Europe & African region International Tax Newsletter

The Austrian Ministry of Finance published a draft bill regarding a tax reform for 2019-20. Among the measures being proposed are the following:

• implementation of anti-hybrid provisions pursuant to the EU directive (ATAD 2) into Austrian domestic tax law
• phased-in reduction of the corporate income tax rate from 25-23 percent as from 2022 and 21 percent as from 2023
• provisions allowing small businesses to calculate their income tax on a lump-sum basis
• reduction of progressive income tax rates
• extension of research and development (R&D) premiums. 
  
  
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The Belgian VAT authorities have recognized that pharma contributions paid by pharma companies to a public health insurer may be eligible for a reduction of VAT owed on certain sales of medicines.

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The Czech Ministry of Finance has introduced its plans for a new digital services tax. The Czech digital services tax is proposed to be imposed at a rate of 7 percent on certain revenues.

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The Ministry of Finance disclosed draft amendments to tax laws for 2020, generally with a goal of increasing revenues.

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A draft amendment to the VAT law for 2020 would introduce changes with respect to consignment stock arrangements and intra-community transactions with goods.

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The European Commission announced a new system for EU Member States to exchange and process VAT data rapidly.

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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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ECOFIN discussed digital tax and updates the EU blacklist.

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Taxpayers that are not residents of Germany may not be fully taxed on their German-sourced income. However, there recently have been situations when the tax authorities imposed tax liability on payments made to non-resident internet portal operators for online advertising.

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The German Federal Tax Court has been uncertain as to what details are required for an input VAT refund application and specifically what “number of the invoice” is to be designated.

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Among the tax law changes included in tax legislation in Greece are anti-avoidance rules that generally align Greek tax law with the EU anti-tax avoidance directive (ATAD).

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The Court of Justice of the European Union issued judgments in two VAT cases concerning application of the reverse-charge mechanism in Hungary. The cases are: Farkas, no. C-564/15, and PORR Építési Kft, no. C-691/17.

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Italy has enacted a regime for UK entities currently conducting business operations in Italy and for Italian entities conducting business in the UK, in the event the UK leaves the EU without a deal.

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Law Decree no. 34 includes measures expanding an existing tax incentive program for certain individuals.

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A decree of “urgent economic growth measures” was published in the official gazette. The decree introduces the following tax incentives:

• the reintroduction of an extra or bonus depreciation regime for certain tangible assets
• a reduced rate of corporate income tax on reinvested profits
• an increase in the deductibility of local real estate tax for corporate income tax purposes
• simplification of the patent box regime
• reintroduced business combinations bonus.
  
  
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VAT measures are included in a decree concerning “urgent economic growth measures”. The decree delays the effective date of the VAT imposed with regard to remote sales of certain imported goods.

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The Court of Justice of the European Union rendered its decision in a case concerning state aid as it relates to a Dutch dividend withholding tax refund claim. The case is: A-Fonds case (C-598/17).

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The Revenue Mobilization Allocation and Fiscal Commission indicated it intends to commence forensic investigatory audits of “deposit money banks” with respect to their stamp duty collection activities for the periods from year 2000-18.

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The Federal Inland Revenue Service announced plans to conduct joint tax audit exercises with the tax authorities of the various Nigerian states.

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This edition of the Nigerian Tax Journal summarizes the decided tax cases and administrative pronouncements by RTAs and Tax Administrators in 2018.

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The OECD reported that there is an agreement for a “road map” with regard to resolving the tax challenges arising from the digitalization of the economy and a commitment for continued work toward a consensus-based long-term solution by the end of 2020.

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The General Court of the European Union issued a judgment finding that the European Commission incorrectly classified the Polish tax on the retail sector as illegal state aid. The case is: Poland v. Commission, T-836/16 and T-624/17.

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The final step in the legislative process for implementing the carbon tax has been completed and the carbon tax legislation has an effective date of 1 June 2019.

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An amendment to the foreign earnings exemption that is to limit the exemption for the first ZAR 1 million of income for employment services rendered outside South Africa has an effective date of 1 March 2020.

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A tax on chemicals used with respect to certain electronic products was introduced in Sweden in 2017. The Swedish government now appears ready to expand the scope of the chemical tax.

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Customers of Swiss financial institutions who own UK property need to be aware that they may be subject to UK capital gains tax on any gains upon disposal arising after April 2019, even if they are not UK residents.

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A proposal to reduce the tax burden on employee participation in start-ups and family businesses has advanced following approval by committees of the Council of States and the National Council.

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Swiss voters approved Swiss tax reform in a referendum. With the voters’ approval, the Swiss tax reform measures are expected to be effective 1 January 2020.

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The Swiss federal tax authority published a first draft of updated guidance in relation to foreign companies and VAT.

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The VAT notice for Making Tax Digital has been updated and includes some new information and rules.

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HM Treasury proposes to place a 2 percent tax on revenues derived from British users’ creation of value for digital services businesses.

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Proposed amendments to the recently enacted rules on the taxation of offshore receipts in respect of intangible property have now been released in draft format along with draft guidance, for consultation.

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European Commission concluded on whether UK CFC finance company exemption constitutes state aid.

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FTT finds that a German pension scheme which had not registered in the UK was entitled to exemption from tax on its property investment income. The case is: BAV-TMW-Globaler-Immobilien Spezialfonds v HMRC.

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First-tier Tribunal decision holds stamp duty land tax anti-avoidance legislation can apply whether or not there is ‘avoidance’. The case is: Hannover Leasing v HMRC.

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