Italy: Revised patent box-regime and e-invoicing obligation

A new patent box regime entered into force on 22 October 2021. The revised patent box regime allows eligible taxpayers to claim a super tax deduction equal to 90 % of their R&D costs related to eligible intangible assets (i.e., software protected by copyright, industrial patents, trademarks, designs and models, processes, and formulas and know-how relating to experience acquired in the industrial, commercial, or scientific fields that can be legally protected) in addition to the current 100 % deduction. As the result, taxpayers are allowed to claim an overall deduction of 190 % of their eligible R&D expenses. For application of this new super deduction regime, taxpayers must apply to the Italian tax authorities. Such election will be valid for five years and renewable but will be irrevocable during the five-year period.

Additionally, effectively from 1 January 2022, taxpayers resident or established in Italy will be obliged to submit the information related to transaction carried out with foreign business partners to an interchange system. This mandatory e-invoicing reporting replaces the obligation to submit the “Esterometro” return (sales and purchase report).

Belgium: Expatriate tax regime and FAQ to TSA

In early October the Belgian government announced a new expatriate regime replacing the existing special tax regime for expatriates, i.e., foreign executives and specialists temporarily employed in Belgium, which will be applied from 2022. The new regime shall be implemented into legislation till the end of 2021 and should align the Belgian regime more closely with regimes applied by neighbouring countries and secure a legislative basis for the regime as the previous one was introduced by circular letter.

On 7 October 2021 the Belgian tax authorities published an administrative guideline (in the form of FAQ) relating to the implementation of the new 0.15 % annual tax on securities accounts (TSA) where the average value of the account exceeds EUR 1 million. The guideline is available here (in German/French or Dutch only).

Cyprus: DAC 6

A decree (available only in Greek) published in Cyprus’ official gazette on 29 October 2021 contains guidelines for the application of the legislation transposing EU Directive 2018/822 (DAC 6) into domestic law. The decree provides practical guidance with respect to the reporting process and further clarification on the main provisions of the law.

USA: Build Back Better Act

Momentum is building in the US parliament to approve the Build Back Better Act, a massive bill that includes significant tax increases impacting large corporations and high-income individuals to pay for lower and middle-class tax relief and fund new governmental spending.

Among the most important tax related changes is a 15% minimum tax on the “adjusted financial statement income” of certain large corporations, a 1% excise tax on certain publicly traded corporations that buy back stock from their shareholders, additional limitations on the deduction for business interest, a new surtax on certain upper-income individuals, estates, and trusts and many others.