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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 July and 31 July 2013.

Albania France Luxembourg South Africa
Austria Germany The Netherlands Spain
Belgium Ghana Nigeria Switzerland
Bulgaria Gibraltar OECD Turkey
Croatia Hungary Poland Ukraine
Cyprus Italy Romania United Kingdom
Czech Republic Kenya Russia  
European Union Lithuania Serbia  

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

To contact the Global International Corporate Tax Group email go-fmglobalict@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 Corporate income tax/ tax compliance 2013 Guidance from the Ministry of Finance (approved as Instruction No. 17) sets forth the procedures for registering with the Albanian tax authorities and concerning tax payment obligations of “fiscal representatives.”
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Austria
Treaties DTT/exchange of Information 1 October 2013 A second Protocol to the Austria-Canada income tax treaty will enter into force on 1 October 2013, according to a Canada Department of Finance release. The Protocol, signed in March 2012, contains provisions for the exchange of tax information.
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Belgium
Tax legislation adopted and regulatory update Dividend taxation 2013-2014 The Belgian government, in the context of the budget control for 2013 and for 2014, has agreed that withholding tax (imposed at a rate of 25 percent on dividends received by Belgian investment companies) would no longer be creditable and refundable.
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Fairness tax 2014 The Belgian Parliament on 18 July 2013 passed tax law measures under the budget control proposals, including the “fairness tax.”
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Proposed legislation Budget 2013-2014/ various taxes 2013-2014 The Belgian government agreed, pursuant to budget control provisions for 2013 and the budget for 2014, to certain tax measures (which may be amended during the legislative process) including:
introduction of a non-deductible special 5 percent “alternative minimum tax” or “fairness tax” on certain dividend distributions
expansion of the 25 percent withholding tax on certain capital gains realized with respect to share repurchases in bond funds and mixed funds
repeal of a tax credit for the 25 percent withholding tax imposed on Belgian investment companies with respect to dividends received
imposition of a withholding tax rate at 1.69 percent on dividends distributed to foreign companies
increased withholding tax rate of 25 percent (up from 15 percent) on dividends distributed to “intercommunales”
imposition of VAT on services provided by lawyers
increased excise duties on alcohol and tobacco.
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Fairness tax 2014 The Belgian government is reportedly working on draft proposals to implement a “fairness tax”—a separate tax under the corporate income tax regime that would be independent of and would be imposed on top of the other tax(es) under the corporate income tax regime. The rate of the “fairness tax” would be 5.15 percent (i.e., 5 percent subject to an increase of a 3 percent crisis surcharge).
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Administrative and case law Corporate income tax Argenta Spaarbank NV v. Belgische Staat, C-350/11 (4 July 2013) The Court of Justice of the European Union (CJEU) issued its judgment concluding that the Belgian notional interest deduction is contrary to the freedom of establishment principle under EU law.  
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Bulgaria
Tax legislation adopted and regulatory update VAT June 2013 Bulgaria’s tax authorities issued guidance clarifying the input VAT deduction with respect to leased vehicles.
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Croatia
Other EU membership 1 July 2013 Croatia became the 28th Member State of the EU.
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Cyprus
KPMG Publications Various taxes 2013 KPMG in Cyprus prepared a “tax card” that provides an easy-to-read overview of the tax system in Cyprus for 2013.
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Czech Republic
Proposed legislation Payroll tax 1 January 2015 Proposed legislation in the Czech Republic would implement a new payroll tax regime that, if enacted, would be part of the single collection point legislation and, for many employers, could result in higher wage costs.
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European Union
Tax legislation adopted and regulatory update FTT 3 July 2013 The EU Parliament approved a proposed FTT to allow 11 EU Member States to impose tax on trades in stocks and bonds (at a rate of 0.1 percent) and on derivatives (at a rate of 0.01 percent).
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Custom duties 31 July 2013 The deadline for filing applications for relief from customs duty with respect to imports of certain goods into the EU is 31 July 2013.
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July 2013 The European Parliament and the Council of the EU published a regulation on customs enforcement of intellectual property rights.
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VAT July 2013 The European Commission issued a report setting forth the rates of VAT applicable in the EU Member States.
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The Council of the European Commission announced the adoption of measures to enable EU Member States to address VAT fraud, with directive provisions that allow for rapid reaction and as well as a specific measure to counter “carousel fraud.”
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Excise tax 1 July 2013 The European Commission posted updated reports of excise tax rates for receipts on sales of alcohol, tobacco, and energy products within the EU Member States.
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Proposed legislation Shipping industry July 2013 The European Commission announced plans to ease customs formalities for ships and to reduce delays in ports.
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KPMG publications FTT July 2013 KPMG’s EU Tax Centre has produced a brief report on the status of the FTT and the amendments presented by the European Parliament.
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France
Proposed legislation Tax compliance/ e-invoicing 1 January 2013 The French tax authorities have issued draft guidelines under new electronic invoicing rules.
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Germany
Tax legislation adopted and regulatory update Various taxes   29 June 2013 The legislative process for new tax law in Germany has been completed with the publication of the law in the federal law gazette on 29 June 2013. Among the measures are provisions concerning:
extension of the correspondent taxation to the dividend taxation regime
transfer pricing rule changes
real estate transfer tax (RETT) blocker structures
extension of the scope of the group exemption provision for RETT purposes
expansion of the limits on offsetting losses related to reorganizations
application of treaty provisions with respect to small business remunerations
EU administrative assistance law
VAT on place of supply of other services
VAT with respect to the concept of business established abroad
VAT invoicing rules
CFC motive test provisions
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Transfer pricing 29 June 2013 Newly enacted legislation in Germany was published in the federal law gazette on 29 June 2013, and includes changes with regard to transfer pricing with the transposition into German tax law of article 7 of the OECD Model Tax Convention and the related commentary.
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VAT 30 June 2013 Following the enactment on 29 June 2013 of a new tax law in Germany VAT changes are effective on different dates, beginning with new invoicing requirements, effective 30 June 2013.
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Ghana
Other Transfer pricing July 2013 The Ghana Revenue Authority (GRA) is expected to announce the launch of a transfer pricing unit to serve as a special function of the GRA “large taxpayer office.”
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Gibraltar
Tax legislation adopted and regulatory update Corporate income taxation 1 July 2013 Changes to the tax treatment of interest on inter-company loans, effective 1 July 2013, include such interest within the classes of income subject to tax in Gibraltar.
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Hungary
Tax legislation adopted and regulatory update FTT/ other taxes 1 August 2013 The Hungarian Parliament passed legislation that, on enactment, is intended to enhance the collection of taxes and other contributions that could assist the government in reaching its target for a balanced national budget. Among the measures included in the legislation are:
an increase in the rate of the financial transaction tax, generally to be imposed at 0.3 percent of the amount of the transaction, but subject to a cap of HUF 6,000
an increase in the financial transaction tax rate to 6 percent for cash payments made from bank accounts (e.g., ATM payments)
changes to the telecommunication tax
an increase in the mining tax rate, to 16 percent (up from 12 percent) on natural gas and oil from hydrocarbon fields put into use prior to 2008
a 6 percent health care levy (in addition to the 16 percent individual income tax rate) imposed on interest income realized after 1 August 2013
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Italy
Tax legislation adopted and regulatory update Withholding tax/ tax compliance 11 July 2013 The Italian tax authorities released revised and updated versions of forms to be used by non-residents in filing claims for refund of Italian withholding tax when the refund claim is based on:
provisions of an income tax treaty, and the claim concerns withholding tax on payments of dividends, interest, royalties and other income
the EU Parent-Subsidiary Directive (90/435/EEC)
the EU Interest and Royalties Directive (2003/49/EC)
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Kenya
Proposed legislation Excise tax June 2013 Kenya’s Finance Minister proposed a 10 percent excise tax (duty) on fees charged by financial institutions—with a goal of raising more tax revenue.
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Lithuania
Tax legislation adopted and regulatory update Corporate income tax 2014 Corporate income tax changes in Lithuania concern:
foreign entity income based in Lithuania
exemption of income from the transfer of shares
extension of ongoing investment project; addition of “long-term” to list of assets
deadlines for payment of income tax
reduction of taxable income and income tax rate for funds provided for movie production
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Luxembourg
Treaties DTT 19 July 2013 The governments of Luxembourg and Japan exchanged notes concerning the Luxembourg-Japan income tax treaty (1992) and amending Protocol (2010) with respect to taxation of income of “family holdings”.
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1 January 2014 A Protocol amending the Luxembourg-Russia income tax treaty has been ratified.
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The Netherlands
Tax legislation adopted and regulatory update Investment incentives 1 July 2013 An amendment to the depreciation rules in the Netherlands allows business taxpayers making new investments during the second half of 2013 to claim an immediate “bonus” depreciation of up to 50% of the acquisition or production costs of the investment.
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The Dutch tax authorities have provided an explanation and examples illustrating application of the new rules on “free depreciation” (or bonus depreciation) for businesses making new investments between 1 July – 31 December 2013, thus making bonus depreciation available for a one-time write-down of up to half of the costs of acquisition or production costs (subject to certain conditions).
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Nigeria
Tax legislation adopted and regulatory update IFRS June 2013 The Nigerian tax authority in June 2013 released guidance concerning the tax implications of adopting the IFRS.
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OECD
Tax legislation adopted and regulatory update Base erosion and profit shifting July 2013 The OECD conducted a press briefing in advance of Friday’s release of the OECD “action plan” to address tax base erosion and profit shifting by taxpayers.
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19 July 2013 The OECD publicly released its “action plan” for multilateral cooperation to address tax base erosion and profit shifting.
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Proposed Legislation Transfer pricing 1 October 2013 The OECD released a “white paper” on transfer pricing documentation. Comments are due 1 October 2013.
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The OECD announced a revised discussion draft on the transfer pricing aspects of intangibles. Comments concerning the revised discussion draft are due 1 October 2013.
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Poland
Administrative and case law VAT Minister Finansów v. RR Donnelley Global Turnkey Solutions Poland sp. z o.o., C-155/12 (27 June 2013) The CJEU addressed the VAT treatment of storage services, and concluded that a storage service may be regarded as connected to an immovable property only when the recipient is given a right to use all or part of expressly specific immovable property.
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Romania
Tax legislation adopted and regulatory update Corporate income tax/ tax compliance 31 July 2013 Two ordinances concerning forms filed by non-resident taxpayers carrying out business activities in Romania through one or more PEs were published in the official gazette by the Romanian tax authorities.
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KPMG publications Various taxes 2013 The KPMG member firm in Romania has prepared a reference guide that sets forth tax rates for corporate and individual taxpayers, provisions concerning indirect taxes, depreciation and amortization, transfer pricing, tax treaties, and other information.
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Russia
Tax legislation adopted and regulatory update Anti-avoidance 2013-2016 The Russian federation approved a tax policy plan for tax years 2014, 2015, and 2016 that contains an evaluation of the tax policy plan for 2013 and also establishes the government’s tax policy priorities for these subsequent years. Among the items included in the tax policy initiative are provisions:
to address tax avoidance by taxpayers using entities or transactions in low tax jurisdictions
to develop a model intergovernmental agreement for the exchange of tax information and to amend Article 87 of the Russian tax law to allow for the participation of foreign tax authorities in tax audits by the Russian tax authorities
to allow the tax authorities to obtain information from banks concerning taxpayer accounts, deposits, and cash balances
to enhance VAT audits
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Serbia
Tax legislation adopted and regulatory update Personal income tax 30 May 2013 Newly enacted laws in Serbia include measures amending the individual income tax provisions, and revising the social security insurance contribution rules.
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Tax compliance 29 June 2013 New tax guidance in Serbia (referred to in English as “rulebooks”) concerns inter alia the tax return filed by a non-resident with respect to capital gain and rental income from immovable and movable property .
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Transfer pricing 20 July 2013 Transfer pricing provisions enacted in Serbia are effective July 2013, following the enactment and publication of a “rulebook” on transfer pricing. In general, the transfer pricing rulebook:
establishes the form and content of transfer pricing documentation
provides five methods—comparable uncontrolled price, resale price, cost plus, transactional net margin, and profit split methods—for use by taxpayers in determining arm’s length prices
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Treaties DTT 1 August 2013 An income tax treaty between Serbia and the United Arab Emirate (UAE) is effective 1 August 2013. The Serbia-UAE income tax treaty provides for reduced rates of withholding tax on dividends (10 percent, 5 percent, or 0 percent), interest (10 percent or 0 percent), and royalties (10 percent).
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South Africa
Proposed legislation VAT 2013 Among the VAT changes introduced by the Taxation Laws Amendment Bill, 2013, and released for comment by National Treasury are:
whether foreign suppliers of e-commerce services to South African customers need to register for VAT purposes (i.e., the amendment introduces a place-of-supply rule into South African VAT law requiring foreign suppliers of e-commerce services to register for VAT purposes in South Africa)
provisions to broaden and streamline the VAT registration process
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Tax penalties October 2012 Draft proposals would provide certain relief from a tax penalty regime enacted in South Africa and effective beginning October 2012.
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Corporate income tax 1 July 2013 Draft legislation proposes to establish rules on the deductibility of interest relating to “acquisition debt”—reflecting a concern regarding the effect of highly geared leveraged buy-out transactions on the South African tax base.
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Spain
Other State aid 2014 The European Commission announced two new investigations concerning whether:
a new interpretation of the Spanish rules allowing tax deductions in connection with the acquisition of shareholdings in non-Spanish companies is in line with EU state aid rules
a new interpretation allowing amortization of financial goodwill derived from indirect acquisitions complies with EU laws
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Switzerland
Tax legislation adopted and regulatory update FATCA January 2013 The final rules under FATCA were released in January 2013, and affect the business activities and business models of Swiss financial institutions.
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Treaties FTA 6 July 2013 Representatives of Switzerland and China signed a free trade agreement that is intended to reduce customs duty rates on trade between the two nations.
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Turkey
Tax legislation adopted and regulatory update APAs July 2013 Turkey’s APA system is still viewed as being in its infancy, even though Turkey’s transfer pricing rules were effective beginning in 2007.
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Ukraine
Tax legislation adopted and regulatory update Various taxes July 2013 Recent tax developments in the Ukraine include:
Ukrainian Parliament does not ratify a new income tax treaty with Cyprus
National Bank of Ukraine lowers the prime interest rate
new forms for registration documents
improper execution of a contract is not sufficient grounds to void the contract
VAT on factoring operations
social contribution not to be charged on royalty payments
transfer pricing draft law is approved in the first reading
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Tax compliance 1 January 2014 In Ukraine, a new law delays the effective date requiring electronic reporting of certain sales information until 1 January 2014.
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Transfer pricing 1 September 2013 The Ukrainian Parliament passed a transfer pricing law, and the new provisions will be effective 1 September 2013.
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United Kingdom
Tax legislation adopted and regulatory update Finance Act 2013 1 April 2014/ 1 April 2015 Finance Bill 2013—which includes reductions in the UK corporation tax rate to 21 percent, effective 1 April 2014 and to 20 percent effective 1 April 2015—completed its final House of Commons Stage (Third Reading) on 2 July 2013.
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The UK Finance Bill 2013 became Finance Act 2013, after completing its stages in the House of Lords on 15 July 2013 and receiving "Royal Assent" on 17 July.
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Proposed legislation Anti-avoidance July 2013 The UK government has proposed to amend the corporate tax rules concerning corporate debt / loan relationships and derivative contracts—and has proposed to approach anti-avoidance in the following manner:
reduce the scope for avoidance by making it easier to adjust accounting entries based on contrived avoidance arrangements
introduce a targeted tax avoidance rule (TAAR) that would cover the loan relationships and derivative contracts regimes together
modify the unallowable purpose rule to improve its effectiveness as a counter to tax avoidance arrangements by dealing with perceived uncertainties regarding the application of the rule and broadening its scope
continue to adjust accounting debits and credits when they do not reflect arm’s length transactions
supplement anti-avoidance rules with the GAAR
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Investment management sector July 2013 HM Revenue & Customs released for comments three consultations that generally would serve as starting point for future legislation affecting the investment management sector.
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Administrative and case law VAT HM Revenue & Customs v. Newey, C-653/11 (20 July 2013) The CJEU concluded that economic and commercial realities are fundamental factors in applying a common system of VAT and that a substance-over-form approach may be more decisive than the actual “contractual terms” in identifying the recipient of a supply of services.
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