In Uzbekistan, the government confirmed recently announced changes to the country’s corporate income tax and VAT regimes in the 2020 Budget.
In line with an earlier announcement, the Budget included a cut to the VAT rate to 15 percent from 20 percent effective from October 1, 2019. The Budget also confirmed the Government’s plans to remove the flat rate VAT scheme for certain medium-sized enterprises.
Further, the Budget provided for an increase to the headline corporate tax rate from 12 percent to 15 percent.
Other measures included a reduction in the single social payment from 25 to 12 percent for state enterprises, and legal entities in which the state owns at least 50 percent of its authorized capital, and the introduction of a new tax system for individual entrepreneurs, who will newly pay a fixed tax rate based on their actual income.
For more … Read More »
In its latest Economic Survey of Switzerland, the OECD called for a rebalancing of the country’s tax mix, recommending shifting that mix towards more growth-friendly sources in order to help prepare the system for the impact of an anticipated wave of aging Swiss citizens.
The OECD observed that Switzerland “relies more on direct taxation and social security contributions than most other OECD countries, at two-thirds of revenues.”
It went on to suggest that government plans, to raise the VAT rate by 0.7 percentage points and reduce disincentives to work for second-earners in families, are steps in the right direction.
The OECD recommended that VAT exemptions and reduced rates should be “wound back” to finance lower personal income taxes, particularly on lower income earners. It added that the cantons could make more use of the recurrent taxation of immovable property and that there is … Read More »
On October 16, the European Commission published a proposal for a Council Implementing Decision enabling Italy to continue restricting the right to deduct input VAT on vehicles-related expenses.
On April 12, 2019, Italy had requested an authorization to continue to derogate from the EU VAT Directive by limiting to 40 percent the right to deduct input VAT charged on expenditure related to motorized road vehicles not wholly used for business purposes. The Commission said that the rate of 40 percent appears to reflect adequately the actual business use of such vehicles.
In addition, Italy requested an authorization to continue to derogate from the VAT Directive by exempting from VAT the use for private purposes of vehicles included in the assets of a taxable person’s business, where such vehicles are subject to a restriction of the right to deduct.
Italy was first authorized to … Read More »
The Japanese government finally went ahead with its plans to increase the standard sales tax rate. The Japanese authorities have been trailing the move for years now, with the potential last minute danger to the introduction of the measure, or the potential last minute savior of the Japanese economy (depending on your perspective) being the likely chilling effect of a sales tax hike on consumer confidence, and with the knock-on effect that is expected to have on spending.
Given the relative weakness of the Japanese economy over the last few years, with its concerns over the impact of an aging population on government receipts, this is a valid worry. However, the increase has now entered into force (following two previous delays), so let the dice fall where they may, economically speaking.
However, in order to mitigate the impact of the rate rise … Read More »
The French authorities have been busy, unveiling plans on September 23 to ensure the payment of value-added tax on items bought by French residents from online marketplaces, as part of a package of measures included in the 2020 Finance Law.
Under the proposals, announced by Minister of Public Accounts Gerald Darmanin during a visit to an Amazon delivery facility near Paris, online marketplaces facilitating sales between third-party sellers and buyers in France will be liable for VAT on these purchases from 2021.
The reforms will also see the creation of a blacklist of online platforms that fail to comply with certain tax and reporting requirements.
In an additional measure, logistics warehouses will be required to keep a record of the origin and destination of packages, and the amount of VAT due, for a period of 10 years.
The measures will also be accompanied by … Read More »
In Europe, on August 29, legislation was signed into law providing for numerous changes to value-added tax rules.
The legislation included the introduction of a mandatory VAT split payment mechanism on certain supplies, whereby when a taxable person acquires goods or services from another taxable person, the portion of the payment to the supplier that is VAT will be deposited separately and automatically to a dedicated account of the seller, in order to satisfy the VAT that is required to be remitted to the tax agency.
Under this mechanism, it was announced, split payments will be mandatory for supplies that are currently subject to the reverse charge mechanism, including:
European Union emissions trading allowances;
automotive parts and accessories;
coal and coal products; and
electronic machinery and equipment and their parts.
The legislation also includes numerous measures intended to simply VAT rules, including through:
the use of the … Read More »
There’s been a lot of activity with regard to VAT and GST internationally recently, not least in Costa Rica, which introduced VAT on July 1, and recently confirmed that public institutions will be subject to value-added tax from 2020.
Costa Rica has introduced a new value-added tax regime, in place of the sales tax, featuring a 13 percent headline rate, and three reduced rates, of four, two, and one percent.
Further bedding in the new system, the Costa Rican tax authority also late this month released new online forms for declaring value-added tax, capital income, and capital gains.
On June 29, 2019, Costa Rica released a step-by-guide guide on how to fill out form D-104, which must be filed by value-added tax registered persons for the first time between August 1 and August 16.
For more information on this, and other topical international tax … Read More »
New Zealand has enacted the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act. I honestly don’t know how they come up with these catchy names, I really don’t.
The legislation will introduce new GST collection obligations for low-value imported goods, and will make a number of “fairness changes” to the tax regime; one of the biggest changes will require offshore businesses that supply low-value goods (those worth NZD1,000 (USD667) or less) to New Zealand to collect GST. From December 1, offshore businesses who supply more than NZD60,000 of services and low-value goods per year will pass on GST directly to Inland Revenue.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
Tax is something that most people merely grin and bear, albeit through gritted teeth. But it’s sometimes much more exciting than that. Indeed, it can change the course of history. Think the Boston Tea Party or Magna Carta. America might still be ruled by Britain, and Britain ruled by kings and queens, or portly prince-regents with more interest in pies than the parliamentary process. All (or largely) because of tax.
In many countries, 2018 ended in an inferno of tax-motivated protests. Not quite revolutions, but fervent enough to change a government’s mind. The “gilet jaunes” demonstrations in France was the most widely-reported example. But the movement has seemingly inspired similar tax-motivated outcries as far afield as Canada and Taiwan. The streets of Jordan’s capital, Amman, have also reverberated to the sounds of anti-tax protests recently.
Tax cuts, on the other hand, never, … Read More »
In tax circles, Brazil is notorious for its complex tax system. You could compare it to the vast, dense, often impenetrable rain forests that dominate its interior, full of assorted critters and creepy-crawlies ready to bite you at the first opportunity. Indeed, Brazil’s tax code is so vast, it’s probably home to a lost tribe or two.
The good news for taxpayers is that several candidates for the Brazilian presidency, to be decided on October 7, 2018, are proposing to reform indirect taxation, an area of the tax regime particularly noted for its mind-boggling complexity, with a more widely understood system of value-added tax. The bad news is that sales tax in Brazil has also proven to be stubbornly resistant to reform. And this is only one aspect of a tax regime which, akin to an expedition in the country’s huge … Read More »