Europe & African region International Tax Newsletter
Europe and Africa regions
June 2018
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 2018.
| Austria | Belgium | Bulgaria | Czech Republic |
| Denmark | East Africa | European Union | France |
| Germany | Hungary | Ireland | Italy |
| Luxembourg | Mauritius | Netherlands | OECD |
| Poland | Serbia | Sweden | Switzerland |
| United Kingdom |
For a full summary of global tax developments, visit kpmg.com/TaxNewsFlash.
To contact the International Tax Team email internationaltax@kpmg.com.
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Austria
Proposed legislation
Anti-tax avoidance directive - 18 June 2018
A draft of an annual tax amendment law for 2018 includes measures that would transpose the EU Anti-Tax Avoidance Directive into Austrian domestic tax law.
Belgium
Other
Tax compliance - June 2018
The coming second installment of prepayments is an opportunity for every company in a tax paying position, whereas the timely filing of tax returns and local files can also be a challenge.
Bulgaria
KPMG publication
Tax Guide - 1 June 2018
KPMG offers a concise overview of taxes in Bulgaria in 2018.
Czech Republic
Proposed legislation
VAT - 13 June 2018
Amendments to the VAT law completed the comment period and are expected to be submitted to the Chamber of Deputies.
Anti-tax avoidance - 2019
The 2019 tax package is reportedly about to be submitted by the government. The Ministry of Finance has added a new proposal to require taxpayers to report income transferred abroad and to clarify the “abuse of right concept.”
Anti-tax avoidance directive - 1 January 2019
Proposed changes to the income tax law of the Czech Republic has completed the comment process. Among the proposed amendments are provisions that would implement the EU Anti-Tax Avoidance Directive into Czech tax law.
Denmark
Administrative and case law
Cross border loss relief - 12 June 2018
The Court of Justice of the European Union rendered its decision in a case concerning the compatibility with EU law of the Danish rules on the deductibility of losses from foreign permanent establishments. The case is: Bevola and Jens W. Trock (C-650/16).
Withholding tax - 12 June 2018
The CJEU rendered its decision in the Fidelity Funds case, concerning the compatibility with EU law of the Danish withholding tax on dividends distributed to non-resident investment funds. The case is: Fidelity Funds (C-480/16).
East Africa
KPMG Publications
2018 East Africa Budget Analysis - 15 June 2018
The East African Community Finance Ministers presented their countries’ respective budgets modelled along the theme of industrialization for job creation and shared prosperity.
European Union
Tax legislation approved and regulatory update
Custom duties - 22 June 2018
The European Commission announced the adoption of regulation as the EU's rebalancing measures in response to the U.S. tariffs on steel and aluminum.
Mandatory disclosure requirements - 25 June 2018
The new mandatory disclosure requirements for intermediaries and relevant taxpayers entered into force on 25 June 2018.
Proposed legislation
VAT - 1 January 2020
The European Commission issued a release concerning an approach reached by EU Member States on new tools to close loopholes in the EU's VAT system.
Custom duties - June 2018
The European Commission announced a programme proposal aimed at improving the efficiency of tax and customs cooperation among the EU Member States.
Other
CCTB - 19 June 2018
German Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire issued a common position paper on the European Commission’s proposal for a Common Corporate Tax Base (CCTB).
Code of conduct - June 2018
The ECOFIN Council adopted conclusions on the work of the Code of Conduct Group during the first half of 2018. The Member States particularly welcomed the progress made by the Group with regard to the EU blacklisting process and endorsed a new multiannual work program.
Taxation trends report (2018) - June 2018
The European Commission released a report showing that tax revenues rose in 19 EU Member States in 2016 as a percentage of GDP in 2016, but that the level of taxation in EU Member States differs greatly.
France
Administrative and case law
VAT - 29 June 2018
The French Supreme Tax Court held that the French tax authorities can consider income that is not “booked” in the accounts of the taxpayer-company for purposes of determining a tax on added value. In this case, the amount at issue related to a transfer pricing re-assessment. The case no. is: 409645.
Germany
CFC - 5 June 2018
Advocate General of the CJEU published his opinion in a case concerning the derogation from the prohibition on restrictions to the free movement of capital with non-EU countries, and its application to the German controlled foreign company rules. The case is: X-GmbH case (C-135/17).
VAT - 25 June 2018
The German Federal Tax Court issued a judgment in a case concerning the input VAT deduction when the invoice did not provide specific details about the time of the supply.
Carry forward of tax losses - 28 June 2018
The CJEU rendered its decision in a case regarding the compatibility with EU State aid rules of German legislation, which under certain conditions allows a company in financial difficulties to carry forward tax losses despite changes in its shareholder structure. The case is: Heitkamp Bauholding (C-203/16).
Hungary
Proposed legislation
Corporate income tax / Individual taxation - 2019
Draft tax legislation for next year was submitted to Hungary's Parliament.
Ireland
Tax legislation approved and regulatory update
PAYE - June 2018
Irish Revenue recently updated its much awaited guidance on the operation of PAYE for short-term business visitors, who are performing the duties of their overseas employment in Ireland.
VAT - June 2018
KPMG in Ireland prepared a summary of recent VAT developments.
Other
AEO - June 2018
Irish businesses need to prepare for the changes in trading into and out of the UK once the UK finally leaves the EU.
Italy
Tax legislation approved and regulatory update
E-invoicing - 1 January 2019
Law Decree no. 79/2018 postpones until 1 January 2019 the mandatory e-invoice requirements for business-to-business supplies of gasoline or diesel intended to be used as motor fuel and supplied at petrol stations.
Luxembourg
Tax legislation approved and regulatory update
Anti-tax avoidance directives - 19 June 2018
The Luxembourg government issued a bill for the transposition of the EU Anti-Tax Avoidance Directive into Luxembourg domestic tax law.
Administrative and case law
Hybrid convertible loan / Tax rulings - 20 June 2018
The European Commission issued a release stating that Luxembourg allowed two group companies to avoid paying taxes on almost all their profits for about a decade—found to be “illegal” under EU State aid rules because the rulings provided an undue advantage.
VAT - 29 June 2018
Luxembourg’s tax authorities have issued additional guidance concerning the determination of input VAT deductions for “partial taxpayers”.
Mauritius
Tax legislation approved and regulatory update
Tax compliance - 15 August 2018
Companies that pay dividends exceeding MUR 100,000 (approximately USD 2,850) must submit an annual information return of dividends distributed.
Proposed legislation
Tax budget - 14 June 2018
The budget for 2018/2019, reflects tax reform efforts in the global business sector and incentives for certain foreign persons.
Netherlands
Proposed legislation
Corporate income tax / Fiscal unity regime - 8 June 2018
A bill has been presented to parliament in response to a February 2016 judgment of the Court of Justice of the European Union on the “per element” approach in the context of the Dutch fiscal unity regime for corporate income tax purposes.
Administrative and case law
Advance tax rulings - 14 June 2018
Advance tax rulings will no longer be available for standard securitization transactions.
Payroll taxes - 22 June 2018
The Dutch Supreme Court issued its judgment in a case concerning whether a severance package is to be regarded as an early retirement scheme.
OECD
Other
Global revenue statistics database - 28 June 2018
The OECD announced the launch of a new database providing detailed and comparable tax revenue information for 80 countries around the world.
Tax avoidance - 18 June 2018
The OECD issued a release intended for resource-rich developing countries and the attempts by multinational mining enterprises to avoid taxes through the use of tax incentives.
Poland
Tax legislation approved and regulatory update
VAT - 1 July 2018
A measure introduces the “split payment” mechanism as part of the VAT rules. This mechanism is based on the assumption that the purchaser of goods and services will remit the amount of VAT into a dedicated VAT bank account of the supplier.
Serbia
Tax legislation approved and regulatory update
Beneficial owners - 8 June 2018
A law establishing a central register of “ultimate beneficial owners” was enacted. The measures apply to legal entities and others registered in the Republic of Serbia.
Company law - 9 June 2018
National Assembly of the Republic of Serbia adopted amendments of the Law on Companies.
Sweden
Tax legislation approved and regulatory update
Corporate income tax - 14 June 2018
The parliament passed legislation, clearing the path for enactment of corporate tax measures. The bill includes:
- measures for implementation of the EU Anti-Tax Avoidance Directive into Swedish domestic tax law
- changes to the interest deduction limitation rules
- a phased-in reduction of the corporate income tax rate.
Gambling tax - 1 January 2019
The Swedish parliament passed a gambling-related tax bill which is designed as a licensing system, whereby all those who provide games on the Swedish gambling market must be licensed.
Switzerland
Tax legislation approved and regulatory update
VAT - 27 June 2018
Treating an investment fund asset management or performance fee as being subject to VAT has been a standard and accepted practice in the past. However, recent developments have shown that no Swiss VAT is due on such services in certain instances.
Proposed legislation
Corporate income tax - 7 June 2018
“Tax Proposal 17”—as the legislative tax reform proposals have been known—was discussed in the first chamber of the Parliament (Council of States). The Council of States approved the application of an economic commission with amendments.
United Kingdom
Tax legislation approved and regulatory update
VAT / Tax compliance - 1 April 2019
HMRC has confirmed that from 1 April 2019 all VAT registered businesses with a turnover in excess of GBP 85,000 will have to maintain digital records for VAT and submit their returns digitally.
Administrative and case law
PAYE - 22 June 2018
First Tier Tribunal holds that waiving loans to close companies’ directors who were also participators was taxed as earnings.
PAYE - 5 April 2019
Up to 50,000 individuals and their employers could be affected by PAYE and NIC charges that apply to relevant loans outstanding.
Stamp duties - 15 June 2018
The Supreme Court has allowed HMRC’s appeal in this decision on the SDLT due on a Shari’a-financed land purchase. The case is Project Blue v HMRC.
Withholding tax - 22 June 2018
The Court of Appeal has found for HMRC in a case regarding whether a source of interest arose within the UK and a company was obliged to withhold income tax on payments of interest.
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