5 tax updates from around the world
From Brexit plans to the US election, discover the latest tax changes around the globe in this week’s collection of five tax updates.
1)UK’s Chancellor announces VAT deduction for financial services.
Rishi Sunak, the UK’s Chancellor of the Exchequer, has revealed plans for financial services to be permitted to deduct input VAT on export services to the EU. This includes both banking and insurance.
This announcement comes in response to the UK’s upcoming departure from the EU VAT regime at the end of the Brexit transition period on 31st December 2020.
2)EU seeks ‘new transatlantic agenda’ with Biden.
Following the recent appointment of President-elect Joe Biden, the USA and EU must now forge a new transatlantic alliance. The President of the European Commission, Ursula von der Leyen, has urged the USA to work with Europe in areas such as climate change and the digital economy. However, experts warn of potential difficulties regarding the taxation of digital services.
Last month, G20 ministers made the decision to extend negotiations on cross-border tax rules until mid-2021 due to the coronavirus pandemic. Von der Leyen has stated that Europe will act regardless if no decision is made by the new deadline.
3)UAE states it does not plan to raise VAT
The United Arab Emirates has reiterated that it has no plans to raise VAT. The current levy of 5% will continue to be maintained as it has been since its implementation in 2018.
The news comes after neighbouring Saudi Arabia tripled VAT and Oman confirmed plans to impose VAT from April 2021.
4) Vietnam VAT payment deadline extension for coronavirus
Earlier this year, a set of tax measures were introduced in Vietnam to help businesses deal with the financial impact of the coronavirus pandemic.
On 9th November, a further extension to the delay of VAT payments and returns was approved. April, May and June VAT returns and Q1 & Q2 VAT payments for non-incorporated businesses have been extended until 15th December 2020.
5)Burkina Faso ratifies the BEPS MLI
The Organisation for Economic Cooperation and Development (OECD) announced on 30th October 2020 that the African state of Burkina Faso has ratified the base erosion and profit shifting multilateral instrument (BEPS MLI).
The multilateral instrument (MLI) will enable countries to make changes to their tax treaties without having to individually renegotiate each one. Modifications are made to include measures from the OECD/G20 base erosion and profit shifting (BEPS) project. Over 100 countries and jurisdictions were involved in its development and the OECD has confirmed that 55 jurisdictions have now ratified, approved, or accepted the MLI.
The multilateral treaty will enter into force in Burkina Faso on 1st February 2021.
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