This e-newsletter gives you an overview of international tax developments being reported globally by KPMG member firms in the Europe and Africa Regions between 1 December 2018 and 15 January 2019.
|European Union||Luxembourg||Poland||United Kingdom|
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|Tax area concerned||Relevant date||Description of measures and publication link|
|Proposed legislation||CFC||December 2018||
A draft regulation regarding controlled foreign corporation taxation has been issued.
|Tax legislation approved and regulatory update||CFC / Corporate income tax||December 2018||
Legislative changes in Bulgaria include measures that reflect the implementation of EU rules addressing tax avoidance.
|Proposed legislation||VAT||December 2018||
Changes to VAT law proposed for 2019 include a proposed reduction to the standard VAT rate, with the reduction to 20% (or possibly 19%), and the “reduced VAT rate” being 10%.
|Proposed legislation||Digital economy||4 December 2018||
ECOFIN held an exchange of views on the digital services tax, but failed to reach an agreement on a compromise text.
|Administrative and case law||State aid||9 January 2019||
The European Commission reported it has opened an in-depth investigation to examine whether tax rulings granted by the Netherlands to a multinational corporation provide “an unfair advantage over its competitors” in breach of EU state aid rules.
|Other||EU Mandatory Disclosure Requirements||December 2018||
The EU Tax Centre summarizes the implementation of the new mandatory disclosure rules into Member States’ domestic legislation to date and what can be expected from the European Commission going forward.
|Other||Tax avoidance||January 2019||
The European Commission issued a reminder that new rules to eliminate the most common corporate tax avoidance practices were effective 1 January 2019.
|Tax legislation approved and regulatory update||CFC / Tax avoidance||October 2018||
A new anti-fraud law introduces changes with respect to a range of tax topics—including an updated list of non-cooperative jurisdictions and a broadening of the French controlled foreign corporation rules.
|Tax legislation approved and regulatory update||ATAD||20 December 2018||
The EU Anti-tax Avoidance Directive was transposed into Gibraltar’s domestic tax provisions.
|Administrative and case law||Corporate income tax / State aid||19 December 2018||
The European Commission announced its final decision on the state aid investigations into Gibraltar’s corporate tax regime.
|Tax legislation approved and regulatory update||Corporate income tax rate||January 2019||
The corporate income tax rate for most corporations (except for credit institutions) will be reduced under a phased-in schedule: 28% for 2019; 27% for 2020; 26% for 2021; 25% for 2022 and later tax years.
|Tax legislation approved and regulatory update||Corporate income tax / R&D||1 January 2019||
Changes to Italy’s corporate income tax and regional tax were enacted on 30 December 2018. These include:
|Proposed legislation||Digital economy||January 2019||
The Budget Law 2019 includes a “web tax”. Specifically, the new “web tax” will apply at a rate of 3% on revenue generated from certain digital services when provided under business-to-business or business-to-consumer transactions.
|Administrative and case law||Withholding tax||December 2018||
Luxembourg’s high court issued a decision that rejects what had been the administrative practice concerning the limitation period allowed for filing refund claims with respect to tax withheld on dividend payments.
|Other||ATAD 1||December 2018||
KPMG in Luxembourg prepared a summary on recent updates related to ATAD 1, interest limitation, MLI and France tax treaty.
|Tax legislation approved and regulatory update||ATAD||January 2019||
EU Anti-Tax Avoidance Directive was transposed into Maltese law. This includes measures in relation to interest limitation, exit taxation, GAAR and controlled foreign company rules.
|Tax legislation approved and regulatory update||Immigration||January 2019||
The Dutch government has decided that UK citizens and their family members who lawfully reside in the Netherlands before “Brexit” will retain their right of residence in the event of a Brexit “no deal.”
|Administrative and case law||Corporate income tax||December 2018||
For Dutch corporate income tax purposes, costs related to the acquisition or disposal of shares that are covered by the participation exemption are non-deductible.
|Administrative and case law||Regulatory audits||December 2018||
The Nigerian Content Development and Monitoring Board is set to begin what is being described as an extensive assessment of all companies operating in the oil and gas industry regarding their compliance with the Nigerian Oil and Gas Industry Content Development Act on expatriate quota utilization and succession plan implementation.
|Treaties||Double tax treaty||December 2018||
An income tax treaty between Nigeria and Singapore is pending ratification in Nigeria.
|Publications||Corporate Tax Statistics||14 January 2019||
The OECD issued a report providing internationally comparable statistics and analysis from approximately 100 countries on four main categories of data:
|Tax legislation approved and regulatory update||Corporate income tax / Withholding tax||January 2019||
A decree limits application of Article 26(2e) of Poland’s corporate income tax law and temporarily postpones or limits withholding tax rules, depending on the type of payment.
|Tax legislation approved and regulatory update||VAT||January 2019||
In Poland, certain VAT amendments were effective beginning in 2019.
|Tax legislation approved and regulatory update||Corporate income tax||January 2019||New legislation in Serbia generally is
effective for tax years beginning in 2019. Changes include:
|Tax legislation approved and regulatory update||Royalty tax / Mining||December 2018||
The South African Revenue Services is introducing a new system for the royalty tax.
|Tax legislation approved and regulatory update||Tax compliance||1 January 2019||
Individuals and entities that provide tourism-related “intermediation services” to connect lessors and lessees (e.g., internet platforms) for holiday property rentals will be required to report the use of property for tourism purposes on a quarterly basis.
|Administrative and case law||Corporate income tax / Loss deductibility||10 January 2019||
Advocate General Kokott of CJEU rendered Opinions in the Memira (C-607/17) and in the Holmen (C-608/17) cases. Both cases concerned the compatibility with EU law of the Swedish rules on the deductibility of losses from foreign subsidiaries, and the extent to which the ‘Marks & Spencer exception’ applies, i.e. losses are considered final.
|Tax legislation approved and regulatory update||Entrepreneurs relief||January 2019||
Shareholders who do not meet the new profits and assets tests may now still qualify for Entrepreneurs’ Relief.
|Proposed legislation||Brexit||December 2018||
HMRC published various guidelines and recommendations to help businesses prepare for a ‘no deal’ Brexit.
|Proposed legislation||Corporate income tax||January 2019||
Companies using brought forward tax losses need to fulfil new administrative requirements.
|Proposed legislation||Finance Bill||January 2019||
The Finance Bill completed its passage through the House of Commons with the conclusion of the report stage and third reading on 8 January 2019.
|Administrative and case law||Digital economy||January 2019||
Taxpayers qualifying for the six month deferral for Making Tax Digital should have received confirmation from HMRC.
|Administrative and case law||Functional currency||January 2019||
The Ball UK Holdings Ltd v The Commissioners for HM Revenue and Customs decision of the Upper Tribunal.