The State Taxation Administration released on September 18, 2020 the Announcement about Issues Related to Credit Management on Tax Payment, to be implemented from November 1, 2020.
The announcement launched four measures to optimize credit management on tax payment, that is, adding non-independent branches to voluntarily participate in credit evaluation of taxpayers, adding a mechanism to review credit evaluation indicators, adjusting the application rules for taxpayer credit evaluation, and relaxing the measure of keeping D rating for two years. The announcement released a new application form of credit review; if a taxpayer disputes evaluation result, it can fill the form before March of the next year to apply for a review.
The State Council released on September 21, 2020 the Circular about Overall Plan for New Pilot Free Trade Zones in Beijing, Hunan and Anhui and Expanding the China (Zhejiang) Pilot Free Trade Zone.
The China (Beijing) Pilot Free Trade Zone covers three areas of science-tech innovation, international commerce services and high-end industries. The zone will promote the coordinated development strategy of the Beijing-Tianjin-Hebei region, build itself into a science-tech innovation center with global influence, and accelerate the construction of demonstration zones to open up more services and pilot areas to develop digital economy. China (Zhejiang) Pilot Free Trade Zone will be expanded to cover three parts in Ningbo, Hangzhou and Jinyi.
The Ministry of Finance and the State Taxation Administration recently released the Circular about Value-added Tax Rebate Policies for International Transport Ships at the Hainan Free Trade Port. The circular will take effect from October 1, 2020 until December 31, 2024.
According to the circular, domestic shipbuilders can apply for value-added tax rebates if they sell ships to companies operating shipping services on the international market and in Hong Kong, Macau and Taiwan. The tax rebate applications shall be filed by ship buyers, and the tax rebates shall be equivalent to the amount of value-added tax bills when the ships were purchased. The circular also specified document requirements for tax rebate applications.
The State Council released on September 21, 2020 the Decision to Cancel and Delegate Power for Some Administrative Licensing Items. According to the decision, the State Council will cancel requirement for government review on 29 items and delegate power on four items.
Among them, the permit for opening corporate bank account is scrapped. The People's Bank of China (PBOC) should ask commercial banks to conduct online examinations of corporate bank account applicant's business registration, staff and tax payment information, and report the data to the PBOC. If enterprises and individuals are found to have illegally sold corporate bank accounts, they should be barred to open new accounts or suspended to get non-counter services.
In the first seven months of 2020, China became the top trading partner of the European Union (EU), a position previously held by the United States, said Eurostat on Wednesday.
EU's imports from China increased by 4.9 percent in the January-July period, compared to the same period last year, whereas its imports from the U.S. dropped by 11.7 percent.
The bloc's exports to China recorded a slight drop of 1.8 percent, while those to the U.S. fell by 9.9 percent, according to the EU's statistical office.
China and U.S. were followed by the United Kingdom, Switzerland, and Russia on EU's main trading partner list in the first seven months.
In accordance with the world's changing epidemiological situation during the first seven months, the EU's international trade started to fall in January, and regained momentum after May, when confinement measures were gradually eased.
In July, EU exports out of the bloc stood at 168.5 billion euros, down by 11.3 percent compared to July 2019, and its imports from the rest of the world reached 142.6 billion euros, down by 16 percent year-on-year, according to Eurostat estimates.
Since China's resource tax law was formally implemented on September 1, 2020, the five resource and environmental taxes – the vehicle and vessel tax, environmental protection tax, tobacco tax, tax on the occupancy of cultivated land and the resource tax – have all been enacted.
Liu Yi, deputy director of the Property and Behavior Tax Department of the State Taxation Administration, said that the new resource tax law has six changes compared to the original resource tax system.
Expanding the scope of tax collection
The expression covering the scope of taxation for resource taxes changes from "the exploitation of mineral products and the production of salt” to "the exploitation of taxable resources." The law authorizes the State Council to levy a water resource tax for pilot units and individuals who use surface water or groundwater, in accordance with the needs of national economic and social development, providing a legal basis and reserving room for reform of water resource management.
Standardizing and detailing tax items
A total of 164 taxable resources items are listed in the Tax Item and Tax Rate Table attached to resource tax law, covering all the minerals discovered so far.
Regulating the management of tax reductions and exemptions
Chin's resource tax law clarifies effective, long-term tax reduction and exemption policies, such as exempting the resource tax on coal mining enterprises for safe production to extract coal into gas and reducing the resource tax for low-abundance oil and gas fields.
Clarifying the permission division methods of the different tax rates
The tax law directly determines the fixed tax rates for strategic resources such as crude oil, natural gas, medium and heavy rare earths, tungsten and molybdenum. Other taxable resources are subject to a tax rate range, which is determined by the tax law. Meanwhile, the provincial governments are authorized to propose a specific tax rate for their region and report to the Standing Committee of the People's Congress at the same level for decision.
Clarifying price-based taxation as the main method of resource tax collection
One hundred and fifty-eight of the tax items among the 164 integrands listed by the resource tax law are ad valorem. The other six tax items can be levied through price-based taxation or quantity-based taxation according to the convenience of collection.
Clarifying the different tax rates for crude ores and beneficiation
The resource tax law clarifying the different tax rates of crude ores, and beneficiation not only ensures the fairness of taxation but also promotes tax declaration, which is an optimization of the resource tax system.
The government of Ethiopia changed its notes in order to fight illegal trade practices, reduce inflation, and to get back the money that has been circulating illegally in to the mainstream banking system. The transition to the new currency notes is expected to be effected within 2 to 3 months. This is also aimed at strengthening existing banking practices that have been abused in the past. Going forward individuals and companies are limited to daily withdrawals of EBT 200,000 and EBT 300,000 respectively. The maximum amount of Birr (Ethiopian currency) that individuals are allowed to hold outside the banking system and in their home is EBT 1.5 million. This news was announced by the Governor of the National Bank of Ethiopia on 14 September 2020.
The Inland Revenue Department (IRD) has substantially revised its guidance on the determination of assessable profits for profits tax purposes. Notably, the guidance sets out the generally accepted accounting principles (in other words, the Hong Kong Financial Reporting Standards [HKFRS]) that provide the starting point for computing assessable profits, revenue recognition and inventory valuation for tax purposes. The salient features of the latest guidelines as provided in the Departmental Interpretation and Practice Note (DIPN) No. 1 (revised) are set out below.
Computing assessable profits
Financial statements prepared in accordance with the HKFRS form the basis for computing assessable profits, including the recognition of profits on an accrual basis, and outgoings and expenses. The guidance also discusses the interaction between accountancy and tax laws and the need for adjustments under tax law to arrive at the correct amount of taxable profits.
Companies incorporated in Hong Kong are required to prepare annual financial statements in compliance with the HKFRS. Companies incorporated outside Hong Kong are allowed to follow other financial reporting standards, as long as they reflect true profits and losses.
Revenue recognition (revenue from contracts)
HKFRS 15 replaces a number of Standards and Interpretations, in particular HKAS 11 (Construction Contracts) and HKAS 18 (Revenue). HKFRS 15 took effect on 1 January 2018 and provides comprehensive guidance on the recognition of revenue from contracts with customers.
Under HKFRS 15, revenue is recognized when performance obligations of the contract are satisfied. In contrast, profits tax is charged when the profit is derived and the expense is incurred. Nevertheless, there should be no significant practical difference since the accounting treatment follows a substance-based approach which is based on the transfer of control of the goods or services, using the following five-step revenue recognition model:
identifying the contract(s) with a customer;
identifying the performance obligations in the contract;
determining the transaction price;
allocating the transaction price to the performance obligations in the contract; and
recognizing revenue when (or as) the entity satisfies a performance obligation.
Measurement of inventories
HKAS 2 is still recognized as the accounting treatment for inventories as it was in the earlier DIPN, and the basic rule remains that inventories should be valued at the lower of cost or net realizable value.
The revised DIPN provides additional guidance on the basis of valuation, including the deduction of inventory expenses, the use of alternative valuation bases, implications of changes to the basis of valuation, the applicable tax provisions in the case of a cessation of business and appropriation of inventory for non-business use, and relevant case laws. For profits tax purposes, the guidelines note that the IRD generally does not have the right to substitute one valid basis for another valid basis, or to adopt a different basis in computing profits.
DIPN No. 1 (revised) replaces the previous DIPN issued in July 2006 and the full details are available here.
The Ministry of Finance has gazetted the Faceless Appeal Scheme, 2020, where all income tax appeals will be finalized in an electronic manner, except for appeals relating to serious fraud, tax evasion, sensitive matters, international taxation and the Black Money Act.
This includes the electronic allocation of the appeal, communication of notices/questionnaires, verification, enquiry and hearings to the communication of the appellate order to the appellant.
The Faceless Appeal Scheme aims to provide greater convenience to taxpayers and ensure just and fair appeal orders, and minimize any further litigation. The new system is also important in imparting greater efficiency, transparency and accountability in the functioning of the Income Tax Department.
The Faceless Appeal Scheme was announced in August 2020 as part of the government's "Transparent Taxation" platform. The scheme came into effect on 25 September 2020.
Full details of the guidelines are available in Notifications Nos 76 and 77, both dated 25 September 2020.
India is the 3rd largest energy and oil consumer in the world after China and the US
India is the 4th largest importer of liquefied natural gas (LNG).
India consumed 213.2 MMT petroleum products and 60,747 MMSCM natural gas. The import dependency of crude oil and LNG during 2018 was 82.59% and 45.89% respectively. During 2018, petroleum import bill was $ 112 bn, a growth of 27% over $ 88 bn during 2017 - 18, and 23.42% of total gross import of the nation. India’s projected oil demand is going to grow at CAGR of 4% during 2016 - 2030 against the world average of 1%, though the projected oil demand will be much lower as compared to the US and China.
230 billion-barrel O+OEG conventional hydrocarbons in over 3 mn sq.km area, spread over 26 sedimentary basins, is available for investors
India aims to reduce oil and gas imports dependence by 10% by 2022
The demand for petroleum products is estimated to reach 244.960 MT by 2021-22 at a CAGR of 10%
The total number of fuel retail outlets increased from 18,848 (2002) to 64,624 (2019) at a CAGR of 7.5%. State-owned marketing companies are planning to add 78,000 new fuel retail outlets.
Present share of natural gas in the energy mix of the country is 6%. The aim is to increase it to 15% by 2030
12 Biofuel refineries are planned to be opened with an investment of $1.5 bn
India is the 2nd largest consumer of Biogas with 5000 CBG plants to be opened by 2023 under the SATAT scheme
Ethanol blending in petrol will grow from 5% to 20% by 2030 in India
Gas Consumption CAGR (2014-19)
Oil Consumption CAGR (2014-19)
Petrochemical Industry CAGR (by 2022)
Fuel RO CAGR (2002-19)
⇒ 100% FDI allowed in exploration activities of oil and natural gas fields under automatic route
⇒ 49% FDI allowed in petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs under automatic route
The phrase ‘innovate or die’ may sound simple, but for businesses, it is a reality. Even more so in times when business is haunted by a global pandemic, and simultaneously faces the challenges of climate change.
To retain its position as a global innovation centre with attractive taxation, Switzerland in 2020 introduced both input and output research and development (R&D) tax incentives, with the clear intention to strengthen Switzerland`s position as an innovative R&D hub. All incentives were designed with the OECD framework against harmful tax regimes in mind, thus – allowing for internationally accepted – tax benefits that can further reduce the already very competitive headline tax rates, which are below 12% in some Swiss cantons.
As part of the new rules, companies with Swiss sourced R&D activities may opt-in for an additional tax deduction of up to 50% of R&D related employee costs (including a mark-up) and/or qualifying contract R&D expenses. In order to simplify the determination of qualifying R&D activities, Swiss tax authorities will, among others, rely on the definition of R&D as provided by the OECD-Frascati manual (2015 edition).
The deduction covers both basic research and process/product application related innovation. The additional R&D deduction is possible, even in case no future profit derives from the underlying R&D spending.
In addition to input promotion, Swiss tax law allows for an output promotion following the OECD-nexus approach and allowing for an additional R&D deduction of up to 90% on patent-related income. The patent box is available in all Swiss cantons and provides companies with a registered patent or comparable right (in Switzerland or abroad) with an efficient instrument to optimise taxation for the useful life of the patent.
Switzerland opted for a patent box that limits the additional administrative burden and reliance on registrations with a recognised patent office. Companies with eligible patents may determine the box profit either by way of a top down approach or bottom up, i.e. based on adjusted patent/product income (with lump sum deductions and brand related costs) or based on taxable income with pre-defined deductions for certain categories of income. The patent box deduction is limited by the ‘nexus ratio’, that determines the Swiss-sourced R&D related to the patent. Acquisition costs for a patent and related party R&D costs from outside of Switzerland reduce the ‘nexus ratio’, while Swiss-sourced R&D expenses and global contract R&D expenses from third parties (with a mark-up of 30%) benefit the ‘nexus ratio’.
To avoid ‘double deductions’, the opt-in to a patent box regime requires entrance taxation of historic R&D expenses related to the patent within five years, with many cantons offering flexible application of the box deduction rather than levying an entrance cash-tax.
The innovation benefits provided by the Swiss tax law should allow Swiss-based companies to keep a competitive edge, attract more foreign investment and allow the country to retain its position as a global innovation leader.
The retirement visa would be renewable every five yearsRetirees need to meet one of three financial requirements for eligibility
The Dubai government announced Wednesday a retirement program that offers resident expatriates and foreigners the chance to retire in the emirate.
The “Retire in Dubai” scheme would allow eligible residents aged 55 and over to apply for a retirement visa that would be renewable every five years.
The scheme is thought to be the first of its kind in the region.
Retirees need to meet one of three financial requirements for eligibility:
earning a monthly income of 20,000 dirhams ($5,500);
having savings of 1 million dirhams;
or owning a property in Dubai worth 2 million dirhams.
To start with, the program will focus on residents working in Dubai who have reached retirement age. Applicants must have valid UAE health insurance.
The program is being spearheaded by Dubai Tourism in collaboration with the General Directorate of Residency and Foreigners Affairs.
Helal Saeed Al-Marri, Dubai Tourism’s director general, said it was launched to “further enhance Dubai’s position as an iconic global city and make it the world’s most preferred lifestyle destination.”“The retirement programme will contribute towards our tourism economy by facilitating frequent visits from families and friends of the retirees and increasing visitation from markets with a high retiree population,” he said.
Dubai, which is home to more than 200 nationalities, aims to become a preferred retirement destination to reinforce the emirate's status as a preferred tourism and lifestyle hub.
The UAE Federal Tax Authorities (FTA) have issued an excise tax user guide providing clarifications on completing excise tax obligations.
The guide details the following steps with regard to excise tax:
creating an e-services account with the FTA;
registering for excise tax;
late registration penalty payment;
amending approved excise tax registration form; and
excise tax deregistering.
The user guide was published on the FTA's website on 10 September 2020.
The United Arab Emirate Ministry of Finance (UAE MoF) has published the revised legislation on Economic Substance Regulations (ESR). The ESR were introduced in 2019, with 2019 being the first reportable year for all UAE based entities (companies, branches and commercial license holders). This revised legislation addresses specific aspects of the ESR.
The main amendments introduced by the revised ESR are summarized below.
Definition of a licensee
A licensee is defined as "an entity that is (i) a juridical person incorporated inside or outside the UAE or (ii)an unincorporated partnership registered in the UAE, including a free zone and a financial free zone and carries on a Relevant Activity."
Branches of a foreign entity registered in the UAE (which can include a permanent establishment or any other form of taxable presence for corporate income tax purposes which are not a separate legal entity) that carries out a relevant activity, are required to comply with the ESR, unless the Relevant Income of such a branch is subject to tax in a jurisdiction outside the UAE.
Similarly, where a UAE entity carries on a relevant activity through a branch registered outside the UAE, the UAE entity is not required to consolidate the activities and income of the branch for purposes of the ESR. This is provided the relevant income of the branch is subject to tax in the foreign jurisdiction where the branch is located.
The following entities are exempted from the ESR:
an investment fund;
an entity that is tax resident in a jurisdiction other than the UAE; and
an entity wholly owned by UAE residents and meets the following conditions:
the entity is not part of a multinational enterprise group; and
all of the entity's activities are only carried out in the UAE;
a licensee that is a branch of a foreign entity the relevant income of which is subject to tax in a jurisdiction other than the UAE.
It should be noted that the exemption provided to companies in which the UAE government, or the government of any emirate of the UAE, has at least 51% as direct or indirect ownership in its share capital has been withdrawn.
Exempted licensees remain subject to the obligation to submit a notification to the relevant authority along with sufficient evidence substantiating their status as an exempted licensee for each financial year in which it claims to be an exempted licensee.
However, a tax resident in a foreign jurisdiction claiming to be an exempted licensee is required to submit one of the following documents along with its notification in respect of each relevant financial year:
letter or certificate issued by the competent authority of the foreign jurisdiction in which the entity claims to be a tax resident stating that the entity is considered to be resident for corporate income tax purposes in that jurisdiction; or
an assessment to corporate income tax on the entity, a corporate income tax demand, evidence of payment of corporate income tax, or any other document, issued by the competent authority of the foreign jurisdiction in which the entity claims to be a tax resident.
First reportable financial
The licensees including those exempted are subject to the ESR Regulations from the earlier of:
their financial year commencing on 1 January 2019, or
the date on which they commence carrying out a relevant activity (for a financial year commencing after 1 January 2019).
The ESR provides that any licensee carrying out any of the following relevant activities should comply with the economic substance requirements:
investment fund management business;
distribution & service centre business;
intellectual property business; and
holding company business.
It should be noted that the new ESR has expanded the scope of the "distribution and service centre business" to include:
the purchase of spare parts, raw materials and finished goods notwithstanding the fact that these goods will be stored in the UAE; and
services providers to all related parties notwithstanding where they are established (previously only services providers to foreign related parties were included in the scope of the relevant activity).
It should also be noted that the revised ESR has limited the definition of high-risk intellectual property licensees as follows:
the licensee did not create the intellectual property asset which it holds for the purpose of its business;
the licensee acquired the IP asset from either:
a Connected Person; or
in consideration for funding research and development by another person situated in a foreign jurisdiction;
the licensee licenses or has sold the IP asset to one or more group companies, or otherwise earns separately identifiable gross income (e.g. royalties, licence fees) from a foreign group company in respect of the use or exploitation of the IP asset.
The condition that the licensee does not carry out research and development, or branding, marketing and distribution as part of its state core income-generating activity has been withdrawn.
The revised ESR clarified that every licensee and exempted licensee is required to submit a notification to their respective regulatory authorities. The notification shall set out the following for each relevant financial year:
the nature of the relevant activity being carried out;
whether it generates relevant income;
the date of the end of its financial year; and
any other information as may be requested by the regulatory authority.
The Notification must be submitted electronically on the Ministry of Finance portal within 6 months from the end of the Licensee or Exempted Licensee's financial year.
It should be noted that licensees that have already submitted a notification directly to their regulatory authorities are required to re-submit a notification in accordance with the provisions of the revised ESR on the Ministry of Finance portal once available.
National assessing authority under ESR
In addition to the regulatory authorities of which the main functions are inter alia to collect, review and report the economic substance regulation notification and all the relevant information required to be submitted by the Licensees and exempted Licensees, the revised ESR has appointed the federal tax authority (FTA) as the national assessing authority which should undertake the following functions:
undertake assessments to determine whether a licensee has met the economic substance test;
impose administrative penalties, applicable;
hear and decide on appeals;
exchange information to the competent authority pursuant to article 10 of the revised ESR; and
carry out any other functions for the purposes of implementing the provisions of the revised ESR.
The UAE MoF will launch a portal to facilitate the electronic filing of notifications, economic substance reports and all other relevant documents and information.
The revised ESR have increased the penalties imposed for non-compliance by the licensee or the exempted licensee with the requirements as follow:
An AED 20,000 penalty if the licensee or the exempted licensee do not submit the revised ESR notification; and
An AED 50,000 penalty (increased to AED 400,000 for the second year) if the licensee or the exempted licensee:
fails to provide the ESR report; or
fails to satisfy the ESR requirement.
The UAE MoF also published a new relevant activities guide (schedule 1 of the ESR) and updated the frequently asked question on its website.
Residential property transactions rose 15.6% in August following introduction of stamp duty holiday.
rise in sales supports nearly three quarters of a million jobs in the sector – with new homeowners also spending extra cash on decorating, furniture and appliances
construction sector reports 30% boost in output in July
House sales rose 15.6% in August following the introduction of the stamp duty holiday – helping to protect nearly three quarters of a million jobs in the housing sector and wider supply chain, new figures revealed today.
After a 14.5% rise in July, residential property transactions in August rose a further 15.6% as more people decided to buy a new home or move house. The increase in transactions came after the Chancellor announced a stamp duty holiday at the start of July that will last until March next year.
The move has helped to protect nearly 750,000 jobs, benefitting businesses across the housing supply chain and beyond, with the Bank of England estimating that households who move home are much more likely to purchase a range of durable goods, such as furniture, carpets or major appliances.
It is expected that among others housebuilders, estate agents, tradespeople, DIY stores, removal and cleaning firms could all benefit from the increased activity.
Chancellor Rishi Sunak said:
Every home sold means more jobs protected – helping us to deliver on our Plan for Jobs.
But this isn’t just about the housing market. Owners doing up their homes to sell and buyers reinvesting stamp duty savings to make their new house feel like a home are also firing up local businesses, supporting, creating and protecting jobs across the country.
As part of its Plan for Jobs, the government introduced a temporary stamp duty holiday for residential properties worth up to £500,000 effective from 8 July 2020 until 31 March 2021.
The holiday means nine out of ten people getting on or moving up the property ladder will pay no SDLT at all. This measure delivers an average saving of £4,500 in SDLT.
The government wants people to feel confident to move, to buy, to sell, to renovate, and to improve their homes, driving growth and supporting jobs.
Figures from Building Societies Association show that there has been a marked uplift in the number of people who say that now is a good time to buy a property - 37% in September compared to 25% in June, whilst figures from Checkatrade show that:
more than one in ten (11%) of Brits are hoping to have bought a new home by the end of March 2021
33% of those hoping to move plan to spend the ‘extra’ cash on home improvements and renovations.
Mike Fairman, CEO at Checkatrade, said:
Since the Government’s stamp duty changes came into effect earlier this year, we’ve seen record numbers of home improvement enquiries to the site suggesting that consumers are planning to reinvest their stamp duty savings straight back into their homes.
This increase has not only benefitted Checkatrade as a business, but also the livelihoods of the traders we represent.
Private housing output grew by about 30% in July compared to June, the single largest contributor to the monthly growth in construction output that month.
As part of its Plan for Jobs, the government has temporarily increased the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This applies from 8 July 2020 until 31 March 2021 and cuts the tax due for everyone who would have paid SDLT. Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.
87% of Primary Residence transactions in England and NI will no longer pay any SDLT, 93% outside of London and SE.
The Home Builders Federation estimate that 240,000 people are directly employed by housebuilders and their contractors and the sector supports a further 300,000-500,000 people indirectly employed.
The government has temporarily increased the stamp duty threshold to £500,000 for property sales in England and Northern Ireland, until 31 March 2021.
Anyone completing on a main residence costing up to £500,000 before then will not pay any stamp duty, and more expensive properties will only be taxed on their value above that amount.
This will save buyers as much as £15,000, if they are buying a property of £500,000 or more.
The move was aimed at helping buyers who have taken a financial hit because of the coronavirus crisis.
It was also intended to boost a property market hit by lockdown, which - according to the Halifax - saw house prices fall for four months in a row.
The average stamp duty bill will drop by £4,500, Mr Sunak has suggested, with nearly nine out of 10 people buying a main home this year paying no stamp duty at all.
However, critics worry it could encourage people who were planning to buy next year to accelerate their plans to take advantage of the tax break. This could lead to a slump in demand when the tax break ends.
How much stamp duty will I pay now?
If the property purchased is your main home, you won't pay any stamp duty on it at all if it costs £500,000 or less.
The next portion of the property's price (£500,001 to £925,000) will be taxed at 5%, and the £575,000 after that (£925,001 to £1.5m) at 10%.
Before the announcement, stamp duty in England and Northern Ireland was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. But this stamp duty holiday replaces the first-time buyer discount.
Landlords and second home buyers are also eligible for the tax cut but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.
What about Scotland and Wales?
In Scotland, the rates on Land and Buildings Transaction Tax are 2% on £145,001-£250,000, 5% on £250,001-£325,000, 10% on £325,001-£750,000, and 12% on any value above £750,000.
Scottish landlords pay an extra 4% Land and Buildings Transaction Tax on top of standard rates.
In Wales, the rates on Land Transaction Tax are 3.5% on £180,001-£250,000, 5% on £250,001-£400,000, 7.5% on £400,001-£750,000, 10% on £750,001-£1.5m, and 12% on any value above £1.5m.
Welsh landlords pay an extra 3% Land Transaction Tax on top of standard rates.
How much does stamp duty raise?
The government's annual take from stamp duty is around £12bn, according to the latest figures released by HM Revenue and Customs (HMRC).
That's roughly equivalent to 2% of the Treasury's total tax take.
The nine-month stamp duty holiday in England and Northern Ireland - from July 2020 to March 2021 - will cost the Treasury an estimated £3.8bn.
The Chancellor Rishi Sunak today outlined additional government support to provide certainty to businesses and workers impacted by coronavirus across the UK.
Delivering a speech in Parliament, the Chancellor announced a package of measures that will continue to protect jobs and help businesses through the uncertain months ahead as we continue to tackle the spread of the virus. The package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme and 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
The announcement comes after the Prime Minster set out further measures to combat the spread of the virus over the winter, while preserving the ability to grow the economy.
The Chancellor of the Exchequer Rishi Sunak said:
The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery…
Our approach to the next phase of support must be different to that which came before.
The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve.
Since the beginning of the pandemic, the government has taken swift action to save lives, limit the spread of the disease and minimise damage to the economy.
Ministers have introduced one of the most generous and comprehensive economic plans anywhere in the world with over £190 billion of support for people, businesses and public services - including paying the wages of nearly 12 million people, supporting over a million businesses through grants, loans and rates cuts and announcing the Plan for Jobs in July.
The government has been consistently clear that it would keep its support under review to protect jobs and the economy, with today’s action reflecting the evolving circumstances and uncertainty of the months ahead. The package of measures, which applies to all regions and nations of the UK, includes:
Support for workers
A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.
In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April - ensuring our support continues right through to next year. This is in addition to the more than £13 billion of support already provided for over 2.6 million self-employed individuals through the first two stages of the Self Employment Income Support Scheme – one of the most generous in the world.
Tax cuts and deferrals
As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year. This will give businesses in the sector - which has been severely impacted by the pandemic - the confidence to maintain staff as they adapt to a new trading environment.
In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
On top of this, around11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Giving businesses flexibility to pay back loans
The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses. These measures will further protect jobs by helping businesses recover from the pandemic.
We also intend to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
In addition, the Chancellor also announced he would be extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November. As a result, more businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund. This change aligns all the end dates of these schemes, ensuring that there is further support in place for those firms who need it.
Investment in public services
At the start of the pandemic, the Chancellor pledged to give the NHS and public services the support needed to respond to coronavirus – and as of today, £68.7 billion of additional funding has been approved by the Treasury, including £24.3 billion since the Summer Economic Update in July.
This funding has helped ensure the procurement of PPE for frontline staff, provided free school meals for children while at home and protected the country’s most vulnerable. In addition, the £12 billion funding to roll-out the Test and Trace programme has played a key role helping to unlock the economy, enabling businesses like restaurants and bars to serve customers again.
As announced earlier this year, the Treasury has also guaranteed the devolved administrations will receive at least £12.7 billion in additional funding. This gives Scotland, Wales and Northern Ireland the budget certainty to for coronavirus response in the months ahead.
These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. It is right to target help on jobs with a future, but can only be part-time while demand remains flat. This is how skills and jobs can be preserved to enable a fast recovery.
Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.
The Chancellor has listened to evidence from business and acted decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.
Mike Cherry OBE, Federation of Small Businesses National Chair, said:
The UK’s small businesses are facing an incredibly difficult winter. Today’s support package is the flipside of the coin to Tuesday’s COVID-19 business restrictions.
It is a swift and significant intervention, extending emergency SME loans, creating new wage support for small employers and the self-employed, and providing cashflow help on VAT deferrals and new Time To Pay for any tax bills to HMRC.
We welcome that the Chancellor is ensuring that decisions to protect public health are informed by the need to protect the economy, people’s jobs and prospects for young people in our schools and workplaces.
BCC Director General Adam Marshall said:
The measures announced by the Chancellor will give business and the economy an important shot in the arm. Chambers of Commerce have consistently called for a new generation of support to help preserve livelihoods and ease the cash pressures faced by firms as they head into a challenging and uncertain winter.
The Chancellor has responded to our concerns with substantial steps that will help companies preserve jobs and navigate through the coming months. The new wage support scheme will help many companies hold on to valued employees after furlough ends, and the extension of business lending schemes and tax forbearance will lessen the immediate pressure on cash flow for many affected firms.
As we look past the immediate challenge, more will need to be done to rebuild and renew our economy. Chambers of Commerce across the UK will continue to work with government to ensure the benefits of these schemes are delivered to firms on the ground.
The World Trade Organization (WTO) has found the United States' additional ad valorem duties on certain products imported from China to be in violation of various articles of the 1994 General Agreement on Tariffs and Trade.
Specifically, China disputed the following additional ad valorem duties imposed by the United States:
additional ad valorem duties of 25%, imposed on 20 June 2018 on a list of 818 tariff subheadings with an approximate annual trade value of USD 34 billion of products imported from China, as of 6 July 2018 (List 1); and
additional ad valorem duties, imposed on 21 September 2018 on a list of 5,745 tariff subheadings with an approximate annual trade value of USD 200 billion of products imported from China, as of 24 September 2018 (List 2).
List 2 set the rate of additional ad valorem duties at 10% until the end of the year, and announced that the rate of additional duties would increase to 25% on 1 January 2019. The increase in the rate of additional duties was postponed twice, but eventually took effect on 10 May 2019.
The WTO rejected the United States' argument that the tariffs were applied to products it said had benefitted from practices that the United States considered to be contrary to "public morals," like theft, misappropriation and unfair competition. Ultimately the WTO found that the United States had not met its burden of demonstrating how its restrictions contributed to protecting its public morals and how they did not extend beyond what was necessary.
To read the full report of the panel issued by the WTO see WT/DS543/R.
Taxpayers across the nation facing hardship in the aftermath of Hurricane Sally in the south-eastern United States and various wild fires in the western United States gain some relief from state revenue departments:
Alabama extended 2019 filing deadlines for all filers in Baldwin, Escambia and Mobile counties affected by Hurricane Sally. Tax deadlines falling between 15 September 2020 and 15 January 2021 are pushed to 15 January 2021. Penalty relief is provided during the extension period. Alabama taxpayers not affected by Hurricane Sally must file and pay individual taxes by te extended deadline of 15 September 2020, or as otherwise usually applicable. Corporate taxes are due according to federal extended Deadlines.
Idaho extended 2019 tax deadlines to all filers affected by the Oregon wildfires and straight-line winds. Tax deadlines falling between 7 September 2020 and 14 January 2021 are pushed to 15 January 2021. Idaho taxpayers not affected by the wildfires and straight-line winds must file and pay taxes following the federal extended deadlines, however, Idaho only follows the federal extension to file, not to pay. Interest will continue to accrue for state tax purposes on any tax that's paid after 15 June 2020, the original Idaho income tax due date.
Kentucky extended 2019 tax deadlines for individual and corporate income taxes, and withholding taxes, for taxpayers in designated areas affected by the Oregon wildfires. The extension pushes the deadline to file and pay to 15 January 2021 for eligible taxpayers, and is applicable for quarterly estimated taxes for calendar year corporate returns with automatic extensions. Late filing and payment penalties will be waived but interest will still be charged.
Texas announced tax filing extension for taxpayers living in declared disaster areas. Eligible taxpayers can request a temporary extension to file their taxes on a case-by-case basis.
The United States continue to make accommodations to their income tax regimes to provide taxpayers with COVID-19 relief for the 2019 tax year. Here is a quick roundup of recent developments:
Arkansas updated its COVID-19 related FAQs. The FAQs confirm that business grants and economic impact payments are not subject to state income tax, 2019 individual income tax filing extensions to 15 July 2020 and more.
New Jersey extended 2019 Corporate Business Tax (CBT) penalty relief for calendar year filers to 16 November 2020. Fiscal year filers similarly obtain a waiver of penalties by 30 days past their federal extension, e.g. fiscal filers with an extended federal due date of 16 November 2020 will have until 15 December 2020 to file their 2019 CBT returns with the state.
North Carolina passed Session Law 2020-97 (signed by the Governor on 4 September 2020) allocating federal funds in the Coronavirus Relief Act to support families with qualifying children with virtual schooling and childcare costs during the COVID-19 pandemic. The grant is a total of USD 335 for each eligible individual, regardless of the number of qualifying children.
Oregon and Louisiana announced special mailing (seeOR Press Release & LA Press Release) from the Internal Revenue Service (IRS) encouraging residents (mostly non-filers) to register for their federal Economic Impact Payment. Non-filers are typically not required to file federal income tax returns but may qualify for an Economic Impact Payment. The deadline for registering for an Economic Impact Payment for both taxpayers and non-filers is 15 October 2020.
Bulgaria’s Finance Minister Kiril Ananiev and the ambassador of the Netherlands to Bulgaria Bea ten Tusscher signed on September 14 a new convention for the elimination of double taxation with respect to taxes on income and the prevention of fiscal evasion and avoidance in the two countries, the Bulgarian Finance Ministry said.
The current convention dates back to 1990 and was signed in circumstances of different economic relations between the two countries and when legal regulation of taxation in Bulgaria was different, the statement said.
Bulgaria’s Finance Ministry said that the new convention is necessary also because of current changes in international taxation, initiated by the G-20 countries and the Organisation for Economic Cooperation and Development, to counteract the reduction of tax base and transfer of profits.
The new guidelines in this field are present in the project Base Erosion and Profit Shifting – BEPS.
The taxation regulations, introduced in the convention, are in conformity with current Bulgarian taxation legislation and the current principles and developments in international taxation, reflected in the OECD Model Tax Convention, the Finance Ministry said.
“Such types of conventions are an important element of the international contractual basis and are of common economic interest, as they stimulate the economic and investment activities between the countries,” the ministry said.