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International Tax Newsletter - Europe & African region

Europe & African region International Tax Newsletter

International Tax Europe and Africa September 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 September and 30 September 2019.

Austria
France
Luxembourg
Serbia
Belgium
Germany
Mauritius
South Africa
Cyprus
Hungary
Netherlands
Sweden
Czech Republic
Ireland
Nigeria
Switzerland
European Union
Italy Poland
United Kingdom

 

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International Tax Newsletter - Europe & African region

Austria

Tax legislation approved and regulatory update Various tax area
September 2019

PMG in Austria has prepared a report providing brief summaries of tax developments for August and September 2019.

Belgium

Tax legislation approved and regulatory update  Corporate income tax / Tax rulings
31 January 2020

The ruling commission has communicated that pre-filing requests or ruling requests regarding transfer pricing or the innovation income deduction concerning the corporate tax return that will be filed by the end of September 2020 must be introduced on or before 31 January 2020.

Tax legislation approved and regulatory update
Earnings stripping regime
12 September 2019

The tax authorities released a circular letter that addresses the “grandfather rule” for certain loans under the new earnings stripping regime.

Administrative and case law Excess profit tax / Tax rulings 16 September 2019

The European Commission announced the opening of “separate” in-depth investigations of whether Belgium’s “excess profit” tax rulings granted to 39 multinational companies were in breach of the EU state aid rules.

Other Notional interest 13 September 2019

The notional interest deduction rate for assessment year 2021 is expected to be 0% for large companies.

Cyprus

Tax legislation approved and regulatory update ATAD
20 September 2019

Under the EU Anti-Tax Avoidance Directive as transposed in Cypriot income tax law, certain “excessive” borrowing costs are deductible in the tax period in which they are incurred but only up to 30% of the taxpayer’s earnings before interest, tax, depreciation and amortisation, as adjusted.

Czech Republic

Proposed legislation  Digital services tax
12 September 2019

The Ministry of Finance has prepared a digital service tax bill — one proposing a tax rate of 7 percent on selected digital services.

Proposed legislation VAT 12 September 2019

The Ministry of Finance is taking steps to address the VAT rules and to respond to a judgment of the Court of Justice of the European Union (CJEU).

European Union

Tax legislation approved and regulatory update
CJEU
September 2019

The EU Tax Centre prepared a summary of EU tax developments that can have both a domestic and a cross-border impact.

Other
VAT
11 September 2019

According to a release from the European Commission, the statistics for the “VAT mini one stop shop” for the period from 2015 to 2018 show “a clear positive result in terms of VAT collection for all EU countries.”

France

Proposed legislation
Tax legislation approved and regulatory update 4 September 2019

The European Commission is holding an open public consultation concerning its evaluation of tax breaks for rum produced in French overseas territories which intended to explore ways to update the tax regime supporting rum producers.

Proposed legislation Tax compliance / E-invoicing 27 September 2019

The French finance bill project reflects the French government’s intention to make electronic invoices in business-to-business (B2B) relationships mandatory, effective January 2023.

Germany

Tax legislation approved and regulatory update VAT
1 January 2020

The German federal cabinet at the end of July 2019 approved the government’s draft bill that would implement EU “quick fixes” for the VAT treatment of chain transactions in the European Union, among other measures.

Administrative and case law  Various tax developments 9 September 2019

The KPMG member firm in Germany has prepared a report that includes various tax developments.

Hungary

Tax legislation approved and regulatory update  Tax compliance
1 April 2020

A new requirement for “real-time” invoice data reporting will be effective beginning 1 April 2020.

Ireland

Tax legislation approved and regulatory update
Individual income tax
September 2019

Certain payments made to individuals on retirement or redundancy may be entitled to beneficial tax treatment.

Administrative and case law Withholding tax 20 September 2019

A decision from the UK Upper Tribunal in August 2019 may have implications with respect to Irish withholding tax on “trailing commissions”—for instance, payments made as “loyalty bonuses” and rebates of management fees—that are deemed to be “annual payments.”

Other Brexit 31 October 2019

While the UK’s currently scheduled departure date from the European Union is 31 October 2019, it is impossible to predict with any reasonable certainty what outcome will eventually emerge. The possibilities range from “a deal” to an “extended Article 50” agreement to a “no deal” Brexit.

Italy

Administrative and case law
Withholding tax   13 September 2019

Italy’s tax authorities issued a tax ruling in response to an application submitted by a Swiss bank concerning the tax treatment of interest payments made to the bank by Italian individuals.

Luxembourg

Treaties
Double tax treaties
September 2019

The Protocol to amend the income tax treaty between Luxembourg and the United States has been ratified.

Mauritius

Tax legislation approved and regulatory update Finance act     September 2019
Clarifications to tax measures included in the Finance Act 2019 were released on 20 August 2019. They include clarifications to:
  • eligibility for 80% participation exemption
  • controlled foreign company (CFC) rules
  • freeport operator or developer
  • substance requirements. 

Netherlands

Tax legislation approved and regulatory update
Tonnage tax regime
31 December 2028

The European Commission approved, under EU state aid rules, the extension and expansion of three amendments to the Dutch tonnage tax regime until 31 December 2028.

Proposed legislation Tax Plan 17 September 2019

The government presented the “2020 Tax Plan” to the Lower House. The proposed tax measures generally focus on lowering labour costs, addressing tax avoidance and tax evasion, providing an attractive business climate for economic activities of substance.

Proposed legislation Individual income tax 1 January 2022

Taxpayers with savings only would, in effect, no longer pay tax on their savings on amounts up to a threshold of approximately €440,000.

Administrative and case law Withholding Tax 5 September 2019

Advocate General of the CJEU rendered his opinion in a case concerning the compatibility with EU law of the Dutch withholding tax on dividends distributed to non-resident investment funds. The case is: Köln-Aktienfonds Deka.

Nigeria

Tax legislation approved and regulatory update
Social insurance funds
25 September 2019

A committee of the House of Representatives has launched an investigation about compliance with the rules requiring contributions to the Nigerian Social Insurance Fund.

Tax legislation approved and regulatory update Tax compliance / Tax administration September 2019

The Lagos State tax authority announced this week the launch of its enterprise tax administration system (eTax).

Proposed legislation VAT 11 September 2019

The Federal Executive Council approved an increase in the VAT rate from 5 percent to 7.2 percent.

Poland

Tax legislation approved and regulatory update Corporate income tax / ATAD 1 January 2020

Changes to Poland’s corporate income tax intended to counteract tax optimization using hybrid structures will be effective beginning 1 January 2020.

Tax legislation approved and regulatory update VAT 1 November 2019

Poland’s VAT law, as amended, provides the requirement to use the split-payment mechanism for selected transactions.

Serbia

Tax legislation approved and regulatory update  Withholding tax
September 2019

The tax authorities have revised their position concerning the withholding tax treatment with respect to interest-rate swaps.

South Africa

Tax legislation approved and regulatory update VAT
20 September 2019

Tax compliance services provided to employees—at the cost of the employer—will be subject to VAT by the employer if supplied to the employees in the course of business.

Tax legislation approved and regulatory update
Tax clearance certificate
25 October 2019

The South African Revenue Service announced it will no longer be issuing printed tax clearance certificates replacing it with an electronic tax compliance status system.

Proposed legislation Special economic zones 10 September 2019

The 2019 Draft Taxation Laws Amendment Bill includes proposed amendments concerning special economic zones.

Proposed legislation Tax incentives 27 September 2019

Pending legislative proposals would impose caps on the amounts of investments made by natural persons and corporations that would be eligible for certain tax incentives.

Sweden

Tax legislation approved and regulatory update Individual income tax
1 January 2021

The government announced its plans for an “economic employer” concept for taxing workers who work temporarily in Sweden.

Proposed legislation Budget 1 January 2020

The government submitted the 2020 budget bill that includes tax proposals and reflects certain reform initiatives.

Switzerland

Tax legislation approved and regulatory update Tax reform
1 September 2019

Zurich voters approved by a 55.95 percent majority a proposal adopted by the Zurich Cantonal Council for implementation of the tax reform plan in the canton of Zurich.

Tax legislation approved and regulatory update
Equal Pay
July 2020

The Swiss Parliament adopted an amendment to the “Equality Act” to add a new section related to equal pay requirements between female and male employees.

Administrative and case law VAT/ 1 January 2020

The Federal Supreme Court of Switzerland released a long-awaited, key decision on the VAT treatment of “intermediary services” by Swiss institutions, and confirmed that a direct proxy is no longer mandatory under the new Swiss VAT law.

Treaties Double tax treaties 20 September 2019

The Swiss government issued a release that representatives of Switzerland and the United States exchanged the instruments of ratification of the Protocol to amend the existing Switzerland-United States income tax treaty.

United Kingdom

Tax legislation approved and regulatory update
Hybrid mismatch rules
September 2019

There are new regulations in the UK concerning the hybrid mismatch rules and implications for certain capital instruments and regulatory capital securities.

Administrative and case law Off-payroll working rules
April 2019

HMRC published new and updated guidance to support implementation of the reformed “off-payroll working rules” from April 2020.

Other Annual corporation tax statistics
27 September 2019

HMRC published annual corporation tax statistics that show receipts and liabilities are increasing and highlight some trends.

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