STTAS EU Trade Weekly
Spain: EU orders Spain to recover corporate tax breaks from acquisitions
Spanish companies given tax breaks when they bought indirect stakes in firms overseas will have to repay the money, the European Commission said, because the benefits breached European Union rules on state aid. Spain adopted in March 2012 a new scheme allowing companies to deduct from corporate tax bills the "goodwill" related to indirect purchases of foreign shareholdings – the acquisition of a stake in a firm by buying shares in a parent company. (Reuters)
Ireland: Controversial “double Irish” tax to be abolished in six years
The Irish government has announced plans to close the country’s biggest tax loophole, the “Double Irish,” which allows companies to shift their profits from high-tax countries to havens. Users of this method can cut their effective tax rate far below Ireland’s already low 12.5 percent rate, in some cases down to less than 2 percent. Companies already registered in Ireland are being given no less than six years to alter their accounting structures. (The Economist).
Russia: Vehicle imports from EU and U.S. will not banned
Russia's Ministry of Industry and Trade has said it is not considering the possibility of a ban on the supply of passenger cars to Russia from the U.S. and EU. A ban had been on the table as one potential response to U.S. and EU economic sanctions against Russia over its involvement in Ukraine, but a Russian official reportedly indicated that the government is now focusing on supporting domestic producers instead. (Automotive Logistics)
EU: Council agrees to extend automatic exchange of information to combat tax evasion
The European Council has agreed on a draft directive extending the scope for the mandatory automatic exchange of information between tax administrations, enabling them to better combat tax evasion and to improve the efficiency of tax collection. This proposal brings interest, dividends and other income, as well as account balances and sales proceeds from financial assets, within the scope of this information exchange. (Council of the European Union).
Czech Republic: Expanded list of 'unreliable' value-added taxpayers
The Czech government has expanded the criteria for inclusion on its online and publicly accessible list of so-called "unreliable taxpayers." The list, which was introduced in 2013, is intended to enable VAT-registered taxpayers to check whether their supplier has a history of non-compliance or is seen to be a fraud risk. (Global Tax News)
Middle East/North Africa
Algeria: Agreement with Argentina on WTO accession
Algeria and Argentina have inked a bilateral agreement on goods trade as part of Algeria’s effort to join the World Trade Organization. Algeria has concluded similar agreements with Cuba, Uruguay, Brazil, Venezuela and Switzerland and is still conducting discussions with 19 other WTO member countries. (Algeria Press Service)
Saudi Arabia: Iraq, Saudi Arabia cut oil prices for Asia and Europe
Iraq has cut its November oil prices for customers in Asia and Europe following a similar move by top global exporter Saudi Arabia as OPEC producers compete for market share in the face of weaker global oil demand and prices. (Arabian Business)
South Africa plans to eliminate duty-free treatment for semi-knockdown truck assembly
South Africa’s Department of Trade & Industry has said that by April 2017 the current tariff-free regime for semi-knockdown assembly of trucks will no longer be supported and only complete-knockdown assembly will qualify for tax breaks. However, one industry official said that with the small size of the domestic market for trucks the change may not end up happening. (Automotive Logistics)
China: New rates for resource tax on coal
China will set a resource tax on coal based on sales rather than production starting Dec. 1, and the rate will be between 2 percent and 10 percent. In addition, "resource compensation fees" will be ceded starting Dec. 1 to reduce financial burdens on coal miners, who are hit by falling prices. (Want China Times).
Brazil: Tax breaks to wind turbine makers
The Brazilian government has approved tax breaks for wind turbine manufacturers in a bid to prop up the domestic wind energy industry. According to Provisional Measure 656 published in the Official Gazette on Oct. 8, 2014, manufacturers will no longer have to pay the Social Integration Program (PIS) tax and the Contribution to Social Security Financing (COFINS) tax on purchases of components used in the production of wind turbines. However, entire wind turbine imports will continue to be subject to the two taxes, which total 9.25 percent. (Global Tax News)