- Europe & Africa Newsletter 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 June and 30 June. Belgium EU Greece Mauritius Poland Spain Uganda Botswana Finland Ireland Netherlands Romania Sweden United Kingdom Channel Islands Czech Republic France Kenya Nigeria Rwanda Switzerland Germany Luxembourg OECD South Africa Tanzania To contact the Group in Russia and the CIS go to the Contacts section. To register for the webcasts, click here. Tax area concerned Relevant date/case reference Description of measures and publication link (Considerations in italic where necessary) Belgium Administrative and case law Corporate income tax/ state aid Income tax June The European Commission announced its decision to open a formal state aid procedure regarding the Belgian excess profit tax ruling system. June The European Commission this week announced that it was referring Belgium to the Court of Justice of the European Union (CJEU) because of the Belgian tax law that uses different methods of assessing income from property. Botswana adopted and Tax compliance June The Botswana Unified Revenue Service (BURS) issued a notice announcing that it will no longer accept cheques for
purposes of tax payments (except for bank certified / guaranteed cheques). Tax payments other than by cash or bank certified / guaranteed cheques will have to be made via electronic transfers into the BURS account at the Bank of Botswana. Channel Islands FATCA 31 July The Jersey tax authorities announced that the FATCA adopted and reporting deadline may be extended to 31 July (from 30 June ) if a reasonable request is made for an extension. Czech Republic VAT 1 July Expansion of the reverse-charge mechanism, for VAT adopted and purposes, is effective for certain crops and cereal grains beginning 1 July. EU adopted and Customs June The European Commission announced that top-level customs officials of the European Union and Japan have signed an agreement to allow for the creation of an IT system that would support an automated data exchange between Japanese and EU customs authorities for the mutual recognition of Authorized Economic Operators. 30 June The European Commission announced that representatives of the EU and China signed a joint statement about final steps before mutual recognition of their respective trusted trader programs will enter into force and be effective, scheduled for November. Proposed Antiavoidance 17 June The European Commission presented an action plan that would reform corporate taxation in the EU, and that would set forth a series of initiatives to address tax avoidance, secure sustainable revenues, and strengthen the EU single market for businesses.
Finland Proposed Various tax May Finland s government announced its tax policy. Among the areas tax policy measures, the government stated that: there would be no increase to the general level of taxation taxation in Finland is to be based on a broad tax base and low tax rates. Some specific measures would allow limited liability companies to offset losses of one income source against profits of another source of income. Administrative WHT June Finland s Supreme Administrative Court held that the and case law principle of free movement of capital, under EU law, precludes a levy of withholding tax on dividends paid to taxpayers established in a non-eu Member State, if such dividends would be tax-exempt in a corresponding domestic situation. Accordingly, investment funds and publicly listed limited liability companies established in a non-eu Member State would be exempted from withholding tax on Finnish-source dividends. France adopted and FATCA 20 July The reporting deadline for French financial institutions under the FATCA regime has been extended to 20 July (from the original due date of 15 July ). Administrative and case law Corporate income tax June The Advocate General of the CJEU concluded that French rules that allow a French parent company a full exemption in respect of dividends received from domestic subsidiaries under a group taxation regime, but effectively tax 5 percent of dividends received from shareholdings in EU subsidiaries, are in breach of the freedom of establishment. Case: Groupe Steria (C-386/14). Treaties Double tax treaties 31 March Representatives of the governments of France and Germany signed a Protocol to amend the existing treaty (1959) on income tax and wealth tax. The Protocol is expected to enter into force as early as 2016, assuming its timely ratification by both the French and German parliaments. Germany
adopted and Inventory valuation VAT June Germany s Ministry of Finance issued guidance on the application of the last-in first-out (LIFO) method. June KPMG in Germany has prepared an of recent VAT developments in the EU and in Germany. Among the topics discussed are the following items: European digital single market strategy relevant supply relationship within the scope of a business transfer input tax deduction from the invoice of an insolvency administrator place of supply for trade fairs, exhibitions, and congresses. Administrative Excise duties 4 June The CJEU issued a judgment finding that EU law does not and case law preclude an excise duty such as the one that Germany imposes on nuclear fuel. The case is: Kernkraftwerke Lippe-Ems GmbH v. Hauptzollamt Osnabrück, C- 5/14. Greece Proposed Anti- May The Greek Minister of Finance submitted for public avoidance/ consultation a project of law to establish a voluntary Tax disclosure program for capital, investments, and tax compliance compliance. Under the proposal, a special procedure would enable Greek taxpayers to disclose any increase in their assets (i.e. bank deposits in Greece) by paying tax at a rate of 30 percent, provided the disclosure is made on or before 31 July. Ireland adopted and FATCA 31 July Irish Revenue Commissioners announced that the FATCA reporting deadline has been extended to 31 July (from 30 June ) for Irish reporting financial institutions to file a FATCA return with respect to 2014. Kenya Proposed Various tax areas June Proposals affecting corporate and individual (personal) income tax as well as indirect taxes are included in the
budget in Kenya. Luxembourg FATCA 31 July Luxembourg tax authorities have confirmed that the adopted and deadline for FATCA reporting with respect to financial accounts as of 31 December 2014 has been extended to 31 July (instead of 30 June ). Mauritius Treaties Exchange of information June The Organisation for Economic Co-operation and Development (OECD) announced that Mauritius has signed a convention providing for the comprehensive multilateral exchange of information and assistance in tax collection matters. Double tax treaties 1 January 2016 A new income tax treaty between Mauritius and South Africa (signed in May 2013) has been ratified by the Mauritius government. Provisions under the new income tax treaty will be effective beginning 1 January 2016. Netherlands and legislative FATCA June Guidance concerning FATCA, issued in January by the Dutch Ministry of Finance, was only officially available in Dutch. An official English version of is now available. Administrative and case law CIT 9 June The CJEU issued a judgment finding that the Swedish tax rules that deny a deduction for a currency loss on shares in a foreign company are not contrary to EU law. The CJEU s decision was primarily based on the fact that a similar loss could arise on shares in a Swedish company and this would also be non-deductible. A KPMG member firm in the Netherlands issued a report detailing the Dutch implications. Salary taxes May Because of a change in approach of the Dutch immigration services, the calculation of the fixed salary components of highly skilled migrant workers excludes a vacation allowance and the 13 month s salary payment.
WHT 25 June The Advocate General of CJEU issued an opinion in three joined cases, and concluded that withholding tax imposed on a non-resident may not exceed the individual income tax burden of a resident taxpayer. The three joined cases are: Miljoen (C-10/14), X (14/14) and Société Générale (C-17/14). Nigeria and legislative Tax incentives June An published by Nigeria s Federal Ministry of Industry, Trade and Investment lists 44 industries and products that are approved for incentive grants under the pioneer program. OECD Treaties KPMG publications Exchange of information BEPS June Representatives of the governments of Australia, Canada, Chile, Costa Rica, India, Indonesia and New Zealand have signed a multilateral agreement for the automatic exchange of information. June KPMG member firm in the Netherlands summarized the status of the OECD action plan on BEPS as of June. Poland and legislative VAT 1 July Changes to the VAT law in Poland, effective 1 July, include among others the following provisions: there are new additional requirements to meet, in order to apply the reverse- charge mechanism for the supply of goods bad debt relief may be available for affiliated parties. Romania and legislative FATCA 28 May An intergovernmental agreement signed 28 May between Romania and the United States follows the Model 1 IGA, and involves a reciprocal automatic exchange of information between the tax authorities of the
two countries. Rwanda Proposed WHT June Proposals in the budget in Rwanda are intended to encourage investment. For instance, interest on savings deposits would be exempt from withholding tax, and the withholding tax rate on dividends would be set at 15 percent. Among the other tax proposals, cooperatives would pay corporate income tax, and the government has proposed that the rate of capital gains on shares would be set at 5 percent of the net gain. South Africa FATCA June The South African Revenue Service has issued a general and legislative guide for South African financial institutions to follow with respect to implementation of the FATCA regime and the intergovernmental agreement between South Africa and the United States. Spain Tax June The Spanish tax authorities issued draft guidance for and legislative compliance common reporting standard purposes. Sweden Administrative and case law Corporate income tax 10 June The CJEU issued a judgment finding that the Swedish tax rules that deny a deduction for a currency loss on shares in a foreign company are not contrary to EU law. VAT June Sweden s Supreme Administrative Court held that the supply of internally produced services provided by a foreign head office to its Swedish branch, that is also a member of a VAT group, is subject to VAT and that the VAT group is liable for the amount of VAT payable.
Switzerland Proposed Corporate 5 June Swiss Federal Council adopted a dispatch for proposed income tax corporate tax reform. The following tax policy measures are proposed: repeal of the cantonal tax status for holding, domicile, and mixed companies as well as of the principal company taxation and the finance branch regime introduce a patent box for cantonal taxes provide an option for the cantons of envisaging increased deductions for research and development expenditure provide an option for the cantons to introduce targeted capital tax reductions allow measures such as uniform rules for the disclosure of hidden reserves (step-up); repeal of the issue tax on equity capital; increase the tax base on dividends from major participations. Other Corporate 8 June KPMG in Switzerland held a webcast on the proposed income tax corporate tax reform, explaining in detail the proposed measures and their implications. Tanzania Proposed Individual income tax/ VAT June The government has proposed to reduce the rate of individual income tax and to provide exemptions from VAT for certain items as part of Tanzania s budget. Uganda Proposed Various tax areas June Among the tax proposals in the budget in Uganda are measures that would provide relief from VAT for the petroleum and mining sectors with respect to the purchase of goods and services. Other measures would expand the definition of permanent establishment and adjust the thin capitalization rules. UK Proposed Various tax areas 27 May The Queen gave her speech to Parliament setting out the Conservatives legislative plans for the upcoming year. Key highlights of the speech from a tax perspective
include: tax lock commitment until 2020; personal tax allowance; Scotland; enterprise bill. June no plans to reduce the rate of corporation tax below 20 percent clear rejection of the EU proposals for a Common Consolidated Corporate Tax Base continued commitment to the OECD BEPS project promise to reform the way businesses pay their tax. Administrative VAT 4 June The CJEU issued a judgment, finding that the United and case law Kingdom cannot apply, with respect to all housing, a reduced rate of VAT to the supply and installation of energy-saving materials because that rate is reserved solely to transactions relating to social housing. The case is: Commission v. United Kingdom, C-161/14. KPMG publications Accounting for June KPMG prepared an article which summarizes certain the UK diverted profits tax highlights of the new diverted profits tax regime in the UK relevant to accounting for income taxes. Other Various tax areas June The UK Office of Tax Simplification has issued a report examining the complexity of the UK tax system, and providing an approach for avoiding complexity, including: proper consideration of the administrative implications of new measures evaluation as to whether the benefits of a change outweigh the inevitable disruption provisions for post-implementation to determine continued relevance. For a full summary of global tax developments, visit kpmg.com/taxnewsflash. Contacts in Russia and the CIS Anna Voronkova Partner, Head of +7 (495) 937 44 24 Alexander Tokarev Senior Manager, +7 (495) 937 44 77 Evgenia Wolfus Partner, +7 (495) 937 44 19 Olga Ermolaeva Senior Manager, +7 (495) 937 44 77
Elena Dolgova Senior Manager, +7 (495) 937 44 77 Yuriy Kulikov Manager, +7 (495) 937 44 77 Rezida Valitova Manager, +7 (495) 937 44 77 Privacy Legal KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks of KPMG International. Designed by Evalueserve. Publication Number: 132606A-G