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International Tax Newsletter - Europe & African region

Europe & African region

International Tax Newsletter

International Tax Europe and Africa December 2018 - January 2019

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.

Austria Gibraltar Netherlands South Africa
Bulgaria Greece Nigeria Spain
Czech Republic Italy OECD Sweden
European Union Luxembourg Poland United Kingdom
France Malta Serbia  

 

For a full summary of global tax developments, visit home.kpmg/taxnewsflash.

To contact the International Tax Team email internationaltax@kpmg.com.

To register for the International Tax webcasts, click here.

International Tax Newsletter - Europe & African region

Austria

  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.

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Bulgaria

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.

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Czech Republic

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%.

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European Union

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.

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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.

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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.

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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.

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France

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.

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Gibraltar

Tax legislation approved and regulatory update ATAD 20 December 2018

The EU Anti-tax Avoidance Directive was transposed into Gibraltar’s domestic tax provisions.

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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.

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Greece

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.

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Italy

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:

  • extension of the “hyper” or bonus depreciation allowed certain tangible and intangible assets
  • amendments to the research and development tax credit
  • repeal of the notional interest deduction
  • lower corporate income tax rate for profits reinvested in the acquisition of income-producing assets and/or in job creation.

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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.

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Luxembourg

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.

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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.

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Malta

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.

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Netherlands

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.”

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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.

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Nigeria

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.

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Treaties  Double tax treaty December 2018

An income tax treaty between Nigeria and Singapore is pending ratification in Nigeria.

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OECD

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:

  • corporate tax revenues
  • corporate income tax rates
  • corporate effective tax rates
  • tax incentives related to innovation.

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Poland

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.

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Tax legislation approved and regulatory update VAT January 2019

In Poland, certain VAT amendments were effective beginning in 2019.

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Serbia

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:
  • new rules on tax depreciation and amortization
  • repeal of the limits on advertising and promotional expenses
  • a “double deduction” for qualifying research and development expenses. 

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South Africa

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.

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Spain

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.

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Sweden

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.

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United Kingdom

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.

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Proposed legislation  Brexit December 2018

HMRC published various guidelines and recommendations to help businesses prepare for a ‘no deal’ Brexit.

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Proposed legislation Corporate income tax January 2019

Companies using brought forward tax losses need to fulfil new administrative requirements.

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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.

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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.

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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.

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