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 2012.
| |
Tax area concerned |
Relevant date/case reference |
Description of measures and publication link
(Considerations in italic where necessary) |
| Austria |
| Tax legislation adopted and regulatory update |
Withholding tax |
2007 |
In 2010 the Austrian Government introduced rules that allow certain EU/EEA entities to seek refunds of withholding tax on dividend income, and in some instances to reduce the rate of withholding tax to 0%. Refund claims can currently be made going back to 2007 (2007 until 31 December 2012).
Read more |
|
Back to top |
| Belgium |
| Tax legislation adopted and regulatory update |
VAT |
November 2012 |
When a specific part of immovable property is assigned for the exclusive use of the recipient of the services, the services are connected to the immovable property and thus remain taxable for VAT purposes.
Read more |
| Corporate income tax/VAT/Indirect tax |
2013 |
The federal government has reached an agreement on the Budget for 2013 which will include corporate income measures (ID, capital gains tax), withholding tax measures (rate will be increased), and indirect tax measures.
Read more |
|
Back to top |
| Bulgaria |
| Administrative and case law |
VAT |
TETS Haskovo/PIGI |
Based on two recent judgments of the ECJ, when analyzing whether or not an input VAT adjustment is to be made under EU rules, the taxpayer must first consider if there is a change in the factors used to determine the initial VAT deduction.
Read more |
|
Back to top |
| Cyprus |
| Tax legislation adopted and regulatory update |
VAT |
November 2012 |
Cypriot VAT officials issued guidance (Circular 170 and Circular 171) with regards to recent amendments to the capital goods rules concerning books and records. The new rules apply to situations when there is a change in the use of buildings that were built by contractors under a contract for the supply of construction services on land owned by taxable persons.
Read more |
|
Back to top |
| Czech Republic |
| Proposed legislation |
Budget |
2013 |
A tax package is sent to the Senate. Among the legislative changes are provisions that would increase the VAT rates to 15% and 21%.
Read more |
|
Back to top |
| Denmark |
| Treaties |
DTT |
1 January 2013 |
A new income tax treaty between Denmark and China can be effective beginning 1 January 2013, depending on the ratification in both countries.
Read more |
|
Back to top |
| European Commission |
| Tax legislation adopted and regulatory update |
Customs |
1 January 2013 |
The European Commission published the latest version of the Combined Nomenclature (which forms the basis for the customs declaration of goods) that will be effective beginning 1 January 2013.
Read more |
| Financial Transaction Tax |
November 2012 |
The EU Council discussed the financial transaction tax and savings agreements and adopted conclusions on tax fraud, evasion, and VAT derogations.
Read more |
| Other |
November 2012 |
President Obama this week signed into law measures that direct U.S. officials to prohibit a U.S. airline from participating in any emissions trading scheme unilaterally established by the European Union — as the EU did in Directive 2003/87/EC (October 13, 2003) — provided that the U.S. officials find it is in the ‘public interest’.
Read more |
|
Back to top |
| Estonia |
| Administrative and case law |
VAT |
October 2012 |
Court cases on transfer of equipment and VAT on legal services.
Read More. |
|
Back to top |
| Finland |
| Administrative and case law |
Corporate income tax |
Commission v. Finland, C-342/10 |
The Court of Justice of the European Union issued a judgment holding that the fact that Finnish resident pension funds can deduct amounts transferred to reserves from their taxable income, while non-resident pension funds cannot, is an unjustified restriction of the free movement of capital.
Read more |
|
Back to top |
| France |
| Proposed legislation |
Budget |
2013 |
The French government has indicated its intention to introduce several new tax measures, including a tax credit that would be based on a company’s payroll. The tax credit would be paid for with increased rates of VAT and new environmental taxes.
Read more |
Draft measures have been proposed to close certain ‘tax loopholes’ and to block abusive tax schemes for individual and corporate taxpayers, as well as modify certain provisions of the French tax code to bring them into compliance with EU regulations.
Read more |
| VAT |
2014 |
The French Prime Minister announced a government proposal to amend the VAT rates in France beginning 1 January 2014.
Read more |
|
Back to top |
| Germany |
| Proposed legislation |
Budget |
2013 |
The German lower house (Bundestag) passed a version of the 2013 Tax Act. The proposal includes changes with respect to transfer pricing, hybrid financing, exemption for dividends and VAT.
Read more |
| Administrative and case law |
VAT |
GfBk Gesellschaft für Börsenkommu
nikation mbH v. Finanzamt Bayreuth, C-257/11 |
The Advocate General of the Court of Justice of the European Union issued an opinion in which he stated that sub-delegated investment advisory services can qualify for VAT exemption on the basis that they fall within the meaning of ‘fund management’.
Read more |
| Other |
VAT |
November 2012 |
A report summarizing recent value added tax (VAT) developments in Germany includes a discussion of:
| • |
cases referred to the CJEU by the German Federal Tax Court (BFH) concerning whether the distinction between passenger transport in taxis (7% tax rate for transport within a municipality or over distances of less than 50 km) and rental cars (19% tax rate without differentiation) is compatible with EU law |
| • |
a specialist draft, published by the German Federal Ministry of Finance (BMF), on amendments of obligations to furnish evidence in respect of intra-Community supplies of goods, effective 1 July 2013 |
| • |
BMF guidance concerning supply relationships in transactions involving the disposal of valuable waste materials, in which the supply of waste deemed to have an independent economic value constitutes a barter transaction |
| • |
a European Commission request that Germany no longer require VAT refund applications by non-EU operators to be personally signed by the applicant. |
Read More
|
|
Back to top |
| Greece |
| Tax legislation adopted and regulatory update |
Accounting |
1 January 2013 |
Newly enacted law in Greece amends the bookkeeping and accounting rules for taxpayers. The new measures are effective beginning 1 January 2013.
Read more |
|
Back to top |
| Hungary |
| Proposed legislation |
Budget |
1 January 2013 |
The Hungarian Parliament accepted, as proposed, most of the changes relating to the tax law for 2013. The amendments in the passed legislation concern a variety of tax areas — ranging from individual income tax, health and social contributions, value added tax (VAT) systems, corporate income tax, customs duty, to local taxation. Read a an October 2102 report and a November 2012 report and read background on the legislation:
Read More |
|
Back to top |
| Ireland |
| Other |
Incentives |
November 2012 |
Companies that claimed research and development (R&D) tax credits in recent years should expect to be audited.
Read more |
|
Back to top |
| Italy |
| Proposed legislation |
VAT |
1 July 2013 |
The standard VAT rate — as previously planned — would increase to 22% (from 21%) effective 1 July 2013. The reduced VAT rate of 10% and the super-reduced VAT rate of 4%, however, would not change.
Read more |
| 1 January 2013 |
An amendment to the Italian law provisions concerning banking services (and related exemptions) proposes to impose VAT on services provided by securities-based asset management entities beginning 1 January 2013.
Read more |
|
Back to top |
| Luxembourg |
| Proposed legislation |
Budget |
1 January 2013 |
Luxembourg’s Finance Minister presented the budget for 2013 that includes a minimum tax for corporations, proposed reductions of the investment tax credits, and other measures aimed at generating additional revenue.
Read more |
|
Back to top |
| Malta |
| Tax legislation adopted and regulatory update |
VAT |
November 29, 2012 |
VAT guidelines for aircraft leasing
Read More |
|
Back to top |
| Mauritius |
| Proposed legislation |
Budget |
2013 |
The Mauritius budget for 2013 includes measures to foster the establishment of ‘regional treasury centers’ (regional headquarter structures).
Read more |
|
Back to top |
| The Netherlands |
| Proposed legislation |
Budget |
1 January 2013 |
The new government agreed on tax proposals including changes with respect to incentives, excise tax and a ’profit box’.
Read more |
| Withholding tax |
1 January 2013 |
A proposal to amend the rules for remittance reduction in respect of dividend withholding tax for fiscal investment institutions (fiscale beleggingsinstellingen) would be effective 1 January 2013, and could have significant consequences for fiscal investment institutions in which pension funds participate.
Read more |
|
Back to top |
| Norway |
| Administrative and case law |
Corporate income tax |
Hydro K/G |
The Norwegian Supreme Court issued its decision in the Hydro K/G case, concluding that a claimed loss was not deductible because the entity claiming the deduction was a company (and not a transparent entity) for Norwegian tax purposes.
Read more
Furthermore, the Norwegian Supreme Court’s decision provides that outbound dividends distributed from Norwegian companies and paid to limited partnerships registered in the European Economic Area are exempt from Norwegian withholding tax—regardless of where the partners are residents and regardless of whether the partners are corporations or individuals.
Read more |
|
Back to top |
| Russia |
| Tax legislation adopted and regulatory update |
Permits |
2013 |
The government of the Russian Federation issued Resolution No. 1137 establishing the number of work permits to be issued to foreign citizens for 2013—1,745,584 work permits for Russia as a whole.
Read more |
|
Back to top |
| Serbia |
| Tax legislation adopted and regulatory update |
VAT |
November 2012 |
Serbia’s Minister of Finance and Economy adopted three new VAT “rulebooks” with each defining in greater detail i) electronically provided services, ii) secondary raw materials, and iii) rules for VAT refunds.
Read more |
|
Back to top |
| Slovakia |
| Proposed legislation |
Corporate income tax |
2013 |
An amendment presented to the Slovak Parliament would increase the rate of corporate income tax from 19% to 23%, for tax years beginning after 31 December 2012.
Read more |
|
Back to top |
| Spain |
| Administrative and case law |
VAT |
25 October 2012 |
The Advocate General of the Court of Justice of the European Union concluded in an opinion that Spain’s application of reduced rates of VAT to specific health care equipment, instruments, products, and medial substances is contrary to an EC directive.
Read more |
| Tax legislation adopted and regulatory update |
Energy tax |
1 January 2013 |
The Spanish Cabinet approved a draft bill on environmental measures and energy sustainability — a bill containing tax provisions relating to energy generation and fuels — and sent the proposals on to the Spanish Parliament for its consideration.
Read more |
| VAT |
31 October 2012 |
Changes to Spain’s VAT law are effective 31 October 2012.
Read more |
|
Back to top |
| Sweden |
| Tax legislation adopted and regulatory update |
Corporate income tax |
2013 |
Sweden’s Parliament passed a bill to reduce the corporate income tax rate to 22%, and approve the government’s proposal to expand the interest-deduction limitation regime.
Read more |
| Administrative and case law |
VAT |
27 November 2012 Commission v. Sweden, C-480/10 |
The Advocate General of the European Court of Justice (CJEU) this week issued an opinion finding that the Swedish value added tax (VAT) grouping rules are in breach of the EC VAT Directive.
Depending on the outcome of the judgment, it remains to be seen how the Swedish Government will react. Companies in the financial and insurance sectors need to monitor this development.
Read More |
|
Back to top |
| Turkey |
| Tax legislation adopted and regulatory update |
Customs |
1 December 2012 |
The European Commission reported that Turkey will join the EC agreement on common transit, effective 1 December 2012.
Read more |
|
Back to top |
| United Kingdom |
| Administrative and case law |
Corporate income tax |
Explainaway Limited v. HMRC, FTC/72/2011 & FTC/79/2011 |
The Upper Tribunal issued its decision in a corporation tax case finding that tax planning involving derivative contracts in 2001 and 2002 was ineffective to shelter capital gain realized on the sale of shares.
Read more |
| Test Claimants in the FII Group Litigation v. Commissioners of Inland Revenue, C-35/11 |
The Court of Justice of the European Union issued a judgment concerning the UK’s rules for applying the imputation method to foreign-sourced dividends. The CJEU found that the UK tax rules do not provide for the tax treatment of these dividends in a manner that is equal to how UK-sourced dividends are treated under the exemption method.
Read more |
| Tax legislation adopted and regulatory update |
Corporate income tax |
November 2012 |
HM Revenue & Customs published three draft regulations concerning i) advance corporation tax, ii) debt cap, and iii) patent box rules. HMRC requested comments on the draft regulations.
Read more |
HM Revenue & Customs updated the guidance on the tax treatment of distributions. There is separate guidance for companies and individuals.
Read more |
| Treaties |
DTT |
November 2012 |
A Protocol amending the United Kingdom-India income tax treaty has been signed and published. The Protocol will not enter into force until both countries complete their ratification processes.
Read more |
| Administrative and case law |
Corporate Income Tax |
MJP Media Services Ltd v. Commissioners for HMRC, No. A3/2011/2831 (UK Ct. App. 28 November 2012) |
The UK Court of Appeal this week issued a decision concerning whether certain intra-group debts were loan relationships.
Read More |
|
Back to top |
