Worldwide: Global Expansion Updates

Last Updated: 15 June 2017
Article by SKP  

AFRICA

Gabon

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.

Ghana

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.

AMERICAS

Argentina

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

Canada

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.

Quebec Budget 2017-18 highlights

The Finance Minister tabled the 2017-2018 Quebec Budget on 28 March 2017. The key tax measures from the Budget are summarised below:

Corporate tax measures

  • Reduction in the Health Services Fund contribution rate for all small and medium-sized businesses.
  • The Budget eliminates the health contribution retroactively, as of 2016, for all adults whose income for that year does not exceed CAD 134,095.

Personal tax measures

  • The Budget is proposing to extend the eligibility period for the RénoVert tax credit to 31 March 2018.
  • As of the 2017 taxation year, the legislation will be amended in order to increase the basic tax credit and to simplify the calculation of personal tax credits as follows:
    • The zero-tax threshold will be raised from CAD 14,544 to CAD 14,890 for all individuals other than trusts;
    • Personal tax credits will be calculated according to the rate applicable to the first taxable income bracket of the personal income tax table, i.e., 16% instead of 20%.

For more information, click here.

Newfoundland and Labrador budget 2017-18

Recently, budget has been announced. According to the budget there is no tax increases. Below are the highlights:

  • The provincial general corporate income tax rate remains at 15%.
  • The Budget does not include any changes to personal income tax rates.

For more information, click here.

Manitoba's 2017 budget highlights

Recently, Manitoba's 2017 Budget has been announced.

The Budget did not include any changes to the province's individual (personal) or corporate tax rates.

The Budget amends several of Manitoba's tax credits, including reducing the provincial research and development (R&D) tax credit to 15% (from 20%) and decreasing the non-refundable portion of the manufacturing investment tax credit to 1% (from 2%).

According to the Budget, Manitoba will review its tax system.

For more information, click here.

Mexico

Proposed changes in the employment law

Recently, the Mexican government has announced employment related reforms, which are summarised below:

  • Transfer of employee related conflicts to new labour counts and it will no longer be transferred to Conciliation and Arbitration Boards for resolution.
  • Introduction of specific formal procedure rules for regulation of strike and voting evidence.
  • Introduction of requirements on employers and unions for registration of collective bargaining agreement for workers awareness.

United States

IRS Tax Tip 2017-38 issued

The Internal Revenue Service (IRS) issued Tax Tip 2017- 38 on credit for contributions to retirement saving accounts. Taxpayers may be entitled to claim the savings credit if they contribute to a retirement saving plan such as 401(k) plan or (Individual Retirement Account) IRA plan. This credit can help a taxpayer to save for retirement and reduce taxes at the same time.

For more information, click here.

Advance version of announcement 2017-04 released

Recently, the IRS has released an advance version of announcement 2017-04. Relief from certain excise taxes under section 4975 of the Internal Revenue Code and any related reporting requirements has been provided by advance version of announcement 2017-04 to conform to the temporary enforcement policy described by the Department of Labor (DOL).

Proposed amendment to ban state- wide sales tax in Montana

Recently, a constitutional amendment has been proposed by Montana Governor to prohibit a statewide sales tax. This is subject to voter approval. At present, the statewide general sales tax rate is 4%.

Introduction of economic nexus legislation in Washington

Recently, the Washington Senate has introduced the legislation for creating economic nexus standard for the collection of sales and use tax. A seller will have substantial nexus if he has more than USD 267,000 receipts from Washington or at least 25% of its total property, payroll or receipts in Washington, during the current or preceding calendar year. In addition, a seller will also have substantial nexus if its gross proceeds exceed USD 10,000 during current or preceding calendar year, subject to fulfilment of certain conditions.

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