Progress in Implementing EU Directives and OECD Standards
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Estonia: Parliament approved legislation for public CbC reporting requirements of Council Directive (EU) 2021/2101 and return requirements for the Pillar 2 global minimum tax of Council Directive (EU) 2022/2523.
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Poland: The Council of Ministers approved a bill for the implementation of DAC7 rules on the exchange of information on income generated by sellers through digital platforms, with an expected entry into force on July 1, 2024.
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Netherlands: Implemented the EU Public Country-by-Country Reporting Directive as part of the Dutch legal framework for financial and nonfinancial corporate reporting, applicable as of June 22, 2024.
Amendments to Corporate Income Tax Rates and Incentives
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Cape Verde: Introduced tax changes for 2024, including a reduction in the corporate income tax rate from 22% to 21%, a new tax group regime allowing loss transfers, a deduction for company capitalization, and indefinite loss carryforwards.
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Malawi: Parliament approved the 2024/2025 budget, extending the additional 10% corporate income tax for commercial banks on profits above MWK 10 billion to all businesses with profits exceeding this threshold.
Changes to Value Added Tax (VAT) Rates and Registration Thresholds
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Lebanon: Increased the mandatory VAT registration threshold from LBP 100 million to LBP 5 billion in turnover over one to four consecutive quarters, effective from 2024.
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Ecuador: Provided guidance on the application of the temporarily increased VAT rate of 15% from April 1, 2024, clarifying when the VAT obligation arises for the supply of goods and services.
Developments in Personal Income Tax and Social Security Contributions
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Lebanon: Revised personal income tax brackets and rates for employment income, effective from 2024.
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Malawi: Approved changes to the monthly PAYE income tax structure, increasing the 0% bracket threshold from MWK 100,000 to MWK 150,000.
- Ireland: Revised several Tax and Duty Manuals considering the new outbound payments defensive measures introduced as part of the Finance (No.2) Act 2023, which restrict domestic withholding tax exemptions for certain payments to associated entities in non-cooperative jurisdictions.
Updates to Tax Compliance and Reporting Requirements
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New Zealand: Issued a determination on the 2024 international tax disclosure exemption, limiting the requirement for taxpayers to disclose interests in foreign entities for the income year ending March 31, 2024.
- Singapore: Implementing a phased adoption of InvoiceNow for GST-registered businesses, requiring them to transmit e-invoice data to IRAS, starting from November 2025.
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Congo (DRC): Introduced tax changes for 2024, including a reduction in the number of advance tax payments, new penalties for failing to file tax returns and certify financial statements, and updated rules for tax investigations and complaints.
Insights:
This week’s tax policy updates highlight the ongoing efforts by governments to align their tax systems with international standards, particularly in the context of implementing EU directives and OECD guidelines. The progress made by Estonia, Poland, and the Netherlands in adopting public CbC reporting requirements and other measures demonstrates the growing emphasis on transparency and the prevention of tax avoidance.
The amendments to corporate income tax rates and incentives in Cape Verde, Malawi, and Finland reflect the need to balance revenue generation with promoting economic growth and investment, especially in strategic sectors such as renewable energy and sustainability.
Changes to VAT rates and registration thresholds in Lebanon, Ecuador, and Finland underscore the importance of adapting tax systems to evolving economic circumstances and supporting businesses in the post-pandemic recovery.
The developments in personal income tax and social security contributions in Lebanon, Malawi, and Greece highlight the ongoing efforts by governments to provide relief to taxpayers while ensuring the sustainability of public finances.
Finally, the updates to tax compliance and reporting requirements in New Zealand, Singapore, and the Democratic Republic of the Congo emphasize the increasing focus on digitalization and the streamlining of tax administration processes to enhance efficiency and reduce the compliance burden for taxpayers.
As the global tax landscape continues to evolve, businesses and tax professionals must stay informed about these developments and adapt their strategies accordingly to ensure compliance and optimize their tax positions in an increasingly complex and interconnected world.
