World Tax Brief: December 2023

AlbaniaRates-National/Federal: Albania enacted Instruction No. 26 on 19 September 2023, implementing the new Income Tax Law No. 29/2023 effective from 1 January 2024. Key changes include a standard 15% corporate income tax rate, with reduced rates for specific sectors until 2029.
Withholding rates: New withholding tax rules for payments to residents and permanent establishments (PEs) of non-residents are now in effect, applying the same rates as for non-residents. These rates include 8% for dividends, 15% for both interest and royalties.
Thin capitalization rules: Interest deduction is limited to 30% of taxable earnings before interest, tax, depreciation, and amortization (EBITDA). Disallowed interest can be carried forward for up to five years. Banks, financial institutions, and insurance companies are exempt from these rules.
See the story in RegfollowerAustraliaThin capitalization rules: The Australian government has released the amendments and a supplementary explanatory memorandum to the interest limitation rules within the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023. The Parliamentary amendments commence at the start of the first quarter following Royal Assent and apply to assessments for income years beginning on or after 1 July 2023.
See the story in RegfollowerAustriaRates-Special tax rate: The Austrian lower house is considering Bill No. 2322 dB to implement EU Directive 2022/2523, establishing a global minimum tax for multinational enterprises. The bill proposes national and primary supplementary taxes starting from 31 December 2023, and a secondary supplementary tax from 31 December 2024, in alignment with EU regulations.
See the story in RegfollowerBangladeshSubmission of returns: The National Board of Revenue (NBR) officially notified an extension of the deadline for submitting individual income tax returns and corporate tax returns for the assessment year (AY) 2023-2024 on 29 November 2023. As per Notification No. 08.01.0000., the NBR stated that the deadline for individual taxpayers to submit their annual income tax returns has been postponed to 31 January 2024 (generally deadline 30 November). Similarly, company taxpayers, who were initially expected to file by 15 January 2024, now have until 28 February 2024 to submit their tax return.
See the story in RegfollowerBelgiumRates-Special tax rate: The Belgian parliament is currently considering the draft bill for implementing the Pillar 2 global minimum tax, as per Council Directive (EU) 2022/2523 of 14 December 2022. The draft bill was submitted to the Parliament on 13 November 2023. The draft law proposed introducing the Pillar 2 income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to impose a minimum tax rate of 15% for MNE groups with annual revenue of at least EUR 750 million. The draft law also includes a provision for a qualified domestic minimum top-up tax (QDMTT).
See the story in RegfollowerCroatiaRates-National/Federal: Croatia enacted amendments to the Profit Tax Law on 4 October 2023 with key tax measures. The standard 18% corporate tax rate applies to businesses with annual revenues more than EUR 1 million, up from EUR 995,421.06. A reduced 10% rate applies if below the threshold.
Submission of returns: The amendments includes that the annual tax return must be submitted no later than 4 months after the end of the relevant tax period. The tax liability or difference for payment is due by the last day of this four-month deadline.
See the story in RegfollowerRates-Special tax rate: The Croatian government has issued a draft law aligning with EU Directive 2022/2523, implementing Pillar 2 global minimum tax rules for multinational enterprises (MNEs) with consolidated revenue over EUR 750 million. The law introduces the income inclusion rule (IIR) and undertaxed payment/profit rule (UTPR) to ensure a minimum 15% tax.
See the story in RegfollowerCyprusRates-Special tax rate: On October 30, 2023, Cyprus government has announced its consent for OECD/G20 Inclusive Framework’s Undertaxed Profits Rule Safe Harbour and Qualified Domestic Minimum Top-up Tax Safe Harbour, in line with July Administrative Guidance.
See the story in RegfollowerEstoniaRates-Special tax rate: Estonia has published draft amendments to the Income Tax Act in line with the EU Minimum Tax Directive. The amendments clarify that Estonia is contemplating deferring the implementation of the Income Inclusion Rule (IIR) and Under Tax Paid Rule (UTPR) under Article 50 of the EU Directive.
See the story in RegfollowerGermanyRates-Special tax rate: The lower house of the German Parliament (Bundestag) approved a law implementing EU Directive 2022/2523 for global minimum taxation (Pillar Two) on 10 November 2023. The changes involve mandatory exemptions from recognizing deferred taxes under the minimum tax act and mandatory disclosures in financial statements to enhance transparency. The law awaits approval from the upper house of the parliament (Bundesrat) to become effective.
See the story in RegfollowerHungaryRates-Special tax rate: Hungary’s Parliament has passed legislation, implementing the Pillar 2 global minimum tax rules based on EU Directive 2022/2523. The law establishes the income inclusion rule (IIR) and undertaxed payment/profit rule (UTPR), ensuring a 15% minimum tax for MNE groups with annual consolidated revenue of at least EUR 750 million.
See the story in RegfollowerJamaicaRates-Special tax rate: The Jamaican government is considering implementing a Qualified Domestic Minimum Top-up Tax (QDMTT) aligned with Pillar 2 Global Minimum Tax regulations. The QDMTT aims to impose a minimum tax of 15% on Constituent Entities of multinational enterprises (MNEs) in Jamaica, ensuring a fair tax rate on low-taxed profits.
See the story in RegfollowerKuwaitRates-Special tax rate: The Kuwait government is considering a business profit tax proposal at a 15% rate for all legal entities. This initiative is driven by concerns about the OECD Pillar Two framework, targeting large multinational enterprises (MNEs) with global revenues above EUR 750 million. The proposed tax is set to be implemented in two phases: Phase 1 in 2025 for MNEs exceeding EUR 750 million turnover and Phase 2 in 2026 for all other legal entities, with plans to eliminate existing direct tax laws in Kuwait.
See the story in RegfollowerNorwayRates-Special tax rate: Norway’s government has introduced a bill to implement a global minimum tax, effective from January 2024. Targeting large multinational companies, the rules ensure a 15% minimum tax rate on profits in all countries, aiming to prevent profit shifting and counter harmful tax competition.
See the story in RegfollowerPakistanRates-Special tax rate: The Pakistan Federal Board of Revenue issued Notification SRO 1588(I)/2023 on 21 November 2023, introducing a windfall tax for banks under the new Section 99D of the Finance Act 2023. The tax rate is set at 40%, applicable to banking companies. The payment deadline is 30 November 2023, with an option for taxpayers to apply for a 15-day extension.
See the story in RegfollowerSwedenRates-Special tax rate: The Swedish government has released a bill on its website outlining the final legislative proposal for implementing OECD global minimum tax rules (Pillar Two) and the EU minimum tax directive. The rules target large multinational groups with a yearly turnover of EUR 750 million or more and require a minimum 15% effective tax rate in all operating jurisdictions from 1 January 2024.
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