July2017


Germany To Phase Out Solidarity Tax

Posted on July 18th, by Global Tax Weekly in Corporation Tax. No Comments

They say that there’s no such thing as a temporary tax hike. If so, the corollary to this maxim should be that there’s no such thing as a permanent tax cut.

The reality is that life isn’t quite as simple as that, and governments aren’t always as mean to taxpayers as is often made out (including by this commentator!).

We’ve had two examples of countries not living up to this rule of thumb in recent days and weeks.

In one of potential significance, Germany’s Christian Democrat Union (CDU) has proposed phasing out the far-from-beloved solidarity tax, which was introduced as a fiscal buffer when the East Germany’s basket case of an economy began to merge with the West more than 25 years ago.

Looking in from the outside, it would be hard to disagree with those who say that the solidarity tax has served its purpose. … Read More »


India’s GST Regime Comes Into Effect

Posted on July 11th, by Global Tax Weekly in Sales Tax. No Comments

India’s indirect tax reform promises to be a transformational, generational change that will unleash the full potential of this sleeping economic giant while modernizing the tax system and widening the tax base. And the Government deserves a great deal of credit for driving the reforms through in the face of hostility from state governments and with a political opposition which initially opposed the reforms for opposing’s sake (ironically, the same opposition that proposed GST in the first place when in government some years ago – that’s politics for you!).

Nevertheless, this is a reform made by committee i.e. it recognizes several competing interests and consequently is one big, far-from-perfect compromise. And this is reflected in the somewhat complex three-tier state/central/interstate regime, which effectively has two standard rates (one is the norm), in addition to a reduced rate and a “luxury” rate.

One suspects … Read More »


Latvia To Abandon Flat Tax Regime

Posted on July 6th, by Global Tax Weekly in Corporation Tax. No Comments

Flat taxes were all the rage in the not-too-distant past. But have they had their day? Latvia seems to have fallen out of love with them.

Flat taxes, normally defined as a single rate of tax on personal or corporate income, or in some cases both, are often associated with Eastern Europe, where countries embraced these supposed pro-growth tax policies as they emerged from the economic straight jacket of the Warsaw Pact. But they are found in all corners of the world, from Abkhazia to Tuvalu.

Nevertheless, it was Eastern Europe that many countries looked to when debating the merits of flat taxes versus progressive taxation, including the United States. Indeed, the region has been something of a massive laboratory performing a mass flat tax experiment.

So what can we glean from the results? To my mind, they are inconclusive. Undoubtedly, flat taxes … Read More »





RELATED ARTICLES AND INFORMATION

Netherlands Cancels Planned Corporate Tax Reduction

The Dutch Government’s 2021 Tax Plan, unveiled in mid-September, revealed that a planned decrease in the headline corporate tax rate from 25% to 21.7%...

Germany Tackles Missing Trader Fraud

In Germany, plans were announced in the draft Annual Tax Act 2020 to impose the VAT reverse charge mechanism on supplies of certain telecommunication...

Ireland Reduces VAT

Ireland has reduced its standard rate of VAT from 23 percent to 21 percent from September 1, 2020, with the reduction to be in...