Wednesday, 07 March 2018 15:33

PRISM Tax Newsletter- 1st Quarter 2018 issue

 

The latest issues of PRISM – the quarterly tax newsletter, which is part of Reanda’s effort to stay in touch with our clients by sharing updates and insights on the recent taxation changes and current hot topics. Read the publication online.

Highlights

Australia

Non-Compliance with Laws and Regulations (NOCLAR)
What is NOCLAR?
• What does NOCLAR mean?
• How do professional accountants apply NOCLAR standards?
• What is expected from professional accountants?
• How does NOCLAR reconcile with professional confidentiality?
• What actions are expected from the relevant Governments in the implementation of NOCLAR?
• What actually changed in the ethical Code to allow for NOCLAR?
• How does NOCLAR affect your local professional standards?

China

Distributed profits generated from resident enterprises of China and directly invested in encouraged investment projects by foreign investors after 1st January 2017 are temporarily exempted from withholding tax.
The Chinese government has successively issued documents to clarify that distributed profits generated from resident enterprises of China and directly invested in encouraged investment projects by foreign investors after 1st January 2017 are temporarily exempted from withholding tax, for the sake of further utilizing foreign capital actively, promoting foreign capital growth, increasing foreign capital quality and encouraging sustaining expansion of foreign investment in China.

Germany

Changes and additions of the German regulations regarding the documentation of Profit Allocations
The German legislature expanded the cooperation duties for all participants in the tax process. Therefore the German tax authority published updated Regulations Regarding the Documentation of Profit Allocations (short: GAufzV) for international and related companies. The Documentation has to be split into a country-specific local file about the company-individual price calculations and a master file with detailed information about the whole group. For small Groups and companies some exceptions are made. The necessary records should be done completely and in a timely manner. Otherwise the tax authority is allowed to estimate the taxable profit.

Cyprus

Cyprus signs off a Double Taxation Avoidance Agreement (DTAA) with Saudi Arabia–January 2018
Cyprus and Saudi Arabia have concluded and signed a Double Taxation Avoidance Agreement (DTTA). The treaty will be confirmed and finalized within 2018 and will be effective from the 1st of January 2019.

Hong Kong

The new two-tier profits tax rates regime
Hong Kong is proposing to adopt a competitive two-tier profits tax rates system to promote economic development while maintaining a simple tax regime and low tax rates.

Nepal

‘Permanent Establishment’ – Nepalese Aspect
Section 2(ka daa) of Income Tax Act, 2002 of Nepal defines “Permanent Establishment” as follows -
“Permanent Establishment (PE)” means a place where a person wholly or partly carries on a business, and includes the following places;
1) A place where a person wholly or partly carries on a business through an agent, other than a general agent of independent status acting in the ordinary course of business as such,
2) A place where a person has, is using, or is installing substantial equipment or substantial machinery,
3) One or more places within a country where a person furnishes (whether through employees or otherwise) related services (including technical, professional, or consultancy services) for a period or periods aggregating more than 90 days within any 12 months’ period, or
4) A place where a person is engaged in a construction, assembly, or installation project for 90 days or more, including a place where a person is conducting supervisory activities in relation to such a project.


Italy

2018 Italy Budget Law
Italy 2018 Budget law is published in Official Gazette on the 29th of December 2017. The most relevant tax measures contained in the Law related to:
• Super-amortization and hyper-amortization: it is directed to entities investing in new assets or new hi-tech tangible assets or certain intangible assets. The benefit consists an extra deductible cost of 30%, 40% or 150% on the amount of investments producing a deductible extra amortization.
• New definition of Permanent Establishment (P.E.): it is introduced according to OECD BEPS Action 7. The new provision implies the possibility of having a PE presence in Italy even where a company does not have a physical presence into the Italian territory.
• Web Tax: lt is a new Tax on digital transactions.
• Tax regime of certain capital income: income arising from disposal of qualifying participations such as dividend and capital gain were issued to individuals.
• Dividend and income arising from participations in companies resident in the so called “tax haven countries”: tax regime for dividend received from companies resident in low tax jurisdictions.