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Companies must pay close attention to tax planning given the important role it plays in helping them to achieve their financial goals. A holistic approach to tax planning and corporate organisational structures is required. The C-suite will have a pivotal role to play in helping to coordinate overall strategies with tax planning. For US companies, the process will be affected by the recent overhaul of the tax system, which generated headlines, both locally and globally. The reforms will change how the US taxes individuals, partnerships, and domestic and multinational businesses.

UNITED STATES

Rosemary Sereti

Deloitte

“The publication of regulations and guidance to implement the 2017 federal tax act, passed on 22 December 2017, is a high priority for the Department of Treasury and the Internal Revenue Service (IRS). In providing guidance, the Treasury and the IRS must be mindful of executive order ‘Reducing Regulation and Controlling Regulatory Costs’, which requires that new regulations neither add to the regulatory burden nor impose additional costs. The ‘2017-2018 Priority Guidance Plan’ includes plans to issue guidance with respect to the federal tax act, revoke final, temporary or proposed regulations and provide general guidance in other areas, such as the centralised partnership audit regime.”

CANADA

Alex Smith

Grant Thornton LLP

“Much of the attention of the Canadian Department of Finance has been directed toward the owner/manager in Canada and in particular, what is perceived to be the abusive use of domestic regimes designed to help and promote small business. From an international tax perspective, the largest developments include a significant tightening of the Canadian voluntary disclosure regime encouraging taxpayers to become compliant and Canada’s movement toward adopting the multi-lateral instrument (MLI) as part of the BEPS initiative. With the MLI, and the BEPS initiative as a whole, Canada continues to take a conservative approach by adopting the minimum standards included in the MLI agreement, and a pledge to consider the other elements in the future.”

MEXICO

Alejandro Barrera

Basham, Ringe y Correa, S.C.

“There have been three key developments relating to tax regulations over the last 12-18 months. First, a tax amnesty repatriation programme for funds kept abroad by Mexican taxpayers. Second, amendments to the Income Tax Law to discourage the use of service or outsourcing companies. And third, the execution of the Multilateral Convention to modify Bilateral Tax Treaties. Under the amnesty repatriation programme, Mexican taxpayers who kept income abroad could elect to pay an 8 percent flat rate on funds repatriated to Mexico, rather than the ordinary 30-35 percent tax rate, plus surcharges and fines, provided certain requirements were met.”

BRAZIL

Alexandre Gleria

ASBZ Advogados

“Brazilian tax authorities are currently putting a strong effort into aligning local policies to several global standards, and especially Organisation for Economic Co-operation and Development (OECD) standards, since our country indicated its willingness to join the entity in the near future as an effective participant. Therefore, the Brazilian Internal Revenue Service (IRS) and legislators have already adopted some of the Base Erosion and Profit Shifting (BEPS) guidelines and the implementation of many others is being carefully prepared.”

UNITED KINGDOM

Nigel Barker

Deloitte LLP

“There have been a number important developments in the UK. One is the wider context of the G20/Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) project, now adopted by over 100 jurisdictions. Another is the work of the OECD forum on tax administration and how it is being implemented in the UK. In addition, there has been a new requirement for large businesses and partnerships to publish their UK tax strategy, with the first due date of 31 December 2017 for businesses with a calendar year-end.”

SPAIN

Eduardo Gracia

Ashurst

“The 2016 general election in Spain gave rise to a hung parliament and there have been no tax legislative initiatives other than the implementation of very significant EU and multilateral initiatives. In addition to these initiatives, the Spanish government has approved a number of administrative regulations.”

BELGIUM

Annick Visschers

Laga (Deloitte Legal)

“The federal summer agreement was quite significant and received broad press coverage, as it brought the most important reform in corporate tax in decades. One of the most anticipated and important measures is the gradual reduction of the corporate tax rate from 33.99 percent, 33 percent plus 3 percent crisis contribution, to 29.58 percent, 29 percent plus 2 percent crisis contribution, in 2018 and a further reduction to 25 percent, without crisis contribution, in 2020. For small and medium-sized enterprises (SME) specifically, the rate is reduced to 20 percent as of 2018.”

NETHERLANDS

Tim Mulder

DLA Piper

“Over the last 12-18 months there have been many important changes and proposed changes to the Dutch corporate tax system. Some of the most important changes have been the expansion of the domestic dividend withholding tax exemption to companies in jurisdictions that have concluded a tax treaty with the Netherlands, as well as the announced proposal to abolish the Dutch dividend withholding tax of 15 percent as of 1 January 2020. There has also been a proposal to lower the Dutch statutory corporate income tax rate from 25 percent to 21 percent. All of these developments serve to make the Dutch investment climate more attractive.”

GERMANY

Ernst-August Baldamus

KPMG

“International developments in German taxation in 2017-2018 have predominantly been driven by BEPS. Global competition for tax base is increasing and the German tax authorities are increasingly claiming their piece of the pie. US tax reform and Brexit are some of the other developments that are currently causing German multinationals to reconsider their tax strategies. On a national level, the main focus is on tax compliance and tax technology. Tax compliance has been the focus since German case law became particularly strict and personal liability risks became severe in the corporate environment.”

ITALY

Luca Bosco

Deloitte

“The major recent changes to the Italian tax rules are related to the introduction of a ‘web-tax’, levied in the form of a 3 percent withholding tax, which will be applied on payments for ‘digital services’ made by Italian companies to resident and non-resident providers from 1 January 2019, where the same provider engages in more than 3000 transactions during a calendar year. The Ministry of Finance will issue guidance that will identify the services, subject to the equalisation tax and provide implementation rules.”

INDIA

S. P. Singh

Deloitte Haskins and Sells LLP

“The Indian government has tried to implement a number of reforms over the last three years. Some of these reforms were derived from the recommendations of a committee to reform tax administration, the TARC. The overall direction of these reforms is the re-examination of the existing law and aligning India with prevailing international best practices so as to attain overall tax efficiency and improve customer satisfaction. The government has also made certain changes to implement the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) recommendations.”

JAPAN

Yutaka Kitamura

Deloitte Tohmatsu Tax Co.

“In line with the Organisation for Economic Co-operation and Development’s (OECD) BEPS project, Japan has legislated a series of tax reforms in terms of guidance on transfer pricing documentation and country-by-country reporting, designing effective controlled foreign company rules and preventing the artificial avoidance of permanent establishment status, among others. In addition, Japan has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.”

CONTRIBUTORS

ASBZ Advogados

Ashurst

Basham, Ringe y Correa, S.C.

Deloitte Haskins and Sells LLP

Deloitte LLP

Deloitte Tohmatsu Tax Co.

DLA Piper

Grant Thornton LLP

KPMG

Laga (Deloitte Legal)