Corporate Tax News is closing out 2022 with two lead articles from the Netherlands: a temporary windfall profits tax on companies in the gas, oil and coal sectors and an interesting Supreme Court decision on the static versus ambulatory approach to the interpretation of tax treaties.
The European Commission has launched a public consultation on its proposal for the introduction of a common set of rules for EU groups operating cross-border to calculate their taxable base, along with an agreement on a method for allocating profits between EU member states based on a formula. The CJEU has released two important decisions: one on the long-standing Fiat case involving potential state aid from Luxembourg and another on a German case involving the ability of a member state to disallow the deduction of final losses incurred by a foreign PE.
France’s finance bill 2023 includes the introduction of a windfall tax and the reintroduction of a generous tax credit for SMEs carrying out energy-efficient renovations of their buildings. Ireland’s finance bill contains measures that weren’t included in the budget announcements and omits some measures that were included. Both bills are expected to be enacted by year-end. Poland aims to finalize rules to implement DAC 7 (new EU tax transparency rules on digital platforms) into domestic law before the end of 2022 and a UK article, which looks at draft regulations that will bring data sharing into effect for the gig economy.
Turning to the Asia-Pacific, Cambodia has clarified the documentation needed to substantiate an arm’s length interest rate on related party loans and the rates to be used in such transactions. China has granted temporary enhanced benefits to encourage high-tech enterprises to engage in technological innovation and upgrade their equipment and allowing a higher deduction for R&D expenses. Further refinements are being made to Hong Kong’s proposed FSIE regime to address EU concerns. Interest income and capital gains derived by nonresidents from Korean government bonds and monetary stabilization bonds are exempt through the end of 2022. Malaysia’s budget confirms that the country will introduce the 15% global minimum tax under Pillar Two in 2024, as well as a qualified domestic minimum top-up tax.
And in Latin America, with Brazil’s presidential elections now concluded, we’ll have to wait to see how the new President will move his ambitious agenda for income tax and VAT reform forward.
Learn about these developments and more in Corporate Tax News. Be sure to check out the Corporate Tax Bytes column and the compilation of recent global tax alerts.
- IRELAND:
- EUROPEAN UNION:
- INTERNATIONAL: Corporate tax bytes
- ARGENTINA: Mandatory disclosure regime suspended until end of 2022
- AUSTRALIA: Budget 2022-23 includes measures affecting MNEs, including changes to the thin cap rules
- BRAZIL: Post-election tax reform: What can we expect?
- CAMBODIA: Guidance issued on related party loans
- CHINA: New temporary incentives to support scientific and technological innovation
- FRANCE: Corporate tax measures in 2023 draft finance bill
- GERMANY: CJEU rules in favour of Germany on PE final loss deduction
- HONG KONG: Bill on proposed FSIE regime to be further revised to address EU concerns
- KOREA: Tax exemption for interest and capital gains of nonresidents and key corporate measures for 2023
- LUXEMBOURG: CJEU rules no state aid in Fiat case
- MALAYSIA: One-time windfall tax to be levied on fossil fuel companies for 2022
- NETHERLANDS:
- POLAND: DAC 7 implementation rules being drafted
- SINGAPORE: Administrative concession for employer contributions to mandatory pension/provident funds to be withdrawn
- SOUTH AFRICA: Navigating the logistics of the corporate income tax rate reduction
- THAILAND: Enhanced focus on international business
- UNITED KINGDOM:
- UNITED STATES: What the new corporate AMT means for your business
Content adapted from BDO Global
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