EUDTG Newsletter March – April 2017

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various challenges.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Belgium: CJEU judgment on interpretation of the subject-to-tax requirement of the Parent-Subsidiary Directive: Wereldhave
  • Belgium: AG Opinion on interest deduction limitation in light of the Parent-Subsidiary Directive: Argenta
  • Germany: CJEU referral on the German CFC rules: X

National Developments

  • Belgium: Supreme Court does not allow withholding tax refunds for dividends received by investment companies before 12 June 2003
  • Belgium: CJEU referral by the Commission of Belgium over the discriminatory tax treatment of foreign real estate income
  • Finland: Supreme Administrative Court confirms tax treatment of dividend income from third countries to be in line with Articles 63 and 65 TFEU
  • Italy: Amendments to the NID and Patent Box Regime
  • Norway: Government’s response to ESA’s decision on the compatibility of the Norwegian interest limitation rules with the freedom of establishment
  • Poland: Supreme Administrative Court judgment on the settlement of foreign branch losses
  • Spain: Supreme Court judgment on State aid recovery procedure
  • United Kingdom: England and Wales High Court judgment regarding repayment of stamp duty reserve tax: Jazztel plc v The Commissioners for HMRC
  • United Kingdom: The Great Repeal Bill White Paper

EU Developments

  • EU: European Parliament clears way for formal adoption of ATAD II by the ECOFIN Council
  • EU: Update on EU proposal for public country-by-country reporting
  • EU: Council adopts conclusions on EU relations with the Swiss Confederation
  • EU: Informal ECOFIN Council held in Malta in early April

Fiscal State aid

  • Greece: CJEU judgment on State aid implemented by Greece: Ellinikos Chrysos AE
  • Italy: CJEU judgment on Italian bankruptcy procedure: Marco Identi

Read the full newsletter here.

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes: www.pwc.com/eudtg

Switzerland: New social security treaty between Switzerland and China

A social security treaty between Switzerland and the People’s Republic of China (China) will enter into force on 19 June 2017. The maximum posting period is 72 months. For the duration of the posting employees (regardless their nationality) are exempt from the compulsory insurance obligations of the country of occupation which are covered in the social security treaty. As from 19 June 2017 it will be possible to obtain a Certificate of Coverage.

 

Click here for more details

 

Contact

Véronique Schaller
+41 58 792 5036
veronique.schaller-wiesli@ch.pwc.com

Natalia Graf
+41 58 792 4324
natalia.graf@ch.pwc.com

 

EUDTG Newsletter January – February 2017

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various challenges.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Netherlands: CJEU judgment on pro-rata personal deductions for non-resident taxpayers: X
  • Netherlands:  CJEU judgment on the application of Article 64 (1) TFEU concerning the extended recovery period for foreign assets: X

    National Developments
  • Belgium: New Innovation Income Deduction replaces the Patent Income Deduction
  • Finland: Supreme Administrative Court confirms withholding tax treatment for non-UCITS and non-listed Maltese SICAV
  • Hungary:  Hungarian implementation of ATAD’s CFC rules
  • Italy: Italian Tax Court of First Instance judgment on the compatibility of withholding tax levied on dividends distributed to a US pension fund with EU law
  • Sweden: Swedish Supreme Administrative Court judgments on the denial of refund of Swedish withholding tax
  • Switzerland: Corporate Tax Reform III rejected by the Swiss voters
  • United Kingdom: Supreme Court judgment in R (on the application of Miller and another) v Secretary of State for Exiting the European Union

EU Developments

  • EU: ECOFIN Council agreement on ATAD II
  • EU: European Parliament Resolution of 14 February 2017 on the annual report on EU competition policy
  • EU: Public CBCR: European Parliament’s joint ECON & JURI Committee issues draft report
  • EU: EU Member States send letter to non-EU 92 countries in context of common EU list of non-cooperative tax jurisdictions
  • Spain European Commission requests Spain to amend its law implementing reporting obligations for certain assets located outside of Spain

Fiscal State aid

  • Luxembourg: Non-confidential version of the European Commission’s State aid opening decision in GDF Suez
  • Spain: AG Opinion on tax exemptions for Church-run schools

Read the full newsletter here.

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes: www.pwc.com/eudtg

ITSNewsalert: Disclosure of final beneficiaries in Brazilian corporate taxpayer register

On December 29, 2016, the Brazilian tax authorities issued Normative Instruction (NI) 1,684/2016 which postpones the starting date to disclose information related to final beneficiaries in the Brazilian corporate taxpayer register (“CNPJ”).

Background

In May 2016 the Brazilian tax authorities issued NI 1,634 establishing the obligation to disclose information related to final beneficiaries of Brazilian companies in the CNPJ.

According to NI 1,634, the term “final beneficiaries” refers to (i) an individual who ultimately, either directly or indirectly, holds, controls or significantly influences an entity; or (ii) an individual on whose behalf a transaction is undertaken. A shareholder is deemed to have significant influence if (i) owns more than direct or indirect 25% of the entity’s capital stock or (ii) has the ability to influence the decision-making and elect or appoint members of the entity’s management.

Please note that, among others, legal entities set up as listed companies in Brazil, or in jurisdictions which impose the public disclosure of information of relevant shareholders, as well as non-profit entities, were not required to comply with this obligation unless the entities were located in tax havens or privileged tax regimes under the Brazilian tax legislation.

The takeaway

Although the disclosure of the final beneficiaries was initially set to start on January 1, 2017, NI 1,684/2016 has postponed the general starting date to July 1, 2017. As an exception, companies registered in Brazil before July 1, 2017 will have time until December 31, 2018 to comply with the disclosure obligation (however, please note that if a Brazilian company updates its CNPJ before December 31, 2018 for any other reason, the disclosure obligation will arise at the date of such change).

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Contacts

If you would like to discuss the implications for your organisation, please contact your usual PwC adviser or:

Daniel Gremaud
PwC | Senior Partner, Tax and Legal Services
Office: +41 58 792 81 23
Mobile: +41 79 213 5459
Email
PricewaterhouseCoopers GmbH
Avenue C.-F. Ramuz 45 | Case postale | 1001 Lausanne

 

 

Grasiele Teixeira Neves
PwC | International Tax Services
Office: +41 58 792 9825
Mobile: +41 79 350 5138
Email
PricewaterhouseCoopers AG
Avenue Giuseppe-Motta 50 | Case postale | 1211 Genève 2

EU: Anti-Tax Avoidance Directive II (“ATAD II”)

On February 21, 2017, the 28 European Union (EU) Finance Ministers in the ECOFIN Council meeting reached political agreement on the Council Directive amending Directive (EU) 2016/1164 regarding hybrid mismatches with third countries with a view to adopting it (subject to receiving European Parliament’s opinion and legal-linguistic revision).

ATAD II basically adds to the existing ATAD I (adopted in 2016 and effective as of 2019) rules on mismatches with third countries and basically extends the hybrid mismatch definition to also include mismatches resulting from arrangements involving PEs, hybrid transfers, imported mismatches, and reverse hybrid entities. In addition, ATAD II includes rules on tax residency mismatches.

ATAD II still needs to be submitted for formal adoption at a next ECOFIN Council meeting after the European Parliament has formally issued its opinion on the EC proposal, which is currently scheduled for 26 April 2017.

Once formally adopted, EU Member States will need to transpose the provisions by 31 December 2019 and apply them per 1 January 2020. By way of derogation, the specific reverse hybrid entity rule would need to be transposed by 31 December 2021 and applied per 1 January 2022, however payments to reverse hybrids would not be deductible anymore from 1 January 2020.

The further developments in the EU in this regard should be closely monitored as they may potentially have implications for Swiss Finance Branches and Principal Companies.

For more information please find below the newsletter from our EUDTG network.

Download EUDTG newsletter

 

GDPR key challenges: #2 mandatory data breach notification

The EU General Data Protection Regulation (GDPR) introduces a mandatory data breach notification regime. Companies should develop or update their internal data breach notification procedures by May 2018. These should comprise incident identification systems as well as incident response plans.

 Data breaches

Data breaches will have to be reported to the competent supervisory authority without undue delay and, where feasible, within 72 hours. A data breach is defined as “a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data transmitted, stored or otherwise processed”. It is important to note that no notification is required if the data breach is unlikely to result in a risk to the rights and freedoms of the persons affected. However, guidance on how to determine such risk to the rights and freedoms of data subjects is yet to be provided. The European Data Protection Board (EDPB) is expected to issue further guidance on data breach notifications.

Furthermore, a data breach likely to result in a high risk to the rights and freedoms of data subjects in general requires the company to communicate the breach to the data subjects concerned without undue delay. The need to communicate such information may also be triggered by a decision of the supervisory authority deeming a particular data breach to pose a high risk to natural persons.

This notification regime also applies to outsourcing. If a company outsources data processing to a data processor, the company must make sure that it will be informed by the data processor immediately if any data breaches occur.

Read more…

 

Contacts:

Susanne Hofmann
PwC | Legal Compliance Leader
Office: +41 58 792 17 12
Mobile: +41 79 286 83 67
Email
PricewaterhouseCoopers AG
Birchstrasse 160 | Postfach | CH-8050 Zurich

Michael Adrian Meyer
PwC | Legal Services – Senior Manager
Office: +41 58 792 51 31
Mobile: +41 79 150 75 64
Email
PricewaterhouseCoopers AG
St. Jakobs-Strasse 25 | CH-4002 Basel

Dr. Idir Laurent Khiar
PwC | Legal Services – Assistant Manager
Office: +41 58 792 17 51
Mobile: +41 79 267 72 16
Email
PricewaterhouseCoopers AG
Birchstrasse 160 | Postfach | CH-8050 Zurich

 

GDPR key challenges: #1 Applicability to non-EU companies

In May 2016, the new EU General Data Protection Regulation (GDPR) became effective. In May 2018, after a transposition period of two years, the GDPR will be mandatorily applicable throughout the European Union (EU). Although the GDPR is EU legislation, under certain circumstances it might be also applicable to Swiss and other non-European companies. This is the case if such company has an establishment in the EU. And the GDPR will also be applicable if, according to the newly introduced “Lex loci solutionis”, a non-European company without establishment in the EU is offering goods or services to the European Union’s market or if it is monitoring the behaviour of people living in the EU.

Read more…

 

Contacts:


Susanne Hofmann
PwC | Legal Compliance Leader
Office: +41 58 792 17 12
Mobile: +41 79 286 83 67
Email
PricewaterhouseCoopers AG
Birchstrasse 160 | Postfach | CH-8050 Zurich

 

 


Michael Adrian Meyer
PwC | TLS Senior Manager
Office: +41 58 792 51 31
Mobile: +41 79 150 75 64
Email
PricewaterhouseCoopers AG
St. Jakobs-Strasse 25 | CH-4002 Basel

 

EUDTG Newsletter November – December 2016

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various opportunities.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Belgium: AG’s Opinion on the Belgian fairness tax: X
  • Denmark: CJEU Judgment on the Danish thin capitalisation rules: Masco Denmark ApS
  • Portugal: CJEU Judgment on the taxation of profits distributed by entities in third countries: SECIL
  • United Kingdom: AG’s Opinion regarding UK trust exit taxation: Trustees of the P Panayi Accumulation & Maintenance Settlements v HMRC
  • United Kingdom: AG’s Opinion on UK FID regime: The Trustees of the BT Pension Scheme v HMRC

National Developments

  • Netherlands: Dutch AG’s Opinion regarding Dutch dividend withholding tax on foreign investment funds
  • Spain: National High Court of Justice upholds insurance company claims
  • United Kingdom: Court of Appeal judgment on remedies in the franked investment income (FII) group litigation

EU Developments

  • EU: ECOFIN Council of 8 November 2016 adopts criteria for screening of third country jurisdictions
  • EU: ECOFIN Council of 6 December 2016 – results
  • EU: European Commission’s public CBCR proposal’s legal basis challenged
  • EU: European Commission welcomes the entry into force of new transparency rules for tax rulings

Fiscal State aid

  • Hungary: European Commission publishes its final decision on the Hungarian advertisement tax
  • Ireland: Non-confidential version of the European Commission’s final State aid Decision on Apple
  • Spain: CJEU Judgments on the Spanish financial goodwill amortisation scheme: Autogrill v Commission and Banco Santander and Santusa v Commission

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Read the full newsletter here.

Further information about our service offerings in EU taxes: www.pwc.com/eudtg

Mass dismissals – beware of the pitfalls

EmploymentIN A NUTSHELL
Under Swiss law, mass dismissals require compliance with special procedures, which are stated in the Swiss Code of Obligations (CO). It is important to adhere to the rules, as non-compliance may result in lawsuits (for unfair dismissal) or the continuance of the employment relationships. However, when do we speak of mass dismissals and what are the required procedures?

DEFINITION OF MASS DISMISSAL
Notices of termination given by the employer within a period of 30 days for reasons unrelated to the individual employee and affecting the following numbers of employees are considered as ‘mass dismissals’ (art. 335d CO):

  • 10 employees in a business usually employing more than 20 and less than 100 employees;
  • 10 percent of the workforce in a business usually employing more than 100 and less than 300 employees;
  • 30 employees in a business employing more than 300 employees.
    While terminations for altered conditions and early terminations of a temporary contract are considered to be relevant for purposes of the rules on mass dismissal, terminations based on termination agreements or due to the employer’s bankruptcy are not included within the coverage of the rules.

Continue to read in our current newsletter.

If you have questions, please contact your usual PwC contact person or one of PwC Switzerland´s legal experts named below.

Martin Zeier
Legal Services
martin.zeier@ch.pwc.com
Myriam Büchi
Legal Services
myriam.buechi-baentli@ch.pwc.com
Christine Bassanello
Legal Services
christine.bassanello@ch.pwc.com

Swiss-US Privacy Shield: New Framework for the Transfer of Data to the USA

The so-called Swiss-US Privacy Shield replaces the Safe Harbor Agreement between Switzerland and the USA. The agreement establishes a new regulatory framework for the transmission of personal data from Switzerland to certified companies domiciled in the US. The same standards will apply for Swiss transfers of personal data to the USA as for data transfers from the EU.

Swiss data protection legislation stipulates specific requirements for the transfer of personal data abroad. They protect the personality and the rights of the data subjects concerned. However, the US is not deemed to provide an adequate level of data protection in terms of Swiss law. Swiss companies therefore have to take specific measures to safeguard personal data when it is transferred to the US.

Until recently, Swiss companies could rely on the Swiss-US Safe Harbor Agreement. After the Court of Justice of the European Union declared the EU-US Safe Harbor Agreement invalid, the Swiss Federal Data Protection and Information Commissioner (FDPIC) put the Swiss-EU Safe Harbor Agreement into question.

In August 2016, the EU and USA put into place a successor agreement, the EU-US Privacy Shield. Switzerland also entered into negotiations with the USA, which resulted in the Swiss-US Privacy Shield.

Enhancing the Application of Data Protection Principles, New Tasks for the FDPIC
The agreement is expected to substantially improve the position of those concerned by personal data transfers. The application of data protection principles by participant companies should be enhanced, as should the management and supervision of the framework by the US authorities. Cooperation between the US Department of Commerce (DOC) and the Federal Data Protection and Information Commissioner (FDPIC) should be intensified. The persons concerned are being given specific instruments to enable them to find out about data processing directly from certified US companies or the competent authorities, and to ensure that any required corrections or deletions are made. For example, the FDPIC will act as a point of contact for persons in Switzerland in the event of any problems in connection with the transfer of data.

Same Conditions as in the EU for the Transmission of Personal Data to the US
The new regulatory framework corresponds to the solution adopted by the USA and the EU and implemented within the European Economic Area (EEA) – the EU-US Privacy Shield. The similarity is highly significant, as it guarantees the same framework conditions for persons and businesses in Switzerland and the EU/EEA area in relation to transatlantic data flows. The same standards therefore apply for Swiss personal data transfers to the USA as for data transfers from the EU. This increases legal certainty in commercial transactions and reduces additional costs for the economy.

Need for Action for Companies
US companies can start the certification process with the DOC three months after the finalization of the agreement. Interested US companies are advised to obtain a Privacy Shield Certificate from the DOC. Swiss companies should make sure that their US partners possess such a certificate. These conditions are essential for Swiss companies to submit personal data to the US without requiring additional contractual guarantees. Furthermore, companies should review their current contractual basis for data transfers to the US and adapt it to the Swiss-US Privacy Shield where required.