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Tuesday, 15 September 2020 08:17

PRISM Tax Newsletter- 2nd Quarter 2020 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.

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Cyprus ratifies the Base Erosion and Multilateral Instrument
On 22 January 2020, the Instrument of Ratification of the Multilateral Convention to Implement (MLI) Tax Treaty Related Matters to Prevent Base Erosion and Profit Shifting were published in the Official Gazette of the Republic of Cyprus. This Convention aims to update existing Double Tax Treaties (DTT) and ensure uniformity and coherence as per OECD/G20 Base Erosion and Profit Shifting (BEPS) project.


Measures issued by the Italian Government to support the employment and the economy in Italy after Covid – 19 outbreak.
After the Covid-19 outbreak, the Italian government promptly approved the Law Decree no.18 of 17th March 2020 to support the employment and the economy. The law contains a cluster of measures to contrast the emergency of COVID-19. This article resumes a number of measures about employment, in particular, we focus on the following three sections:
1.Social Safety Net (art.19-22 of the Law Decree).
(i) Standard Layoff Fund,
(ii) Special Layoff Fund and
(iii) Wage Integration Fund
2.Allowances, leave and permits for certain categories of workers (art. 23 of the Law Decree)
3.Other provisions of interest to companies.


Prihatin Rakyat (People Concerned) Economic Stimulus Package (PRIHATIN).
On 27 March 2020, Malaysia’s Prime Minister YAB Tan Sri Dato’ Haji Muhyiddin Bin Haji Mohd Yassin announced a comprehensive economic stimulus package known as Prihatin Rakyat (People Concerned) Economic Stimulus Package or PRIHATIN, valued at RM250 billion.
It aims at assisting businesses and people in times of serious Covid-19 outbreak.


Tax Amendments made by Nepal Budget 2077 (2020 AD)
This article is a summary of the tax amendments made by Nepal Budget 2077 (2020 AD), including:
1. Tax Rebates (Applicable from 2076/77 (2019))
2. Major Amnesty announced in Finance Bill 2077 (2020)
3. Changes in Income Tax Rate of Co-Operative Entity:
4. Amendments in provisions related to Tax Deducted at Source (TDS)
5. Other Major Amendments in Income Tax [Effective from Shrawan 1, 2077 (16 July 2020)]
6. Other Amendments in VAT Act, 2052 (1995 AD)

Hong Kong

Passage of Inland Revenue (Amendment) (Profits Tax Concessions for Insurance-related Businesses) Bill 2019 by Legislative Council
The Inland Revenue (Amendment) (Profits Tax Concessions for Insurance-related Businesses) Bill 2019 has been passed by the Legislative Council in Hong Kong on 15 July 2020


Introduction of Economic Substance Regulations (ESR) in UAE
UAE introduced ESR to honor the UAE’s commitment as a member of the OECD Inclusive Framework on BEPS. The regulation applies in respect to financial years commencing on or after 1 January 2019.
Any Licensee who is undertaking any Relevant Activity (Banking, Insurance, Investment Fund Management, Lease Finance, Headquarters, Shipping, Holding Company, Intellectual Property, Distribution and Service Centre Business) is required to file a notification and a report as per the deadlines set by the Ministry of Finance. Hence this regulation covers all kind of entities including free zone, offshore and mainland which are carrying out any relevant activity.


Off-payroll (IR35) Responsibilities on End Clients and Agencies
The introduction of the off-payroll working rules to the private sector is considered one of the most significant changes to how both contractors and the clients/agencies that engage them interact and will have a considerable impact on UK businesses. These rules are an extension to the offpayroll working rules brought in for the public sector in April 2017 which replaced the original anti-avoidance legislation commonly known as IR35.
The new rules, coming into force from April 2020 affect medium/large UK companies and passes the responsibility of both determining the employment status of “contractors” and taxing of payments under the contract to either the company receiving the service or, where the entity paying the fee is different, the agency paying the fee.