Bulletin 15

Printable Version

IRELAND: Consultation on corporation tax

The Irish government has launched a public consultation on corporation tax policy. It follows the publication in September of the government-commissioned Coffey Review, which affirmed that the country’s 12.5 per cent corporation tax rate should remain unchanged, though it should consider changing to a territorial tax system. The consultation closes on 30 January 2018.

FRANCE: Wealth tax to be replaced with tax on property

The French government’s draft Finance Bill 2018 proposes to replace the existing wealth tax with a ‘real property wealth tax’, applying to property not linked to the owner’s business activities, as of 1 January 2018. A flat-rate capital gains tax of 30 per cent will also be introduced.

UK: Advisors warn of global reach of ‘failure to prevent evasion’ offences

International law firms and tax advisors are drawing attention to the extraterritorial reach of the UK’s Criminal Finances Act, which came into force this week, creating two new offences of failing to prevent the facilitation of tax evasion either in the UK or outside it. All companies and partnerships are within scope of the Act, irrespective of their place of incorporation or formation, or the jurisdiction in which they operate.

EUROPE: Luxembourg ordered to collect EUR250 million from Amazon

The European Commission has concluded that Luxembourg gave EUR250 million of illegal tax benefits to Amazon by offering it a favourable corporation tax agreement ruling in 2003, under which almost 75 per cent of Amazon’s profits were not taxed. The ruling, further extended in 2011, enabled Amazon to shift the vast majority of its profits from a Luxembourg-resident company to a company not subject to tax. Luxembourg must now recover the sum from Amazon.

EUROPE: Commission takes Ireland to ECJ over Apple tax deal

The European Commission has referred Ireland to the European Court of Justice (ECJ) for its failure to recover EUR13 billion of ‘illegal tax benefits’ from US-owned multinational, Apple. The Commission ruled, on 30 August 2016, that a favourable corporation tax arrangement granted to Apple in Ireland amounts to unauthorised state aid, and was illegal under the EU treaties. The Irish government disagrees, but has promised to comply.

CORPORATE TAXATION: OECD pushes debate on permanent establishment profit attribution

The OECD has released public comments received on its proposals for the transactional profit split method for transfer pricing, and the attribution of profits to permanent establishments.

EUROPE: Directive introduces binding arbitration in double taxation disputes

EU finance ministers have adopted the European Commission’s Directive introducing a new system for resolving double taxation disputes between Member States. It calls for a binding arbitration procedure if the mutual agreement procedure fails. Member States have until 30 June 2019 to transpose the Directive into national law.

EUROPE: Belgium enacts beneficial ownership regime

Belgium has implemented the beneficial ownership disclosure provisions of the EU Fourth Anti-Money Laundering Directive, nearly four months after the transposition deadline passed. It includes detailed definitions of beneficial owners of international non-governmental organisations, not-for-profit organisations, foundations, and trusts.

HONG KONG: Corporate taxation for small enterprises is cut even lower

The Hong Kong government is to introduce a new 8.2 per cent rate of corporation tax on the first HKD2 million (USD255,000) of company profits, its chief executive Carrie Lam has announced. A 300 per cent tax deduction will be offered on the first HKD2 million of eligible research expenditure, and 200 per cent for additional R&D costs.

NETHERLANDS: Coalition government confirms dividend tax reform

The new four-party coalition government of the Netherlands has adopted the main measures of the previous caretaker government’s 2018 budget. The 15 per cent dividend tax will be abolished for all countries with a tax treaty, though non-residents in low-tax jurisdictions will still be subject to withholding taxes on royalty and interest payments. Corporation tax rates will be cut, but deductibility of interest payments on corporate debt will be restricted.

Sources: STEP | IFC Review

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