International Tax - Europe and Africa, July 2019

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 July and 31 July 2019.

Africa EU Luxembourg South Africa
Austria France Mauritius Spain
Belgium Germany Montenegro Switzerland
Czech Republic Hungary Netherlands UK
Denmark Italy Norway  

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International Tax Newsletter - Europe & African region


Treaties Trade agreement  30 May 2019  

The Africa Continental Free Trade Area agreement entered into force on 30 May 2019, having been ratified by 22 countries (the threshold requirement). At present, only three countries (Benin, Eritrea, and Nigeria) have not signed the agreement.


Tax legislation approved and regulatory update  Various tax areas  July 2019

KPMG in Austria has prepared a report providing brief summaries of tax developments, including:

  • additional amendments on ultimate beneficial registry rules
  • income tax treaty between Austria and Russia entered into force 20 June 2019


Proposed legislation Digital services tax July 2019

The Austrian Ministry of Finance proposed in spring a draft bill that would introduce a tax on digital advertising. Due to changes in Austrian government (interim government), the status of the digital services tax proposal is uncertain at present.


  Tax area concerned Relevant Date Description of measures and publication link
Tax legislation approved and regulatory update Multilateral instrument July 2019 

The federal law containing assent with the multilateral instrument was published in the Belgian official gazette. This publication completes the final step in the Belgian process of ratification of the MLI.

Czech Republic

Tax legislation approved and regulatory update R&D / Tax incentives    July 2019

Information published by the tax authority concerning a 2019 tax package (effective 1 April 2019) includes transitional rules for the research and development allowance.

Proposed legislation  Digital services tax 4 July 2019

The Czech government on started the formal legislative process to introduce a digital services tax that would be imposed at a rate of 7%.


Administrative and case law Withholding tax  July 2019

Denmark’s high court in 2019 issued its decision in a case following the 2018 judgment of the Court of Justice of the European Union concerning the compatibility with EU law of the Danish withholding tax on dividends distributed to non-resident investment funds.

European Union

Tax legislation approved and regulatory update  MDR July 2019

KPMG's European Tax Centre summarizes the implementation of the new rules into Member States’ domestic legislation to date and the state of play at the level of the EU institutions.

Tax legislation approved and regulatory update Dispute resolution 1 July 2019

The European Commission issued a reminder that new dispute resolution EU rules are effective starting 1 July 2019.

Administrative and case law Advertisement tax / State aid  27 June 2019

The General Court of the European Union annulled the European Commission's decision that a Hungarian advertisement tax was incompatible with EU state aid rules.

Administrative and case law Tax incentives / Yacht industries  25 July 2019

The European Commission announced several actions or referrals to the CJEU, including steps to end “illegal tax breaks” in the yacht industries of Italy and Cyprus.

Administrative and case law Various tax areas  July 2019

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

Treaties Trade agreements  June 2019

The European Union and Mercosur member states—Argentina, Brazil, Paraguay and Uruguay— reached a political agreement for a trade agreement.


Tax legislation approved and regulatory update Corporate income tax  25 July 2019

The French government’s plan for a phase-down reduction of the rate of corporate income tax—ultimately to 25% in 2022— has been revised and enacted.

Tax legislation approved and regulatory update Digital services tax 25 July 2019

The French digital services tax legislation was published in the official gazette. As enacted, the French digital services tax retroactively applies to digital services revenue as of 1 January 2019.

Tax legislation approved and regulatory update Tax compliance  1 July 2019

Taxpayers are now allowed to prove expense receipts using a computerized version of the receipts for purposes of determining the tax base for tax and social security contributions, as of 1 July 2019.


Proposed legislation  VAT group 5 June 2019 

The German Ministry of Finance has presented the key features of the VAT group rules in line with the EU VAT Directive—that could replace the regulations concerning VAT groupings in Germany.

Administrative and case law Corporate income tax 2 July 2019

The federal tax court has amended its position from prior decisions concerning the treatment of adjustments to income for the derecognition of an unsecured intragroup loan and now concludes such loss is not tax deductible.


Proposed legislation  Interest limitations under group taxation July 2019

A commission of Hungary’s parliament has submitted proposals to amend a draft law that was previously submitted to the parliament by the Ministry of Finance in late June 2019.


Tax legislation approved and regulatory Tax incentives   June 2019

The Italian parliament amended and converted Law Decree no. 34/2019 into law. The new law decree includes tax incentives for the real estate and leasing sectors.


Double tax treaty   2 July 2019 

Luxembourg’s Parliament ratified a new income tax treaty with France.

Treaties Double tax treaty   17 July 2019

The U.S. Senate approved Protocols amending the existing income tax treaties with Switzerland, Luxembourg, and Japan.

Proposed legislation  MDR 26 July 2019

Luxembourg’s government approved a bill for transposition of an EU Directive on administrative cooperation in the field of taxation (DAC 6).


Tax legislation approved and regulatory update Partial exemption regime / CFC   25 July 2019

The Finance Act 2019 received the president’s assent. Measures include:

  • “tax holidays” for companies engaged in certain activities
  • extension of an 80% partial exemption regime
  • consolidation of the anti-avoidance rules by including CF rules.



KPMG publication  Tax card 2019  2019

A KPMG Tax Card gives a concise overview of taxes in Montenegro in 2019.


Proposed legislation ATAD 2 2 July 2019

A bill to implement an amendment to the EU Anti-Tax Avoidance Directive (ATAD2) was presented to the Dutch Lower House.

Proposed legislation MDR July 2019

A bill to implement the EU Directive on mandatory disclosure (DAC6) has been presented to the Lower House.

Administrative and case law   VAT / Economic substance  July 2019

The Dutch Supreme Court issued two judgments broadly interpreting the economic interdependence standard required when entities or persons seek to function as a single tax entity for VAT purposes.


Proposed legislation  VAT  June 2019

The Ministry of Finance in published a consultation paper concerning a proposal to repeal the exemption from VAT that applies for imports of “low-value goods”.

South Africa

Proposed legislation  Tax on single-use plastics July 2019

South Africa’s government is considering a new tax on single-use plastics.


Treaties  Double tax treaty  16 July 2019 

The U.S. Senate approved a Protocol to amend the income tax treaty with Spain.


Tax legislation approved and regulatory update Withholding tax July 2019

The Swiss Federal Council released a circular on the revised federal withholding tax laws for individuals, providing a commentary and practical guide to these new rules.

Treaties Double tax treaty 17 July 2019

The U.S. Senate approved Protocols amending the existing income tax treaties with Switzerland, Luxembourg, and Japan.

United Kingdom

Proposed legislation Digital services tax 11 July 2019

The UK Government published the draft legislation on the Digital Services Tax as part of the draft clauses for Finance Bill 2019-20.

Proposed legislation  Capital losses offset July 2019

Capital losses offset restricted to 50 percent of gains from 1 April 2020.

Proposed legislation Finance Bill 2019-2020 July 2019

The UK government published draft clauses and supporting documents for Finance Bill 2019-2020. Measures include: a digital services tax; corporate capital loss restriction; off-payroll working rules effective April 2020; and the extension of stamp duty anti-avoidance to unlisted shares.

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