ey-global-tax-policy-outlook-for-2015

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Czech Republic • amortization • Changes to tax enforcement approach • Top marginal personal income tax (PIT) rate • PIT base 2.3 Tax policy outlook for 2015 — summary Corporate income tax burden Lower No change Higher Personal income tax burden Lower No change Higher VAT/GST/sales tax burden X Lower No change Higher X X 2.4 Tax policy outlook for 2015 — detail Corporate income taxes • interest-free loans should become taxable under certain circumstances. The amendment was signed by President Milos Zeman in early November 2014 and is an initiative independent from the annual budget. • The favorable 5% CIT rate currently applicable to investment (usually used for tax optimization in the real estate area), will be limited to investment vehicles (publicly traded investment funds, open-ended mutual funds and other investment funds 68 | The outlook for global tax policy in 2015 Taxes on wages and employment • of the currently applied interpretation. • There is a compulsory reporting of income (even exempt) above certain threshold (subject to high penalties upon noncompliance). VAT, GST and sales taxes • Introduction of a second decreased VAT rate (in addition to the current 15% rate) of 10% for selected items, such as medicines and books • telecommunication services in business-to-consumer
Czech Republic 2.5 Fiscal stimulus in 2015 2.6 Political landscape In the Czech Republic, tax policy is governed centrally by the Cabinet, with the Ministry of Finance having the key role and responsibilities in this area. The Ministry drafts the majority of tax laws and initiates the legislative process. become rather smooth and quick. tax reforms to be passed, 2014 has seen a range of measures passed, with others still under negotiation. 2.7 Current tax policy and tax administration leaders Tax policy leaders (interim government — will likely be • Bohuslav Sobotka, Prime Minister • Andrej Babis, Minister of Finance • and Customs Tax administration leader • 2.8 Key tax policy changes in 2014 • Extensive corporate and personal income tax reform was Code and the Act on Corporations (primarily new civil law law features, e.g., trusts). • of qualifying expenses, which is effectively a double deduction of an individual expense, and 110% deduction applicable to year-on-year increases). • Further, the abolition of inheritance and gift taxes and their integration under the income tax brought a number of changes in the area of taxation of non-monetary income and related interpretation issues. • New transfer pricing reporting (an overview of related-party transactions) was introduced for large taxpayers — on a voluntary basis in 2014 — but will become mandatory as of 2015 for companies meeting at least one of the following criteria: (i) their assets exceed CZK40 mil, (ii) their net revenues exceed CZK80 mil and (iii) they have over 50 employees. • The six-month test for the exemption of income earned by an individual from the sale of securities was prolonged to a three-year term. • • The new Real Estate Tax and the new Real Estate Transfer Tax Act became effective as of 2014. 2.9 Country position on OECD Base Erosion and Prot Shifting (BEPS) Action Plan • The contemplated tax law amendments are generally aligned Plan is not the key driver for the amendments). • There are currently no formal public statements, consultations, legislation or working group(s) in relation to BEPS. • At this stage, the Ministry of Finance has indicated its intention to focus primarily on transfer pricing and related BEPS Action items are of greatest interest. 2.10 Pending tax proposals • The Investment Incentives Act amendment is pending, which would have an impact on the tax holidays relief (reduction of the percentage from the qualifying new investment is expected). • Additional amendments to the VAT Act and real estate tax are being proposed. Neither should have material impact. 2.11 Consultations opened/closed • for public consultation. Private individual taxpayers would be required to prove the origin of their private assets (whether acquired from taxed income). Additional income tax and heavy penalties would be assessed if the origin is not proved. elements as the tax authorities would be effectively able to assess tax from income earned in statute-barred tax periods. Further development is expected in this area. The outlook for global tax policy in 2015 | 69
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The outlook for global tax policy i
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Tax twists and turns For more than
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where cuts in VAT rates were initia
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What were the highlights of 2014 fo
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Forecast of tax policy trends for 2
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The strong focus on the tax treatme
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in the formation of tax policy in 2
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Italy Japan 6/2 of the 29 countries
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to understand; if governments are g
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Page 27 and 28: Americas Tax policy Tax controversy
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Page 31 and 32: EMEIA Tax policy Tax controversy Eu
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Page 39 and 40: Australia The following election go
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Page 45 and 46: Brazil 2.2 Fiscal consolidation vs.
Page 47 and 48: Brazil 2.5 Fiscal stimulus in 2015
Page 49 and 50: Canada 2 | 2015 tax policy outlook
Page 51 and 52: Canada 2.3 Tax policy outlook for 2
Page 53 and 54: Canada 2.9 Country position on OECD
Page 55 and 56: Chile 2.2 Fiscal consolidation vs.
Page 57 and 58: Chile Taxes on wages and employment
Page 59 and 60: Chile 2.11 Consultations opened/clo
Page 61 and 62: China 2 | 2015 tax policy outlook
Page 63 and 64: China • • Top marginal persona
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Page 73 and 74: Denmark 2.2 Fiscal consolidation vs
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Page 77 and 78: Finland 2.2 Fiscal consolidation vs
Page 79 and 80: Finland 2.8 Key tax policy changes
Page 81 and 82: France 2.2 Fiscal consolidation vs.
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Page 85 and 86: Germany 2 | 2015 tax policy outlook
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Page 89 and 90: Germany 2.9 Country position on OEC
Page 91 and 92: Greece 2.2 Fiscal consolidation vs.
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Page 95 and 96: Hungary 2.2 Fiscal consolidation vs
Page 97 and 98: Hungary 2.5 Fiscal stimulus in 2015
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Page 105 and 106: Ireland 2.2 Fiscal consolidation vs
Page 107 and 108: Ireland 2.8 Key tax policy changes
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Page 111 and 112: Italy 2 | 2014 tax policy outlook 2
Page 113 and 114: Italy 2.7 Current tax policy and ta
Page 115 and 116: Japan 2.2 Fiscal consolidation vs.
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Luxembourg 2 | 2015 tax policy outl
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Luxembourg 2.4 Tax policy outlook f
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Luxembourg 2.10 Pending tax proposa
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Malaysia 2 | 2015 tax policy outloo
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Malaysia 2.3 Tax policy outlook for
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Malaysia 2.9 Country position on OE
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Mexico 2.2 Fiscal consolidation vs.
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Mexico 2.7 Current tax policy and t
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Netherlands • Additionally, the C
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Netherlands 2.4 Tax policy outlook
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Netherlands exemption, the tax tre
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New Zealand 2.2 Fiscal consolidatio
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New Zealand 2.6 Political landscape
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Poland 2.2 Fiscal consolidation vs.
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Poland 2.5 Fiscal stimulus in 2015
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Portugal 2 | 2015 tax policy outloo
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Portugal 2.4 Tax policy outlook for
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Russia 2 | 2015 tax policy outlook
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Russia 2.4 Tax policy outlook for 2
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Russia 2.9 Country position on OECD
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Slovak Republic 2.2 Fiscal consolid
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Slovak Republic VAT, GST and sales
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South Africa 2.2 Fiscal consolidati
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South Africa 2.8 Key tax policy cha
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South Korea 2.2 Fiscal consolidatio
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South Korea 2.6 Political landscape
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Spain 2.2 Fiscal consolidation vs.
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Spain 2.5 Fiscal stimulus in 2015
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Switzerland 2.2 Fiscal consolidatio
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Switzerland 2.5 Fiscal stimulus in
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Thailand • Continued sluggish eco
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Thailand 2.4 Tax policy outlook for
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Thailand 2.10 Pending tax proposals
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United Kingdom 2.2 Fiscal consolida
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United Kingdom 2.5 Fiscal stimulus
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United Kingdom 2.11 Consultations o
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United States • There is a desire
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United States 2.4 Tax policy outloo
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United States • Committee • C
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EY | Assurance | Tax | Transactions
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