With a continuation of the general downturn in Government finances across much of Europe, greater efforts are being made to open up the tax base, to clamp down on evasion and reassess the most aggressive avoidance schemes. The result is new, more targeted legislation, say lawyers, at both the individual and corporate level.
Some suggest however that recurring tax rises are having a negative effect on both public acceptance of austerity measures and economies themselves, creating a downward spiral of decreased activity and tax revenues. Consequently we are also seeing, for example, in Greece, a simplification of the tax regime and thresholds. The removal of discretionary bands and greater transparency in decision-making in order to reduce opacity.
Belgium has finally seen the resolution of the political impasse that had halted much new legislation, with the new Government finally announcing a Budget for 2013, which includes amendments to the corporate and withholding tax regimes.
Germany is looking more closely at inheritance and gift allowances at both the individual and corporate level. Recent judicial decisions in Austria have similarly seen a reassessment of the legitimacy of grandparent contributions, capital duty triggers and interest deductibility in relation to corporate transfers. Poland meanwhile, has seen a total reappraisal of the tax advantages applicable to limited liability partnerships (LLPSs) effectively ending the benefits enjoyed, say lawyers there.
The UK likewise is seeing greater focus on avoidance in both the public and legislative arenas, including new rules targeting the "corporate enveloping" of properties and the payment (or non-payment) of capital gains tax. Among the amendments to Danish tax regulation is however the exemption of capital gains tax on portfolio shares, alongside new anti-avoidance rules affecting "stepping stone" companies.
Elsewhere greater focus is beginning to be placed on using the tax system to try and encourage economic growth, with measures soecifially targetting employment and investment.
In France the introduction of credits intended to reduce labour costs follows such a path. Italy has introduced a scheme of R&D credits to encourage innovation, while also offering greater flexibility in the payment of taxes and arrears. Spain too is seeing greater focus in areas like real estate and trusts to modernise regulation and better reflect current and international practice.
Authorities are also looking mor closely at the application of VAT, and the possibility to increase the number of exemptions, as is the case in Iceland, in order to encourage more inward investment.
Cyprus is promoting the benefits of itself as a holding company jurisdiction especially for intellectual property assets, for corporate tax planning, as also is Luxembourg. In an attempt to encourage the development of a new tax base, Portugal has expanded the rules applicable to non-habitual residents with a favourable ten-year regime.
Switzerland too is seeing notable amendments in relation to employee shares and bonus payments, and reflecting wider tends, growing pressure to increase taxation on the most wealthy.
Elsewhere, beyond Europe, we are seeing the South African authorities restate the rules applicable to the transfer of immovable assets held by non-citizens; a presentation of the Tunisia individual and corporate tax regimes, and in the UAE, a restating of a system which continues to see a zero corporate income tax regime and an expanding network of double taxation treaties.