Parliament has passed the Value Added Tax (VAT) Law and the Tax Procedures Law. The amendments to the VAT Law require the tax administration to reimburse VAT within 60 days of a taxpayer filing a request and within 30 days of an exporter filing a request; while the amendments to the Tax Procedures Law establish the Directorate of VAT Reimbursement within the General Tax Directorate.
As most companies usually suffer financial losses in their first years of activity, it is important to avail of the tax loss carry-forward rules to help save tax and ensure the most favourable tax treatment. Strategies might include the proper allocation of expenses, so that any significant losses can be offset in the first profitable years, taking into consideration the three-year carry-forward period.
The legal framework regulating the taxation of capital gains provides that a 'capital gain' is the difference in value between the purchase price (ie, the capital contribution) and the sale price of company shares. Capital gains are taxed at a rate of 10% and the tax application mechanism is different according to whether the capital gain is realised by a resident or non-resident individual or a legal entity.
The Albanian tax regime provides for a flat tax rate of 10%. This rate also applies to dividends distributed by Albanian companies, and is levied through a 10% withholding tax. In addition to this attractive tax treatment of dividends, foreign investors may plan for efficient dividend taxation through the network of double tax treaties to which Albania is a party.
For several years the possibility of a fiscal amnesty has been at the centre of political debate, and this debate has gained momentum in recent months. Based on an unofficial draft law which has been circulated, the proposed amnesty will deal with several areas, including the cancellation of customs, social security and healthcare contributions and tax obligations, and penalties for late payment and interest.
The Complementary Finance Act 2009 covers a range of fiscal measures, including amendments that reflect the government's new policies on the reduction of advantages for direct investment and on limitations on, and increased control over, transfers of funds. The changes particularly affect beneficiaries of tax privileges and parties involved in importing goods and services.
The Complementary Finance Act 2009 has significant implications for Algerian and foreign companies. Among other things, this new legislation affects the regime for building and civil engineering contractors, amends the tax consolidation regime, introduces an enhanced tax credit for research and development expenses and allows for revaluations resulting from the adoption of new accounting standards.
The 2009 Finance Act introduced several amendments that affect foreign entities, typically by either creating a heavier tax burden on foreign investment or introducing new procedural requirements. For example, profits transferred to a non-resident foreign company by its branch established in Algeria or an Algerian permanent establishment are considered distributed profits and are subject to a 15% withholding tax.
The government is proposing an ambitious tax amnesty law which would allow taxpayers to disclose undeclared assets and extinguish any tax obligation relating to such assets by paying a penalty. The government proposal gives taxpayers the option to use the disclosed assets to subscribe to a three-year zero coupon bond and a seven-year 1% per year coupon bond.
Argentina has recently amended the regulations on harmful tax competition in relation to low or no-tax jurisdictions, which set out a black list identifying tax havens. Under the new decree, for the purposes of the Income Tax Law and the applicable regulations, all references to 'low or no-tax jurisdictions' will now instead refer to 'non-cooperative countries for purposes of fiscal transparency'.
Following the cancellation of the former double tax treaty between Spain and Argentina in 2012, a new treaty between the two countries has recently been signed. The new treaty reflects in general terms the structure of its predecessor, while introducing a few relevant changes. Although these changes are significant, a mere renegotiation of the then-extant treaty would arguably have sufficed.
A conflict between the Income Tax Law and the Companies Act may arise if, during the two-year period following a restructuring, the surviving company (or companies) must make a capital reduction following the mandate imposed by the Companies Act, thus potentially jeopardising the requirement under the Income Tax Law for the continuity of proprietary interest. This conflict was analysed in a recent appellate court decision.
Following its unilateral termination of tax treaties with Chile, Spain and Switzerland, Argentina is in the process of negotiating new double tax agreements. It is hoped that this will ensure that the continuity of treaty benefits can be preserved. A number of rulings are also pending before the Supreme Court dealing with certain treaty law open issues for which a definition or clarification is expected.
In 2009 it was announced that Aruba was no longer on the Organization for Economic Cooperation and Development's tax haven blacklist or its 'grey list' of jurisdictions with too few exchange of information treaties. However, the Financial Action Task Force's subsequent report on Aruba and its plans for a new blacklist have prompted the government to propose rigorous changes to the existing system.
Aruba's new turnover tax was introduced with effect from January 2007 as part of a shift from direct to indirect taxation. However, certain accompanying amendments, including the introduction of a definition of a 'permanent establishment' for wage tax and profit tax purposes, followed much later and have greatly increased the administrative burden on entrepreneurs.
Proposed legislation on tax and social security liability creates additional liability for contractors and subcontractors - a contractor may be liable not only for its own wage tax and social security premiums, but also for those of its subcontractors and all of the subcontractors in the same chain. The legislation will also establish liability where temporary employees are hired from an agency.
The government has published a revised exposure draft on the Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2006 containing proposals for the tax treatment of financial arrangements. These proposals will introduce Division 230 into the Income Tax Assessment Act 1997, which will provide new tax timing rules as they apply to financial arrangements.
Parliament has approved the Taxation Laws Amendment (2006 Measures No 4) Bill 2006, which amends Australian income tax law to target better and strengthen capital gains tax laws for non-residents. Non-residents' liability to Australian capital gains tax will be limited to capital gains tax events involving Australian real property or business assets of a foreign resident's Australian permanent establishment.
Australia imposes interest withholding tax according to Part III, Division 11A of the Income Tax Assessment Act 1936. Interest withholding tax is imposed at a rate of 10%; however, this rate may vary subject to the operation of applicable double taxation agreements entered into by Australia.
The federal government has introduced draft legislation which proposes to reduce the Australian capital gains tax base as it applies to non-residents who hold a direct interest in Australian entities. It may also potentially broaden the Australian capital gains tax base as it applies to non-residents who dispose of interests in Australian entities indirectly.
As part of the 2006 Federal Budget the government included a number of changes to Commonwealth taxation. These changes are intended to foster and promote saving, investing and working in Australia. Although the proposed changes are still to be approved by Parliament, it is envisaged that they will take effect from either July 1 2006 or July 1 2007.