Kitty Miv, Editor
07 January, 2021
With all of the 'big ticket' news coming out of the United States and Europe recently, and with the world still in the grip of the COVID pandemic, it's been easy for tax developments elsewhere to slip through the net.
However, the tax wheels have continued to turn, including in Luxembourg, where the 2021 Budget Law was gazetted at the end of 2020, with the majority of measures entering into force at the start of this year. These included
- A fixed 20 percent tax on real estate income derived by Specialized Investment Funds;
- An increase in the scope of the three percent super-reduced VAT rate for property renovations to cover properties that are at least 10 years old, down from 20 years currently;
- The introduction in 2021 of a carbon tax of EUR20 (USD23.50) per tonne of carbon emitted, rising to EUR25 per tonne in 2022 and to EUR30 per tonne in 2023; and
- The replacement of the favorable stock options tax regime for highly remunerated foreign workers.
In Argentina, legislation to impose a one-off tax on wealthy taxpayers was gazetted, to be imposed at rates of between 2 percent and 3.5 percent on Argentina-based assets, and at 3 percent to 5.25 percent on assets held overseas.
Poland confirmed the introduction of its new "Estonian-style" corporate tax regime from January 1, 2021, with legislation enacted in December providing that companies whose revenues do not exceed PLN100m (USD26.6m) may defer payment of corporate tax. Profits that are reinvested into the company will not be subject to tax.
Croatia, meanwhile, cut its small business tax rate from 12 percent to 10 percent on January 1, 2021, with the new rate available to businesses with turnover up to HRK7.5m (USD1.17m). Croatia also lowered its 24 percent and 36 percent personal income tax rates to 20 percent and 30 percent, respectively.
Finally, on December 30, the French Government published the 2021 Finance Law in the Official Journal.
This included numerous recently announced corporate tax reliefs, including increasing the annual turnover threshold for small companies to qualify for the 15 percent concessionary rate of corporate tax to EUR10m, from EUR7.63m, with effect from January 1, 2021.
In addition, new Article 2b set new withholding tax bands and rates for non-resident individuals' employment income for 2021, as follows:
- income up to EUR15,018, zero percent;
- income thereafter up to EUR43,563, 12 percent (or eight percent for recipients situated in overseas French departments); and
- income above EUR43,563, 20 percent (or 14.4 percent for recipients in overseas French departments).
Additional measures included reducing the burden of three local level taxes, and proposals to introduce a VAT group regime, enabling groups of companies to be represented by a single entity for VAT purposes and disregard (for VAT purposes) transactions between members.
Until next week!
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