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May 7, 2024

Global Tax Policy and Controversy Watch | May 2024 edition

Key highlights

Poland publishes draft Pillar Two legislation, with option to apply retroactively from 1 January 2024

Legislation proposed in Poland to implement the EU directive on global minimum tax is expected to be adopted in the third quarter of 2024 and to be in force from 1 January 2025. The effective date is subject to certain exceptions, including optional application of the Qualified Domestic Minimum Top-Up Tax (QDMTT) Safe Harbor and Income Inclusion Rule (IIR) as of 1 January 2024.

EU Public Country-by-Country Reporting (PCbCR) Developments Tracker now available

Under the European Union (EU) PCbCR Directive, certain multinational enterprise (MNE) groups operating in the EU are required to publicly disclose income taxes paid and other tax and non-tax related information. As countries continue to transpose the Directive into national law, local nuances have emerged, which need to be carefully considered by MNE groups in scope. The EU PCbCR Developments Tracker provides an overview of the Directive and how each EU Member State and European Economic Area (EEA) country is implementing the Directive, spotlighting early adopters, commonalities and deviations.

EY Green Tax Tracker updated

The EY Green Tax Tracker provides an overview of global green taxes, exemptions and incentives, as well as carbon pricing regimes. Global sustainability policies and regulations are advancing at a rapid pace. As global sustainability tax policies grow in number, so do the associated business impacts, risks and opportunities. The EY Green Tax Tracker can help businesses get ahead and stay ahead on developments in this area.

The latest on BEPS 2.0

Register for and join a 4 June 2024 webcast on the OECD/G20 BEPS 2.0 project. Learn about the latest developments on Pillars One and Two in the Inclusive Framework negotiations and in jurisdictions around the world.

News items

European Commission Group on the Future of VAT 44th meeting highlights

On 17 April 2024, the Group on the Future of VAT (value-added tax) of the European Commission published the minutes of its 44th meeting, which took place on 21 March 2024. Topics discussed included implementation of the new scheme for small and medium-sized enterprises, the status and elements of the VAT in the Digital Age package and EU customs reform.

Algerian tax authorities extend deadline for filing annual tax and transfer pricing declarations

The General Directorate of Taxes has informed all taxpayers that the deadline for filing the annual income declarations (G4 and G11) and the annual personal income declaration (G1) for the fiscal year 2023, along with the attached documents, has been extended until 31 May 2024.

Algeria issues VAT guidelines

Tax authorities in Algeria recently published a tax administration doctrine regarding the tax audit approach on input VAT and VAT credits, as well as VAT compliance requirements in relation to a VAT exempted turnover.

Canada tables Federal Budget 20242025

The budget contains several measures affecting individuals and corporations, including an increase in the capital gains inclusion rate, but no change to the general corporate tax rate or the general personal income tax rates. The budget does include changes to the alternative minimum tax.

Colombia's highest tax court sustains tax authority opinion denying activation of most-favored-nation clause in tax treaties

Colombia's highest tax court has declined to annul a Colombian tax authority opinion ruling that three double-tax treaties executed by Colombia were not affected by provisions in a later-executed tax treaty, because most-favored-nation clauses in the three treaties were not activated.

French Tax Authorities conclude general VAT rules apply to NFTs

French Tax Authorities recently published a ruling on the VAT treatment applicable to non-fungible tokens (NFTs), concluding that NFTs are not subject to any specific VAT scheme and that general VAT rules apply. The tax ruling also details the VAT treatment of three specific transactions carried out using NFTs.

Companies now required to register for German single-use plastics levy

Germany's Federal Environment Agency announced that a digital platform online register is now available for companies required to pay a levy into the Single-Use Plastics Fund. The register will be used to implement the mandatory levy on certain single-use plastic products from 2025.

Honduran Tax Authority issues agreement on CbCR

Effective for tax years that begin on or after 1 January 2025, multinational groups with consolidated revenue of at least €750m will be required to file country-by-country reports and corresponding notifications.

Hong Kong introduces bill on patent-box tax incentive

Under the new patent-box regime, qualifying income will be taxed at 5%. The portion of eligible intellectual property income that will be taxed at the 5% concessionary rate will be determined in a manner that would be consistent with the "nexus approach" in BEPS Action 5 and will also take into account certain expenditures incurred by the previous owner of the intangible asset, if conditions are met.

Netherlands implements EU Public CbCR Directive, applicable as of 22 June 2024

The Dutch Government finalized legislation to implement the EU Public CbCR Directive in the Netherlands. In line with the deadlines established in the Directive, the first year of reporting in the Netherlands will be the financial year starting on or after 22 June 2024, and publication must take place within 12 months from the end of the reporting financial year.

Poland introduces mandatory e-invoicing from 2025

Poland has introduced a National E-invoicing System, which will be mandatory for all Polish taxpayers and foreign companies that have fixed establishments for VAT purposes in Poland from 2025. The Ministry of Finance announced a timeline for implementation.

Saudi Arabia issues guidelines for Regional Headquarters Tax and zakat rules

The guidelines aim to further explain the provisions set out in the Regional Headquarters Tax Rules and clarify ambiguities in the tax and zakat treatment of regional headquarters activities.

Uganda issues tax amendment bills for 2024 affecting excise duty, stamp duty, VAT, income tax and PEs

The proposed modifications include the introduction of a 5% income tax on disposal of nonbusiness assets by both residents and nonresidents. The proposed modifications introduce the concept of a permanent establishment, which is currently not a defined term under Uganda's Income Tax Act.

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Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

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