Summary: 1. Australia • Tax Laws Amendment (2013 Measures No. 2) Bill 2013 − Introduced into Parliament on 29 May − Implements three key government proposals previously announced + Advancing the time at which large corporations pay income tax: quarterly will be changed to monthly + Tax incentive for large infrastructure projects + Tax transparency: publication of Australian income tax payable by corporate entities with total income of AUD 100 million or more • Draft public ruling on proprietary software − Focuses on when income is derived by software developers − Cross-border aspects (e.g., “royalty” definition) not covered For information: - Peter Madden (Sydney) pmadden@deloitte.com.au - David Watkins (New York) davwatkins@deloitte.com 2. Cases • India: DBS Bank (Development Bank of Singapore) − Mumbai Income Tax Appellate Tribunal − India’s transfer pricing rules: application of “5% tolerance band” to interest rates set by reference to LIBOR For information: - Anis Chakravarty (Mumbai) anchakravarty@deloitte.com - Shanto Ghosh (Boston) shghosh@deloitte.com 3. China • Extension of “TASE” tax incentives program − Tax incentives program for “technology advanced service enterprises” (TASE) extended from 31 December 2013 to 31 December 2018 • VAT pilot program − 28 May: SAT released Circular 37, providing guidelines for national VAT pilot program, which will be effective from 1 August 2013 • Shenzhen: carbon emissions trading scheme − Trial program will commence in Shenzhen on 18 June 2013 For information: - Vicky Wang (Shanghai) vicwang@deloitte.com.cn - Ye Hong (Shanghai) hoye@deloitte.com.cn 4. Korea • Double tax treaties effectively increase Korean tax − Outbound equipment rentals: prima facie tax rate under domestic law is 2.2% − Korea / Country X treaty + Equipment rentals are included in “royalties” definition + Korea is permitted to levy tax of (say) 10% on royalties − Korean tax law change: tax rate imposed under domestic law (in regard to equipment rentals paid to a resident of Country X) is 10% − Tax rate on equipment rentals paid to residents of non-treaty countries remains at 2.2% For information: - Gyung Ho Kim (Seoul) gykim@deloitte.com 5.In brief • BEPS: Statement by OECD official at UN meeting • India: Sanofi case − Indian tax authorities file special leave petition to Supreme Court • New China / Netherlands treaty expected to be signed • Malaysia: GST − “Be prepared!”
