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

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France 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 • resources without increasing tax rates. As a result, being utilized. Taxes on wages and employment • In the frame of the so-called “competitiveness pact,” the engagement is held. VAT, GST and sales taxes • No change is expected. 2.5 Fiscal stimulus in 2015 2.6 Political landscape • At the end of 2013, President François Hollande announced a change of economic policy, focusing more on the role of companies. This change led to several governmental initiatives and to a change of prime minister after a local elections defeat for the socialist party in the end of March 2014. 80 | The outlook for global tax policy in 2015 • Manuel Valls, the new Prime Minister, represents the socialliberal stream of the socialist party, while the precedent 2.7 Current tax policy and tax administration leaders • The Minister of Finances is Michel Sapin, since 2 April 2014. • Parent since 1 July 2014. 2.8 Key tax policy changes in 2014 Increase of the temporary additional contribution to CIT • The temporary additional contribution to CIT has been increased from 5% to 10.7% and applies to companies (or tax consolidated groups) with an annual turnover exceeding maximum CIT rate thus amounts to circa 38% instead of the previous 36.1%. Limitation on deductibility of interest accrued to low taxed related-party lenders • The 2014 Finance Bill introduced new rules that disallow the tax deduction of interest accrued to related parties if the French taxpayer cannot justify, upon request of the FTA, that the lender is liable to CIT on such interest that amounts to at least 25% of the CIT that would have been due, had the lender been established in France. Exceptional solidarity surtax on remuneration exceeding €1 million • The 2014 Finance Bill introduced an “exceptional solidarity tax” of 50%, borne by companies, on the portion of remunerations granted to an employee or director that
France exceeds €1 million. Remunerations taken into account are, in principle, those deductible for CIT purposes. The tax only applies to remunerations granted in calendar years 2013 and 2014 and is capped at 5% of the turnover of the civil year. by 30 April of the following year. Requirement to provide accounting statements and consolidated accounts in case of tax audit • The 2014 Finance Bill introduced a requirement to communicate analytical and consolidated accounts upon a tax audit for taxpayers exceeding certain thresholds, to the extent they keep any such accounts. • Taxpayers who fail to provide their analytical and consolidated accounts (if any) upon the opening of a tax documentation • Pursuant to section 223 quinquies B of the French tax documentation obligation is now in force. Companies documentation” within six months following the deadline to 2.9 Country position on OECD Base Erosion and Prot Shifting (BEPS) Action Plan • on this matter. • Indeed, and for several years now, France has already BEPS situations. • Interest deductibility has been a particular target, with several limitations put in place in the last two to three years against acquisitions made through French conduits. The general limitation deduction is now set at 25% when the the most recent limitation designed to disallow interest (on the interest) at least at 25% of the CIT rate it would have in France. • Furthermore, and as previously mentioned, France has increased sanctions in the case of a tax audit and failure to comply with new transfer pricing reporting obligations and with new obligations to comply with in the case of a tax audit accounting statements and consolidated accounts in case of tax audit). • Finally, the 2015 Finance Bill enacted an anti-abuse provision for the distribution of dividends that are normally tax exempted on the basis of the European parent subsidiary directive, where the so-called dividend paid by the subsidiary is tax deductible from its taxable result and tax exempted for the parent company. In addition, the distribution of sums derived from activities not subject to CIT or an equivalent tax • The 2015 Finance Bill also introduced increased penalties for failing to provide appropriate transfer pricing documentation upon the opening of a tax audit. A penalty of €10,000 or 0.5% of transaction volumes with related parties or 5% of 2.10 Pending tax proposals • Since the second revised 2014 Finance Bill and the Finance Bill for 2015 were passed, there are no pending proposals. • Nonetheless, it is worth noting the amendment of the French tax consolidation regime to allow “horizontal tax consolidation.” • In order to comply with a recent decision rendered by the European Court of Justice (ECJ), the Amending Finance Law 2014 allows a French company or permanent establishment (PE) to form a French tax consolidated group with other French companies or PEs as long as all are owned at 95% or more by a company or PE that is subject to a tax equivalent to French CIT in another EU country or European Economic Area country. • The horizontal tax consolidation will be optional. The closing dates of the French parent company and French consolidated companies be identical, but that it also be aligned with those of the foreign parent company and all foreign intermediate companies. Under the current tax year preceding the start of the consolidation (e.g.., by mid- • Regarding the operation of the regime, the neutralization of intercompany transactions provided by the current French tax consolidation regime (e.g., intercompany sale of assets, depreciation of intercompany shares or receivables, dividends) would be extended to certain transactions intermediate companies. • Likewise, the restructuring provisions applicable under the current regime (i.e., merger, demerger or change of ownership situations) are extended to transactions intermediate companies. • apply the regime to calendar year 2014, the election was in principle due mid-May 2014. 2.11 Consultations opened/closed • Not applicable The outlook for global tax policy in 2015 | 81
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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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Messages for business We are now we
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This is probably going to turn out
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Actions for business to consider Ag
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Connect with us The outlook for glo
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Americas Tax policy Tax controversy
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Tax policy Tax controversy New Zeal
Page 31 and 32: EMEIA Tax policy Tax controversy Eu
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Page 35 and 36: Country outlooks The outlook for gl
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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
Page 65 and 66: China 2.4 Tax policy outlook for 20
Page 67 and 68: China 2.10 Pending tax proposals
Page 69 and 70: Czech Republic 2 | 2015 tax policy
Page 71 and 72: Czech Republic 2.5 Fiscal stimulus
Page 73 and 74: Denmark 2.2 Fiscal consolidation vs
Page 75 and 76: Denmark 2.7 Current tax policy and
Page 77 and 78: Finland 2.2 Fiscal consolidation vs
Page 79 and 80: Finland 2.8 Key tax policy changes
Page 81: France 2.2 Fiscal consolidation vs.
Page 85 and 86: Germany 2 | 2015 tax policy outlook
Page 87 and 88: Germany 2.4 Tax policy outlook for
Page 89 and 90: Germany 2.9 Country position on OEC
Page 91 and 92: Greece 2.2 Fiscal consolidation vs.
Page 93 and 94: Greece 2.7 Current tax policy and t
Page 95 and 96: Hungary 2.2 Fiscal consolidation vs
Page 97 and 98: Hungary 2.5 Fiscal stimulus in 2015
Page 99 and 100: India 2 | 2015 tax policy outlook 2
Page 101 and 102: India 2.4 Tax policy outlook for 20
Page 103 and 104: India • Action 8 • The Indian t
Page 105 and 106: Ireland 2.2 Fiscal consolidation vs
Page 107 and 108: Ireland 2.8 Key tax policy changes
Page 109 and 110: Ireland 2.11 Consultations opened/c
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.
Page 117 and 118: Japan • • for each stock owne
Page 119 and 120: Japan 2.9 Country position on OECD
Page 121 and 122: Luxembourg 2 | 2015 tax policy outl
Page 123 and 124: Luxembourg 2.4 Tax policy outlook f
Page 125 and 126: Luxembourg 2.10 Pending tax proposa
Page 127 and 128: Malaysia 2 | 2015 tax policy outloo
Page 129 and 130: Malaysia 2.3 Tax policy outlook for
Page 131 and 132: 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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