International Tax Updates
On October 18, 2024 the North Macedonia’s Public Revenue Office confirmed that October 25, 2024 is the deadline to file VAT-04 returns. However, the Tax Authority emphasized that even in the cases of no taxable turnover, taxpayers need to proceed with the filing, so that they meet the legal obligations.
To read more on the announcement, click here.
On October 2024, the Federal Supreme Court in Brazil ruled that applying a 25% withholding income tax on retirement and pension income paid to individuals living abroad is unconstitutional. As a result, part of the received pensions and retirements from Brazil by non-residents will be exempt, in line with the exemptions already available to Brazilian residents.
The Court, while examining the provisions under Article 7 of Law No. 9,779/99, as amended by Law No. 13,315/16, further emphasized that taxing foreign residents differently from domestic residents violates the principles of Equality, Progressiveness of Income Tax, and Proportionality as enshrined in the Federal Constitution.
More details can be found in the official ruling here.
On October 18, 2024 the Argentina’s Ministry of Economy requested the Federal Administration of Public Revenue to extend the deadline for taxpayers to join the Special Regime of Income Tax on Personal Property (hereinafter REIBP). The extension allows two groups until October 31, 2024 to complete the process:
- Taxpayers who started joining REIBP by September 30, 2024 but couldn’t finish, and
- Taxpayers who filed their personal property tax return by September 30, 2024 and now want to join REIBP.
The voluntary program allows individuals to pay taxes in a unified way until December 31, 2027, covering assets regularized under Law No. 27743/2024.
To read more on the extended deadline specifics, click here.
On October 17, 2024 the Belgium’s Federal Public Service-Finance confirmed that an extension for submitting withholding tax returns (hereinafter WTH) has been provided. According to the announcement, given the technical problems the new deadline now is October 30, 2024. The new deadline concerns WTH for September 2024 and the third quarter of 2024 However, interest on late payments will apply only from October 31, 2024.
To read more on the announcement, click here.
On October 16, 2024, the Swiss Federal Assembly approved the draft law providing for an increase in VAT rates, to be implemented from January 2026. The changes include:
- Increasing the fixed rate of VAT from 8.1% to 8.8%.
- Increasing the special VAT rate on construction services from 3.8% to 4.2%.
- Revised VAT rate reduction from 2.6% to 2.8%.
These changes are part of the council’s plans to implement new tax policies in the coming years. Click here to read more on the specifics of the VAT rate increase.
- Taxpayers who must pay taxes, fees, compulsory health insurance premiums, and social security contributions for August 2024.
- By this date tax returns for September 2024 must be filed.
- Income taxes for small and medium-sized businesses for the third quarter of 2024 need to be paid.
On October 10, 2024 the New Zealand Inland Revenue issued a Technical Decision Summary clarifying tax rules for restructured group taxation. Shareholders wanted to switch from a holding company structure, which held long-term investments, to a limited partnership. Their goal was to access capital gains without liquidating the holding company.
The Tax Counsel Office confirmed that: 1) removing the holding company from the New Zealand Register is considered liquidation under the Companies Act; 2) liquidation began when shareholders agreed to the amalgamation proposal; 3) the arrangement aligns with the Income Tax Act’s rules on dividends and liquidation; and 4) it doesn’t offer any unfair tax advantage or allow artificial changes to retained earnings.
To access the tax rules for restructures group taxation, click here.
The American tax authority, the IRS, has informed the Israeli Tax Authority that it has issued a notice stating that Israeli residents who report to U.S. tax authorities will receive an extension until September 30, 2025, for the submission of their annual reports for the years 2023 and 2024, as well as for making payments and performing other actions required between October 7, 2024, and September 30, 2025.
On October 7, 2024 the Swedish Tax Agency updated its guidance to align with a recent European Court of Justice (ECJ) ruling on the deductibility of input VAT for goods or services used in ways other than originally planned. The new guidance emphasizes that actual use is more important than intent. For example, input VAT paid for consulting services related to a market survey intended for acquiring shares in another company is deductible, even if the acquisition doesn’t happen, as long as it is connected to economic activity. However, VAT paid on loan payments is not deductible if the intended investments were not made, and the loan amount is fully paid to the group’s parent company.
To read more on the new rules, click here.
On October 4, 2024, the European Court of Justice (ECJ) ruled on Romanian VAT deduction rights in Case C-475/23. An Austria-based company, producing molded parts in Romania, was denied a VAT deduction by the tax authority for using its crane in the manufacturing process. The ECJ clarified that under EU law (Directive 2006/112/EC), the company is entitled to the deduction if the crane was essential for processing the parts. This ruling sets a precedent for future cases, establishing that failure to maintain separate accounts does not justify denying a VAT deduction, as long as the transaction fulfills the substantive legal requirements.
To access the ECJ Ruling, click here.
On October 3, 2024 the Sri Lankan Inland Revenue announced income tax filing deadlines for the 2023-2024 financial year. Registered taxpayers are required to submit their income tax returns by November 30, 2024. Furthermore, the announcement clarifies that electronic filing has become mandatory for individual income tax, partnership income tax, and corporate income tax returns. Taxpayers are advised to start filing individual and partnership returns online through e-services starting now.
As of October 10, 2024 the electronic filing will also be available for corporate income tax returns and simplified income returns for individuals with only primary employment or interest income. To file electronically, individuals need a personal identification number (PIN), while entities and partnerships require both a PIN and a special staff identity number (SSID).
To read more about the announcement, click here.
On October 3, 2024 the Philippine Official Gazette made public Republic Act No. 12023, which will become effective from October 18, 2024. This law introduces VAT for digital services provided in the Philippines, applying to both resident and nonresident providers. It sets a 12% VAT on digital services used in the country and a 5% VAT for nonresident digital service providers offering services to the government.
According to the new rules, the nonresident service providers with annual sales exceeding 3 million pesos must register for VAT. In addition, they are also required to appoint a local corporation for tax compliance or otherwise will face suspension.
To access and learn more on the details of the Republic Act, click here.
Upcoming changes are expected to impact the EU’s non-cooperative jurisdiction list. On October 8, 2024 the EU finance ministers will vote to remove Antigua and Barbuda from the blacklist, shifting it to the greylist. The greylist includes countries that do not yet fully comply with international tax standards but have committed to reforms. Armenia and Malaysia are expected to be removed from the greylist altogether, signaling their progress in meeting tax governance criteria.
The blacklist, which includes countries that have either failed to meet EU tax standards within a given timeframe or refused to comply, currently features several nations:
- Caribbean and Pacific Island nations: Trinidad and Tobago, Fiji, US Virgin Islands.
- Other countries: Panama, Russia.
These updates reflect ongoing changes to the EU’s approach to enforcing global tax compliance and governance reforms across various jurisdictions.
To access the current updated EU non-cooperative jurisdictions list, click here.
On October 2, 2024 the Danish Parliament moved forward with Bill No. L 28, proposing changes to various tax laws for both companies and individuals. Important amendments proposed include: exempting companies from income tax on dividends from unlisted portfolio shares, gradually increasing the cap for share savings accounts starting in 2025, and allowing companies to choose capital gains taxation for up to seven years after listing.
In addition, the bill also raises the personal share income tax threshold from 63,300 to 83,100 kroner, increases the R&D tax credit cap to 35 million kroner starting in 2027, and adjusts rules for carrying forward losses. The law is set to take effect on January 1, 2025, excluding the Faroe Islands and Greenland.
To read more on the amendments proposed in the Bill, click here.
On October 1, 2024, the Irish Department of Finance announced the budget for 2025, which includes several changes to taxes. Here are some of the important updates:
- The income tax standard rate will increase by €2,000, and individual, employee, and earned income tax credits will rise to €2,000 from €1,875.
- The 2% Universal Social Charge (USC) rate limit will be raised to €27,382, while the 4% USC rate will be lowered to 3% for incomes between €27,382 and €70,044, starting January 1, 2025.
- The threshold for the Research and Development (R&D) tax credit will increase to €75,000 from €50,000.
- VAT registration thresholds will rise to €85,000 for goods and €42,500 for services.
To read on all the tax information, you can access the 2025 Budget here.
On October 1, 2024 the Austrian Federal Ministry of Finance published a Federal Finance Court decision following the case of a taxpayer with two residences claiming business travel expense deductions. The decision provides with new rules affecting taxpayers with two residences, who are now allowed to deduct business travel expenses under certain conditions. To qualify:
- The travel must be for professional purposes, with sufficient documentation.
- The distance between the taxpayer’s farther residence and the work site must be reasonable.
If complete documentation of travel is not provided, an estimated deduction can be claimed at a rate of €0.42 per kilometer. This ruling clarifies that, even with incomplete records, taxpayers may still claim deductions, provided the professional nature of the travel is demonstrated.
To access the Federal Finance Court Decision, click here.
Since October 1, 2024 the Royal Decree No. 790 has taken effect in Thailand. This decree extends the temporary VAT rate reduction to 6.3% until September 30, 2025, pushing back the previous deadline of September 30, 2024. The lower rate will apply to VAT liabilities incurred from October 1, 2017, through September 30, 2025.
To read more on the details of the announcement, click here.
On September 30, 2024 the Azerbaijani Ministry of Taxes announced several tax deadlines that are due by October 2024. Some of the main deadlines include:
By October 15, 2024: Deadline for Quarter 3 profit and income taxes, state social insurance fees, unemployment insurance premiums, and compulsory health insurance fees.
By October 21, 2024: Deadline for quarterly income tax for special notaries, September withholding tax on salaries, and tax on early insurance contract terminations.
By October 21, 2024: Deadline to file VAT declarations, road tax, simplified tax on real estate transactions, and cash withdrawals for September.
By October 21, 2024: Deadline to declare and pay September’s mining tax.
To read more on specific details regarding the tax deadlines, you can access the Tax Authority’s announcement by clicking here.
The Croatian Ministry of Finance opened a consultation on September 25, 2024, regarding changes to the VAT law that are planned to take effect on January 1, 2025. Key proposals include increasing the VAT registration threshold from €40,000 to €50,000 and allowing VAT exemptions for businesses with turnover under €50,000 in Croatia or €100,000 in the EU. Another change would remove the requirement for VAT refund reciprocity for non-EU businesses. The deadline to submit comments is October 24, 2024.
To read more about the proposed changes on the VAT law, click here.
On September 25, 2024, South Korea’s National Assembly considered Bill No. 2204256, which aims to update the Income Tax Act to provide more benefits for families with children as part of the 2025 tax budget.
Among the several new rules proposed, the Bill includes the increase of the annual income tax credits for residents with children aged 8 or older. For instance, for one child the credit will increase from 150,000 won ($112) to 300,000 won ($224). For two children, it will rise from 350,000 won ($262) to 600,000 won ($448), and for each additional child, from 650,000 won ($487) to 900,000 won ($674).
The changes are expected to take effect on January 1, 2025.
To read more on the details of the Bill, click here.
On September 24, 2024, the tax authority in Estonia clarified that October 1, 2024, is the deadline to pay any additional individual income tax owed based on 2023 income declarations. The accouchement further explains that the taxpayers who may have trouble making their payment on time can schedule a payment vis-à-vis the tax agency’s e-services platform, e-MTA. The platform also allows taxpayers to check the exact amount of income tax they owe.
To read more on the specifics of the communication click here.
On September 24, 2024 the Italian Revenue Agency announced the tax filing and payment deadlines for October 2024. Among the several dates provided, the announcement includes:
By 16 October 2024 taxpayers must pay individual income tax installments for the end of 2023 and the first advance for 2024. This deadline also includes VAT for the previous month and other taxes.
By 31 October 2024 payments for VAT, registration tax, and stamp duty are due, along with corporate income tax declarations and forms for tax substitutes and intermediaries for 2023.
On September 24, 2024 the Bulgarian Tax Authority reminded taxpayers that they need to submit corrective income tax returns by latest 30 September 2024. This deadline applies for individuals who have either undeclared or incorrectly declared their 2023 income. To help taxpayers, government has provided additional information through a podcast episode, the NRA website, or by phone.
To read more on the specifics of the deadline, click here.
On September 23, 2024 the Uruguayan Official Gazette announced Decree No. 256, extending the 9% reduced VAT rate for the tourism sector. Originally set to expire on September 30, 2024, the reduced rate will now be in effect until April 30, 2025. The extension applies only if payments are made through certain electronic methods.
To access the Decree, click here.
On September 20, 2024 the Belgium’s Federal Public Service-Finance announced that it is extending deadlines for filing corporate and individual income tax returns due to technical issues. The new deadlines are:
October 7, 2024 instead of September 30, for corporate tax returns of legal entities and nonresident companies.
October 28,2024 instead of October 16, for individual income tax returns related to certain types of income, including nonresident professional income and first-time declared income.
To read more about the details of the new set dates, click here.
On September 19, 2024, the Swiss Federal Tax Administration published the interest rates for late, refunded, and advance taxes that will apply from January 2025. Among the several interest rates introduced, the announcement confirmed that the interest rate for defaults, refunds, and conditional payments will be lowered from 4.75% to 4.5%.
In addition, the rate for voluntary advance payments will decrease to 0.75%, from the original rate of 1.25%. These rates will apply to a range of taxes, such as VAT, direct federal tax, withholding tax, CO2 levy, stamp duty, and the additional tax for large multinational companies.
To learn more about these new interest rates, click here.
On September 18,2024 the Bulgaria’s Ministry of Finance opened a consultation on proposed amendments to the VAT Law. The changes aim to align with EU regulations, and key updates include requiring Bulgarian businesses to register for VAT if their annual turnover exceeds 166,000 Bulgarian leva (around $94,667). In addition, EU businesses must register if they surpass the same threshold in Bulgaria or €100,000 (about $111,538) within the EU. The bill also adjusts VAT rules for internet streaming and virtual events, import VAT procedures for investment projects, and addresses an EU court decision on taxable turnover for second-hand goods and tourism services. The changes would take effect on January 1, 2025.
On September 18, 2024 the Montenegrin Government published a law amending the Personal Income Tax rules. The updated law will now include individual income from internet and video gaming, as well as games of chance, in taxable income. Taxpayers can also deduct 15% of their expenses related to internet activities.
Additionally, income from liquidation distributions that exceed the invested capital will be classified as capital income. The amendments exempt employer benefits for female employees on International Women’s Day, up to 100 euros annually. Furthermore, the exemption limit for food allowances provided by sports clubs to amateur athletes will increase from 300 euros to 600 euros monthly. Lastly, up to 3% of health expenses paid to certain organizations will be recognized.
To read more on the new amendments, click here.
On September 17, 2024, HM Revenue and Customs in the United Kingdom released updated guidance for nonresident companies that conduct business in the UK through a dependent agent permanent establishment (DAPE). The key points include that these companies must register for UK corporate tax within three months of becoming liable for it. The guidance also outlines the necessary documents for registration, the procedures for registering online and by other means, and the obligations companies must follow after they register.
To read more on the specifics of the communication click here.
On September 17, 2024 the Ministry of Finance in Netherland presented the 2025 Tax Plan, that provides with several tax changes. Key amendments include the drop of the income tax rate to 35.82% from 36.97% for income up to €38,441, while a new 37.48% rate will apply to income between €38,441 and €76,817.
Furthermore, the new rules also propose raising the corporate interest deduction limit from 20% to 25%, while reducing the SME profit exemption to 12.7%. In addition, a 27% expatriate tax deduction will remain for five years starting in 2027. VAT on accommodation and cultural services will rise to 21% in 2026, and a dividend tax exemption for listed companies will continue.
To read more on these changes and the other ones, you can access the official announcement here.
On September 16, 2024 Greece’s Official Gazette published Law No. 5135, which addresses digital transaction fees and stamp duty. The law repeals stamp duty provisions starting January 1, 2025, and introduces new digital transaction fees of up to 3.6% on certain transactions.
According to the new rules, the transactions made on or before November 30, 2024, will still include the stamp duty. The law also outlines the procedure for paying digital transaction fees and how to calculate these fees for deposits and withdrawals, along with details on exempt transactions.
On September 13, 2024 the Maltese Official Gazette published Legal Notice No. 229 of 2024, which updates the rules on capital expenditure deductions for intellectual property (IP) and IP rights. The changes include defining “qualifying income” as taxable income generated from IP or IP rights, before deductions. The amendments also clarify how to calculate capital expense deductions, noting that for those deductions that can’t be fully used due to low income, will be carried forward to future years. Expenses taking place prior to 2024 will be processed using a special calculation method.
To read more on the Legal Notice and access the details of the new rules, click here.
On September 13, 2024, the Maltese Official Gazette published Legal Notice No. 229/ 2024. It updates the rules for deductions related to intellectual property (IP) and IP rights. The amendments define “qualifying income” as the taxable income generated from IP or IP rights before any deductions. In addition, it also clarifies how to calculate capital expense and clarifies that if deductions cannot be used due to insufficient offsetting income, they can be carried forward to future tax years. These changes will apply starting with the 2024 assessment year.
More information on the updated rules, can be accessed here.
On September 13, 2024 the Organization for Economic Cooperation and Development (OECD) published online the updated list of countries that have signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
To access the list reflecting the latest information, click here.
On September 10, 2024, the Canada Revenue Agency published their guideline that provide detailed information on the new Reporting Rules for the Digital Platform Operators. Among many aspects, the guidance explains who qualifies as a resident or nonresident “reporting platform operator” or “reportable seller.”
In addition, the new rules require the platform operators to report to the tax authority the identification and activity data on their reportable sellers. The first information return must be submitted by January 31, 2025, for the 2024 calendar year. Returns must be filed in XML format, with different processes for residents and nonresidents.
To read more on the details of the Rules, click here.
On September 10, 2024 the Polish Ministry of Finance opened a consultation on the recent draft bill which proposes new VAT regulations. The comments on the draft bill are due by September 24, 2024. Key changes proposed on the bill include:
- 0% VAT rate on rescue vessels and lifeboats used at sea (excluding seagoing ships);
- Extending the 8% VAT rate for certain medical devices and lowering the VAT on menstrual cups from 23% to 5%;
- Extends the reverse charge mechanism for gas and electricity until the end of 2026;
- Raises the VAT on certain hemp products from 8% to 23%.
To read more on the draft bill, click here.
On September 6, 2024 the Brazilian Official Gazette published Normative Instruction No. 2216, updating the list of tax benefits for legal entities. It includes 43 (forty-three) different tax incentives, waivers, and exemptions.
According to the new regulation, legal entities in Brazil must declare items 17 to 43 starting from the January 2024 assessment period. Additionally, the deadline to submit or correct declarations for tax incentives from January to August 2024 is October 20, 2024. The instruction replaces the annex of Normative Instruction No. 2198 and takes effect immediately.
To read more on the specifics of the Normative Act and provided instructions, click here.
On September 6, 2024 the Portuguese Government released a detailed set of FAQs addressing the updated 2024 personal income tax (IRS) withholding tables. These updates primarily apply to individuals who earn employment or pension income.
In the FAQ document, the government explained that any excess tax withheld on income between January to August 2024 will be adjusted by revising withholding rates applied in September and October. In addition, the information confirms that for those unable to implement the updated tables in September, the necessary adjustments must be made in October, ensuring that the excess withholdings are properly compensated during this period.
On September 4, 2024, during an event in Brussels the director general of the Italian treasury called for EU’s attention to implement a digital services tax. The proposal was presented in the scope of providing a temporary solution while global negotiations on reallocating profits of multinational companies continue.
Italy addressed its concerns on the slow progress of global tax reform under the OECD’s Pillar One initiative, which aims to reallocate multinationals’ profits. In addition, Italian representative suggested that revenue from such a tax could contribute to the EU’s budget, as countries like Italy, Spain, and France already do.
- Intrastat declarations for intra-EU exports and imports for August.
- VAT Information Exchange System (VIES) declarations for registered persons who have made specific supplies.
- File and pay VAT for August.
- Pay September’s monthly advance corporate tax.
- Intrastat declarations for intra-EU exports and imports for August (for newly registered Intrastat operators).
- Employers must pay advance tax and social security contributions for August.
As of September 2024, multinational companies in Belgium can proceed with making advance tax payments under the new global minimum corporate tax rules. These payments are expected to be completed by 20 December 2024 and in case of non-payment companies might face a surcharge.
This policy concerns the top-up taxes under the Qualified Domestic Minimum Top-up Tax and Income Inclusion Rule regimes, ensuring a minimum 15% corporate tax is collected when there are differences in tax rates across countries.
As a reminder, Belgium has also extended the registration deadline for the global minimum tax rules to 16 September 2024 for companies not making advance payments this year.
To read more on the specifics of the communication click here.
On September 2, 2024 the Swiss Federal Tax Administration updated cantonal withholding tax rates for income and payroll accounting (ERP) systems. These updates apply to employers, software providers, insurance companies, and pension funds.
On September 2,2024 the Slovenian Parliament accepted Bill No. 1683-IX to amend the VAT Act. New provisions propose raising the VAT registration threshold from €50,000 to €60,000 and introduce rules for VAT group formation.
Notably, the bill also implements two EU directives: Directive 2020/285 on administrative cooperation and Directive 2022/542 on VAT rates. It exempts VAT on goods and services for natural disaster victims under certain conditions and limits reduced VAT rates for phytopharmaceuticals and fertilizers until December 31, 2031.
Additionally, the new rules provision cross-border VAT exemptions entitled to Slovenian tax residents who don’t use the small tax exemption.
On September 2, 2024 the Danish Customs and Tax Administration published a binding ruling (No. SKM2024.430.SR) that clarifies the VAT exemption for management services of collective investment funds (CIFs).
The ruling followed the case of an investment management company that claimed its services namely, Undertakings for Collective Investment in Transferable Securities and Alternative Investment Funds, covered by EU directives, were VAT-exempt. The Tax Council confirmed that these services are exempt from VAT as they are specifically designed for managing investment funds in compliance with the EU rules.
To read more on the arguments following the ruling, click here.
On September 2, 2024 the New Zealand Inland Revenue made the following online announcements:
- On August 29, 2024, the second protocol to the 2006 Double Tax Agreement (DTA) with Austria, signed on September 12, 2023, will come into force.
- On November 1, 2024, the DTA and protocol with Slovakia, signed on September 26, 2023, will take effect.
To read more on the specifics of the announcement, click here.
On September 2, 2024 the Belgian Federal Public Service-Finance announced the deadline for advance payments related to the OECD Pillar Two – Income inclusion rule (IIR) is December 20, 2024. On our previous article, that can be accessed here, we covered the specifics of advance tax payments applicable in Belgium, under the new global minimum corporate tax rules.
Multinational and large domestic groups affected by the new tax rules can make their payments through the MyMinfin Pillar 2 VA module or by bank transfer.
To read more on the public announcement, click here.
- Income up to €3,000 will be taxed at 0% tax.
- Income from €3,000 to €5,400 will be taxed at 8% tax.
- Income over €5,40 will be taxed €192 plus a 10% tax.
On August 28, 2024 the Czech Chamber of Deputies moved forward with Bill No. 781/0, aiming to amend the 2013 Act on international tax cooperation, by proposing several key updates.
New rules allow the Tax Administrator to require taxpayers to maintain special records to ensure they meet specific obligations. It also introduces standardized reporting requirements for crypto-asset service providers and operators, including guidelines on notifications and document recordkeeping.
Additionally, the bill outlines the registration procedures for crypto-asset operators and further details due diligence procedures for those using crypto assets.
On August 27, 2024 the Taiwanese Ministry of Finance announced online important tax deadlines dates and procedures which are due in September 2024. Below is a summary of the upcoming deadlines applicable for profit-seeking enterprises:
Income tax declarations must be submitted between 1 September to 30 September 2024. The taxes’ calculations must be based on the previous year’s settlement, under the guidance of the relevant procedures.
The Ministry provides with a variety of channels to pay the taxes, including electronic payments, via financial institutions, via ATMs, or at convenience stores for amounts that fall under NT$30,000 (around US$940).
Additionally, the announcement confirms that certain enterprises, including sole proprietorships, partnerships, and small-scale businesses, qualify for exemptions from provisional payment requirements.
On August 27, 2024 the Serbian Tax Administration announced online important tax deadlines dates which are due in September 2024. Below is a summary of the upcoming deadlines organized by their respective dates:
2 September 2024: Payment of mandatory social insurance contributions for unpaid July wages.
5 September 2024: Payment for entertainment contracts and employing individuals with disabilities.
10 September 2024: Payment of non-life insurance premiums.
16 September 2024: Payment of mandatory social contributions, advance corporate income tax, contributions for nonresident pensioners, and contributions for domestic citizens employed abroad. As well this date is applicable for VAT payers primarily involved in international trade, who need to use Form PID VAT 1 for their declarations.
30 September 2024: Payment of August mandatory social insurance contributions for unpaid wages.
To read more on the specifics of the September 2024 tax deadlines, click here.
- 0% Tax will be levied on monthly income up to EUR 250, or annual income up to EUR 3,000.
- 8% Tax will be levied on monthly income between EUR 250 and EUR 450 euros, or annual income between EUR 3,000 and EUR 5,400.
- 10% Tax will be levied on monthly income above EUR 450 euros, or annual income over EUR 5,400.
- Payment of IRES and IRPEF installments for the 2023 balance and the first advance for 2024.
- Payment of the regional tax on productive activities (IRAP) for the 2023 balance and the first advance for 2024.
- Payment of ethical tax.
- Payment of entertainment taxes, Tobin taxes, substitute taxes, VAT for August, and the third installment of 2023 VAT balances.
- Deadline for submitting specific communications to the Tax Agency.
- Payment of car taxes, VAT on intra-community purchases, and additional tax on vehicle tax.
- Filing of specific declarations, including those related to IRPEF.
- Deadline for reporting data on Q2 2024 VAT settlements.
On August 23, 2024 the Romanian National Agency for Fiscal Administration announced the tax filing and payment deadlines for September 2024.
The following important key dates need your attention:
- 6 September 2024: Deadline for VAT-taxable persons making intra-community purchases in Romania to switch their fiscal period from quarterly to monthly.
- 10 September 2024: Deadline to apply for or terminate the special regime for farmers.
- 20 September 2024: Deadline to apply for or terminate the VAT system.
- 25 September 2024: Deadline to submit declarations for social contributions, income tax, and specific VAT obligations.
- 30 September 2024: Deadline to submit VAT One-Stop-Shop (OSS) declarations.
On August 22, 2024 the Danish Customs and Tax Administration published the City Court decision regarding tax residence and liability. The case subject to the decision concerned a Danish taxpayer who left Denmark in 2007 but was later deemed liable by the tax agency for taxes starting from January 1, 2014.
The City Court decision confirmed the National Tax Court’s earlier ruling, affirming that the deadline for income tax notices under Section 26(1) of the Tax Administration Act does not prevent the tax authority from establishing tax liability as of January 1, provided the taxpayer spent more than 180 days in Denmark during the previous year.
- Taxpayers engaged in both taxable and non-taxable activities are only eligible for partial VAT deductions on general costs.
- Deductions must be reassessed when future transactions, such as fees from subsequent years, are incorrectly included in prior-year calculations.
- Full VAT deductions are applicable when expenses, such as brokerage fees, are directly related to taxable transactions.
On August 21, 2024 the Argentine Official Gazette announced the annulment of the VAT and income tax withholding regimes related to electronic payments. The Resolution issued on this matter further clarified that the new rules will be applicable for payments starting September 1, 2024.
To learn more on the matter, click here.
On August 15, 2024 the Moldovan State Tax Service issued in its website an order addressing feedback on frequently asked questions (FAQs) about VAT, income tax, and real estate tax. It covered a variety of tax aspects, while the following are some of the key information highlighted in the order:
- The VAT payment deadline for taxpayers not registered as VAT payers but who received import services is the 25th of the month following the import.
- The Order clarifies tax obligations for companies when giving gifts to employees during professional award ceremonies.
- Provides detailed information on how special and standard tax regimes are applied to real estate tax calculations for IT park residents.
On August 9, 2024 the North Macedonian Public Revenue Office clarified that August 26,2024 is the deadline to file VAT tax returns for July 2024. In addition, the announcement also highlighted that taxpayers are required to file their returns, even if they had no taxable turnover during the reporting period.
On August 8, the South Korean National Tax Service announced several tax-related measures in a press release. The new rules allow companies to request up to a nine-month extension for corporate tax prepayments due on 2 September 2024, if their fiscal year ends in December.
The tax amendments as well detail how taxpayers can apply online for payment deadline extensions, while informing those with overdue national taxes, that they may face property seizure and sales. However, a potential one-year deferral is provided for such sales. Additionally, the tax verification process for VAT, income tax, and corporate tax reporting will be postponed to the second half of 2024.
To read more about the tax amendments, as provided in the Korean Language, click here.
- 13% for income up to €7,703.
- 5% for income between €7,703 – €11,623.
- 22% for €11,623 to €16,472.
- 25% for €16,472 to €21,321.
- 32% for €21,321 to €27,146.
- 5% for €27,146 to €39,791.
- 5% for €39,791 to €43,000.
- 45% for €43,000 to €80,000, and
- 48% for income over €80,000.
On August 6,2024 the Austrian Federal Ministry of Finance made public the Federal Finance Court’s Decision regarding a company’s corporate tax obligations. The company in question had its articles of association drafted on March 17, 2021, and officially registered on April 9, 2021. However, the company already had a registered internet domain before these official steps were completed.
The Tax Office initially charged the company a minimum corporate tax of €375 which covered three quarters of the tax year. The company disagreed, arguing they should only owe €250 euros for two quarters.
The Federal Finance Court ruled against the company, confirming it was subject to unlimited corporate tax liability. Since the company had an external presence before formal registration, the court decided they were liable from the moment their articles of association were established and owed the minimum tax for three quarters of the year.
You can access the Federal Finance Court Decision in German language here.
In October 2024, Peru will begin to apply a withholding tax to foreign digital platforms that provide services to local customers. This shift is in accordance with the rules of the OECD, as stated in the official gazette decree of the Ministry of Finance. Financial intermediaries will collect this tax if the payments are not remitted directly to the service providers abroad. Within 30 days, the withholding tax rate, which is yet to be determined, will be within the range of 0.5% to 50%. The tax office will frequently examine the accuracy of platform payments.
- The directive 2006/112/EC of the Council on the common VAT system states that the laws of the country do not require a categorization certificate for applying reduced VAT rates to accommodations unless the law precisely outlines the aspects of the category.
- In cases where national laws limit the reduced VAT rate just to certain categories irrespective of other circumstances this is a mistake of principle of fiscal neutrality.
On August 1,2024 the Finnish Tax Administration released guidance No. VH/3968/00.01.00/2024 updating international double taxation in corporate tax matters. The guidance analyzes issues concerning double taxation, and the regulations that apply. Furthermore, it addresses multiple methods for eliminating double taxation, such as the refund method, release method, and other strategies.
Regarding tax procedures, the guidance covers procedures on how to handle certificates of residence and submit refund claims, while explaining the mutual agreement procedure for resolving double taxation issues.
To read more on the guidance click here.
On July 31, the Rumanian Agency for Fiscal Administration announced tax filing deadlines corresponding to various dates in August 2024, as follows:
By August 7, VAT-registered entities involved in intra-community purchases must make sure to declare any changes to their fiscal period. Farmers who wish to either enter or exit the special tax regime need to proceed with the declarations by August 12.
Another important date is August 20, by which businesses need to decide whether to apply for or terminate their participation in the VAT system. Furthermore, in August 26 declarations related to social contributions, income tax, and specific VAT obligations are expected to be submitted. Finally, by August 31 the VAT One-Stop-Shop (OSS) declarations must be submitted, wrapping up the month’s tax responsibilities.
To learn more about the taxation deadlines click here.
On July 31, 2024 the European Commission launched an inquiry to evaluate the enforcement of the Anti-Tax Avoidance Directive (ATAD1) and its amendment (ATAD2) since January 1, 2020. The purpose of this survey is to gather information on the effectiveness of these measures in addressing aggressive tax planning and review the policy choices made by EU member states. Additionally, it seeks to assess how well the measures align with EU Directive 2022/2523 on a new 15% global minimum tax, and determine if any changes are needed. Comments are due by September 11, 2024.
To learn more about the initiative click here.
On July 27, 2024 the Bolivian National Tax Service through Resolution No. 102400000016, extended the deadline for Corporate Income Tax filings to August 30, 2024. Subjects that can benefit from the extension include taxpayers with fiscal year closures as of March 31. The deadline applies for the submission of financial statements, annual external audit reports, minimum tax procedures reports, tax opinions, and Transfer Pricing Study. Important to note, the new deadline does not apply for the filing and payment of the corporate income tax Affidavit, which remains unchanged.
To access the Resolution click here.
On July 2024, the General Directorate of Taxes in Albania announced that taxpayers must declare, through e-Filing, the status of ownership or non-ownership of the premises where they conduct their economic activities by October 20, 2024. In addition, the taxpayers need to submit the relevant documentation to certify this status such as property documents and lease contracts.
Failure to declare the address of the premises where the business activity is conducted will be considered an administrative offense by law.
To learn more on the details of the new rule click here.
On July 24, 2024 the French General Directorate of Public Finance kicked off a consultation to update the VAT liability rules for imports. The proposed changes aim to address several key points. First, they clarify that VAT on certain imports can still be declared and paid to the Directorate of Customs and Indirect Taxes (DGDDI). Second, they would make specific resellers responsible for VAT on imports if there’s a discrepancy between the declared tax base and the actual value of the goods. The draft also seeks to align VAT liability rules with the Union Customs Code and improve how delivery locations for goods are determined. The public can input their feedback until October 1st, 2024.
The South Korean government is intending to propose a delay in cryptocurrency investments taxing income during the next year’s tax revision proposal.
The proposal follows a three-year delay for the taxation plan. If approved, the taxation start date would move from January 1, 2025, to January 1, 2028. The Finance Ministry, however, stated that no decision has been made regarding this additional delay.
On July 28, 2024 Australian Taxation Office announced that the deadline for filing and paying quarterly business activity statements is July 28. According to the notification, taxpayers will automatically you’ll automatically receive a business activity statements (BAS), if they are registered for GST. In addition, it clarifies that even if the business is temporarily paused and there is nothing to report, the taxpayers still need to submit a nil BAS by the due date, either online or by phone.
On July 11,2024 the Italian Revenue Agency issued Answer No. 147/2024, providing guidance on VAT refunds for nonresidents. The case followed the case of a German company that received invoices from Italian suppliers with VAT applied at the standard rate of 22%. Although the taxpayer had not submitted a declaration, they wanted to know the correct procedure for obtaining a refund for the VAT surplus from passive operations.
The Tax Agency clarified that a taxpayer cannot recover the specified VAT surplus when the deadlines for doing so have passed. Additionally, the Agency affirmed that the right to retroactively attribute the specified VAT number is only possible if done within a reasonable time from the date of the first purchase transaction.
Switzerland is seeking to make digital platforms responsible for collecting VAT from sellers. The Swiss Federal Tax Administration has started a consultation on an amendment to its VAT law and aim to enforce this by January 1, 2025. The new changes in the law foresee to use platforms as the main suppliers for VAT purposes, requiring them to provide information on transactions and maintain records for up to 10 years. In addition, according to the new rules, the sellers will still be secondarily liable for paying VAT to reduce fraud.
Hungary announced new taxes that will be imposed on financial and energy sectors, along with foreign-owned companies. Aiming to tackle the budget deficit, these taxes will specifically be levied on banks, multinational companies, and energy firms. Banks will need to pay these special taxes in full by 2024. In addition, the government plans to increase the transaction tax on banks and impose a new tax on their FX trades.
On July 5, 2024 the Portuguese Tax and Customs Authority announced that transfer pricing documentation deadline has been extended to July 31st. To access the announcement, you can click here and learn more on the procedure.
On July 5, 2024 the Croatian Parliament decided to consider Bills PZ 35 and PZ 36, which aim to amend the VAT law. The proposed changes include raising the VAT threshold for small taxpayers from EUR 40,000 (US$43,317) to EUR 60,000 (US$64,975). In addition, the bills define the criteria for small taxpayers, such as not exceeding EUR 60,000 in goods or services in the previous or current year. Click here to access the Bills.
The Belgian Federal Public Service-Finance has extended the deadline for filing 2023 individual income tax returns online from July 15 to July 19. The announcement also provided that taxpayers who have already submitted their returns, can make corrections using the MyMinfin application until July 15.
On July 4,2024 the Finnish Tax Administration published the Central Tax Board Decision (No. KVL:2024/26), clarifying VAT implications related to certain property transfers. The case involved a mutual real estate joint-stock company that owned a building with both residential apartments and business premises. This company also owned and managed 41 parking spaces in the building’s garage. The dispute arose as a shareholder, who managed and rented out the apartments and business premises, did not receive the parking rights from the company.
The Central Tax Board established two important guidelines: First, when parking rights are transferred to tenants along with residential or business premises, this transaction should be treated as a single economic entity. Second, granting parking rights, even for undesignated spaces, does not qualify as a VAT-liable activity or for VAT deductions, as it falls outside the VAT Directive’s definition of immovable property rental.
The Slovenian Ministry of Finance announced on June 27, 2024 its online guidance on international taxation of dividends, interest, and income from property rights. The guidance covers taxation rules under Slovenian laws and international agreements, exemptions from taxes under EU directives and agreements like the automatic exchange of data on financial accounts. Additionally, it includes the application of the Multilateral Convention to prevent base erosion and profit shifting.
On June 20, 2024 the European Court of Justice published a ruling on Portuguese stamp duty for short-term cash transactions. The case followed a Portuguese automotive subcontracting company taxpayer granted a loan to its parent company through a cash pooling agreement and faced additional taxes from the Portuguese Tax and Customs Authority. The company contested this, leading to questions about the fairness of Portuguese law, which exempts domestic but not cross-border loans from stamp duty. The European Court of Justice decided that under Article 63 of the Treaty on the Functioning of the European Union, it is not allowed to exempt domestic loans from stamp duty while charging it on cross-border loans.
On June 20, 2024 the Swedish Tax Agency issued Clarification No. 8-2936141 explaining the deduction and calculation of foreign taxes for individuals with numerous income sources taxed abroad. According to the Clarification, both direct and common costs are to be considered when assessing foreign taxes. It provided with the confirmation that foreign tax deductions are based on income before deducting common expenses. Furthermore, the foreign tax on income taxed by Sweden cannot exceed the tax already paid abroad and tax reductions must be distributed among the applicable taxes and fees they are meant to reduce.
On June 19, 2024 the Ministry of Finance of Finland announced an increase in the turnover limit for VAT liability for small businesses, effective January 1, 2025. The turnover limit for VAT taxation will be raised from EUR 15,000 euros to EUR 20,000. The revised threshold applies if the company’s turnover for both the current and previous calendar years does not exceed 20,000 euros.
On June 18, 2024 the German Ministry of Finance communicated that October 31, 2024 is the new deadline for taxpayers involved with foreign companies to submit declarations for the 2022 assessment year under the Foreign Tax Act. The extension aims to allow time for changes to declarations following the EU Anti-Tax Avoidance Directive.
On June 14, the Swiss Federal Council approved a draft decree to ratify the sixth protocol to the 1971 DTA with Germany. The protocol includes measure to enforce the OECD BEPS standards, namely the anti-abuse provisions and mutual agreement procedures (MAP). Additionally, it addresses the adoption of the OECD’s method for allocating corporate profits to permanent establishments.
Kosovo ratified the Social Security Agreement (SSA) with the Netherlands by the means of Law No. 08/L-263. The SSA was singed on September 17, 2020 and is expected to have entered into force by late June 2024.
On June 10, 2024 the Italian Ministry of Economy and Finance announced a flat-rate deduction for haulers in 2024. According to the new rules, entrepreneurs who personally handle transport outside their company’s municipality can claim a 48-euro (US$51) deduction for undocumented expenses from the 2023 tax period. Additionally, for transport within the municipality, entrepreneurs can receive a tax relief amounting to 35 percent of the deduction for transport outside the municipality.
On June 10, 2024 the Polish Official Gazette announced an extension for the implementation of the mandatory national VAT e-invoicing system, commonly referred as KSeF. The new law postpones the mandatory use of KSeF for all active and VAT-exempt taxpayers from July 1, 2024, to February 1, 2026. Additionally, it introduces an interim period from February 1, 2026, to July 31, 2026, during which invoices can still be issued in the current manner without any penalties.
The law is expected to come into effect on July 1, 2024.
On June 10, 2024 the South Korean National Assembly assessed Bill No. 2200235 which seeks to partially revise the Restriction of Special Taxation Act. Changes proposed include extending credit card income deductions by three years, and increasing the deduction rate from 40% to 50% for spendings in traditional markets.
Switzerland is working on establishing rules for sharing tax information on remote salaries with France and Italy. A new bill proposed on early June 2024 aims to set guidelines for exchanging data between cantonal tax authorities and the Federal Tax Administration.
Furthermore, Switzerland signed an agreement with Italy to make remote work tax rules permanent, allowing up to 25% remote work without affecting tax liabilities. Also, Switzerland reached a similar agreement with France in June 2023, which is now under parliamentary review.
Starting July 1, 2024, Israeli citizens will no longer need a permit to work in the Czech Republic as per a notice from the Czech government. The new rules make it easier for Israeli citizens planning to relocate to the Czech Republic for work, as future employers will no longer be required to officially advertise the job position for Czech citizens first before hiring Israelis.
Israeli citizens can visit and stay in the Czech Republic for up to 90 days without a visa. But for longer stays and employment, they must apply for a “non-dual employee card,” serving as a residency permit.
The new regulation also simplifies procedures for Israelis already working in the Czech Republic who wish to look into more work possibilities in the country. In the past, employees had to inform the Ministry at least 30 days ahead and wait for approval. Now, they can change employers more quickly by notifying the Ministry within just 3 days of the change.
German Government announced on June 5, 2024 the approval of Annual Tax Act 2024, which provisions several key measures. Among the new rules, Act mandates that credits provided by employers, in addition to wages, will be taxed at a flat rate of 25 %. Furthermore, the Act implements a reduction in the tax rate on the delivery and intra-community acquisition of artworks from 19 % to 7 %.
Additionally, the Act qualify landlords offering permanently subsidized housing to receive tax relief, and establish that bonus payments made by statutory health insurance companies for health-conscious behaviors, up to 150 euros, are considered now permanently tax-free.
Lastly, it extends the deferred taxation of monetary benefits from capital investments to share transfers in group companies.
On June 5, 2024 the Bulgarian National Revenue Agency introduced a special VAT regime for small businesses. The new rules allow for EU member states to set an annual turnover threshold of up to 85,000 euros for VAT exemption, and furthermore grant VAT relief to qualified taxpayers who are not based in the state where VAT is due.
Aiming to safeguard cross-border applications, an EU-wide turnover threshold of 100,000 euros has been set. Taxpayers with EU turnover below this threshold and below the national limit can benefit from exemptions. The regime is expected to become effective of January 1, 2025.
On June 5, 2024 Romania and Albania signed an administrative arrangement supporting the implementation of the Social Security Agreement (SSA). The Agreement was signed between the countries on the same day.
Currently, Albania is actively engaged in facilitating SSAs with EU countries.
Turkish Turkey Treasury and Finance Minister Simsek confirmed that Türkiye is not planning to tax profits from stocks and cryptocurrency. Instead, the country is rather considering implementing a “very limited” transaction tax on these assets, although the specific rate is yet to be determined. Concerns about the potential impact of this policy were raised by Ata Portfoy CEO, who suggested that even a small tax on stock trading could disrupt market efficiency.
Simsek, while leading efforts to address the country’s inflation, emphasized the government’s commitment to fair and efficient taxation. The Turkish government has already announced measures such as reducing public spending and proposing a minimum corporate tax rate as part of its fiscal consolidation efforts.
On June 4,2024 the Slovak Financial Administration brough into the attention of individual and corporate taxpayers with foreign income that the extended deadline for 2023 tax returns and payments is July 1,2024. The notice confirmed that tax overpayment refunds will be processed by August 10,2024 and provided additional details on remittance, extensions, and payment plan application procedures.
The OECD’s International Compliance Assurance Program (ICAP) now allows multinational companies to participate even if their parent corporation is based in a non-participating jurisdiction. This is achieved through a “surrogate lead tax administration” from a ICAP participating country, allowing companies to complete their risk assessment .
The ICAP program enables companies to discuss their transfer pricing positions with tax administrations, which helps to clarify their tax obligations. To request a surrogate, companies must have significant operations in the participating country and ensure that the tax administration is sufficiently acquainted with the company in order to request a surrogate. ICAP was established in 2018 and has since expanded to 23 participating countries.
Brazilian newspaper O Estado de S. Paulo published insights on the new proposal that aims to control “trusts,” a financial tool used to manage assets outside of Brazil, in the wake of the country’s tax overhaul. The Draft Proposal states that the Bill will regulate taxation in certain circumstances that have not been regulated up to this point, such as death, donation, or asset relinquishment.
On May 31, 2024 the Singaporean Inland Revenue Authority released an updated e-tax guide concerning the tax framework governing Variable Capital Companies (VCCs). The guide covers various aspects, including but not limited to, an overview of its purpose, relevant definitions, details on income tax treatment, GST treatment, and stamp duty treatment. Additionally, it outlines procedures for seeking clarification on the guide’s content.
On February 6, 2024 Albania and Italy signed the Social Security Agreement. This Agreement was ratified by Albania under Law No. 47/2024 and published by the Albanian President through Decree No. 209 on May 31, 2024.
On May 30, 2024 the South Korean National Tax Service issued guidance concerning tax credits for earned income increases. This guidance addresses various aspects, such as an overview of the earned income increase tax system, eligibility criteria, and the calculation formula. Additionally, it clarifies the tax credits implicaitons for workers transitioning to full-time employment and outlines additional deductions for those transitioning to regular positions. The guidance further includes FAQs, calculation examples, and the standard forms to provide clarity and usability by citizens.
On May 30, the Maltese Inland Revenue explained the implications of the VAT Act, which provisions the treatment of interest under the VAT Act in alignment with that of the Income Tax Acts. As a result, the interest earned on income tax refunds will not be taxable, while the interest expenses are not to be deductible when calculating taxable income.
Additionally, taxpayers are directed to distribute VAT interest income and expenses that are not chargeable or deductible whenever included in tax returns for 2024-2025. The VAT Act aims to optimize tax procedures and ensure consistency in handling interest matters.
On May 30, 2024 the Finnish Parliament accepted to review the new Bill concerning the increase of general Value-Added Tax (VAT) and the Tax on Specific Insurance Premiums. The Bill proposes raising the rate on taxes that become liable after September 1, 2024, from 24% to 25.5%. Additonally, after the Bill takes effect, the new rate will also apply to products obtained within the community.
On May 30, the Latvian State Revenue Service provided information on filing 2023 Individual Annual Income Tax Declarations. Among the provisions, some of the key rules include the announcement of submission deadlines of June 3 or July 1, based on last year’s total income; the requirement to use the State Revenue Service’s electronic declaration system (EDS) and mandatory declarations for those receiving low-income benefits.
Furthermore, the declarations will subject as well the residents with unreported income, such as self-employed earnings or foreign income. As per the announcement, the tax overpayment refunds will be issued within three months of filing.
On May 29, the Danish Customs and Tax Administration published City Court Decision No. SKM2024.295.BR, addressing dual domicile, tax residence, and tax obligations under DTA (Double Tax Agreement) rules. Following the case of a dispute between a Danish resident and the Tax Agency on the tax liability under the DTA, the Court established that dual domicile can occur under DTA provisions.
However, to end Danish residence, a taxpayer must provide proof of terminating cohabitation with a spouse to end Danish residence. Additionally, the Court ruled that the Danish Tax Authority can exercise its taxing rights if the taxpayer does not submit evidence that their center of life interests has shifted to a foreign country.
On May 29, the Czech Ministry of Finance published an updated list of Double Taxation Agreements (DTAs) that are currently in effect. This comprehensive list is up-to-date ensures that all relevant information is accurate and reflects the latest changes and agreements. You can click here to access the list.
The Czech Ministry of Finance disclosed on May 21 that the Double Taxation Agreement (DTA) with the United Arab Emirates, signed on May 24, 2023, came into effect on May 13, 2024. As per the terms, the agreement will be enforced from January 1, 2025, and it will impact withholding taxes and all other taxes applicable to taxable periods starting on or after January 1, 2025.
The Cypriot Tax Department has set July 31, 2024 as the deadline for filing the 2023 income tax return. This applies for employees, pensioners, and self-employed individuals with gross total income exceeding 19,500 euros (US$21,135) for the year 2023.
In an interview with TRT Haber, the Turkish Treasury and Finance Minister Mehmet Simsek stated that the Turkish government is working on a plan to introduce a minimum corporate tax. Additionally, he mentioned a study on income from land and real estate, without giving further details.
The UK Tax Authority is seeking opinions on draft legislation to amend the application of its new penalty regime for late tax payments. The draft legislation, published recently, will grant His Majesty’s Revenue and Customs the power to apply late payment penalties before the due tax has been fully paid.
Currently, penalties can be applied only after the overdue tax is fully paid and within a two-year assessment period. This measure aims to stop taxpayers from avoiding penalties by delaying tax payments until the end of the assessment period. The new penalty regime is points-based, with a fixed £200 fine for every two penalty points accumulated each time a taxpayer files a return late.
The French General Directorate of Public Finance issued an administrative doctrine concerning the taxation of capital gains and losses from business transfers involving non-real estate assets. It explains that capital gains are exempt from taxation for transfers of non-real estate assets, including sole proprietorships, complete branches of activity, or all rights or shares in partnerships considered as professional assets. Furthermore, a full exception applies if the market value of the assets is less than 500,000 euros, and a partial exception applies if the market value of the assets transferred is between 500,000 euros and 1 million euros.
Albania and Croatia on 2 October 2023 singed the bilateral Social Security Agreement. This Agreement is the first of its kind between the two countries, that is to be implementd after it enters into force. The Albanian Official Gazette issued Notice No. 7233, reporting that the social security agreement with Croatia came into force on May 1, 2024. Additionally, the Croatian Official Gazette published Decision No. 28, ratifying the administrative agreement to implement the social security agreement with Albania, effective from May 15.
The Czech Official Gazette released Notice No. 115, suspending Articles 10, 11, and 13 of the 1996 Double Taxation Agreement and the 2010 Protocol with Belarus from June 1, 2024, to December 31, 2026. The notice takes effect on May 29.
The European Commission recently has registered a European Union citizens’ initiative that urges for more consideration of greenhouse-gas emissions and non-renewable natural resource consumption in policies designed to fight global warming.
The initiative suggests using some emissions levy revenues to support low-income households, reducing the economic impact and increasing public support for carbon pricing.Despite its potential to significantly cut emissions, some EU governments and parts of the European Parliament view carbon pricing as an economic risk.
If the initiative accumulates 1 (one) million signatures from citizens in at least seven EU countries within a year from the date of registration, the European Commission is expected to take an action on the matter.
European Union finance ministers recently will try to search for an acceptance for new value-added and withholding tax rules, but must address objections from two countries in the bloc to succeed. Ministers, meeting in Brussels, will be requested to sign off on a package of three laws introducing digital VAT reporting and e-invoicing, new rules for online platforms, and a single VAT registration for companies operating in the EU.
On this matter, Estonia’s position on the new rules was unclear due to pushback from the country, but as confirmed by their spokesperson, Estonia does not seek to block the plan. Rather, Estonia is conveying their concerns that the proposed plan for online platforms could affect VAT neutrality by limiting options for some service suppliers to deduct input VAT.
As EU seeks to replace current tax refund systems for cross-border dividend and interest payments with simpler procedures, Czechia, too, expressed disagreement with some of the proposal’s basic principles, however further details were not provided.
Since the EU requires unanimous agreement on new tax rules, opposition from one country could delay agreement.
Two German finance agencies expressed their support for maintaining and possibly increasing funding for the EU program Fiscalis, which supports international efforts to combat tax fraud.
Fiscalis supports joint audits and training, and has facilitated joint audits and training programs, which the Bavarian Finance Administration and the German Ministry of Finance’s Baden-Wurttemberg office noted would not have been possible without its financial assistance. Additionally, the program, with a current budget of 269 million euros for the current 2021-27 period, also facilitates technology and best practice exchanges among EU tax authorities.
Recently, the Danish Customs and Tax Administration issued online City Court Decision No. SKM2024.267.BR, addressing the taxation of bank deposits. The case involved a Danish resident who faced additional income tax imposed by the Tax Agency on deposits from his mother’s company, which he claimed were gifts. The legal dispute raised on wheather certain bank deposits are to be considered as employment income or gifts. The City Court ultimately qualified the deposits as additional salary, and not gifts.
Recently, the Italian Revenue Agency released Circular No. 10/E, detailing measures concerning short-term property leasing. The directive specifies a 26% flat tax rate on certain short-term lease contracts, a 21% withholding tax rate for real estate intermediaries and managers of specific electronic portals, and the obligations for non-resident intermediaries.
From September 2024, the United Kingdom will apply a 20% value-added tax (VAT) to the sale of voluntary carbon credits. Initially, these credits were exempt from VAT as they couldn’t be resold, lacking a secondary market.
Certain transactions involving carbon credits will remain exempt from VAT, including the initial issuance by a public authority, holding credits as investments, donations to carbon credit projects, and sales from self-assessed projects without independent verification.
Additionally, from September, carbon credits will be eligible for VAT relief under the Terminal Markets Order, which eliminates the sales tax rate for wholesale commodity transactions on specified terminal markets, according to HM Revenue and Customs.
The OECD has published a report on the rules under Pillar One – Amount B of its global tax framework. This part of the agreement offers a simpler way to figure out a set return for basic marketing and distribution activities, called the Simplified and Streamlined Approach.
This approach aims to reduce transfer pricing disputes, compliance costs, and increase tax certainty for administrations and taxpayers. However, its optional implementation and limited scope complicate these goals.
Key considerations include determining transactions that meet the scoping criteria, applying the approach to eligible transactions, addressing transfer pricing documentation and tax certainty concerns.
Recently, the European Court of Justice (ECJ) issued a preliminary ruling for Case No. C-241/23, addressing the Poland VAT regulations concerning share exchanges. In this particular case, a VAT-registered company aimed to raise its capital by accepting in-kind contributions from various entities, providing its shares in return for properties. These contributions were recorded in the VAT returns at net value, but the Tax Authority, supported by the Appellate Authority, confirmed that capital should be calculated using the shares’ nominal value instead of their issue value.
Pursuant to Poland’s Supreme Administrative Court request, the ECJ concluded that when a company contributes property to another company’s capital in exchange for shares, the taxable amount should be based on the shares’ issue value.
Recently the European Commission announced a consultation to evaluate administrative collaboration for direct taxation. The feedback is to assess how well the automatic exchange of information is working for reportable cross-border arrangements (DAC6).
The evaluation aims to determine if the scope and purpose of DAC are still relevant and address issues faced by EU member states, particularly in ensuring accurate tax assessments in cross-border situations and combating tax avoidance and evasion. It will also examine how effectively DAC achieves its desired outcomes and impact, and evaluate the efficiency of information exchange and other specified tools from a cost-benefit perspective.
The Austrian Federal Ministry of Finance recently launched a consultation on a draft tax reporting ordinance. The ordinance seeks to establish reporting requirements and deadlines, clarifying procedures on how foreign withholding taxes can be used to reduce capital gains tax, and how they are assessed, and refine investment fund reporting. The ordinance is set to take effect on January 1, 2025, and it will be implemented for the first time in tax reports for the 2025 calendar year.
The Danish Customs and Tax Administration recently published the Supreme Court Judgment, explainin transfer pricing adjustments in controlled transactions. Following the case involving a taxpayer parent company which established two nonresident oil production subsidiaries, which later acquired exploration licenses in the states where they were situated.
The tax authority found that the fees for these services from related parties didn’t match the fair market value, so it raised the disputed taxable income. Upon appeal, the Supreme Court upheld this decision, ruling that the preliminary exploration phases, performance guarantees, and know-how had intrinsic economic value that would warrant continuous payments in an independent setting. The court also affirmed that the transactions among the companies were controlled transactions and that the costs charged didn’tmeet the arm’s length standard because there were no ongoing payment obligations.
The Swedish Tax Agency recently upgraded its guidance on VAT treatment for mortgage sales. The modification clarifies a recent European Court of Justice (ECJ) ruling which explaines that arranging auctions for pledged goods wasn’t considered a secondary or supporting activity to the main task of providing credit that is secured by the pledge. Consequently, these services don’t qualify for the VAT exemption applicable to credit-granting services.
The Brazilian Official Legal structures recently released Law No. 14,848, which updates the progressive table for monthly withholding of individual income tax. These adjustments came into effect from February 2024..The new rates are: 1) 0% for income up to BRL 2,259.20 (USD 441.92); 2) 7.5% for income from BRL 2,259.21 (USD 441.93) to BRL 2,826.65 (USD 553.01), with a deductible of BRL 169.44 (USD 33.14); 3) 15% for income from BRL 2,826.66 (USD 553.16) to BRL 3,751.05 (USD 734.05), with a deductible of BRL 381.44 (USD 74.64); 4) 22.5% for income from BRL 3,751.06 (USD 734.05) to BRL 4,664.68 (USD 912.88), with a deductible of BRL 662.77 (USD 129.70); and 5) 27.5% for income above BRL 4,664.68, with a deductible of BRL 896.00 (USD 175.00). The legislation canceles Provisional Measure No. 1,206, which had previously established the monthly rates effective from February 2024.
Recently, the Italian Revenue Agency published Provision No. 213637/2024, which clarifies the substitute tax option for controlled foreign companies (CFCs). The guidance addresses key topics such as relevant definitions, the areas where the substitute tax option can be applied, and the procedures for opting in or revoking it. This provision it also outlines the conditions for terminating the option’s effectiveness and provides a framework for calculating net accounting profits, subject to a 15% substitute tax rate. Moreover, it it outlines how subsidiary profits are taxed and the impact of using the substitute tax option on tax value monitoring.
The Danish Parliament has introduced Bill No. L 183 which promits change different tax laws telated to energy and fuel.. Key changes include phasing in a CO2 tax increase to 750 kroner per ton for non-EU quota companies and setting a 375 kroner per ton rate for quota-covered space heating from 2025 to 2030. A 125-kroner CO2 tax will also be applied to mineralogical processes. Furthemore, new CO2 taxes on fishing, domestic ferries, and aviation are proposed, along with the removal of floor deductions for certain companies. Additionally, the bill aims to reduce the energy tax for space heating, amend waste CO2 tax calculations to align with EU Directive 2003/96/EC, and standardize extraordinary tax liability resumption rules.
Recently, the Greek Independent Authority for Public Revenue announced an extension for submitting 2023 individual income tax returns deadline along with several new filing process features for taxpayers. The new deadline for filing initial returns is set for July 1, with an extended date of July 26 for submitting amended returns without penalties. This year, certain taxpayers will receive automatic pre-filled tax declarations, which can be finalized by July 2 if the automatically filled data is verified to be correct. Additionally, taxpayers in Greece or abroad must now register an International Bank Account Number (IBAN) to receive tax refunds. Any tax refunds will be adjusted against existing tax liabilities up to July 31, and a 3 % (percent) deduction will be applied if the income tax is paid through this method.
Recently, the United Kingdom’s Foreign and Commonwealth Office has presented the bill to the Parliament, aiming to ratify a protocol pertaiing to the 2015 Double Taxation Agreement (DTA) with Sweden. The protocola was signed on February 23, 2021.
In late April, the Turkish Revenue Administration released a guidance on real estate taxation, covering various aspects. It clarifies which transactions are subject to title deed fees. These fees, set at 2 percent, are separately collected from both the buyer and seller, calculated based on either the actual transaction price or the property tax value, whichever is higher.
As well, the guidance addresses penalties and appeals for discrepancies in declared purchase prices. Finally, it classifies as capital gains the income from selling real estate held for less than five years, with an exemption increase to 87,000 Turkish lira, previously 55,000 lira.
The Polish Ministry of Finance recently launched a public consultation on a proposed law aimed at aligning with an EU Directive to implement a minimum 15% tax rate globally, as per OECD guidelines. This draft legislation targets multinational and large domestic companies with revenues over €750 million in at least two of the past four years. The bill introduces several new measures, including a domestic top-up tax, rules for including income and addressing undertaxed profits. Additionally, it also outlines methods for calculating effective tax rates and additional tax amounts, with particular provisions for pass-through entities and permanent establishments.
Recently, the Belgian Federal Public Service Finance announced the filing deadlines for 2024 individual income tax returns. Paper returns, which will be distributed in May, must be filed by June 30. Those choosing for electronic submission, including returns filed by agents on behalf of taxpayers, have a deadline until July 15. Additionally, individuals reporting specific types of income, such as foreign professional income, are given an extended deadline until October 16.
The Austrian Federal Ministry of Finance recently published a decision from the Federal Finance Court regarding an employer’s obligation to withhold wage taxes and employer contributions for payments made to employees by third parties. The case involved a managing director of a company which voluntarily declared non-cash benefits for tax purposes, even though he had already paid income tax on them. However, during an audit, it was discovered that his employer failed to withhold the necessary taxes and contributions for these third-party payments. Despite the employer’s claim that such payments were not subject to employer contributions, the tax office rejected their complaint. The Federal Finance Court supported this decision, confirming that third-party payments are part of taxable employment income and the employer should have managed the deductions since they were aware of these payments.
The Brazilian Federal Revenue Office recently released an upgraded version of its digital tax bookkeeping system, named ECF version 10.0.6. This update enhances the reporting process for corporate income taxes and social contributions on net income The latest version incorporates issues like error corrections in report generation and field rule adjustments, and also removes outdated registry keys. Additionally, the update improves the system’s overall functionality. This version supports the submission of ECF files for the 2023 calendar year, 2024 special cases, and both new and amended filings from previous years.
The Institute of Statistics in Albania (INSTAT) has published key economic indicators for April 2024, including export/import levels and inflation rates.
According to data reported in the official website of INSTAT, exports of goods experienced a positive trend after nearly a year of contraction, reaching a value of ALL 35 billion in April 2024.
Additionally, the statistical data indicate a positive trend in the inflation rate, recorded at 2.1% in April, marking the lowest level for 2024. However, within various economic categories, the rent and energy sectors show an increasing pattern in inflation.
The Netherlands is considering revising its consumption tax on non-alcoholic drinks to include a sugar tax based on sugar content. Currently, the flat tax is set at 26.13 euros per 100 liters, generating significant revenue annually. The proposed sugar tax would potentially vary, with discussions about exemptions for certain drink categories such as mineral water, dairy, and all-natural fruit drinks.
The government has opened a consultation ,set to end by June 7th, to gather opinions on distinguishing between natural and added sugars to effectively implement exemptions. State Secretary for Tax Affairs highlighted that maintaining the tax on all drinks would simplify administration, whereas exempting only mineral water could better align with public health objectives.
HM Revenue and Customs in the United Kingdom recently released an update VAT Notice No. 701/21A regarding VAT exemptions for gold coins in 2024. The notice provides that gold coins with less than 90 percent purity are not exempt from VAT, and provide clarification on the criteria for coins to qualify as investment gold coins. Additionally, HMRC provided an updated list of investment gold coins eligible for VAT exemption upon supply.
On April 9, the Dutch Ministry of Finance initiated a consultation on proposed regulations to modify the transfer tax exemption for real estate acquired through demergers, as outlined in the 2023 Budget Memorandum. The aim is to prevent tax evasion and simplify procedures. Proposed changes include introducing conditions such as a business requirement, continuity obligation, and retention clause. Stakeholders are invited to provide feedback by May 6th 2024.
The Ministry of Finance in Montenegro has released a draft bill concerning the deduction of interest on overdue taxes for individuals, entrepreneurs, companies, and parts of companies. The bill provisions several measures, including granting taxpayers the right to deduct all interest on overdue taxes, fees, contributions, and other payments until December 31, 2024. However, The enjoyment of the relief depends on taxpayers submitting all overdue returns, resolving the principal tax debt, and requesting interest relief within 45 days following January 1, 2025. Additionally, the bill also covers tax debts previously rescheduled under past relief measures and the right to appeal on decisions made by tax authorities denying the relief.
In early April 2024, the Greek Ministry of Finance issued tax initiatives outlined in the 2025 budget, encompassing various measures. Among others, decreasing insurance contributions by 0.5%, permanently reinstating the Special Consumption Tax for farmers and temporarily suspending VAT on construction. Moreover, the measures further introduce a fresh institutional framework to stimulate business mergers and foster innovation through tax incentives. These measures signify efforts to improve fiscal policies and support key sectors within the Greek economy.
The French Ministry of Economy and Finance provided important dates for filing 2024 income tax returns. According to the updates, the resdients can start filing the tax returns electronically from April 11th, 2024, whilst nonresidents can file tax declarations online by latest May 23, 2024. Additionally, the update outlines specific deadlines for different zones. Furthermore, paper declarations, including those for French residents living abroad, must be submitted by May 21. Income tax notices will be issued during July and August 2024.
In April 2024, the Finnish Tax Administration revised its Guidance No. VH/253/00.01.00/2024, providing updated instructions for businesses concerning VAT deductions associated to real estate investments. The Guidance covers several procedural aspects such as timeframe for businesses to review their VAT deductions and procedures for correcting VAT deductions on tax. Additionally, it stipulates that the 10-year review period commences upon the completion of construction or improvements. The guidance became effective on April 9, 2024.
European Parliament lawmakers have endorsed plans for updated transfer pricing rules and a new tax head office system for smaller companies. The transfer pricing update aims to harmonize the legislations of all EU countries with OECD guidelines, ensuring transactions among related companies align with those among unrelated ones. On the other hand, the new tax head office system will allow small and medium-sized companies operating across EU borders to manage tax compliance through their head office country’s tax administration. These measures aim to simplify compliance and facilitate cross-border tax management.
On March 2024, the Czech Government proposed a new draft bill to implement EU rules on administrative cooperation and tracking crypto-assets. In essence, the bill mandates that crypto businesses must register with the tax authority and disclose transactions made by Czech residents. The Central Bank will provide a list of authorized crypto businesses to the tax authority, while the law stipulates penalties up to 1.5 million Czech korunas for non-compliance with the rules of screening, investigation, recordkeeping and reporting inquiries.
In early April, Belgium’s Federal Public Service-Finance provided an important updates regarding VAT return timelines and procedures. Among the measures outlined, the announcement specifies that April 20th is the deadline for Q1 filing for individuals choosing the general pro-rata deduction and seeking reallocation. July 20th is set as the deadline for Q2 declarations for the year 2024. Additionally, taxable individuals are required to categorize incoming VAT invoices by sectors and submit final figures by October 21st for Q3 and by December 20th for November 2024. These updates aim to streamline VAT processes and ensure compliance among taxpayers.
The Austrian Federal Ministry of Finance clarified Court Decision No. GZ. RV/4100567/2022 providing assessment of the tax exemption on the sale of private property. This decision follows a case involving the sale of a residential building composed of two apartments by a taxpayer who, due to health reasons, relocated to another property. Following the trial, the Court ruled in favor of the tax office’s argument, stating that the taxpayer did not meet the requirement of exclusively using two-thirds of the living space. Consequently, the taxpayer was subjected to a 30 percent tax rate on the proceeds from the property sale. Thus, this ruling reinforces the requirement for exclusive use of two-thirds of the living space in order to qualify for tax exemption on the sale of private property.
The Albanian Central Tax Administration in April 2024 provided updates regarding tax payments for businesses providing professional services. The updates declare that the 2024 taxes will be prepaid according to their 2023 self-declared profits, divided into installments with deadlines every three months throughout 2024. These prepayments will adhere to progressive tax rates, with individuals subject to a 15 percent tax on profits up to 4 million Albanian LEK (approximately US$146,519) and 23 percent on profits exceeding that amount. For non-individual taxpayers, a flat 15 percent tax rate will apply to prepayments , regardless of their total tax liability.
The Bosnian-Herzegovinian Tax Administration recently published the 2024 Rulebook composed of updated procedures for determining tax residency. It covers several key aspects, including criteria for determining residency for individuals based on factors like permanent home, vital interests, or habitual abode. Additionally, it outlines the processes and forms for issuing residency and non-residency certificates, along with provisions for denying non-residency certificates if there is no DTA between the country specified in the request and Bosnia. The rulebook also further elaborates relevant terms and guidelines such as “limited tax liability” and “unlimited tax liability”.
In February, the Canadian Revenue Agency (CRA) announced updated annual interest rates for tax underpayments and overpayments for the first and second quarters of 2024. The announcement covers various taxes, including income tax, Goods and Services Tax and the Harmonized Sales Tax. Among the key highlights of the interest rates is the increase in the interest rate on overdue taxes, Canada Pension Plan contributions, and employment insurance premiums from 9% to 10% for both Q1 and Q2. Additional increase rates impact corporate taxpayer overpayments from 5% to 6, non-corporate taxpayer overpayments from 7% to 8%.
Early this April, the Finnish Tax Administration released Guidance No. VH/82/00.01.00/, updating information on the individual income taxation of business and professional income earned by foreigners in Finland. The guidance clarifies several aspects, such as determination of when construction contracting becomes a permanent establishment (PE) and the conditions for advance debt collection registration requiring the right to conduct business in the country. Among the key matters addressed, the guidance provides with an overview of social contributions and discussion on the impact of Double Taxation Agreements (DTAs) on taxation rights.
In April 2024, the Hungarian National Tax and Customs Administration issued clarification on the social contribution tax liability for certain nonresidents, effective from January 1st. The Administration stipulates that income earned from previous work by individuals insured in Hungary until December 31st, 2023, previously exempt from social contribution tax, is now taxable. This update aims to ensure compliance with tax regulations and address changes in tax liability for nonresidents in Hungary.
The Spanish State Tax Administration Agency has announced that July 1st, 2024 is the deadline for filing 2023 individual income tax declarations. While defining individual income tax, the Administration emphasizes that both residents in Spain and those abroad meeting specific criteria are required to declare. Additionally, it states that the declaration must include individual total income, capital gains, losses, and imputed income, irrespective of residency or where the taxable event occurred.
Early in April 2024, the United Kingdom HM Treasury updated the VAT registration threshold for small businesses, which has been raised from £85,000 to £90,000 . Furthermore, small business multiplier for business rates stays unchanged for the fourth consecutive year, and a reduction in national insurance contributions for working individuals will take effect at the start of the new business tax year. For UK independent films there will be a 53 percent tax credit on qualifying expenditures. These measures aim to support small businesses and encourage growth within the UK economy.
The Norwegian Finance Ministry announced a proposal to tax foreign sea-farming companies on incomes generated across the entire Norwegian continental shelf. Currently, there’s no legislative basis for taxing such companies operating on the shelf. The continental shelf, a shallow seabed, falls under Norway’s sovereignty for the exploitation of natural resources, spanning over 2 million square kilometers.
The proposal aims to extend taxation to foreign companies involved in sea farming and mineral extraction activities on the shelf, including taxing salaries of foreign employees. The proposal is open for public consultation until June 2024, with potential implementation in 2025 if approved.
In February 2024, the Lithuanian State Tax Inspectorate issued the guidance regarding the taxation of income acquired in 2023 from real estate sales. The guidance addresses essential aspects of real estate transactions, including the declaration and payment deadlines for income received in 2023 from real estate sales, the nontaxable holding period of 10 years on immovable property, taxation rules for sales made before the holding period ends, tax calculation methods, and documentation requirements.
Recently on March 2024, the Irish Revenue Commissioners issued Revenue eBrief No. 103/24, offering updated guidance regarding the payment and receipt of interest and royalties without the deduction of income tax. This guidance covers various topics such as withholding tax, interest payments to U.S. companies, and the tax treatment of companies operating under Hong Kong’s territorial system. One of the introduced updates involves implementing defensive measures regarding outbound payments of interest and royalties. Additionally, it includes offering further guidance on applying interest withholding tax to interest payments made to Irish partnerships and foreign tax-transparent entities
On March 2024, the French Official Gazette published Decree No. 2024-274, introducing measures to eliminate double taxation of profits derived from corporate tax on foreign businesses. Among others the measure include (i) allowance of deduction from total net results for distributed dividends and participation products for France-based legal entities, regardless of profitability; (ii) clarifying that profits or income from sales for France-based entities, aren’t considered when determining results for transferring shares of foreign entities, and (iii) France-based entities subject to corporate tax must justify including profits or positive income subtracted from the result of transferring or selling shares.
Portugal is updating the Nationality Law under Law 01/2024, which brings significant changes. The new provisions in the law include stricter national security and defense criteria, changes to the naturalization process for Sephardic Jews’ descendants, the implementation of biometric verification for data authenticity, and a change in the calculation of the required period of legal residence for nationality acquisition by naturalization.
In addition, individuals applying for Portuguese nationality must have legally resided in Portugal for at least five years, including the time since they applied for a temporary residence permit, rather than just when it was issued. This is especially important for foreign citizens awaiting residence permit approvals, particularly those seeking an investment residence permit (ARI).Furthermore, the Portuguese Nationality Law establishes criteria for Portuguese origins and the circumstances under which non-nationals can acquire citizenship, emphasizing the importance of genuine ties and a deep connection with Portugal, its traditions, culture, and values.
In March 2023, business organizations in Canada called upon Parliament to include significant tax changes within the budget bill. The Canadian Chamber of Commerce advocated for amendments that would eliminate retroactive components of proposed digital services taxes, while electrical corporations requested an exemption from limits on interest expense deductions. The Senate is now considering Bill C-59, which proposes a 3% tax on large internet corporations retroactive to January 1, 2022.
The United States has previously criticized Canada’s digital services tax for its impact on American firms. Furthermore, industry group Electricity Canada, pointed out how the bill’s Excessive and Financing Expenses Limitation (EIFEL) provisions would disproportionately burden private companies that rely on foreign financing.
In march 2024, Belgium introduced a reduced value-added tax (VAT) rate of 6% to property renovation projects, in purpose to boost the investment in rental properties. Belgium Finance Minister Vincent Van Peteghem said that the reduced VAT rate, which is now applicable to demolishing old properties and constructing new private houses on the same site, will now also apply to rental oriented demolition and reconstruction projects. To qualify for the reduced rate, the property must not exceed 200 square meters and must be rented out as primary residences for a minimum of 15 years following reconstruction. In General, Belgium’s VAT rate stands at 21%.
Australian treasurer Jim Chalmers, announced that the core minimum tax regulations will apply from January 1, 2024, pursuant to international standards. Australia seeks feedback on two sets of legislation implementing the 15% global minimum tax, aiming multinational corporations with annual global revenue exceeding EUR 750 million.
Additionally, the government is looking for feedback on how these laws interact with existing tax regulations, such as hybrid mismatch rules and controlled foreign company rules. The draft legislation is open for discussion until April 16th, 2024, and further changes to the current tax regulations are expected to come.
In the UK budget proposal, there’s a plan to change a tax rule that benefits wealthy foreigners living in the country. The Chancellor of the Exchequer, Jeremy Hunt, talked about it during a meeting with the Parliament’s Treasury Committee. As he stated in the meeting, the simplification of the tax system will include significant “Non-Doms” changes.
The current rule, known as the “non-domicile” tax loophole, allows wealthy foreigners to avoid paying tax on income they gain outside the UK. The proposed amendment includes the cancellation of this rule, and implement a tax regime where individuals are taxed on their foreign income once they have live in the UK for four years. .
According to Hunt, the “old” tax system is outdated and not efficient, and this new regulation is estimated to bring in about £2.7 billion per year for the UK government by 2028.
The European Commission is asking for feedback on the efficacy of the EU Directive (EU) 2017/1852 concerning tax dispute resolution mechanisms, aiming to facilitate the resolution of double taxation issues. Effective from July 2019, the Directive provisions a two-year deadline for Member States to resolve disputes arising from their tax agreements. In addition, it allows taxpayers to request an independent opinion or go to court if this deadline is missed.
The consultation, that took place in March 2024, aims to gather input on the process of filing complaints, the timeliness of authorities’ responses, and the effectiveness of resolving disputes within the two-year timeframe. .
This dispute resolution rule applies to both businesses and individuals. according to the commission, it’s covers a wider range of issues compared to previous methods, extending beyond transfer pricing and profit attribution to permanent establishments.
The commission will review the feedback and evaluate the effectiveness of the law, to be followed by a report on its performance.
As of April 2024, Poland will reintroduce a 5% value-added tax (VAT) on basic foods, such as meat, dairy, and cereal products, according to an announcement from the Polish Finance Ministry. This decision making follows the implementation of a temporary 0% VAT rate on these essential items in early February 2022, aiming to assist customers in managing rising inflation.
The reimposing of the 5% VAT is supported by the preliminary statistical data indicating that January’s inflation slowed to 3.9% year-on-year, the lowest since March 2021. The Ministry of Finance notes a significant decline in the annual growth rate of consumer prices for food and non-alcoholic beverages, down to 4.9% year-on-year. Moreover, the ministry predicts a downward trend for both inflation and the growth rate of food prices, supported by factors such as decreasing prices in global agricultural markets and a strong base effect from the previous year’s substantial increase in food prices.
In March 2024, the Finnish Parliament (Eduskunta) approved the consideration of a bill aimed at ratifying the Double Taxation Agreement (DTA) and its accompanying protocol with France. Signed on April 4, 2023, this DTA replaces the current 1970 DTA, introducing several key provisions, including: Prevention of double taxation on non-public service pensions,
Authorization for the source country to impose a 15 % withholding tax on portfolio dividends,
Shift the taxation methodology from the exemption method to the credit method and
Outline of rules regarding the taxation of permanent establishments (PEs).
The DTA complies with the OECD Model Tax Agreement, incorporating the minimum standards and recommendations outlined in the OECD base erosion and profit shifting (BEPS) project.
According to the nonpartisan Joint Committee on Taxation, the global tax deal, aiming to redistribute profits from major multinational corporations, could lead to an annual loss of US revenue ranging from $100 million to $4.4 billion.
This global deal, which was agreed upon by over 140 countries in 2021, comprises Pillar One, reallocating profits to market jurisdictions, and Pillar Two, establishing a 15% global minimum tax. Pillar Two has been enacted in numerous countries, but Pillar One remains pending.
The committee’s analysis, released ahead of a House Ways and Means subcommittee hearing, presents three simulations, indicating a projecting of $1.4 billion loss. Concerns are presented over Pillar One provisions, with bipartisan opposition to the deal’s aim of eliminating digital services taxes (DST), potentially impacting global GDP. DSTs, imposed by countries on large digital companies, prompted tariff threats from the US. Canada is proceeding with its DST plans, despite the agreement to delay implementation. The finalized treaty is expected this spring, with an extension granted to some countries to retain their DSTs until June.
In the past years, the shift from cash transactions to digital exchanges has rapidly progressed, signaling a potential transition to a cashless future. Greece, whilst facing economic challenges and tax evasion, has taken a significant step by implementing a ban on cash transactions exceeding 500 euros (approximately $540) to combat tax evasion. This policy carries substantial fines, potentially doubling the transaction amount. Concurrently, Greece has adopted a “point of sale everywhere” approach, ensuring that digital transactions generate receipts, with real-time data provided to the Independent Authority for Public Revenue. Assuming compliance and adequate enforcement resources, this policy is anticipated to significantly improve tax collection efficiency and effectiveness.
The increased usage of digital transactions, partly driven by the COVID-19 pandemic, may have enduring consequences. In a near cashless future, the pandemic could be remembered for fundamentally reshaping the global economy and providing a long-term solution to a major source of tax fraud.
Germany’s ruling coalition is working on a stimulus package of approximately €7 billion ($7.6 billion) aiming to revive the country’s economy. Chancellor Olaf Scholz’s government aims to reduce the tax burden on companies and is working on securing parliamentary approval before the summer break. However, as the discussions are still in the early stages the package’s value could change. The German Ministry of Finance has refrained from commenting on the plans.
The current proposed stimulus is about 0.16% of Germany’s output this year. However, some economists suggest the country may need as much as €30 billion to overcome economic challenges, including high energy costs, exposure to the struggling Chinese market, and geopolitical tensions from Russia’s war on Ukraine.
The Economy Minister, Robert Habeck, recently lowered the growth forecast for 2024 to 0.2%, citing challenges, including a court ruling from last year that overturned the coalition’s budget strategies. The government is also seeking approval for a separate package, initially valued at €7 billion but now reduced to just over €3 billion, focusing on small- and medium-sized businesses. A meeting is scheduled for March 2024 to seek approval for this package in the upper house of parliament, Chancellor Scholz remains optimistic about the approval of the package, although in an altered version.
The Government of Spain is considering an alternative approach for energy companies where they can invest profits rather than paying a windfall tax. Energy Minister Teresa Ribera revealed in an interview plans for a new system, offering companies the choice to invest profits or contribute to the state through taxes. The government aims to implement this system in the upcoming weeks.
This temporary tax, which had its beginnings in 2023, as a relief measure for inflation, imposes a 1.2% levy on revenues of large energy companies. The mentioned tax has raised many concerns in the energy industry, and in response energy firms have demanded even more clarity on plans for the windfall tax. As a result, Repsol SA has announced plans to reduce investments in the country.
With the country’s strong production of renewable resources, Spanish energy prices have fallen in recent days. However, companies have nevertheless experienced a significant increase in income as a result of the Russian invasion of Ukraine.
In March 2024, Belgium officially announced the Royal Decree No. 2022041540, as published in the Belgian Official Gazette. This decree will take effect starting from 2025 and outlines two key provisions: Firstly, it specifies the implementation of a zero percent income tax rate on specific sources of income such as pension income, other replacement income, and unemployment income for taxpayers earning up to 10,160 euros (US$11,031). Additionally, it details an increase in the basic deduction from 236 euros (US$256) to 237 euros (US$257).
The UK’s annual finance bill, recently passed into law, includes global minimum tax changes, business tax breaks, and enhanced powers for the tax office. The global minimum tax, part of the OECD deal agreed by 140 countries so far, imposes a 15% tax on multinational enterprises. The law integrates OECD guidance supporting the application of the safe harbor, hence allowing companies to use country-by-country information, instead of accounting data to calculate the tax liability.
Additionally, the UK made the full expensing regime permanent, merged R&D tax breaks for large and small firms, and introduced a new credit for small R&D-intensive companies. Tax breaks for creative industries are now refundable expense credits. Other measures include extending grandfathering clauses for investment schemes and criminalizing continued promotion of tax avoidance schemes. In the course of March 2024, when Spring Budget will be presented by Chancellor of the Exchequer Hunt, further tax cut initiatives might be announced.
The Turkish Revenue Administration released Publication No. 504, clarifying the tax on income from selling property owned by an individual within five years of the purchase. The publication covers different topics, including, defining capital or commercial gains, taxation of capital gains from various property types, determining acquisition dates, filing electronic and paper tax declarations, 2023 income tax brackets and rules for claiming loss offset, deductions, and exemptions. This publication is useful for filing 2023 annual income tax returns.
A new Double Taxation Agreement (DTA) has been signed between the Turkish Revenue Administration and the state of Azerbaijan replacing the 1994 Double Taxation Agreement currently in force between the two countries. This agreement will enter into force after the approval of the DTA by the parliaments of both states. The main purpose of the new DTA is to create possibilities and favorable conditions for investors, including but not limited to cooperation in tax collection, taxing rights, and exchange of information.
Speakers at the Tax Foundation Europe seminar, voiced their concerns on possible tensions between Europe and the US over taxes on digital profits if the global tax deal’s Pillar One faces delays. Pillar One governs the allocation of profits for tax purposes among the world’s largest multinationals based on market presence jurisdictions, rather than headquarters. Stakeholders at the seminar voiced their concerns that the OECD’s Pillar One proposal is uncertain, and in case it stalls, alternatively the revival of Digital Service Tax could prompt new US retaliation. As highlighted by European Commission, the EU’s priority is to increase tax revenue and balance their tax mix regime to meet growing public investments needs.
The Swedish Tax Agency on February 2024, following Statement No. 8-2785199, has clarified VAT rules for business transfers. The statement establishes that the transfer of business assets is not considered a delivery of goods or services unless deductible tax is owed or a refund is granted. Additionally, it highlights that the right of deduction is tax-exempt for outgoing transactions, regardless of tax status, and does not require deduction restrictions. Similarly, it clarifies that transferring a mixed-activity business is not considered a supply of goods or services under certain conditions. Lastly, it is stipulated that assets, aside from current assets, are exempt from tax liability if the taxable individual can demonstrate that the input tax was not entirely deductible at the time of acquisition.
The Austrian Federal Ministry of Finance clarified cross-border commuter tax exemptions in a recent decision posted online by the Federal Finance Court in February. The decision was presented about a case regarding an Austrian citizen working in Switzerland, who was sent to the U.S. by his employer to work for a month from March 28, 2021, to April 27, 2021. He claimed a tax exemption on the U.S. income. The tax office denied it, and the Austrian citizen appealed. The Federal Finance Court ruled that the exemption was not valid as the foreign activity in the U.S. did not last for more than one continuous month, as mandated by Austria’s Income Tax Act. The one-month prerequisite would have been fulfilled on April 28, 2021, after the taxpayer’s return.
Recently this month, Austrian Federal Ministry of Finance published online the Federal Finance Court Decision No. GZ. RV/7100381/2023, clarifying the taxation of losses from capital assets. The taxpayer, involved in share transactions, argued that the denial of loss deduction violated constitutional principles of equality and fairness.
The Tax Authority countered that the losses didn’t qualify as extraordinary burdens under the law and in addition an income extrapolation error in the taxpayer’s 2020 assessment was identified.
The Federal Finance Court sustained the Tax Authority’s decision, stating that the losses weren’t extraordinary burdens, the loss deduction exclusion was in line with constitutional principles, and the income tax assessment was revised to correct the income extrapolation error.
[Austria, Federal Ministry of Finance, 02/14/24]
A recent OECD report explains new rules that make it easier to simplify transfer prices proceedings for specific transactions under the 2021 global tax deal, called Amount B. These rules intent to simplify how companies value their transactions, particularly for basic marketing and distribution deals.
OECD stated: “This framework is expected to reduce transfer pricing disputes, compliance costs, and enhance tax certainty for tax administrations and taxpayers alike,” … adding “Low-capacity jurisdictions facing limited resources and data availability will especially benefit from the administrative simplification provided by Amount B.”.
The report and outlines situations in which a distributor falls under the scope of Amount B, including instances where the distributor engages in additional non-distribution activities, like manufacturing.
Furthermore, the report addresses the transfer pricing needs of “low-capacity” countries by simplifying the approach for certain distributors through Amount B rules. However, concerns arise about potential mismatches when one country opts for Amount B while the other does not. For example, OECD acknowledges India’s reservations due to undefined terms and the risk of losing out on higher margins.
The Inclusive Framework plans to finalize the list of low-capacity jurisdictions by March 31, with the Amount B approach applicable from January 2025. The report’s content is now part of the OECD Transfer Pricing Guidelines.