International Tax News – december 2020
The international tax environment is constantly changing, and companies as well as individuals need to keep themselves updated on those evolutions, and adapt their situations and structuring to comply with fiscal rules that may apply to them.
With more than 20 years of expertise in International tax advisory, Alpha Prime provides updates and analysis on the evolution of the tax environment of its clients and business partners.
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Nicolas Michaux, Founder
Hong Kong New Tax Treaty
The tax treaty between Hong Kong and Serbia has been signed in August and will enter into force after both sides complete ratification procedures. Here is an overview of the main withholding tax applicable:
|Before the Treaty||20%||25/20%||25/20%||25/20%|
|After the Treaty||5/10%||0/10%||5/10%||0%|
French Tax Residency
In a June 9 2020, the French supreme court decided that tax residency as defined in the French Chinese Double Tax Treaty was not conditioned on the taxpayer’s full tax liability. A person who moved from France to China and was subject to taxation in China only on his China-sourced salaries, but was exempt from taxation in China on his French sourced dividends. The French tax authorities refused to the tax payer the application of the China-France tax treaty that could allowed him to benefit a reduction from 30% to 10% of the French withholding tax on dividends, based on the fact that the taxpayer was not subject to full tax liability in China, and therefore could not be considered a resident of this country treaty. The French Supreme Court ruled that the treaty only required that the taxpayer be liable to tax in China by reason of their domicile, residence, place of management, or any criterion of a similar nature, and that full tax liability was not required.
Italy 3% Tax
In August 2020, Italy reinstated the asset step-up regime, which allows Italian corporations to access a special temporary regime, that applies a 3% substitutive tax on assets accounted for as of 31/12/2019. If a taxpayer elects the step-up, then the higher values must be disclosed in the 2020 financial statements and can be deducted for direct tax purposes beginning with the tax period that includes December 31, 2021.
French Finance Bill Draft for 2021
The French corporate income tax rate will still progressively decrease down to 26.5% in 2021 (except for companies which turnover exceeds €250 million which will bear a 27.5% rate) and to 25% for all companies in 2022.
This will align France with the standard corporate income tax rate applicable in Europe.
Beneficial owners & shareholders register in the UAE
A UAE Ministry of Economy resolution requires that companies based in the UAE in free zones to maintain registers of their beneficial owners and shareholders. The registration will have to be done with the relevant registrar and licensing authorities. The information maintained in the register could be shared by the Ministry of Economy with foreign governments at their request, under international cooperation measures. Beneficial ownership information may also be required to be reported under the UAE economic substance regulations.