International - Corporate tax bytes

  • Bermuda: The government announced on 8 August 2023 that it is considering the introduction of a corporate income tax regime that would apply to Bermuda businesses that are part of multinational enterprise groups with annual revenue of EUR 750 million or more. If enacted, the tax—which would be imposed at a rate of up to 15%— would become effective in 2025. The corporate income tax would be taken into account in calculating the effective tax rate of Bermuda businesses under the OECD Pillar Two rules. The government plans to issue a public consultation paper as part of its deliberations and is currently holding a public consultation that will close on 8 September.
  • Canada: The Department of Finance announced a public consultation on 4 August 2023 on legislation that would implement a 15% global minimum tax, as well as revised draft legislation on a 3% digital services tax. Comments are due by 8 September 2023 (the DST legislation) and 29 September (Pillar Two legislation).
  • Curacao: Domestic businesses that earn up to ANG 500,000 are subject to a reduced corporate income tax rate of 15%, with the normal 22% rate continuing to apply to businesses exceeding this income threshold. The change applies retroactively as from 1 January 2023.
  • Estonia: The corporate income tax rate will increase from 20% to 22% on 1 January 2025 and the standard VAT rate also will increase from 20% to 22%.
  • Italy: A law decree that became effective on 11 August 2023 introduces a one-time 40% windfall tax on certain banks for 2023. The tax will be levied on the excess profits earned from higher interest rates in 2022 and 2023 and will be due within six month following the end of the tax year.
  • Latvia: Effective 1 July 2023, the British Virgin Islands, Costa Rica, Marshall Islands and Russia were added to Latvia’s list of low-tax jurisdictions to bring the list in line with the EU noncooperative jurisdiction list, which was revised in February 2023 to add these jurisdictions/territories to the list.
  • Luxembourg: A draft bill that would implement the EU minimum taxation directive was submitted to the chamber of representatives on 4 August. The bill generally follows the directive and includes a qualified domestic minimum tax and transitional safe harbours. The measures will be implemented in a law separate from the corporate tax law. EU member states must implement the directive in their domestic laws by 31 December 2023.
  • Saudi Arabia: The Zakat, Tax and Customs Authority (ZATCA) has released guidance for legal entities and individuals to obtain a tax ruling to obtain clarification of the tax law from ZATCA. The ruling procedure applies to income tax, withholding tax, real estate tax, VAT, excise tax and customs duties.
  • Slovak Republic: The Ministry of Finance has opened a public consultation on a bill that would transpose the EU minimum taxation directive into domestic law. The consultation period runs from 3-24 August 2023. EU member states must implement the directive in their domestic laws by 31 December 2023.
  • United Arab Emirates: On 29 July 2023, the Ministry of Finance announced updated Executive Regulations on the Tax Procedures Law that became effective on 1 March 2023. The regulations clarify the position on voluntary disclosure, specifies record-keeping or extension timelines, sets out new requirements for tax agents, etc. (for an analysis of the regulations, see the alert prepared by BDO in the UAE).
  • United Nations: On 9 August 2023, the Secretary-General issued an advance version of a report on the promotion of inclusive and effective international tax cooperation at the UN. The report looks at existing international tax cooperation arrangements, options to improve such cooperation and outlines potential next steps. The report concludes that enhancing the UN role in “tax-norm shaping and rule setting,” taking into consideration existing multilateral and international arrangements, would seem to be the most viable path for making international tax cooperation fully inclusive and more effective.

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