Latest International Tax News

Some tax highlights happening around the world

Russia: Potential Change to Definition of Russian Tax Residency for Individuals

Individuals spending 90 days a year in Russia, or having their centre of vital interest in Russia, might be viewed as Russian tax residents starting from January 1, 2020 following the OECD’s Country Programme on Taxation with the Russian Federation.

Moreover, through the introduction of CFC legislation and management and control test foreign structures of Russian owners may be taxable in Russia. Signing up to AEOI/CRS and starting exchanging information with foreign tax authorities made non-compliance with Russian legislation apparent to the Russian tax authorities.

France and US: Digital Tax Contention

U.S. and French officials announced that they’ve reached an agreement to at least temporarily resolve the potential for trade conflict created by France’s enactment of a digital tax that mostly affects U.S. tech companies. France has said that once the OECD reaches a multilateral consensus, it will refund U.S. companies the amounts paid under the digital tax if the amounts owed its treasury under the OECD deal are less than the digital tax already paid. It’s unclear what the United States has promised in return, although presidential tweets threatening tariffs on French wines have ceased for now. The U.S. trade office’s investigation into whether the French tax is a discriminatory violation of trade obligations, remains ongoing. The principle behind the U.S.-French bargain rests on the assumption that countries ultimately will agree to a multilateral plan for taxing the digitalized economy under OECD auspices. The United States has apparently committed to ensuring that its companies will pay the French digital tax in 2019 and 2020. That raises more questions, such as whether the agreement also includes a tacit commitment that Treasury will allow U.S. companies a foreign tax credit for the digital tax paid

 France: The Digital Service Tax

The French digital services tax is a 3 percent tax on gross revenues, limited to companies with €750 million in global digital sales and more than €25 million of sales in France. It applies (retroactively to January 2019) to two main categories of revenue: that from online ads generated by sales of data — that is, revenue from advertisers that place targeted advertising on a digital interface based on user data — and fees generated from intermediary services linking users to online sales platforms. Revenue is calculated net of VAT, and a deduction is allowed for French corporate income tax payments. The first installment is due soon, with companies required to make an estimated tax payment by October 31.

India: Reduction of Corporate Tax Rates

India has drastically reduced corporate tax rates for domestic companies as part of a fiscal relief package designed to promote investment from both inside and outside the country.

Effective for fiscal 2019-2020, domestic corporations will be able to opt for a 22 percent income tax rate, down from 30 percent, as long as they aren’t claiming any exemptions or incentives. Companies that elect this treatment will also avoid the minimum alternate tax, which has been reduced from 18.5 percent to 15 percent to aid companies that continue to use exemptions and incentives.

Singapore: The Tax Incentive Headquarters Award

Generally, for a foreign company planning to locate its regional headquarters company in Singapore, the most relevant tax incentives in Singapore would be the Regional Headquarters Award (RHA) and the International Headquarters Award (IHA), both administered by the EDB.

Companies with RHA status pay a lower corporate tax rate of 15% for three years plus a potential further two years on incremental qualifying income, if the prescribed conditions are satisfied. If the applicant company satisfies all the minimum requirements by the third year of the incentive period, it will enjoy the 15% concessionary tax rate on qualifying income for an additional two years.