Investment-Driven Tax Innovation
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Australia: Introduces BTR incentives: 4% capital works deduction rate (up from 2.5%) and reduced 15% MIT withholding tax, subject to 15-year compliance.
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Thailand: Offers 10% corporate tax rate in 10 border SEZs for targeted businesses over 10 accounting periods.
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Azerbaijan: Launches extensive tax incentives including 90% exemption for cultural enterprises, 30-year exemptions for renewable energy PPPs.
Housing Market Intervention
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Spain: Announces 100% tax on property purchases by non-EU residents to combat housing affordability crisis. (Article 09)
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Slovenia: Increases VAT registration threshold to €60,000, introduces new VAT group rules reducing administrative burden. (Article 08)
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Lithuania: Proposes 9% VAT rate for essential foodstuffs and catering services from July 2025.
Industry-Specific Tax Reform
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Uzbekistan: Introduces 1% profit/income tax for textile sector until 2028, mandates VAT registration for pharmaceutical/medical services.
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Kenya: Proposes 4% sugar development levy on domestic and imported sugar, effective February 2025.
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Azerbaijan: Introduces 75% income tax exemption for specified professional services up to AZN 45,000 annually.
Progressive Personal Taxation
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Turkey: Updates tax brackets with rates from 15% to 40%, different thresholds for employment/non-employment income.
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Turkey: Adjusts valuable housing tax with progressive rates: 0.3% to 1% on properties over TRY 15.7M.
International Tax Developments
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US-Taiwan: House approves Expedited Double-Tax Relief Act, enabling treaty negotiation and interim benefits.
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Netherlands: Issues Minimum Tax Implementation Decree with detailed OECD-aligned guidelines on calculations and safe harbors.
Insights:
This week’s developments reveal an emerging dichotomy in property taxation strategies, with Australia incentivizing institutional investment while Spain takes defensive measures against foreign buyers, signaling a shift toward more interventionist housing policies.
The rise of highly targeted sectoral tax incentives, exemplified by Uzbekistan’s textile industry measures and Thailand’s SEZ framework, suggests a move away from broad-based incentives toward precision economic engineering through tax policy.
The expanding scope of professional service tax benefits across jurisdictions indicates growing recognition of the gig economy’s importance, with countries like Azerbaijan leading in creating tax frameworks for the modern service economy.
These trends point to an increasingly sophisticated use of tax policy as a tool for achieving specific social and economic objectives, requiring careful balancing of domestic priorities with international competitiveness.
