December 2014 major tax law changes

20 January 2015

In brief

We summarise below major tax law changes that occurred around the world in December 2014 and were not covered in our quarter 4 of 2014 Global Tax Accounting Services (TAS) Newsletter (Q4 2014 newsletter) issued on 22 December 2014.

Information presented in this alert can be helpful to multinational companies in their tax accounting considerations. It is intended to increase readers' awareness of global tax law changes during December 2014, but does not offer a comprehensive list of tax law changes that should be considered for financial statements.

Notable enacted tax rate changes

Country Prior rate New rate
Bulgaria (withholding tax on interest and royalties) 5% 0%1
Colombia (net wealth tax) N/A 0.2%-1.15% (2015)
0.15%-1% (2016)
0.05%-0.4% (2017)2
Ecuador (corporate income tax) 22% 25%3
Peru (corporate income tax) 30% 28% (2015-2016)
27% (2017-2018)
26% (starting from 2019)4
Peru (withholding tax on dividends) 4.1% 6.8% (2015-2016)
8% (2017-2018)
9.3% (starting from 2019)5
Uzbekistan (corporate income tax) 8% 7.5%6

Other significant enacted tax law changes

Argentina

On 16 December 2014, the Argentine Supreme Court of Justice ratified a ruling from the Argentine Court of Appeals that held that the 'wealth tax,' a tax introduced in 2002 that applies to foreign investors doing business in Argentina, does not apply to branches of foreign entities operating in Argentina.

Colombia

On 23 December 2014, the Colombian government passed a major tax reform package that became effective from 1 January 2015. The package included the following significant measures:

Ecuador

On 29 December 2014, the Ecuadorian government enacted a major tax reform package that became effective from 1 January 2015. The package included the following significant measures:

France

On 18 December 2014, both the 2014 Amended Finance Act and the 2015 Finance Act were passed. Under the new legislation, the French fiscal unity regime is now available to French 'sister' companies (so called 'horizontal tax consolidation'), new conditions have been introduced to benefit from the parent-subsidiary regime applicable to dividend distributions and a new penalty applies for failure to comply with French transfer pricing documentation requirements.

Ireland

On 23 December 2014, the following measures mentioned in the Q4 2014 newsletter were enacted in Ireland:

United States

On 19 December 2014, the US president signed into law the Tax Increase Prevention Act of 2014, providing for a one-year retroactive extension of business and individual tax provisions that expired at the end of 2013.

Key business provisions that were renewed through 31 December 2014 included the research credit, 50% bonus depreciation, look-through treatment for CFCs, and a Subpart F exception for active financing income.

Other significant proposed tax law changes

Denmark

On 12 December 2014, the Danish government proposed to introduce a general anti-avoidance rule (GAAR) which would apply to any foreign transactions with a Danish entity. In essence, the protection normally available to transactions under Danish tax treaties and EU Directives would no longer be available unless multinational companies meet certain substance and commercial reasons tests.

Notably certain EU countries may be viewed as tax havens for Danish purposes.

Japan

On 30 December 2014, the Japanese government tabled a proposal for a significant tax reform, which will be considered by the Diet (Japanese Parliament) in January 2015 and is expected to pass without significant changes in March 2015. The tax reform proposal includes the following significant measures:

Let's talk

For a deeper discussion of how the above tax law changes might affect your business or for other tax accounting questions, please contact your PwC engagement team or Tax Accounting Services network member listed here:

Tax Accounting Services

Andrew Wiggins
+44-(121)-232-2065
andrew.wiggins@uk.pwc.com
Steven Schaefer
+1-(973)-236-7064
steven.schaefer@us.pwc.com
David Wiseman
+1-(617)-530-7274
david.wiseman@us.pwc.com
William McAlpine
+1-(312)-298-3814
william.c.mcalpine@us.pwc.com
Katya Umanskaya
+1-(312)-298-3013
ekaterina.umanskaya@us.pwc.com

 

1 This change was enacted on 19 December 2014 and is effective from 1 January 2015. It applies to interest and royalty paid to related parties in the European Union.
2This change was enacted on 23 December 2014 and is effective from 1 January 2015. The rate of net wealth tax depends on taxable base. For more information on this and other tax rate changes in Colombia click here.
3This change was enacted on 29 December 2014 and is effective from 1 January 2015. It applies to certain companies.
4This change was enacted on 31 December 2014 and is effective from 1 January 2015.
5This change was enacted on 31 December 2014 and is effective from 1 January 2015. Dividend payments related to accumulated profits generated until 31 December 2014 will be subject to the original withholding tax of 4.1%.
6This change was enacted on 4 December 2014 and is effective from 1 January 2015.