Europe & African region International Tax Newsletter

The Austrian Federal Finance Court held that an assignment of receivables by a taxpayer to a company located in Malta, with which the taxpayer frequently engaged in trade and transactions, was an abusive arrangement.

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A new regime that limits certain interest deductions—known as the earnings stripping rules—has an effective date of 1 January 2019. A draft law has been introduced in parliament to clarify the earnings stripping rules.

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Changes to the income tax law were made by legislation that was published in the official gazette. The amendments are generally effective 1 January 2020.

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The government submitted to the Chamber of Deputies a bill introducing a digital services tax to be imposed at a rate of 7%.

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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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The German Finance Minister issued a revised proposal for a Council Directive regarding the introduction of a common financial transaction tax to the participating EU Member States in the so-called enhanced cooperation procedure.

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The French Supreme Tax Court issued a decision that may provide refund opportunities regarding withholding tax when there were expenses incurred for direct professional services.

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The Federal Tax Court (BFH) held that for the years at issue (2005-2007), the controlled foreign company rules for passive income requiring an add-back of passive income with an investment character did not violate the free movement of capital under the EU treaty.

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The National Tax and Customs Authority announced a pilot program concerning a standard audit file for tax purposes. The program would be intended to support the provision of data to facilitate more efficient tax audits and the automated processing of data.

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Guidance from Irish Revenue requires employers to consider only the number of work days employees spend in Ireland in a single year of assessment—a change from requirements issued in 2018 that made tracking Irish workdays across consecutive tax years and even multiple years necessary.

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Changes have been made to the proposed digital services tax during the legislative process.

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The Advocate General of the Court of Justice of the European Union rendered an opinion in a challenge to Italy’s financial transaction tax. The Advocate General concluded that the tax does not infringe the free movement of capital.

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The Luxembourg Parliament on 19 December 2019 passed the 2020 budget bill. The legislation includes expiration of pre-2015 advance tax agreements as well as measures to transpose into Luxembourg domestic tax law the EU Anti-Tax Avoidance Directive.

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The Dutch Upper House of Parliament adopted tax measures that include the “2020 Tax Plan” in addition to bills to implement the second EU anti-tax-avoidance directive and the EU directive on cross-border arrangements.

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The Dutch Supreme Court issued a judgment concerning application of the reduced 2% transfer tax rate regarding the acquisition of a right to an apartment in a building converted from an office building to residences.

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The president of Nigeria signed the 2020 appropriation bill into law.

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The new royalty regime, enacted as part of legislation concerning deep offshore and inland basis production-sharing contracts, specifies a baseline royalty of 10% for crude oil and condensates that are produced in the deep offshore and 7.5% for the “frontier and inland basin.”

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The Federal Inland Revenue Service issued a notice announcing the start of a nationwide tax enforcement exercise.

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The Tax Appeal Tribunal issued a judgment holding that interest on an additional state tax assessment is to be computed by imposing interest only on the principal amount of the tax liability.

A circular issued by Nigeria’s Federal Inland Revenue Service provides guidance on claiming benefits under an income tax treaty.

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Draft decrees again delay the effective date of application of withholding tax rules in Poland.

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Serbia’s parliament passed legislation that amends the corporate income tax law, and the legislation was published in the official gazette on 6 December 2019.

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Legislation would make changes that could affect investors in venture capital (VC) companies.

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The upcoming rules on reporting obligations under the mandatory disclosure rules are proposed to be effective 1 July 2020, with some measures being effective retroactively from 25 June 2018.

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The Swedish high court issued a new decision that affirms the conclusion that director's fees are to be taxed as income from employment.

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The digital services tax provisions were published in the official gazette.

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KPMG in the UK considers HMRC’s updated guidance on the UK hybrid and other mismatches rules.

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