International taxes in brief – April

Austrian government announced a package of proposals to tax the digital economy. According to European Commission UK CFC rules constitutes illegal state aid. This is only some of the news that you will read about in the International Tax News.

Austria: proposal of 5% digital advertising tax
In a 3 April 2019 statement, the Austrian government announced a package of proposals to tax the digital economy comprising a 5% digital advertising tax and tax compliance measures targeting online booking and retail platforms.

European Commission: UK CFC rules constitutes illegal state aid
On 2 April 2019, the European Commission announced the results of its state aid investigation into the group financing exemption in the UK’s controlled foreign company (CFC) rules. The Commission found that the exemption granted a selective advantage to certain multinational groups that is illegal under EU state aid rules. The UK now must take steps to recover the illegal state aid from the multinational companies that benefitted.

European Commission: paper on impact of CCTB
On 15 March 2019, the European Commission published “The Impact of the CCTB on the Effective Tax Burden of Corporations: results from the Tax Analyzer Model” that attempts to evaluate the impact of the introduction of the common corporate tax base (CCTB) on the effective corporate tax burdens in EU member states.

German: exemption of merger gain in upstream merger
Germany’s Federal Tax Court has ruled that the general 5% add-back rule of the domestic participation exemption, under which 5% of gains on a merger are deemed to be non-deductible business expenses for German tax purposes, will not apply in fiscal unity cases where an entity is merged upstream into a controlled subsidiary.

Italian Supreme Court: different positions on dividend WHT exemption
Italy’s Supreme Court and the tax authorities have taken conflicting positions on whether dividends that are granted an income tax exemption under the domestic law of the dividend recipient’s jurisdiction may be granted a withholding tax exemption by Italy.

The article is part of dReport – April 2019, Tax news; Grants and investment Incentives.

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