International Tax News - June 2014

by DLA Piper

DLA Piper - International Tax News


Starting January 1, 2015, EU VAT rules for suppliers of digital content, telecommunications and broadcasting services are changing. And this is only part of the global story as revenue authorities throughout the world more closely scrutinize tax issues for the growing e-commerce sector and cross-border suppliers of intellectual property.

For companies that move digital content and intangible rights and services across borders, we are pleased to publish our new Global VAT Guide.

The Guide provides information on relevant VAT regulations in numerous jurisdictions as well as offering tips to assist companies on minimizing their VAT risk and compliance costs.

Read the guide.


By Daniel Chan, Peter Chen, Peng Tao and Zipo Lai, Hong Kong

Foreign investment in the telecom industry has traditionally been highly regulated and restricted in China. China tightly controls what types of telecom businesses, including basic telecom services and value-added telecom services (VATS), are open for foreign investment.

However, as it continues promoting the Shanghai Free Trade Zone, China has opened additional VATS businesses for foreign investment and lifted the foreign equity ownership cap concerning some VATS businesses in the zone.

Find out more.


By Erik Björkeson, DLA Nordic, Stockholm

A Swedish government committee mandated to analyze the Swedish corporate tax system – including the need for a more comprehensive approach to the overall deductibility of interest expenses as well as the strengthening of the equity capital of companies – has proposed new corporate tax rules.

On June 12, the committee announced that it is proposing to introduce a new system for corporate taxation.

Find out more.


By Ruslan Vasutin and Anton Polivanov, St. Petersburg

Russia has introduced a new requirement for Russian citizens holding any other citizenship or permanent residence permit in a foreign state to notify the Russian Federal Migration Service (FMS) of such foreign citizenships or residence permits.

The law does not introduce any other new requirements or restrictions for dual citizens apart from this notification requirement.

Failure to file the notification is a criminal offence. The notification can only be filed in Russia, via a local FMS agency or a post office.

Find out more about this new rule, which goes into effect in early August.


By Carlos Rodríguez

The Spanish government has asked an experts committee to prepare a report on proposals for tax reform.

Among the proposals is one to establish a new limit on the tax deductibility of financial expenses.

Under current regulations, the deductibility of financial expenses is limited to 30 percent of the “adjusted” EBITDA of the borrower. This restriction is applicable if annual financial expenses exceed €1 million. The amounts not deducted can be carried forward 18 years with the same limit.

The proposal of the experts committee is to apply a different limit while maintaining the €1 million threshold.

Find out more.


By Franz Althuber, Matthias Baritsch and Daniel Varro, Vienna

The deductibility of interest in connection with the acquisition of capital under Austria’s Corporate Income Tax Act (Körperschaftsteuergesetz) was introduced in 2005 as part of the Tax Reform Act. Yet in practice the precise interpretation of the term “interest” has been disputed.

Now a ruling from the Administrative Supreme Court (Verwaltung-sgerichtshof) says that money costs are deductible for tax purposes.

Reporting from Austria, DLA Piper lawyers Franz Althuber, Matthias Baritsch and Daniel Varro look at this case and other recent developments in Austria’s international tax landscape.

Read the June newsletter from Austria.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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