February 2025

The Ministry of Innovation and Growth (MIR) has announced that micro, small and medium-sized enterprises will be supported with 16.3 million leva for the protection of intellectual property rights. The procedure takes place within the framework of the Programme for Competitiveness and Innovation in Enterprise (UCIP) and is expected to be announced by the end of February 2025.

The measure will be managed by the Patent Office of the Republic of Bulgaria. Part of the funds will be invested in developing the information environment, expanding the services offered by the institution and improving the conditions for their use by businesses.

The funds will be able to finance the costs of consultancy services for the preparation and preparation of documentation related to the filing of patent applications, utility models, trade marks and industrial designs. In addition, costs for fees for maintaining the validity of intellectual property security documents, as well as costs for utility model applications.

Source: Confindustria Bulgaria

Finance Minister Temenuzhka Petkova and BNB Governor Dimitar Radev signed a joint letter containing a request for the preparation of emergency convergence reports on the introduction of the euro and sent it to European Commission President Ursula von der Leyen and European Central Bank President Christine Lagarde.

The letter was prepared and sent in accordance with the decision of the National Assembly of 26 July 2024 to accelerate and complete the process of preparation for the adoption of the euro in the Republic of Bulgaria. The Government decided to send the request for emergency reports after the last of the Maastricht criteria for Bulgaria's accession to the euro area - that for price stability - was accepted as covered.

Each of the two institutions, the ECB and the EC, will prepare a report assessing whether Bulgaria meets the convergence criteria and is ready to introduce the single currency. The final decision is taken by all EU Member States, voting unanimously.

Source: Confindustria Bulgaria

On February 4^th, 2025, the Customs Tariff Commission of the State Council issued the Announcement on Imposing Additional Tariff on Certain Imported Goods Originating from the US (the "Announcement").

The Announcement specifies that, according to the Tariff Law of the People's Republic of China and other laws and regulations, as well as the basic principles of the international laws, and upon approval by the Ministry of Commerce (MOFCOM), additional tariff shall be imposed on certain imported goods originating from the US, starting from February 10, 2025.

Relevant matters are notified as below:

• An additional 15% tariff shall be imposed on coal and liquefied natural gas;
• An additional 10% tariff shall be imposed on crude oil, agricultural machinery, large-displacement cars, and pickup trucks; and
• The additional tariffs on the corresponding imported goods from the US, as listed in the appendix, shall be based on the current applicable tariff rates, the existing bonded and tax reduction policies shall remain unchanged, and the additional tariffs imposed will not be subject to reduction or exemption.

The full announcement is available here: https://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202502/t20250204_3955222.htm

The State Taxation Administration (STA) released the Announcement on Relevant Matters Concerning the Certificate of Chinese Fiscal Resident (the "Announcement"), with effect from April 1, 2025.

The Announcement proposes the following optimizations：

• Expanding the applicable scenarios for the Certificate of Chinese Fiscal Resident: applicants shall select the purpose of their application based on actual circumstances, whether to claim treaty benefits or not, with the latter covering various overseas scenarios taxpayers have encountered in recent years.
• Enabling full-process online handling: enterprises and individuals may apply for the Certificate of Chinese Fiscal Resident entirely online via the e-tax website and the e-tax website for natural persons, thereby streamlining the application process.
• Adjusting the content in the Certificate of Chinese Fiscal Resident: the certificate now includes additional information such as the taxpayer identification number, removes the signature of the responsible official from the tax authority, and allows for notes on partnerships or other relevant details as needed by applicants, thereby meeting potential personalized demands.
• Reducing processing time: if the competent tax authority may independently determine fiscal residency status, the processing time will be reduced from the current ten working days to seven working days.

The announcement is available here: https://fgk.chinatax.gov.cn/zcfgk/c100012/c5238262/content.html

The State Taxation Administration (STA) has issued the Announcement on Adjusting Matters Related to the Filing of Value-added Tax Returns (the "Announcement"), with effect on February 1, 2025.

According to the Announcement, tax authorities will provide taxpayers with data aggregation services for exported goods subject to applicable value-added tax (VAT) policies. When filing VAT returns for exported goods that are subject to VAT policy, taxpayers must log in to the unified national electronic tax office to complete the confirmation of the purpose of the exported goods data. Taxpayers engaged in processing and re-export businesses are required to report the value of imported materials used in the exported goods when confirming the purpose of the exported goods data. The Announcement also includes adjustments to the instructions for filling out the Value-added Tax and Additional Tax Return (for General Taxpayers) and its attached documents, as well as the instructions for filling out the Value-added Tax and Additional Tax Prepayment Form and its attached documents.

The announcement is available here: https://fgk.chinatax.gov.cn/zcfgk/c100012/c5238176/content.html

In early January 2025, Hong Kong proposed to introduce an inward company re-domiciliation regime.

Under the Companies (Amendment) (No. 2) Bill 2024 (the Amendment Bill), which was gazetted on 20 December 2024, non-Hong Kong incorporated companies are able to preserve their legal identity and maintain their business continuity, upon successful registration as re-domiciled companies under the Companies Ordinance.

The proposed change would allow non-Hong Kong companies incorporated or domiciled in any foreign country, to now move their domicile to Hong Kong from the jurisdiction of incorporation.

Any non-Hong Kong incorporated companies that have successfully registered as a re-domiciled company in Hong Kong, will still be able to maintain the business continuity under the same legal identity while enjoying the benefits of a locally incorporated company.

Tax Implications of Re-domiciliation in Hong Kong

Hong Kong adopts a territorial basis of taxation. Profits tax is payable by any person including corporations, partnerships, trustees and bodies of persons, carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits arising in or derived from Hong Kong from such trade, profession or business. Hence, the tax residence of a person is irrelevant, and there is no distinction between residents and non-residents when it comes to liability to profits tax.

Re-domiciliation will not relieve the company from its profit tax in respect to its activity incurred during the pre-domiciliation period. Tax implications:

• Non-Hong Kong Companies which have re-domicile to Hong Kong would then be subject to a two-tiered profit tax of 8.25% of the first HKD 2 million and 16.5% onwards according to the territorial basis.
• If a non-Hong Kong Company has previously carried on any trade, profession or business in Hong Kong, for which profits tax was chargeable in Hong Kong, profit tax liability may still apply after its re-domiciles.
• If a non-Hong Kong Company has never carried out any trade, profession or business in Hong Kong before its re-domiciles to Hong Kong, no profit tax liability may apply after its re-domiciles.

Finally, under the new regime, a re-domiciled company will also be regarded as a company incorporated in Hong Kong and in turn a resident of the HKSAR – and therefore will enjoy a series of DTA agreement with several participating economies.

Current Status and Future Considerations

Currently, the initiative is pending scrutiny and confirmation by the Legislative Council; aspects of the amendment are still to be addressed to strengthen the decisions positive economic impact and the treatment of transitional tax arrangements which will provide general conditions to the tax deductions of certain expenditures and eliminate double tax liabilities to relocating corporations.

Diacron is committed to offering comprehensive support and tailor-made solutions to address the complexities of international taxation. Contact us for a dedicated consultation.

The Singapore Budget 2025 has introduced a series of strategic measures to manage business costs for local companies, enhance technology and innovation engines, strengthen the enterprise ecosystem and invest in infrastructure. Here below are listed some key highlights:

1. Business Support: Tax Reliefs and Incentives

Corporate Income Tax (CIT) Rebate and Cash Grant

To support business cash flow, a 50% CIT rebate on payable taxes will be introduced in Year of Assessment (YA) 2025. Additionally, active businesses with at least one local employee in Calendar Year (CY) 2024 will receive a minimum CIT Rebate Cash Grant of $2,000. The total maximum benefits (i.e., the sum of the CIT Rebate and CIT Rebate Cash Grant) that a company may receive is $40,000. Eligible companies will automatically receive the benefits from 2Q CY 2025 onwards.

Progressive Wage Credit Scheme (PWCS)

Introduced in Budget 2022, the PWCS supports wage increases for lower-income workers until CY 2026. Eligible employees must have an average gross monthly wage of up to $3,000 before the increase, and up to $4,000 after, with a wage increase of at least $100 in each qualifying year. Wage increases in each qualifying year are co-funded for two years if sustained.

2. Support for Internationalization and Mergers & Acquisitions

Market Readiness Assistance Grant: Extended to March 31, 2026

The increased grant cap of $100,000 per new market, originally set to expire on March 31, 2025, has been extended until March 31, 2026. This measure aims to help local SMEs expand internationally.

Double Tax Deduction for Internationalization (DTDi): Extended to 2030

Companies can continue to benefit from a 200% tax deduction on qualifying market expansion and investment development expenses until December 31, 2030, to reinforce efforts to help businesses internationalize.

Enterprise Financing Scheme (EFS): Extended to March 31, 2030

The EFS helps Singapore enterprises access financing across various stages of growth. Two enhancements have been announced:

• The maximum loan quantum under the EFS – Trade Loan is permanently raised from $5 million to $10 million, recognizing increased trade financing needs and supporting internationalisation efforts.
• The scope of the EFS – M&A Loan is expanded beyond equity acquisitions to support targeted asset acquisitions from April 1, 2025 to March 31, 2030.

Mergers & Acquisitions Scheme: Extended to 2030

Originally set to end in 2025, this scheme has been extended until December 31, 2030. Eligible businesses can benefit from:

• An M&A allowance (written down over five years) based on 25% of up to $40 million in qualifying acquisitions per YA (i.e., $10 million).
• A 200% tax deduction on transaction costs (capped at $100,000 per YA), subject to specified conditions.

3. Key Tax Changes

Corporate Income Tax and Personal Income Tax Rebates

• Eligible companies will benefit from a 50% Corporate Income Tax (CIT) rebate for YA 2025, with a minimum benefit of $2,000.
• A Personal Income Tax (PIT) rebate for YA 2025 will also be provided.

Enhancements to Section 13W of the Income Tax Act 1947

Eligible companies will gain upfront certainty of non-taxation for companies’ disposal gains.

New Tax Incentives for the Equity Market

Incentives will be introduced to encourage IPOs and boost investments in Singapore-listed equities, in line with the recommendations of the Equities Market Review Group.

Conclusion

The measures in Budget 2025 maintain a strategic focus on economic growth and support for businesses in a thriving ecosystem. The new incentives, including tax reliefs, wage support, and financing for internationalization, strengthen business competitiveness in an uncertain global landscape.

Diacron Group specializes in accounting, tax advisory, HR & Payroll and corporate services. Our team of experts can assist you in assessing eligibility, ensuring compliance, and maximizing the benefits available under the Singapore Budget 2025. Contact us today to explore tailored solutions for your business success.

Key Findings

Part A: Recent Developments and Economic Outlook

• The economy is set to gain momentum in 2025, driven by stronger domestic demand and fiscal stimulus measures. Growth is projected to accelerate to 2.9 percent in 2025 up from 2.6 percent in 2024.
• Tourism and private consumption will continue to be key drivers of growth, although at a slower pace.
• Tourism is projected to return to pre-pandemic levels by mid-2025 with the number of tourists expected to surge to 40 million from 35.3 million in 2024.
• Private consumption will benefit from fiscal stimulus measures, particularly the Digital Wallet cash transfer program. Preliminary estimates suggest that the cash transfers raised GDP growth by 0.3 percentage points in 2024. However, this comes at a high fiscal cost of THB 145 billion or 0.8 percent of GDP.
• Poverty is estimated to have declined to 8.2% in 2024, underpinned by the ongoing economic recovery and cash transfer program. Additionally, inequality is estimated to have declined by about 1.5 Gini points.
• Inflation is forecasted at 0.8% in 2025, still below the central bank’s target.
• Goods exports are expected to moderate slightly due to softer growth in major markets such as the United States and China, despite the global electronics upcycle.
• For Thailand to raise fiscal resilience amid rising spending needs it would be important to focus on targeted social assistance, enhance tax revenue mobilization, and accelerate public investments in infrastructure, technology, and human capital to stimulate private sector growth.
• A cautiously accommodative monetary stance is essential to support recovery, with a focus on providing targeted household debt relief while maintaining financial stability.
• Structural reforms on economic competitiveness are necessary to boost long-term growth. Without urgent policy reforms, Thailand's potential growth is projected to decrease from an average of 3.2% in 2011-21 to 2.7% in 2022-30, hindering its high-income aspirations.

Part B: Innovation in a Changing World – Empowering SMEs and Startups

• Thailand has made significant social and economic progress over the past five decades. However, to achieve higher income levels and living standards, increasing private-sector productivity—especially among SMEs—is critical. Technology adoption and innovation will be key to remaining competitive in a rapidly evolving regional and global economy.
• Thailand faces several risks if it fails to innovate. It risks falling behind as regional peers accelerate their innovation efforts. Firms must also adopt sustainable production practices or risk exclusion from global value chains. Pressing challenges such as aging demographics, healthcare, and logistics will also require innovative solutions.
• SMEs can be a major asset in reigniting economic growth in Thailand. They account for 99.5 percent of firms in Thailand, 69.5 percent of national employment, and 35.3 percent of overall GDP. However, their low innovation and limited participation in global value chains highlight untapped potential.
• SMEs and entrepreneurs in Thailand face four main challenges: limited access to financing, lack of support to early-stage infrastructure (incubators and accelerators), inadequate skills for the future, and regulatory barriers, especially related to fair competition and trade and investment. These constraints in part explain the relatively low number of entrepreneurs trying to break into markets, especially in the digital sector, which is crucial for productivity and innovation.
• Thailand has a history of overcoming challenges and is well-positioned to drive innovation. By addressing barriers to research and development, financing, skills development, and enhancing competition and market access, the country can strengthen its position as a regional innovation leader. Coordinated efforts across sectors will be essential to ensure alignment and efficiency in innovation policies.

The Federal Tax Authority (FTA) has clarified specific circumstances under which the statutory deadlines for submitting a tax assessment review request or a request for reconsideration may be extended. According to the relevant decision, the FTA may approve an extension if a taxpayer is unable to meet the prescribed deadlines due to the following exceptional circumstances:

• the occurrence of an accident or serious illness affecting the authorized signatory;
• the death of the authorized signatory, their legal representative or any first- or second-degree family member;
• a temporary business disruption beyond the taxpayer's control;
• the destruction of records due to a disaster;
• a general malfunction in the FTA's systems;
• the sudden loss of business records or discontinuation of business operations due to the implementation of a new computer system;
• a request by the FTA for additional documents, provided that the taxpayer can demonstrate the inability to procure them within the legally mandated timeframe; and
• a force majeure event, as determined at the FTA's discretion.

Conversely, the decision stipulates that the FTA will not grant an extension in the following cases:

• the taxpayer's lack of awareness regarding their obligations;
• delays caused by the negligence of a third party, such as a tax agent or legal representative, on whom the taxpayer relied;
• the complexity of the tax assessment review request or request for reconsideration, leading to the taxpayer's inability to submit it on time; and
• the taxpayer's preoccupation with business activities.

The clarification of the specific circumstances in which the statutory time limits for submitting a request for a review of the tax assessment or a request for reconsideration apply will come into force from 1 March 2025.

Source: IBFD Tax Research Platform News

HMRC has launched a new compliance initiative aimed at individuals who may have undeclared income from online marketplace sales in the 2022/23 tax year and earlier.

At the same time, a separate campaign has been introduced to raise awareness about the tax implications of  ‘side hustles’ and extra earnings.

These efforts highlight HMRC’s growing focus on the digital economy and the increasing number of people earning income outside traditional employment.

Whether selling handmade products, offering services through online platforms, or monetising content as an influencer, taxpayers need to be aware of their obligations and ensure they remain compliant with UK tax laws.

Online marketplace sales: HMRC’s compliance crackdown

As part of its latest compliance campaign, HMRC has sent letters to a number of individuals identified as having received income from selling goods through online marketplaces but who may not have declared it. The letter explains that those who buy or create items to sell at a profit are likely to be considered as trading, meaning they may be subject to income tax on their profits.

However, not all sales will result in a tax liability. No tax is due if total sales are below the £1,000 trading allowance, which allows individuals to earn up to this amount from self-employment or casual trading without needing to report it. Similarly, if a person’s total taxable income is within their personal allowance (£12,570 for most taxpayers in 2023/24), no tax will be payable.

In addition to income tax, HMRC’s letter highlights potential capital gains tax (CGT) liabilities. CGT may apply when personal possessions (known as chattels) are sold, depending on their nature and value.

If an item sells for £6,000 or less, no CGT is due. Where a gain is made on a more valuable item, individuals may still benefit from their annual CGT exemption, which has been significantly reduced in recent years:

• £12,300 for 2020/21 to 2022/23
• £6,000 for 2023/24
• £3,000 for 2024/25

Those who are simply selling unwanted personal belongings – such as clearing out old clothes, second-hand furniture, or used electronics – do not generally need to worry about tax. However, where there is a pattern of regular buying and selling for profit, HMRC may view this as a taxable trade.

How to respond to HMRC’s letter

The letter from HMRC requires recipients to take action within 30 days. If an individual has income to declare, they should follow the instructions on the gov.uk website or call HMRC using the number provided. Those who do not owe any tax should still respond, either by phone or email, to confirm their position.

Failure to act within the deadline may result in a compliance check, which could lead to additional scrutiny and potential penalties. HMRC has access to extensive data from online platforms, banks, and other sources, meaning it can often cross-check undeclared income.

‘Side hustles’ campaign: raising awareness of tax obligations

Alongside its compliance letters, HMRC has launched a public awareness campaign titled ‘tax help for hustles’. This initiative is aimed at individuals earning additional income outside of traditional employment, whether through digital platforms, freelance work, or rental properties.

The campaign provides guidance across several common income streams:

• Buying or making things to sell – those who create handmade products, refurbish goods for resale, or engage in dropshipping may be considered traders.
• Side gigs – individuals offering services such as tutoring, delivery driving, or pet-sitting must consider whether their income is taxable.
• Multiple job holders – those juggling various part-time or freelance roles may need to account for additional tax liabilities.
• Content creators and influencers – social media earnings, including advertising revenue, sponsorship deals, and affiliate marketing, could be taxable.
• Renting out property – those letting out rooms, holiday homes, or other properties need to be aware of income tax and CGT implications.

More details can be found at:  https://taxhelpforhustles.campaign.gov.uk/?&utm_source=icaew_article&utm_medium=referral&utm_campaign=sidehustles

What this means for taxpayers

These initiatives underline HMRC’s focus on ensuring that income earned through digital platforms and side ventures is properly declared. With increased access to transaction data from online marketplaces and financial institutions, the tax authority is taking a proactive approach to identifying undeclared earnings.

For those engaging in occasional sales or small-scale side hustles, the trading allowance and tax-free exemptions may mean no tax is due. However, anyone earning more than these thresholds should ensure they are meeting their tax obligations.

If you have received a letter from HMRC or are unsure about your tax position, seeking professional advice can help clarify your obligations and avoid penalties.

Author: Angelo Chirulli, Tax Advisor Diacron London 

As of 2 April 2025, new provisions for entry into the UK will come into force. One of the main changes concerns the introduction of the Electronic Travel Authorisation (ETA), which will become compulsory for all those intending to travel to the country, including for tourist or short-stay purposes.

What is the ETA?

The ETA is an electronic authorisation required for stays of up to six months in the UK, including travel for tourism, visits to family and friends, short business trips or study. It is not a visa, but a prior authorisation to travel to the country.

Who has to apply for the ETA?

All travellers, including children and infants, entering the UK must apply for an ETA. British and Irish citizens and UK residents with a valid residence permit are exempt from the requirement.

How to apply for an ETA?

From 5 March 2025, it will be possible to apply directly online, via the official UK government website (www.gov.uk). You will need:

• Contact details and passport valid for the entire planned stay.
• A recent digital photo.
• Answer a series of questions.
• Payment of the £10 fee by credit or debit card. It is planned to increase to £16 in the future.

The decision on obtaining the ETA is usually taken within a few minutes, but it may take up to three working days.

Validity of ETA

The ETA allows multiple trips to the UK for stays of up to six months and is valid for two years or until the expiry of the passport used for the application, whichever comes first.

Important note for transits

ETA is not required for passengers transiting through a UK airport who do not pass through border control. If in doubt, you should check with your airline. We encourage you to plan your travel to the UK carefully, making sure you obtain your ETA before departure to avoid inconvenience.

Further information is available on the official UK government website: www.gov.uk