BDO Corporate Tax News summarises recent tax developments of international interest across the world.
The European Commission has published a draft directive to combat the misuse of shell entities for improper tax purposes in the European Union. Known as “ATAD III (Anti-Tax Avoidance Directive III), the directive would introduce a “minimum substance test" and reporting requirements, which could result in the denial of tax benefits to EU entities that are considered to have no or minimal economic substance.
The United Arab Emirates—which historically has been known for its 0% corporate tax—is set to impose a 9% federal corporate tax from June 2023, a development that will affect domestic and multinational business operations and structures in the country. The introduction of a corporate tax regime indicates that the UAE (as a member of the OECD Inclusive Framework) intends to address the challenges arising from the digitalisation of the global economy and ensure the implementation of a global minimum tax. The OECD has released for public comment draft model rules on “Amount A,” the share of a business’s residual profits that will be subject to the new taxing right created under Pillar One.
A variety of tax changes are being made in annual budgets and tax reforms in Belgium, India, Italy, Japan, Malaysia, the Netherlands and South Africa. There are corporate tax rate changes in Myanmar, Netherlands and Turkey, new withholding tax rules in Cyprus and a reduced rate on dividends in Turkey.
Content adapted from BDO Global.