New Zealand: proposed change to debt remission rules
New Zealand’s Inland Revenue has released an Officials’ Issue Paper seeking feedback on proposed legislative changes to make New Zealand's ‘debt remission’ rules more certain for taxpayers. These proposals will be of interest to Australian based corporate groups with New Zealand subsidiaries that may be considering debt recapitalisations. Submissions close on 14 April 2015.
New Zealand: Tax Tips March 2015
Information on recent New Zealand income tax developments is available from PwC New Zealand,
Seychelles signs Convention on providing international assistance on tax matters
On 24 February 2015, the Organisation for Economic Co-Operation and Development (OECD) announced that Seychelles has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters which provides for all forms of mutual assistance - exchange on request, spontaneous assistance, tax examinations abroad, simultaneous tax examinations and assistance in tax collection, while protecting taxpayers’ rights.
Exchange of information with Switzerland
On 3 March 2015, the Commonwealth Treasurer announced that Australia and Switzerland had agreed to automatically exchange information based on the OECD's common reporting standard (CRS). Under the agreement, the Australian Taxation Office (ATO) will automatically receive details of financial accounts such as investment income and balances that Australians hold in Switzerland, and will use it to check against information declared in Australian tax returns. Similarly, the Swiss Federal Tax Administration will receive details of Swiss residents that hold financial accounts in Australia. Australia and Switzerland are to implement the CRS in 2017 and will begin exchanging information in 2018.
OECD: Global Forum on Transparency and Exchange of Information
On 16 March 2015, the OECD Global Forum on Transparency and Exchange of Information published nine peer review reports which demonstrate continuing progress toward implementation of the international standard for exchange of information. Included in the published material was a supplementary peer review report on Switzerland’s Legal and Regulatory Framework which assesses the improvements that Switzerland has made to its exchange of tax information mechanisms.
United Kingdom: Budget 2015
The United Kingdom (UK) Budget was handed down on 18 March 2015. From an international perspective, of key relevance are:
- the Diverted Profits Tax (confirmed implementation date of 1 April 2015)
- a new anti-avoidance rule targeted at planning to refresh tax losses (effective immediately)
- confirmation that the UK will introduce country by country reporting (date to be determined), and
- postponing the planned changes to the rules on the taxation of loan relationships and derivative contracts following consultation with business (with the exception of the proposed repeal of the late paid interest rules, which will be included in the forthcoming Finance Bill).
Further information is available from PwC UK.
European Commission: Combatting corporate tax avoidance
The European Commission has presented a package of tax transparency measures as part of its ambitious agenda to tackle corporate tax avoidance and harmful tax competition in the European Union (EU). Central to this package is a proposal to introduce the automatic exchange of information on tax rulings between member States, which, if adopted, will apply from 1 January 2016. The automatic exchange of information on tax rulings is designed to enable Member States to detect certain abusive tax practices by companies and take the necessary action in response. Additionally, the Commission considers that the measure will “encourage healthier tax competition, as tax authorities will be less likely to offer selective tax treatment to companies once this is open to scrutiny by their peers”.
A number of other initiatives are underway including consideration of public disclosure of tax information by multinationals and reviewing the EU Code of Conduct on Business Taxation.