Global Topics from Tax & Legal Updates

Argentina

Federal Tax Agency increases personal income tax threshold by 20%

Australia

Australian Treasury Department begins effort to limit favorable tax treatment of Living Away From Home Allowance (LAFHA) under Australian tax code

Australian treasury requests comments on draft legislation providing individuals with a standard deduction for work-related expenses and costs of managing tax affairs.

New standard travel and overtime meal allowances released for 2011

Austria

Austrian Government announces 7 billion euros in new taxes as part of 5-year Austerity Program

Belarus

Five year Income tax exemption signed into law for Individuals establishing Permanent Residence in Belarus.

Substantial tax changes adopted as of December 30, 2011, including decrease in corporate tax from 24% to 18%.

Belgium

European Commission asks Belgium to change property transfer tax regime in Brussels Capital Region.

European Court of Justice has upheld a Belgian tax law providing a deduction from the registration tax on purchase of a home in Flanders.

Belgium by EU to change its rules concerning the taxation of capital gains.

Brazil

Brazil Central Bank established April 5, 2012 as date for Brazilian taxpayersto declare foreign assets worth $100,000 or equivalent.

Brazilian Finance Minister announced measures to stimulate the economy, primarily aimed at domestic credit and financing.

Legislation enacted that increases income limits for small business simplified tax regime, effective January 2012

Brazil increases financial transactions tax in effort to stop rise in currency valuation

Canada

Canadians residing in the U.S. must report Canadian Retirement Plans to the IRS and Treasury or face severe adverse consequences.

Canadian Minister of Finance announced the automobile expense deduction limits and automobile operating expense benefit rates for 2012.

Canadian Finance Ministrer introduces job creation legislation providing temporary hiring credit for small businesses

China

New Statistics show that tax revenue from non-resident companies rose sharply in 2011 - 32% over 2010.

China's state council announced a 5% - 10% sales tax on oil and natural gas will be extended nationwide.

China’s State Council has provided for a decrease in the monthly extra tax deduction for foreigners working in China

Croatia

Temporary income tax on salaries and pensions to be announced

Denmark

Danish Parliament passes 2009 tax reform law; top marginal income tax rate reduced

Egypt

Press reports indicate a new real estate tax to be introduced January 1, 2010

European Commission

European Court of Justice renders important decision concerning ability of suppliers to recover VAT overpayments from the government.

European Commission release proposal for an EU-wide financial transaction tax (FTT) effective January 2014.

The EU has proposed postponing the deadline for businesses to claim 2009 VAT refunds, from September 30, 2010 to March 31, 2011

Finland

The Finnish Tax Administration released tax values for fringe benefits for 2010. The decision sets values for benefits provided in kind, such as accommodations, meals, employer provided vehicles, and telephones.

France

President Sarkozy announced January 29, 2012 plans to increase the country’s standard VAT rate from 19.6% to 21.2% as of October 1.

President Sarkozy Scraps New Tax on Second Homes Owned by Non-Residents

EU formally requests that France amend legislation that provides tax shield

Germany

Several German banks have reacted to the new FATCA imposed by the United States by closing securities accounts of thousands of American clients.

Germany’s State Governments Continue to Increase Tax Rates on Real Estate

Greece

Change request of real estate transfer tax ignored by Greece; European Commission refers matter to European Court of Justice

Honduras

Mandatory Minimum 1% Income Tax Decree Imposed

Hong Kong

Hong Kong’s Treasury clarifies 183-day threshold used in the double tax arrangement with mainland China for determining the taxability of cross-boundary workers.

Hungary

European Court of Justice upholds Hungarian property tax transfer rules against a claim by the European Commission.

Hungarian Ministry for National Economy announced that a flat 16% personal income tax adoped by Parliament in November of 2010 will be temporarily suspended.

India

India has released a new form, Form 49C, to be filed by non-residents with liaison offices in India.

Two farmers in northern India on November 2011, released about 40 snakes (including at least four cobras) in a busy tax office in order to exact revenge for alleged bribery demands made by corrupt local officials.

Indian Authority for Advance Rulings keeps 20% withholding as “fees for included services”

Ireland

Ireland’s proposed 2012 budget contains numerous tax changes, however neither the current 12.5% tax rate for corporations, nor individual tax rates, would change.

List of Tax Defaulters Published by Irish Revenue Office

Israel

In November 2011, the Israeli Tax Authority announced a new voluntary disclosure program for Israelis with undeclared foreign assets.

Notice issued by government to clarify position on date individual becomes an Israeli resident

Japan

Tax Reform Measures enacted June 2011 including Tax Credit for New Employment

Tax revenue declined in August compared to 2008

Malaysia

In November 2011, the Malaysian Inland Revenue Board issued Public Ruling 8/2011 clarifying the tax treatment of foreign nationals working in Malaysia.

Mexico

Senate approves 2010 tax legislation; temporary tax increase for individuals and corporations incuded

Netherlands

The Netherlands is working on revisions to its rule that allows some expats to pay tax on only 70% of their income (the so-called "30% ruling").

Travel Compensation to Temporary Foreign Workers in The Netherlands cannot be included under tax free "30% rule"

New Zealand

Personal tax cuts effective April 1 will total $1 billion

Norway

New law will require withholding on pensions paid from Norwegian sources to non residents

Poland

Poland’s Government proposes increase in VAT rates if country’s debt-to-GDP exceeds 55%

Romania

Romania abolishes minimum business tax effective September 30, 2010

Russia

South Korea

President lee Myung-bak proposes "unification tax" to fund future merger of North and South Korea

Spain

Council of Ministers Approve Measure in Combat Tax Fraud and Illegal Workers

Switzerland

Switzerland is planning to hand over to U.S. authorities considerable information on suspected U.S. tax evaders.

Taiwan

United Kingdom

U.K. Office of Revenue and Customs issued brief reversing previous position that “smart phones” are not mobile phones for purposes of provisions, allowing employers to provide them to employees without tax cost - effective February 20, 2012.

U.K. government issued draft legislation that would exclude a number of passive security enhancements from being treated as accessories in calculating the taxable value of employee benefits from use of a company car.

U.K. and Switzerland signed an agreement that will subject assets of U.K. taxpayers in Swiss banks to taxation, but without revealing the names of those taxpayers.

UK Treasury issues increase in Mileage Allowance Rate to 45 pence per mile for first 10,000 miles of business use

Vietnam

Worldwide Tax Rates

KPMG Survey shows growing tax revenue dependency on indirect taxes such as VAT

International Legal Issues

Pressure intensified on EU over Airline Carbon Tax

Obama issues Executive Order on Travel and Tourism Promotion

India's Prevention of Corruption Act 1988 prohibits bribery of an Indian Official

China and India take action against corruption - With implications for U.S. Companies

UK Bribery Act Guidelines Issued – Enforcement Starts July 2011

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