Worldwide: SKP Global Expansion Updates - May 2017

Last Updated: 12 June 2017
Article by SKP  

We are pleased to present the April issue of SKP Global Updates – our newsletter that covers employment, payroll, Goods and Services Tax (GST)/Value Added Tax (VAT) and corporate tax related developments globally.

The key highlights of this issue includes the budget highlights of Quebec, Newfoundland and Labrador, exemption changes in foreign earned remuneration for South African residents, corporate tax rate changes in Australia, and proposed employment Law changes in Netherlands.



Obligation of country-by-country report and transfer pricing regulations

Recently, the Republic of Gabon has introduced an obligation to file a Country-by-Country report (CbC report) and transfer pricing documents from 1 January 2017.

Parent and ultimate parent companies whose consolidated annual turnover (excluding tax) is greater than or equal to CFA 491,967,750,000 for the fiscal years beginning on or after 1 January 2017 are required to file a CbC report within 12 months after the end of the fiscal year. Non-compliance of the same can attract penalty equal to 0.5% of consolidated turnover excluding taxes, maximum to CFA Franc 100 million per fiscal year.


Corporate tax incentives to stimulate Investment

Recently, the Ghana Investment Promotion Centre has announced a proposal to offer the following tax incentive to entities:

  • To reduce the corporate income tax rate from 25% to 20% by year end; and
  • Tax holiday grant to companies that relocate their headquarters to Ghana, for a 10-year period.

Ghana issues regulations on capital allowance claim

Recently, the Ghana Revenue Authority has issued regulations for the capital allowances claim. The key points of the regulations are summarised below:

Exemptions - In cases where depreciable assets are used for the production of exempt income/income under temporary concession, the capital allowances will be deductible for income tax purposes.

Ownership - At the end of the basis period, depreciable asset must be owned by the person making a claim for capital allowance.

Loss of asset - In cases where a depreciable asset is destroyed by a natural disaster, accident or theft, the asset would be considered to be realised for zero consideration and additional capital allowance may be granted. This will be subject to the proof of loss submitted. If the asset is insured, the compensation received will be reduced from the written-down value of the asset before capital allowance is granted for the particular asset.

South Africa

Changes to exemption of foreign earned remuneration for South African residents

Budget 2017 has proposed a change in the taxation of South African tax residents working outside the country that will make them liable for South African tax unless they pay the foreign tax in the country where they are working.

Currently, a South African resident working abroad can be exempt from South African income tax on the income earned relating to the services rendered outside of South Africa. This exemption is available irrespective of whether services are provided on behalf of a foreign or a South African employer. In order to qualify for the exemption, certain conditions need to be met by the outbound assignee:

Proposed changes: It has now been proposed that the exemption will only apply to cases where the foreign income is subject to tax in that country.



Introduction of exemption of tax on debits and credits in bank accounts

The Executive Branch's Decree 223/2017 introduces new exemptions in the Official Gazette for tax on debits and credits in bank accounts.

Exemptions have been added to the bank accounts mentioned below:

  • Trusts established by Decree 924/1997.
  • The fiduciary fund established by Decree 286/1995, ratified by Law 24,623.
  • The federal fiduciary fund established by Law 24,855.
  • Funds administered by federal government agencies for the purpose of financing infrastructure projects and assisting provinces.

Effective date: 3 April 2017

Rules on value of assets for annual tax return published

Recently, Resolution 4018-E has been published to provide rules on mandatory values regarding wealth tax for preparation of annual tax returns for the tax year 2016. The information refers to the mandatory values of certain assets, as follows:

  • Tax identification numbers of financial entities;
  • For listed companies, mutual funds and other financial assets;
  • Foreign currency exchange rates for foreign assets;
  • List with specific values for each type of vehicle for automobile; and
  • Real estate registry information for properties located throughout the country.

Effective date: 29 March 2017


Changes to parental, maternity and caregiving leaves

The Canadian Federal Budget 2017 proposes more flexible parental, maternity and caregiving leaves and Employment Insurance (EI) benefits to support employees in balancing work and their family responsibilities. Following are the changes proposed:

Parental and Maternity Leave: It is proposed to give parents a choice between receiving EI parental benefits for up to 18 months at a rate of 33% of average weekly earnings, or up to 12 months at the existing benefit rate of 55%. It also proposes to increase the maternity benefits from 8 weeks to 12 weeks before their due date.

Longer Job Protected Leave: It proposes amendments to the Canada Labour Code (CLC) which would afford job protection to employees while they are receiving parental or maternity benefits; such changes would apply only to federally regulated employers.

Caregiving Leave: A new EI caregiving benefit has been introduced in Budget 2017. Currently, EI benefits are available in cases where a loved one is gravely ill and at significant risk of death, or where a child is critically ill or injured.

New Job Protected Leave: Budget also proposes changes to the CLC which would afford job protection to employees while they are receiving caregiving benefits – such changes would apply only to federally regulated employers.

Considering the above changes, employers should anticipate that employees would be taking longer periods of leave to fulfill their family responsibilities.

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