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News in Brief New Double Taxation Treaty between Germany and Turkey The Federal Republic of Germany and the Republic of Turkey signed a Double Taxation on Income and Prevention of Smuggling Tax Agreement in Berlin on 19 September 2011. This is intended to make both countries more attractive to investors. It was agreed to implement the provisions of the Agreement from 1 January 2011. Turkey has now concluded Double Taxation Agreements with 82 countries of which 74 are in force. For more information please contact: Selman Uysal Sun Bagimsiz Dis Denetim Yeminli T: +90 232 466 01 22 E: selmanuysal@pkfizmir.com IRS Rules on Creditability of UK Special Remittance Tax The IRS issued Revenue Ruling 2011-19 ruling that US individuals resident in the United Kingdom who elect to pay the £30,000 levy for non-domiciliaries may claim a foreign tax credit for that amount. The IRS determined that the remittance basis charge (RBC) applied to long-term nondomiciliaries - those resident in the UK for seven of the last nine years but who continue to claim foreign domicile - falls under the code section 901 definition of a creditable foreign income tax. Under changes introduced by the UK in 2008, long-term non-domiciliaries must pay the additional charge to remain within the UK remittance-based tax regime. Under the remittance tax regime, a non-dom is not taxed on foreignsource income that remains offshore but will instead be taxed only on income remitted to the UK and on UK - source income. Uncertainty surrounding the treatment of the tax under US rules raised the specter of double taxation for US nationals who claimed U.K. non-dom status. Because of the unique nature of the charge, it was not clear whether it would be creditable under reg. section 901-2(a)(1), which requires that "the predominant character of that tax is that of an income tax in the US sense." In its analysis, the IRS determined that the remittance basis charge and remittance basis taxation are a single tax, which it terms the long-term non-domiciliary levy, for section 901 purposes. 3 // PKF International Tax Alert All Regions Issue 8 November 2011
Austria Update Publication of financial statements In accordance with European Union legislation, corporate enterprises have to publish their financial statements within nine months after balance sheet date. If they miss this date, the entities face a fine of at least EUR 1,400/4,200/8,400 (depending on the size of the corporation). Foreign corporations that support an Austrian subsidiary registered in the commercial register are also required to publish their foreign financial statements in German language. Tax treatment of American S Corporations by Austrian fiscal authorities is unlawful Under American civil law, an S corporation is considered a corporate entity but for tax purposes it is deemed a passthrough entity. Therefore, S corporations combine the benefits of transparent taxation with the advantages of limited liability on corporate level. Austrian fiscal authorities regard these advantages to be excessive and seek to create a right of taxation via profit allocation leading to double taxation for Austrian investors. Increase of R&D Bonus Austrian fiscal authorities refund 10% (8% by 31 Dec 2010) of research & development costs according to Frascati definition of the OECD. Interest from Group acquisitions Interest arising from the acquisition of subsidiaries within the group is no longer deductible after 31 December 2010. For more information please contact: Dr Thomas Ausserlechner T: +43 1 512 8780 E: Thomas.ausserlechner@pkf.at W: www.pkf.at 4 // PKF International Tax Alert All Regions Issue 8 November 2011
Page 1 and 2: International Tax Alert Issue eight
Page 3: Malaysia 26 Lee Yiing Ting summaris
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Page 15 and 16: Cyprus Update Tax treaty update Cyp
Page 17 and 18: Ghana Update Highlights of the tax
Page 19 and 20: India Update An introduction to Tra
Page 21 and 22: Ireland Update Domestic Tax Changes
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Page 35 and 36: Romania Update There have been some
Page 37 and 38: Slovak Update Impact on income tax
Page 39 and 40: Slovenia Update Tax changes in 2011
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Page 47 and 48: United Kingdom Update Changes propo
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