June 2018

  • Bulgaria
    • Proposed amendments to regulations for application of VAT Act – consultation launched

      On 29 May 2018, the Ministry of Finance published for public consultation a proposal for amendments to regulations for the application of the VAT Act. Below the most important topics mentioned in the proposal are listed:
      • the requirements related to annual adjustment of input VAT in the case of mixed use of business assets;
      • clarifications on input VAT adjustment in the case of VAT deregistration of a person;
      • details on the register of the persons exempt from the obligation for providing security to tax authorities when receiving liquid fuels;
      • clarifications regarding gold coins considered as investment gold and exemption from VAT on their importation;
      • the inclusion of goods provided under finance lease in the nomination of the formula for calculating the pro rata VAT deduction; and
      • the abolishment of the requirement for the submission of a list with the available assets at the date of the VAT registration.
    • Tax on fees from renting out apartments located in mountain and naval resorts introduced

      On 19 June 2018, the parliament's Committee on Regional Policy, Urban Development and Local Self-Government adopted a law amending the Local Taxes and Fees Act. A special tax will be introduced on "non-rented accommodation", including, among other things, accommodation in owner-occupied vacation homes. Individuals often provide such accommodation to tourists and do not declare the fee charged, pretending that the accommodation was provided without a fee. Therefore, a surcharge of between 0.5% and 0.7% on the tax due on each property located in mountain and/or naval resorts is introduced. The exact amount of the tax for each property will be determined by each municipality through an ordinance yet to be introduced. The tax on the "non-rented accommodation" is expected to enter into force on 1 January 2019.
    • 2018 Manual on corporate income tax published

      On 28 June 2018, the National Revenue Agency published on its website the 2018 version of the Manual on corporate income taxation. The Manual provides a detailed overview of the applicable legislation as well as numerous examples with comments by the authorities.
  • China
    • China to Increase Personal Income Tax Threshold to 5,000 Yuan

      The much-anticipated draft amendment on individual income tax has been submitted to the Standing Committee of the National People's Congress for the first discussion on June 19, 2018. The amendment, the seventh tax overhaul since the personal income tax code of 1980, proposed to increase personal income tax threshold to 5,000 yuan per month (60,000 yuan a year) from 3,500 yuan at present. For the first time, the taxation is expected to cover all personal income, including income from personal services and rewards and royalties writers earn. Also, for the first time, the following items are deductible from personal income tax, such as the cost of children's education and continuing education, medical fees for major diseases, interest on housing loans as well as housing rent. In order to close tax loopholes, the draft amendment on personal income tax law introduced anti-avoidance clauses, authorizing tax agencies to make appropriate tax adjustments to fight against taxpayers who attempt to evade tax at overseas destinations and adopt unreasonable arrangements to reap illicit tax benefits.
    • China Reiterates Pledge to Cut Import Tariff

      The State Council held an executive meeting on June 13, 2018, deciding to further expand imports to drive economic upgrade and balance China's trade structure. The government will support import of products involving people's livelihood, including daily necessities, medicines, rehabilitation and elderly care facilities, implement measures to reduce import tax on certain commodities; make a major push to develop emerging service trade and boost imports of production-related services like R&D, logistics, consulting, energy conservation and environmental protection; improve policies on duty-free stores and expand imports of duty-free goods, and more technical equipment conducive to economic transformation will also be imported. China will optimize the process of import customs clearance and seek international mutual recognition of Authorized Economic Operators to facilitate import. Unreasonable management measures and fees during the import process will be cleared, and the country will step up the building of a credit system for foreign trade and improve intellectual property protection.
    • Announcement of the State Administration of Taxation on Promulgation of the Administrative Measures on Pre-tax Deduction Proof for Enterprise Income Tax

      With effect from 1st July 2018, the pre-tax deduction proof shall be classified as internal proof and external proof based on the source. Internal proof shall mean the original accounting vouchers prepared by an enterprise for accounting of costs, expenses, losses and other expenditure. Preparation and use of internal proof shall comply with the relevant provisions of accounting laws and regulations of the State. External proof shall mean proof documents for expenditure obtained by an enterprise from other organizations, individuals in the conduct of business activities and other matters, including but not limited to invoices (including hard copy invoices and electronic invoices), government revenue receipts, tax payment proof, collection proof, split receipts etc. These will reduce the tax burden for the taxpayers.
    • SAFE Announces Rules for Trade Credit Statistics and Investigation

      The State Administration of Foreign Exchange recently published the Rules for Trade Credit Statistics and Investigation, effective from the date of issuance. There are three prominent amendments to the latest edition of the rules. The first is to change the name from the Rules for Trade Credit Investigation; the second is to adopt a new principle that data providers should be payers and payees of trade activities; the third is to further clarify the definitions of such trade terms, such as trade credit, offshore resale and major export countries and regions, and adjust the explanations of such indicators like export receivable account balance/advance receipt balance at the end of a period and import payable account balance/advance payment balance at the end of a period.
  • Hong Kong
    • Amendment bill implementing three concessionary tax measures – gazetted

      The Inland Revenue (Amendment) (No. 5) Bill 2018 (Amendment Bill) was gazetted on 8 June 2018. The Amendment Bill seeks to implement three tax concession measures as proposed in the 2018-19 Budget. The measures include the following:
      • allowing the husband and wife the option of electing for personal assessment separately;
      • allowing enterprises to claim a 100% tax deduction for capital expenditure incurred for procuring environmental protection installations in 1 year instead of over 5 years; and
      • extending the scope of the tax exemption for debt instruments under the Qualifying Debt Instrument Scheme.
      The Amendment Bill will be introduced into the Legislative Council on 13 June 2018. Subject to the approval by the Legislative Council, the three tax measures will be implemented retroactively from the year of assessment 2018/19.
  • Switzerland
    • Secretariat for International Financial Matters publishes factsheet on mutual agreement procedure

      On 7 June 2018, the Secretariat for International Financial Matters (SIF) of the Swiss Federal Department of Finance published a factsheet on the application of the mutual agreement procedure under tax treaties, setting out, inter alia, content requirements of a mutual agreement procedure request. In addition, the SIF made available two separate forms for filing mutual agreement procedure requests regarding transfer pricing matters and non-transfer pricing matters which can be found here.
    • Council of States adopts TP17

      On 7 June 2018, the Council of States (the upper house of the parliament) approved the dispatch on tax proposal 17 (TP17). It is expected that the parliament will consider and adopt TP17 in the autumn session.If a referendum is not called. ​he first measures may come into force at the beginning of 2019, with the remainder coming into force from 2020.
  • South Africa
    • Allianz to acquire 8% stake in Africa Re

      Allianz Group, one of the world’s leading insurers and asset managers with more than 88 million retail and corporate customers, has signed an agreement to acquire 8% in Africa’s reinsurer Africa Re. Under the terms of the agreement, the total cash consideration payable at closing would amount to $81m. Niran Peiris, Member of the Board of Management of Allianz SE, responsible for Global Insurance Lines & Anglo Markets, Reinsurance, Middle East, Africa, said: “Having identified Africa as one of the future growth markets, we continue to invest step-by-step in the continent. This investment in Africa Re is a major milestone for Allianz’s long-term growth strategy in Africa.” Through cooperation and innovation in various areas, Allianz and Africa Re aim to jointly support insurance penetration in Africa and the economic development of the continent. “This partnership with Allianz Group, a reliable and strong partner with a global network, particularly in agriculture and the emerging field of cyber insurance, will definitely strengthen Africa Re’s capacity to offer its clients services of higher quality,” said Corneille Karekezi, Africa Re’s Group Managing Director and CEO. The partnership, built on mutual business support, will enable co-operation in areas of reinsurance, business development, sharing of best practices, risk management tools, as well as training and technical support, especially in emerging areas and underserved markets. Africa Re, founded in 1976 by the member states of the African Union and African Development Bank (AfDB), has operations across the continent. It has a diversified set of shareholders, including 44 African states (35%), over 110 African insurance and reinsurance companies (34%), the ADB (8 percent) and non-African investors (23%). Africa Re, after 42 years operational experience on the continent, has in-depth business knowledge of the African markets and an expansive network across both regions and linguistic communities, allowing it unmatched proximity to its clients. “This partnership with Africa Re is a strategically complementary one for both companies, as well as being beneficial to our clients on the continent, who can rely on the support, experience, and cooperation of both Allianz and Africa Re,” Peiris said.
    • Ethiopian government to open telecoms and national airline to foreign investors

      Ethiopia is opening the state-owned telecommunications company and airline to foreign investors for the first time, a move that indicates new Prime Minister Abiy Ahmed is more receptive to outside interests in Africa’s second-most populous nation. According to Bloomberg, Ethiopia will sell minority stakes to foreign and domestic investors in state monopolies such Ethio Telecom and Ethiopian Airlines Enterprise, the continent’s biggest airline, as well as Ethiopian Shipping & Logistics Services Enterprise, the state-run Ethiopian News Agency said late Tuesday, citing the ruling Ethiopian People’s Revolutionary Democratic Front. “Foreigners with knowledge and foreign capital can play a critical role in our growth,” it said. The East African country of more than 100 million people has long been a target of the biggest phone companies in Africa, including MTN Group Ltd. and Vodacom Group Ltd., the largest by sales and market value respectively. The government has until now been strict about keeping the industries in-house, but there are signs it’s opening up to the world since Abiy’s rise to power earlier this year. The move hints at Abiy’s intent for the nation ranked by the International Monetary Fund as Africa’s fastest-growing economy. He’s already reduced the role of Ethiopia’s military in construction and similar projects, and lifted a state of emergency introduced after former Prime Minister Hailemariam Desalegn quit in February. Ethiopian Airlines has turned the nation’s capital, Addis Ababa, into Africa’s equivalent of the Persian Gulf hubs, linking almost 70 global cities with almost 60 across the continent. It’s also planning to take equity stakes in new operators in Zambia, Chad, Mozambique and Guinea. Also on Tuesday, Ethiopia agreed to implement a peace deal signed at the turn of the century with Eritrea after Abiy undertook two months ago to normalise relations with its neighbouring long-time foe. The deal was originally signed in 2000 to end a two-year border war that killed thousands of people.
    • Tharisa takes stake in Karo to deepen Zimbabwe presence

      South African miner Tharisa on Wednesday said it has acquired a 26,8 percent stake in Karo Mining Holdings, deepening its exposure to the southern African country. Karo, which has interests in both platinum and coal mining in Zimbabwe, in March signed a $4.2 billion deal to develop a platinum mine and refinery in Zimbabwe. Tharisa said it had acquired the Karo stake for a total cash consideration of US$4.5 million. It had also provided Karo with an $8 million repayable debt facility to finance initial geological exploration and sampling work. The deal, it added, provided it with access to an area in the Great Dyke of Zimbabwe covering 23,903 hectares. Indirectly, the deal also shows that Karo’s mining activities will be on the land which Zimbabwe Platinum Mines last week agreed to release to the Zimbabwe government. Karo’s deal with the government includes establishing a platinum group metals (PGMs) mine, concentrators, smelters, a base metal and precious metals refinery, as well as power generation capacity for the operations with surplus energy capacity made available to the Zimbabwe power grid. In May, Tharisa acquired a 90 percent stake in Salene Chrome, a company which has been awarded three special grants under the Zimbabwe Mines and Minerals Act covering an area of approximately 9,500 hectares in the Great Dyke. Both Karo Holdings and Salene are owned by the Pouroulis family that controls Tharisa.
    • Gigawatt Global Cooperative and ECOWAS sign $1 billion renewable energy deal

      The US government through solar developer Gigawatt Global Cooperative UA has signed a deal with Economic Community of West African States, ECOWAS to build US $1bn of renewable energy projects in the region. The U.S. is supporting the project through its Power Africa initiative set up in 2013 under President Barack Obama’s administration, a program that had pledged to invest US $7 billion over five years. The advancement of this deal is an indication that the U.S. Agency for International Development has retained its ability to act even though President Donald Trump has slashed aid budgets and criticized U.S. involvement in poverty alleviation. “Energy poverty can be eliminated even in smaller or less developed ECOWAS states with the leverage of a regional strategy,” according to Yosef Abramowitz, chief executive officer of Gigawatt Global.

      Boost in Electricity System

      The deal will help develop the West African Power Pool which is a unit of the ECOWAS that was set up to implement the agreement and create a regional electricity system. The deal also builds on an agreement inked by the U.S. and Israel last year where the two governments pledged to work together to reduce energy poverty in Africa. According to Israel’s ambassador to Nigeria,Guy Feldman,the signed memorandum of understanding indicates that Gigawatt Global will install 800MWof solar and wind farms in Burkina Faso, Senegal, Mali, Nigeria and Gambia. The project development is planned to kick off in early 2019, including feasibility studies, training courses and the signing of power purchase agreements. “This MOU signed is a powerful metaphor to the West and the rest of Africa, which pave the way for future Israeli innovation,” said Feldman. Power Africa is expected to be a lead source of funds for the projects and is also anticipating to bring in other development banks and investors. The funds are expected to have a split of 80% debt and 20% equity.
    • Chinese companies to invest $10 billion in Limpopo SEZ (South Africa)

      The Limpopo Economic Development Agency (LEDA) has signed memorandums of understanding (MOU) and a memorandum of agreement (MOA) with nine Chinese companies who will invest more than US$10bn in the Musina-Makhado Special Economic Zone (SEZ) The signing ceremonies of eight of the MOUs and MOAs took place in Beijing. “There are four projects in the SEZ, namely the power plant, coking plant, alloy factory and steel manufacturing. Today we managed to confirm investment commitments in all of them,” said Ben Mphahlele, group CEO of LEDA. He added that the Musina-Makhado SEZ was advancing very fast and generating a significant amount of interest among potential investors. “The signing will be followed by due diligence as technical representatives of the companies visit the SEZ to do various assessments on the ground before implementing their plans. As we speak, there is a Chinese company that is conducting a feasibility study. We are looking forward to seeing the SEZ getting off the ground and beginning to change the economic landscape of Musina and Makhado by creating business and employment opportunities for the people of the Vhembe District,” said Mphahlele. He further added that described the positive impact of the SEZ to extend to other parts of Limpopo and other African countries such as Zimbabwe and Mozambique. Solly Kgopong, head of department at the Department of Economic Development, Environment and Tourism in Limpopo, said that the SEZ was projected to contribute enormously to the country’s national gross domestic product once fully operational.
    • Venture Capital woes slowing down investments in East Africa – EAVCA

      East Africa economies are well placed to reap from the growing interest on investments in Venture Capital and Private Equity Funds, the East Africa Private Equity and Venture Capital Association (EAVCA) has affirmed. The region, according to EAVCA is likely to benefit from having an already established base for growth focused investment. This will help address the current gap in financing start-up companies which are still facing challenges, EAVCA chairman Ayisi Makatiani said, during the fourth Private Equity in East Africa Conference in Nairobi on June 14. According to Makatiani, East Africa is considered a hotspot for venture capital opportunities, reinforced by the fast paced adaption of technology, along with the enterprise mindset in the region. However, there still exist difficulties faced by Capital Ventures and Private Equity funds, which slows their investment activities. “As EAVCA, we want to position East Africa as the destination for venture capital. We have as an Association noted the gap in financing early stage businesses and startup companies and will be working to navigate some of the complexities encountered by Venture Capital in this region to allow them to increase their capital deployment and support of our younger businesses,” Makatiani said. Key challenges faces by VC’s include raising new funds, winning deals, valuation, legal framework and exits as per targets. He noted trends at the global level indicate an increased focus on growth funds, including venture capital, calling on East Africa states and their respective private sectors to create a conducive infrastructural and regulatory environment to attract more capital inflows. “In this day of globalization with increasing competition for fund allocation, we as a region must guard our position as an investment destination and protect our markets from disruptive changes that may create uncertainty, if we are to maintain our position as a hub for capital inflows,” Makatiani said. “Regulation and policies are some of the measures that contribute to risk profiling and we need to ensure consistency in our policy frameworks to ensure market stability for investment to prevail,” he added. East Africa has been a growth capital market, supporting small and medium sized businesses. In 2017, the region registered 29 Private Equity disclosed deals compared to 44 in 2016. The value of deals was however higher last year totaling US$5.2 billion, compared to US$1.7 billion in 2016. “The value of last year’s deals was boosted by the Vodacom-Vodafone deal and the Lake Albert Oil Project. These were major deals the markets witnessed in the year boosting the value despite a lower number of deals,” said Robert Waruiru, Associate Director, KPMG Advisory Services Limited. The value of the Vodacom-Vodafone deal totaled US$2.6 billion, while in the Lake Albert oil project in Uganda, Total signed an agreement to acquire an additional 21.57 per cent interest from Tullow for US$900 million. Meanwhile, pundits have predicted a brighter future for Private Equity funds in the region owing to its political stability and governments efforts to improve ease of doing business, which is attracting investors. “We however have to be keep on looking at solutions to challenges in Private Equity in the region,” AfricInvest Investment Director Faisal Jiwa cautioned. He noted that a country like Ethiopia, which is opening up for investments under the ongoing political transition, requires a lot of public awareness on PE’s. “A lot of education is needed. Private Equity investors need to educate the markets,” Jiwa noted. Meanwhile, entrepreneurs have been challenged to improve their business modules to attract more funding. “Most local entrepreneurs don’t know the best way to package their businesses for funds. This has seen them miss out on opportunities,” said Peace Osangir, Chief Operating Officer-Kopo Kopo Inc. Private Equity funds and Venture Capital have proved crucial in bridging the financing gap in the markets where most startups and SMEs have been struggling to finance their businesses. The capping of interest rates in Kenya dealt a further blow to SMEs who majority have found it difficult to secure loans from banks due to their “High Risk” profiling. “It has been a challenge to get funds which was worsened by the rate cap but with these alternative funds, SMEs can get convertible debt from Venture Capital without necessarily having collateral,” said Winnie Odhiambo, Associate Partner-I-Dev International. EAVCA has lauded governments in the region for continued improvements in regulatory frameworks, which are becoming more accommodative of private equity as an asset, making doing deals easier. “East Africa’s private capital landscape mirrors much of what we see in global markets: funds raised have been growing and new funds are on the rise, investor mix is getting more diversified, deals are getting more advanced and risk is reducing, as the players now appreciate the nuances of the market,” Makatiani noted. Kenya’s Transport, Infrastructure ,Housing and Urban Development PS Charles Mwaura called for Private-Public-Partnership to drive the growth agenda in Kenya where the government is implementing its Big Four plan, which covers manufacturing, health, food security and affordable housing. The EAVCA fourth annual conference held at the Radisson Blue Hotel brought together over 250 delegate and experts from pension funds, commercial banks, private equity and venture capital funds, impact investors, high net worth investors, business owners, industry associations, government officials and regulators.
    • UAE gives Ethiopia much needed forex

      The Crown Prince of the United Arab Emirates (UAE) marked his visit to Ethiopia by agreeing to inject more foreign currency into the country, providing a boost to Ethiopia’s manufacturing sector. On day one of his two day official visit to Addis Ababa Sheikh Mohammed bin Zayed bin Sultan Al-Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE’s Armed Forces, met with PM Abiy Ahmed (PhD) and President Mulatu Teshome (PhD). PM Abiy surprised many by driving the Prince himself on the way from Bole International Airport to Bole Lemi Industry Park. According to the information disclosed on Friday, the UAE agreed to shoot USD one billion into the national coffer within few days. According to reports when PM Abiy visited the Gulf States recently, he convinced leaders to allocate Ethiopia much needed cash. In March the government reported there was less hard currency than expected and representatives from the manufacturing industry have reported on the dire effect lack of hard currency has on their ability to produce. Industries have suspended or reduced production or reportedly only have enough cash to operate for a few weeks. Now that help is on the way from the UAE, industry representatives are asking the government to give them priority over public projects. In the agreement the UAE also promised to invest an additional USD 2 billion in different sectors. The two countries have also agreed to waive visa conditions for diplomats of the two countries.
    • Construction of $13.9 billion Inga3 hydropower to commence this year (DRC)

      The Democratic Republic of Congo plans to start construction work this year on the frequently delayed Inga 3 hydro power project at a predicted cost of US $13.9bn, after receiving a joint bid from two previously competing consortia of investors. This is according to Bruno Kapandji, director of the Agency for the Development and Promotion of the Grand Inga Project.

      Project Delays

      DR Congo, Africa’s biggest copper producer and the world’s largest source of cobalt has been considering building Inga 3 for more than a decade to address a power shortage that has curbed mining-industry growth. A treaty signed in 2013 allowed the plant to export 2,500MW of power to South Africa. The plant would form part of a larger Grand Inga hydro power complex spanning part of the Congo River and produce as much as 50,000MW when complete, according to the World Bank. China Three Gorges Corp and Actividades de Construccion y Servicios SA of Spain submitted a joint bid on June 6 for the project that will produce 11,000 MW. “Our aim is to start Inga3 hydro power this year. The two consortia have given us a document in which they committed to creating a single consortium. We are in the process of preparing, discussing and negotiating the exclusive collaboration contract which will allow the single candidate to go to the market to find the financing.” Kapandji said.

      Construction Process

      The two consortia will work together and submit a joint offer to build and manage the hydro power and once a concessionaire company has been established, the developers will commit themselves to mobilizing the funds to pave way for construction. The initial phase plan of the project was supposed to produce 4,800MW .However, its capacity status changed after an increase in demand. According to Mr. Kapandji, The mining industry’s energy deficit has increased from about 500 megawatts to 1,300MW in the intervening years since the project was conceived. Construction of the power plant is estimated to take seven years.
    • Jack Ma’s Alipay and WeChat to unsettle Mpesa with Kenya entry

      Finserve Ltd, a subsidiary of Equity Bank has entered into an agreement with Chinese payment platforms WeChat and Alipay to facilitate the growing volume of trade between Kenya and China and present a great challenge to the dominance created by Safaricom’s MPesa. In a memorandum of understanding deal that was announced last week, Finserve and Singapore-based online payment company Red Dot Payment will collaborate to ensure business people travelling to China and those trading with Kenya can transact using these platforms. Under the agreement, Equity mobile payment platform Equitel will offer the base for both WeChat and Alipay. While MPesa charges a little fee for sending and withdrawal of funds, WeChat app is free to install and money transfer is free. Equity Bank is one of the largest regional banks in East Africa with presence in Kenya, Uganda, Tanzania, Democratic Republic of the Congo, South Sudan and Rwanda. The bank has said that it currently controls about 60 percent of e-commerce transactions in the East African region. It has been on a mission to nab international commerce as it also runs American PayPal. Chinese tourists will be able pay for various hospitality services using Alipay and WeChat Pay while East African traders will be able to purchase goods from China using the Chinese mobile payments. Alipay is part of China’s richest man Jack Ma’s empire that also include Ali Baba e-commerce site that is very popular with East African businessmen trading in China. WeChat on its part is a Chinese multi-purpose messaging, social media and mobile payment app. The app allows for social conversations, texting and sending money. The two platforms come at a time when trade between Kenya and China increasingly grows. Just a week ago, the Central Bank of Kenya announced that it was considering using Chinese Yuan as a reserve currency to facilitate trade between the two countries.
    • Real estate investment in Rwanda grows by $496 million

      In the past 14 years, housing demand in Rwanda has hit a high. With the growing population in the country, the citizens have put a demand on the government. A lot of money has been splashed in the real estate investment to cater for the thirst of the market. It has been a blooming business one that has caught the eye of both local and international investors. A number of improvements have as well been made that has seen the rising in figures. Rwanda’s project of building affordable housing has led to Rwanda Development Board (RDB) seeking strategies to meet its target. The board has been involved in a number of partnerships, with the latest being an Israeli firm ready to step into business with the East African nation. The growing middle class has been the target market of the housing sector with the launch of affordable housing in the country being a major project to settle them. Low income earners have had house issue as well. Incentives have been made for investors to fund the project. The Government has collaborated with developers on the building of decent and affordable homes and attract investments in the sector. Such incentives include tax, electricity, water and proximity to roads. Affordable mortgage prices have gained the trust of a number of citizens based on their salaries. With the economy’s dynamic shift, low and middle income earners have shied off from some real estate investments, with the sector facing challenges all through. The housing gap catalyzed by increased population will be reduced by a significant number in 2022. Close to 17% of Rwanda’s population lives in Kigali, and being a strategic location the percentage may increase. To manage this, the government seeks to improve infrastructure in the rural areas and offer better housing for the citizens to settle. 83% of the population live in rural areas which then needs haste in settling the people. In 2016, it was forecast that Rwanda’s property market was a bubble ready to burst. Investors poured money in the market fueling the economic progress of the country. The government can continue investing in housing and infrastructure and draw outside investments to the sector.Large scale housing projects would not only save their pockets but suffice the appetite of the market in the country. The land value is a fraction high in the city of Kigali and the land is scarce. The Government can take advantage of the rural areas where there is an availability of great vastness of land to make housing projects. The income levels could not change overnight and with the consideration of this rural areas could be ideal regions for affordable housing. There is more to be done in the country in the real estate sector.
  • United Kingdom
  • United States
    • Foreign currency regulations further postponed

      On 13 June 2018, the US Treasury Department and the US Internal Revenue Service (IRS) issued Notice 2018-57 to announce their intention to further delay the applicability date of the final regulations (TD 9794) and certain provisions in the temporary regulations (TD 9795), both of which were issued under section 987 of the US Internal Revenue Code (IRC). IRS Notice 2017-57 was issued previously on 16 October 2017 to defer the applicability date of those regulations by 1 year. Notice 2018-57 delays the regulations by 1 additional year. Accordingly, the regulations will apply to taxable years beginning on or after the date that is 3 years after the first day of the first taxable year following 7 December 2016. The final regulations and the temporary regulations were published in the Federal Register on 8 December 2016 to provide guidance on income and foreign currency gain or loss with respect to a qualified business unit (QBU). The final regulations were identified in IRS Notice 2017-38 as significant tax regulations requiring additional review for purposes of reducing tax regulatory burdens. As part of the review, the Treasury Department and the IRS are considering changes to the final regulations that would allow taxpayers to elect to apply alternative rules for transitioning to the final regulations and alternative rules for determining section 987 gain or loss. Notice 2018-57 will appear in the IRS Internal Revenue Bulletin (IRB) as part of IRB 2018-26, dated 26 June 2018.
  • Tax Treaties
    • Tax Treaties

      A tax treaty is a bilateral agreement made by two countries to resolve issues involving double taxation of passive and active income. Treaties Update – June 2018
      Date Country A Country B Object Status
      15.06.18 Pakistan Switzerland Income Tax Treaty Approved by Swiss Parliament
      15.06.18 Kosovo Switzerland Income Tax Treaty Approved by Swiss Parliament
      07.06.18 Moldova United Arab Emirates Income Tax Treaty Ratified by United Arab Emirates
      13.06.18 Saudi Arabia United Arab Emirates Income and Capital Tax Treaty Approved by United Arab Emirates
      13.06.18 Rwanda United Arab Emirates Income Tax Treaty Approved by United Arab Emirates
      27.06.18 Belarus United Kingdom Income and Capital Tax Treaty Ratified by United Kingdom