BDO Corporate Tax News summarises recent tax developments of international interest across the world.
February is “budget month” for a number of countries. Italy’s 2023 budget contains several measures that will impact MNEs with Italian operations, including an extension of the capital gains tax rules to apply to both direct and indirect transfers of shareholdings in Italian companies. India’s budget for 2023-24 proposes to extend tax concessions for International Financial Services Centre units and start-ups and Singapore has announced it will introduce GloBE rules and a top-up tax for financial years starting on or after 1 January 2025. And we also feature an article with some predictions on business tax measures that may be included in the UK’s Spring Budget. We will be reporting on other upcoming budgets as they are released.
Tax reforms are taking place in Colombia and Japan. Colombia has introduced a 15% minimum tax, but the tax does not implement the global minimum tax under the OECD’s BEPS 2.0 project and the calculation of the tax may not be in alignment with the Pillar Two model rules. Japan has decided to move forward with the introduction of Pillar Two rules and also make changes to its controlled foreign company rules to mitigate the administrative burden on MNEs that will be subject to the global minimum tax. Korea has already codified the GloBE rules under Pillar Two.
With the new corporate tax regime in the United Arab Emirates becoming effective in June, any business established outside the UAE but operating in or dealing with the UAE should begin to examine whether the business outside the UAE may be exposed to a PE risk, and the December 2022 Decree-Law on the corporate tax regime provides more details on the tax treatment of companies operating in the free zones under the upcoming regime.
Germany has changed its rules relating to transactions between nonresidents involving IP registered in Germany. Most significantly, such transactions will no longer be subject to German tax liability except where payments are made to related parties in the absence of a tax treaty or where the recipient of a payment is resident in a noncooperative jurisdiction.
On the tax administration and compliance side, Belgium has enacted legislation that extends the statute of limitations in certain instances and expands the investigative powers of the tax authorities and the Canadian tax authorities have amended the return for reporting transactions with non-arm’s length nonresidents, with hefty penalties for failure to comply.
Learn about these developments and much more in Corporate Tax News. Be sure to check out the chart highlighting corporate income tax changes around the globe and the Corporate Tax Bytes column!
- BELGIUM: Tax authorities investigative powers expanded
- CANADA: CRA revises return for reporting transactions with non-arm’s length nonresidents
- COLOMBIA: New 15% minimum tax and concept of significant economic presence introduced
- DENMARK: Supreme Court rules on beneficial owner and tax treaty abuse cases
- EUROPEAN UNION:
- GERMANY: Extraterritorial taxation of German-registered IP rights revised
- ITALY: 2023 budget law measures impact MNEs with Italian operations
- INDIA: 2023-24 Finance bill contains some measures to encourage investment
- JAPAN: Global minimum tax to be introduced under 2023 tax reform, along with easing of CFC rules
- THAILAND: Tax concessions for COVID-19-related donations
- SINGAPORE: Budget 2023 measures include introduction of GloBE rules and domestic top-up tax
- UNITED ARAB EMIRATES:
- UNITED KINGDOM:
- UNITED STATES:
Content adapted from BDO Global.
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