Sunday, 20 January 2019 18:19

PRISM Tax Newsletter- 3rd Quarter 2018 issue

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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

Highlights

Australia
What is a Trust and how does it help as a structure for your business? Part II

Part Two in this PRISM publication is a continuation of Part One article on “What is a Trust and how does it help as a structure for your business?” Part Two will cover these topics:-

4. How trusts differ from other business structures?

5. Why use a trust?

6. How does a trust end?

7. What taxation implications or advantages arise from the use of a trust structure?
In this PRISM article, we will briefly touch on “Anstalt” (establishment of representatives) or “Stiftung” (a foundation) that operate in most of those German speaking countries.

Cyprus
Cyprus signs off a new Double Taxation Avoidance Agreement (DTAA) with the United Kingdom (UK) – March 2018

Cyprus and UK have signed a new Double Taxation Avoidance Agreement (DTTA) on 22 March 2018 that will replace the existing treaty that was effective since 1975. The treaty is expected to enter into force in 2019, once both Cyprus and the UK exchange notifications that their formal ratification procedures have been completed.

Malaysia
Reintroduction of Sales and Services Tax (SST) to Replace Goods and Services Tax (GST)

On 9 May 2018, the 14th Malaysian general election was held to elect members of Parliament of Malaysia. A new government was formed and our new Prime Minister, Tun Dr. Mahathir bin Mohamad announced that the Sales and Services Tax (SST) would be re-introduced to replace Goods and Services Tax (GST)
The GST rate of 6% was reduced to 0% effective from 1 June 2018 and the SST is likely to be implemented effective 1 September 2018. Hence, Malaysian are enjoying “GST tax holiday” for three months from 1 June 2018 to 31 August 2018.
On 16 July 2018, our Minister of Finance, Mr. Lim Guan Eng announced that the SST rate will be levied at 10% for sales and 6% for services. The Bill on the SST was tabled to the Parliament on August 2018 for 1st reading.

UAE
Smooth and envisioned journey of VAT in UAE

After Excise tax, VAT is another addition to the indirect taxation in UAE which came into effect from 1st January 2018 and thanks to the Federal Tax Authority who have successfully implemented and regulated in the short stint of 6 months. It is known fact that untiring efforts were well recognized and appreciated by global media and business community inspite of moderate challenges which have been gradually mitigated. FTA has been proactive in understanding and analyzing the impact of VAT on certain industries and issuing timely guidelines to help businesses and professional advisors.

China
China has adjusted the VAT rate comprehensively

Liu Kun, Minister of finance, announced on March 25th that the Ministry of finance will continue to adjust the tax rate of VAT this year and proceed in the direction of the third ladder of applicable tax rates to the second ladder of applicable tax rates. In addition, it will focus on reducing the tax rates in industries such as manufacturing, transportation and other industries. These measures will further stimulate market players vitality and promote the development of the real economy. On March 28th, Premier Li Keqiang chaired a State Council executive meeting to determine measures to deepen the reform of value-added tax and further lighten the main tax burden of the market.

Hong Kong
Transfer pricing law has come to Hong Kong

In order to adopt the OECD'S recommended transfer pricing framework for implementing Base Erosion and Profit Shifting Action Plans and to significantly empower the Hong Kong tax authority to combat transfer pricing avoidance, Hong Kong passed the long awaited relevant tax law in July 2018.

Portugal
“2018, Day one of Transfer Pricing in Mozambique”

The Cabinet of Ministers approved the transfer pricing rules. The scope includes IRPC (imposto sobre o rendimento de pessoas colectivas) and IRPS (imposto sobre o rendimento de pessoas singulares) Tax payer, resident or domiciled in Mozambique, who carry out transactions with related entities (resident or not, in Mozambican territory). Tax payer, who in the previous year have achieved an annual net profit and other incomes of 2,500,000 MT (around 42,500USD) or more are obligated to prepare their transfer pricing documentation.

Turkey
Current Tax Issues in Turkey

In the pass few months some, Turkish has introduced some significant amendments to its tax legislation. The main purposes of the amendments are to reduce the budget deficit of the Authority that increased in the previous years and to continue to encourage the investments in Turkey. Some of the most significant changes are:

Corporate Income Tax:
• Tax Rate
• Investment Incentives

Additional 5% deduction opportunity
Limitations over Foreign Currency Based Loans
Value Added Tax (VAT)

• VAT on internet sales
• VAT refund
• VAT consolidation opportunity