) A decision of the UK High Court concerns the taxation of portfolio dividends (holdings of less than 10 percent) under former tax law that provided double tax relief for foreign withholding taxes paid on the dividends, but not relief for any underlying tax.
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