Europe & African region International Tax Newsletter

The General Court of the CJEU rendered judgment on the Belgian excess profit system. The case is: T-131/16.

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An amendment to Botswana’s income tax law was promulgated. The new law includes measures that:

• introduce transfer pricing rules
• revise the general anti-avoidance provisions to exclude any reference to related-party transactions, that are now specifically addressed under the transfer pricing provisions
• introduce legislation to counter “earnings stripping” by companies. 
  
  
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The 2019/2020 budget proposals were presented to the National Assembly. There were no changes to the tax laws proposed in the budget speech.

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The 2019 tax package is currently involved in the legislative process, with the Senate in late January 2019 returning the bill to the Chamber of Deputies with amending proposals.

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The Supreme Administrative Court concluded that a customer’s liability VAT that was not paid by the supplier does not always take precedence over denying the customer’s entitlement to VAT deduction.

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The CJEU rendered two landmark decisions on the interpretation of the beneficial owner concept under the Interest and Royalties Directive and the Parent-Subsidiary Directive.

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The EU Tax Centre summarizes the implementation of the new mandatory disclosure requirements into Member States’ domestic legislation to date and the state of play at the level of the EU institutions.

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The European Council formally approved proposals for four “quick fixes” concerning VAT to simplify international trade.

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The EU Tax Centre prepared a summary of EU tax developments that can have both a domestic and a cross-border impact.

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KPMG in France prepared a summary of the corporate tax measures recently enacted and effective starting January 2019, including changes to:

•  tax consolidation regime
• dividend distributions
• limitations of interest deductibility
• patent box regime. 
  
  
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KPMG in France prepared a summary of the corporate tax measures recently enacted and effective starting January 2019.

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The CJEU rendered its decision on 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 (C-135/17).

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The German Federal Tax Court concluded that for purposes of VAT, a “co-ownership by defined shares” is not a “VAT trader”.

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1 January 2019Companies qualifying as micro- or small-size enterprises continue to be exempt from the “innovation contribution.” However, beginning 1 January 2019, whether SMEs qualify for exemption from the innovation contribution is no longer based solely on the financials of the individual company.

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The deadline for filing information returns with respect to employee share participation schemes for 2018 must be filed by 31 March 2019.

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The Irish government released a bill in an effort to address uncertainty regarding “Brexit” and specifically if there is a “no deal” Brexit on 29 March 2019.

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The Italian government issued a decree and a press release in an attempt to clarify application of the rules under a new law in Italy relating to VAT and e-commerce (remote) sales of electronics.

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The Luxembourg Parliament passed legislation for the ratification of the Multilateral Instrument into Luxembourg domestic tax law.

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KPMG in Malta prepared a summary of the corporate income tax and VAT measures proposed in the Budget Measures Implementation Act, 2018.

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The process in the Netherlands for implementing the Multilateral Instrument has advanced.

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A Dutch governmental agency has issued a report that examines possible near-term implications of the UK’s departure from the European Union—Brexit.

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The Financial Reporting Council of Nigeria released a corporate governance code that is based on six governance pillars and 28 principles.

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The Federal Inland Revenue Service issued “Letters of Substitution” under provisions of Nigerian tax law to appoint certain banks to serve as tax collection agents for customers that are identified as “affected companies” and that maintain bank accounts with those banks.

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The Federal Inland Revenue Service directed the banks to suspend tax liens on bank accounts of alleged tax defaulters for a period of 30 days.

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There have been reforms in corporate and tax law in the Republic of San Marino, along with an ever-increasing number of tax information exchange agreements and income tax treaties.

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The Minister of Finance delivered the budget speech for 2019, and while the 2019 budget proposals would not increase taxes in any category, it is proposed to increase tax collection by not adjusting for inflation and by improving the efficiency of the South African Revenue Service.

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The Competition Amendment Act introduces extensive changes to the South African competition law landscape.

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Applications filed by taxpayers seeking relief under a voluntary disclosure programme of the South African Revenue Service have been rejected when the “default” was declared in periods when no tax returns were filed.

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The Finance Minister has confirmed that a carbon tax will be implemented 1 June 2019.

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Relief is available to businesses in the form of incentives.

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A bill for a digital services tax has been published in the official journal of the Spanish legislature. Once enacted, would be expected to apply during the second half of 2019.

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The CJEU released a judgment that rejected the European Commission’s decision to classify a tax regime applicable to four Spanish professional football clubs as “state aid.” The cases are: Athletic Club v. Commission, T-679/16, and Fútbol Club Barcelona v. Commission, T-865/16.

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A draft proposal in Sweden for implementing EU mandatory disclosure reporting rules is subject to public consultation until 24 April 2019.

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The Swiss tax conference released an amended and updated version of Circular 5 concerning the inter-cantonal (and international) allocation of net income and net wealth of banks for Swiss tax purposes.

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Swiss voters on 19 May 2019 will vote on the “Federal Act on Tax Reform and AHV Financing”. At the same time, the implementation process is progressing at the cantonal level, with some cantons having held (or about to hold) referendums.

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A consultation on introducing a 1 percent SDLT surcharge for purchases of dwellings in England and Northern Ireland made by non-UK resident buyers has been published.

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The First-tier Tribunal decides on the eligibility for capital allowances on the construction of a silo provided for temporary storage. The case is: Stephen May v HMRC.

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The First-tier Tribunal decides the value attributable to second hand property fixtures on the sale of a property for capital allowances purposes. The case is: Glais House Care Limited (GHC) v HMRC.

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Upper Tribunal ruled on the practicalities and procedural issues for claims made for repayment of direct tax. The case is: GLL BVK International Immobilien Spezialfonds & iii-BVK Europa Immobilien Spezialfonds v HMRC.

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The Upper Tribunal issued a decision relevant for partly exempt businesses generally and asset management businesses in particular. The case is: BlackRock Investment Management (UK) Ltd v HMRC.

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Three new double tax treaties entered into force between the UK and Guernsey, Isle of Man and Jersey.

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