Corporate / Income Tax
- The regulation related to the obligations of the tax deductible expenses which are unpaid, shall be stopped;
- Depreciation tax shield in connection with the acquisition of new technologies has been removed (previously, an additional deduction of 50% related to the acquisition of new technologies was possible);
- A new introduction is a tax incentive for ‘Research and Development’, which provides an additional deduction from taxable income ;
- Also new rules regarding the corrections to tax-effective expenses and revenue were introduced;
- A new anti-abuse clause, concerning the withholding of tax relief on dividends (specific to the German Corporate Tax Act);
- New comprehensive rules regarding to the provision of information concerning interest payments has been introduced – Thereby implemented 2014/48/EU from, 24th March, 2014 (refers only to the Income Tax Act);
- Significant changes also apply to the Transfer Pricing Documentation (TPD) – most taking effect from 1st January, 2017:
- There are 3 types of TPD, the applicability depends on the amount of revenue or expenses of the taxpayer: Company specific documentation (Local File) – over 2 million EUR; Master File – over 20 million EUR; Country-specific reporting (country-by-country reporting) – over 750 million EUR. (The first country-based reporting should be prepared for the year 2016);
- A benchmark study is mandatory – namely, when revenue or expenses exceeds the sum of 10 million EUR;
- Also new is the obligation to inform the tax authorities about transactions between related companies and create a TPD on an annual basis.
- Since 1st July, 2015 taxpayers have been required to submit a summary report of local business operations that are subject to the local reverse charge system;
- Also with effect from 1st July, 2015 you could apply the reverse charge system for domestic supplies of electronic devices – such as tablets, notebooks, laptops, mobile phones, smart phones and game consoles;
- On the 1st January, 2016 new regulations were introduced concerning the deductibility on input tax to sales tax items and tax-exempt items.
Tax Code (General Tax Code)
- The ‘in dubio pro tributario’ principle was introduced: In such cases where there was some ambiguity of the tax regulations, the tax rules are to be interpreted in favour of the tax.
Also, new penalty interest rates were introduced: In certain cases (50% of normal penalty interest rate) reduced, or increased (150% of normal penalty interest rate) penalty interest rates can be applied.