A Quick Glance At The Recent Tax Updates From Europe
During an international business expansion, it is very risky to assume that all elements
of your local market will be replicated in the overseas environment. While there is significant information available on the Internet or via official sources, it may be worthwhile seeking professional advice to avoid significant problems and potential costs in the future.
Here is a quick glance at the recent tax updates in countries across Europe.
Switzerland: Corporate Income Tax Rate Cut by Half by Canton of Lucerne
The canton of Lucerne, as part of tax law revisions announced in 2011, cut the corporate income tax rate from 3% to 1.5% with effect from January 1, 2012. The steep reduction in tax rate results in a statutory communal and cantonal tax burden of 4.3% to 6.5%. The canton of Lucerne is now offering the lowest corporate income tax of all Swiss cantons making it amongst the most attractive for national and international companies.
European Union: Companies from Non-EU Countries Could Reclaim VAT Incurred in EU via 13th Directive
Companies registered in non-EU countries have until June 30, 2012 to file applications to reclaim Value Added Tax (VAT) incurred in the EU using the 13th Directive. The application entitles them to seek refunds on VAT incurred up to December 30, 2011. The June 30, 2012 deadline is for most EU countries and it is imperative companies begin collecting relevant data immediately as EU member states are not flexible on the deadline and may not accept late claims.
Companies must also ensure they have all necessary documents collected and reviewed prior to submission. Although the documentation requirements vary by country, valid VAT invoices and Certificate of taxable status from the tax authorities (where the non EU business is a resident) are mandatory.
France Social Levy: Effective Date is July 1, 2012
Finance Amendment Law provides for an increase in the social levy (contribution sociale) on passive income, from 3.4% to 5.4%, with effect from July 1, 2012. Earlier the effective date reported was October 1, 2012.
Belgium: VAT Refunds
In Belgium, Notaries and bailiffs were exempt from charging VAT until January 1, 2012 when this exemption was abolished. As per transitional rules, it is not required to pay VAT over to the VAT authorities until later in the year. New rules, however, apply to the recovery of VAT paid in cases where a VAT exemption is abolished. In such situations normal refund processes for VAT do not apply, instead the payer must offset the amount paid in the periodic EU VAT return against VAT payable on future turnover.
Germany: Intrastat Reporting Thresholds for 2012 Increased
Reminder to all companies that intrastat reporting thresholds in 2012, for both dispatches and arrivals, are increased to 500,000.
UK:Returns need to filed Electronically
Reminder to all companies that all mandatory electronic filing of returns and electronic payments are in effect for all accounting periods beginning on or after April 1, 2012.
The financial statements of companies with multi-country operations need to be prepared on different computational bases. This can pose a challenge to companies doing business overseas since the criteria for tax compliance vary from country to country. Partnering with experts can be a wise move as they stay abreast with the latest updates on taxation policies across the world. You can get the necessary assistance in other areas of business like regulatory filings, international accounting, HR, etc.
by: brianwarren
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