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  • Residence and basis for taxation

    In Argentina coexist three levels of taxation which are Federal, Provincial (state) and Municipal level.

    An entity is deemed as resident for tax purposes when it is incorporated in Argentina under the laws of Argentina. An Argentine individual is considered a tax resident unless he or she loses his tax residence status by choice, obtains legal residence in other country, or by fact, when the individual is outside the country for at least a twelve months period, with certain exemptions.

    Domestic 

    Local entities and resident individuals are subject to income tax on domestic and foreign source income.

    Foreign 

    Non resident entities or individuals are taxed on income of Argentine source. The tax applicable is the income tax that comprises corporate earnings and capital gains. In general, a local resident paying to a foreign entity or individual is obliged to withhold income tax. The withholding rate varies in connection with the type of the payment.

    Permanent establishments are taxed as local entities on income attributable to the permanent establishment.

    Income tax on indirect transfer

    Income tax on an indirect transfer may apply if a non resident entity is transferred provided that at least 30 percent of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10 percent of the capital of such entity.

  • Taxable income

    Domestic

    In general the taxable income in the income tax for resident entities and resident individuals is equal to gross earnings minus deductions. In general, all expenses incurred to obtain, maintain and preserve taxable income are deductible unless expressly forbidden.

    Foreign 

    Non resident entities and individuals are taxed in the income tax on the incomes of Argentine source. The local resident paying to a foreign entity or individual is obliged to withhold the income tax at a 35 percent tax rate applied on a presumption of taxable income that varies in connection with the concept by which the payment is made. The presumption of taxable income can be from 35 percent up to 90 percent of the amounts paid.

    For incomes connected to the transfer of shares, bonds or titles, or incomes connected with the rental of real estate or the transfer of assets located in Argentina owned by a non resident, the non resident individual or entity is entitled to choose to apply the presumption of income or to present evidence of all the expenses incurred and deduct those expenses from the gross amount to be paid.

  • Tax rates

    Domestic

    Local entities are subject to an income tax rate of 30% for fiscal year 2019 and 25% as of fiscal year 2020.

    In general, local individuals are taxed at a progressive tax rate that goes from 5% to 35%, except for earnings with a fixed tax rate. Those are the following:

    • For local individuals the transfer of sovereign bonds, or any title is taxed at a 5% income tax rate if the title is issued in Argentine pesos, or 15% income tax rate if a share of a corporation is transferred, or if the title or sovereign bond is issued in Argentine pesos with adjustment clause or in foreign currency
    • The transfer of real estate by a local individual is taxed at a 15% of income tax rate
    • Interests of financial investments such as bank deposits, sovereign bonds, negotiable obligations, financial trusts and similar, issued in Argentine pesos without adjustment clause, are taxed at an income tax rate of 5%. The applicable tax rate is 15% when issued in Argentine pesos with adjustment clause or when issued in foreign currency
    • Dividends paid to a local individual are taxed at a 7% tax rate for fiscal year 2019 and 13% as of fiscal year 2020

    Foreign

    In general non resident entities and individuals are taxed at an income tax rate of 35% applied on the presumption of taxable income with effective tax rates of 12.5% up to 31.5% (see Taxable Incomes). Some concepts are not taxed at the general 35% tax rate and are taxed to an specific tax rate.

    • Transfer of sovereign bonds or any title (public or private) is taxed at a 5% income tax rate if the title is issued in Argentine pesos, or 15% income tax rate if the title is issued in Argentine pesos with adjustment clause, or in foreign currency. The transfer of shares of a local corporation is taxed at a 15% income tax rate. This assumes that the foreign beneficiary is in a jurisdiction considered as cooperative for tax purposes
    • Interests of financial investments such as bank deposits, sovereign bonds, negotiable obligations, financial trusts and similar, issued in Argentine pesos without adjustment clause are taxed at an income tax rate of 5%. The applicable tax rate is 15% when issued in Argentine pesos with adjustment clause or when issued in foreign currency. This provided that the foreign beneficiary is in a jurisdiction considered as cooperative for tax purposes
    • Dividends paid to a non resident individual or entity are taxed at a 7% tax rate for fiscal year 2019 and 13% as of fiscal year 2020

    The applicable tax rates can be lower if a double taxation treaty is applicable.

  • Tax compliance

    Local entities and individuals are obliged to fill tax returns at federal, state and municipal level depending on their activities. Tax returns mas be filled on monthly or yearly bases depending on the tax.

    Information regimes are applicable to certain activities.

    Advance payment regimes are applicable for some taxes.

  • Alternative minimum tax

    Not applicable for this jurisdiction.

  • Tax holidays, rulings and incentives

    Tax holidays

    Not applicable for this jurisdiction.

    Tax rulings 

    In some cases, taxpayers are entitled to present to the tax authorities a request for a ruling on a specific case. The ruling is binding for the consultant. 

    Tax incentives

    There are tax incentives at the federal, state and municipal level which target specific activities such as renewables and software services and development.

  • Consolidation

    Not applicable for this jurisdiction.

  • Participation exemption

    Argentina tax legislation does not provide for a participation exemption.

    Dividends paid by a local entity to another local entity are exempt from income tax. Dividends are only taxed when distributed to a local individual or to a foreign entity or individual.

  • Capital gain

    Capital gains are taxed by the income tax.

    Domestic and foreign, see Taxable income and Tax rates.

    Income tax or indirect transfer

    Income tax on indirect transfer may apply if a non resident entity is transferred provided that at least 30% of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10% of the capital of such entity. When the transfer is carried on intragroup the income tax on indirect transfer is not applicable.

  • Distributions

    Distributions are taxed as dividends. Regardless of the tax residence of the recipient, dividends are taxed at a 7% tax rate for fiscal year 2019 and 13% as of fiscal year 2020.

    Domestic and foreign, see Taxable income and Tax rates.

  • Loss utilization

    Losses can be carried forward and can be offset with future profits for a five-year period.

    Losses considered to be of Argentine source can be offset only with profits considered to be of Argentine source. Losses considered to be of foreign source can only be offset of foreign source profits.

  • Tax-free reorganizations

    In Argentina it is possible to carry on an intragroup reorganization with no tax effects. Mergers, spinoffs or partial spinoffs are exempted from income tax, VAT and turnover tax if certain requirements are met.

    Income tax on indirect transfers can also be carried on with no tax costs if it is an intragroup transfer.

  • Anti-deferral rules

    According to CFC rules, the profits of a foreign entity directly or indirectly owned by a local entity or individual should be declared and taxed in the fiscal year of accrual in the following cases.

    • Trusts: When the trust is revocable, when the settlor is also the beneficiary, or when the resident individual or entity has full control of the trust
    • When the foreign entity is not considered a tax resident of the jurisdiction where it is incorporated
    • When:
      • The local individual or entity directly or indirectly owns at least 50% of the capital of the foreign entity
      • The foreign entity does not have sufficient structure to carry on its business or when at least 50% of the profits of the foreign entity are passive income
      • The taxes paid by the foreign entity in the country where it is incorporated are less than the 25% of the income tax that would be payable in Argentina (this requirement is deemed as occurred if the entity is incorporated in a non-cooperative jurisdiction)
  • Foreign tax credits

    Subject to conditions and limitations, foreign tax credits are available for foreign income taxes paid.

  • Special rules applicable to real property

    Domestic and foreign

    When a local entity or a non resident individual or entity sells or transfers real estate property located in Argentina, income tax is triggered.

    For resident individuals, if the real estate property that is being transferred has been acquired by the seller before January 1, 2018, no income tax is applicable, and the local individual must pay a special tax on transfer of real estate property. 

    There is the possibility of a tax deferral on the income tax applicable to the sale of a real estate property using a sale and replacement mechanism.

  • Transfer pricing

    Argentine transfer pricing rules apply to transactions between an Argentine party and a foreign related entity or any entity domiciled in a tax haven jurisdiction, a jurisdiction considered as non-cooperative, or that is subject to a privileged tax regime.

    Argentine transfer pricing rules follow arm's-length rule and follow the OECD guidelines with some divergences.

  • Withholding tax

    (see Taxable income and Tax rates.)

    Domestic

    Payments made by banks and financial institutions made to local entities or individuals in the case of interests on bank deposits or financial investments are subject to income tax withholding.

    Dividends paid by a local entity to a local individual are subject to income tax withholding. The tax rate applicable is 15%.

    Foreign

    Non resident entities or individuals are taxed on their income considered to be of Argentine source.

    The local payer is obliged to withhold the income tax at the time of the payment. Tax rates and presumptions of taxable income vary in connection with the type of payment made.

    Tax treaties may reduce or eliminate withholding of income tax.

  • Capital duty, stamp duty and transfer tax

    Capital gains are taxed by the income tax (see Taxable income and Tax rates.).

    Stamp duty or Stamp Tax is a provincial tax triggered by the entering of written agreements signed by both parties. The tax rate applicable varies in connection with the province and in connection with the agreement. Tax rates are of 0.2% up to 5% of the total amount of the agreement.

    There are legal mechanisms to avoid the payment of Stamp Tax by entering into an agreement as an offering letter.

    Transfers of shares, assets and real estate property are taxed under the income tax (see Taxable income and Tax rates.).

  • Employment taxes

    Employers must withhold income tax and social security contributions. Employers also must pay their share of social security contributions. These taxes are deductible by an employer for Argentine income tax purposes.

  • Other tax considerations

    Provincial taxes - Turnover tax

    Turnover tax or gross income tax is a tax collected by the provinces. The taxable event is the performance of commercial or industrial activity in the territory of the provinces. Tax rates can be 0.5% up to 6% in connection with the activity applied on the gross income. Some activities are charged with higher tax rates, such as online gambling which is taxed at a 15% tax rate in the Province of Buenos Aires.

    Every province has its own turnover tax. However, the turnover tax collected by each province are similar, although different tax treatments may result applicable for certain activities.

    Tax benefits

    For some activities there are special tax benefits at the federal level and provincial level.

    There are tax benefits for an investment in renewable energy, software production and services, investments in capital assets, biodiesel fuel and mining.

    The benefits may include partial or full exemptions, accelerated depreciation and drawback.

    VAT on the import of digital services

    Federal Government collects VAT on the importation of digital services. The taxpayer is the local resident unless the service provider has a fixed place in the Argentina. The tax rate is 21%.

    Double taxation treaties

    Argentina has signed tax treaties with Germany, Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, United Arab Emirates, Spain, Finland, France, Italy, Mexico, Norway, Netherlands, United Kingdom, Russia, Sweden and Switzerland (all in force), and Turkey, China, and Qatar (signed but not yet in force).

  • Key contacts
    Augusto Nicolás Mancinelli
    Augusto Nicolás Mancinelli
    Of Counsel DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Raúl Sanguinetti
    Raúl Sanguinetti
    Tax Partner Baker Tilly Argentina [email protected] T +54 (11) 5352 2400 View bio

Tax holidays, rulings and incentives

Argentina

Tax holidays

Not applicable for this jurisdiction.

Tax rulings 

In some cases, taxpayers are entitled to present to the tax authorities a request for a ruling on a specific case. The ruling is binding for the consultant. 

Tax incentives

There are tax incentives at the federal, state and municipal level which target specific activities such as renewables and software services and development.

Australia

Tax holidays

Not applicable for this jurisdiction.

Tax rulings 

The ATO and the different State/Territory Revenue Offices issue public rulings, determinations, interpretative decisions and practice statements that set out their views on the operation of the relevant federal or state law.

In addition, a taxpayer can seek certainty in respect of their tax affairs by applying for a private ruling. A private ruling is legally binding on the Commissioner.

Tax incentives

There are tax incentives for specific activities, including research and development, and deductions for certain mining and primary production industries. In addition, lower withholding tax rates (15%) are available for distributions to certain non-residents from eligible Withholding Managed Investment Trusts (MITs).

Austria

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Since January 1, 2011, an Advanced Ruling is available. A complete disclosure is required. A notification is only issued subject to the condition that the applicable legal facts on which the tax authorities' assessment is based do not change. A request for an Advanced Ruling may only be filed with the tax authority that is competent locally with regard to the subject matter for the relevant facts. With respect to content, such Advanced Ruling may be received as of January 1, 2019 to the areas of restructuring (Umgründungen), transfer prices, group taxation (Gruppenbesteuerung) and tax avoidance questions and, as of January 1, 2020, to VAT issues. An Advanced Ruling is subject to an administrative fee (Verwaltungskostenbeitrag), whereby amounts from €1,500 up to a maximum of €20,000 can be charged, depending on the requesting company's turnover. In addition, non-binding rulings are also available and have a high practical relevance.

Tax incentives

An invention premium is granted as a tax refund, which is directly credited or paid to the corporate entity. The premium equals 14% of the expenses for specific research and development activities. The premium is granted as a tax refund and may be claimed at the end of the tax year. An opinion of the Austrian Research Promotion Agency (FFG) is required. The premium applies to research and development activities with respect to expenses paid to companies or permanent establishments located in an EU or EEA country. The premium may also be claimed for contract research projects limited to expenses of EUR 1 Mio p.a.

Belgium

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Certainty over the application of Belgian tax laws to a specific transaction or situation can be obtained by means of a formal ruling involving the agreement of the Advance Ruling Commission (Service des Décisions Anticipées en matières fiscales / Dienst Voorafgaande Beslissingen in fiscale zaken).

Tax incentives

Subject to certain conditions, a company may benefit from IP and R&D related tax incentives.

Brazil

Tax rulings

On certain issues, taxpayers can request a private letter ruling that applies only to the specific issue.

Tax incentives

Brazil provides for different types of tax incentives at the federal, state and local levels, which target the development of specific regions of the country or specific activities.

Canada

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Under certain circumstances, taxpayers can request a private letter ruling that applies to the specific issues addressed therein.

Tax incentives

There are tax incentives for specific activities, including in respect of scientific research and experimental development and certain Canadian production, resource exploration and development and renewable energy activities.

China

Tax holidays

Tax holidays are available to certain encouraged industries, such as basic infrastructure projects, environmental protection and energy and water conservation projects and software enterprises.

Tax rulings

There is no established procedure for advance tax rulings.

Tax incentives

Preferential tax rates are available to certain encouraged enterprises, such as High and New Technology Enterprises and encouraged investment in West China.

Tax exemption or deduction is applicable when an enterprise has generated certain encouraged types of revenue, such as revenue from agriculture, forestry and technology transfer.

Colombia

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Taxpayers can request rulings from the tax authority in Colombia. As of January 1, 2019, tax rulings are not binding for taxpayers. For the tax authority, tax rulings shall be mandatory.

Tax incentives

Some of the tax incentives set forth in the Colombian tax code sets are:

Income exempted from corporate income tax, under certain requirements

  • Income received by companies carrying certain activities classified as activities of "Orange Economy," will be exempt for seven years
  • Income obtained by companies carrying out investments in the Colombian agricultural sector
  • Income obtained in the sale of energy generated based on renewable sources specially indicated in the tax code
  • Income related to the sale of social interest or priority housing is exempt, provided that the taxpayer gets the corresponding permission from the government and the assets are transferred to a trust with a term of a maximum of 10 years, which must carry out the project

Special corporate income tax rates

  • 27% for taxpayers that performs new investments in fixed assets equal or exceeding 30.000.000 UVT (COP$1.028.100.000.000[HB1] – US$3.3 million) and create more than 250 direct employments
  • 20% corporate income tax rate for Free Trade Zone Users
  • 9% corporate income tax rate for taxpayers undertaking specific activities (eg, hotel services and ecological tourism)

Tax incentives for the development of renewable energy projects

  • Taxpayers making investments in projects for the development and generation of energy from renewable sources have the following tax incentives
  • A special income tax deduction equivalent to 50% of the investments completed in renewable energy projects. This tax deduction cannot exceed 50% of net taxable income and can only be recognized in the 5 years following to the taxable year in which the investment take place
  • Accelerated depreciation rate of 20% for machinery, equipment and other assets used in the project. This is a tax incentive because, generally, there are maximum annual tax depreciation rates provided by law in respect of different types of tangible assets (between 2.2% and 20%)
  • Purchase and import of machinery and equipment and related services acquired for renewable projects will be exempt from VAT
  • Imports of equipment and machinery will be exempt from customs duties

Finland

Tax holidays

Not applicable.

Tax rulings

Companies may apply for a binding advance ruling concerning a specific tax question with the Finnish tax authorities or alternatively with Finnish National Board of Taxes.

Tax incentives

Key foreign expert employees working in Finland may apply to be taxed at flat rate of 35% on their employment related income. Such a tax treatment is applicable for a maximum of 48 months.

France

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. On certain issues, taxpayers can request a private letter ruling that applies only to the specific issue.

Tax incentives

There are tax incentives for specific activities, including R&D credits. The payroll tax credit for competitiveness and employment has been replaced as from January 1, 2019 by social charges exemption.

Germany

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Taxpayers can request a binding ruling from the tax authorities before executing a transaction. If the relevant tax authority issues a ruling, it is bound by it if the taxpayer has executed the transaction as described in its request.

Tax incentives

Various incentive programs exist for the promotion of modern energy generation and efficiency (eg solar and wind energy), as well as programs for the promotion of domestic buildings, environment protection, R&D, health care, infrastructure and agriculture. Promotion can either be granted as a tax benefit, allowance, guarantee, loan or participation.

Hong Kong

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Advance rulings are available to taxpayers as a paid service and are subject to certain formalities.

A taxpayer can voluntarily request for a ruling in specified areas, such as the application of the locality of profits rules or the general anti-avoidance provision, royalty payments, stock borrowing or lending and interest income exemption.

The normal processing time is 6 weeks but a complex application can take significantly more time. A ruling is final but it does not affect the taxpayer's right of objection against a subsequent tax assessment issued in accordance with an unfavorable ruling.

Tax incentives

See Tax rates. Tax incentives are also available to certain specified areas subject to qualifying conditions, such as interest on and any profit made in respect of Renminbi sovereign bonds, capital expenditure on specified environmental protection facilities, capital expenditure on plant and machinery specifically related to manufacturing, and on computer hardware and software.

India

Tax holidays

Tax holidays are available to certain corporations either engaged in specific sectors such as exports or infrastructure, or to corporations that are newly formed or that are of a smaller size.

Tax rulings

An advanced ruling can be obtained by an applicant (either a non-resident or a resident transacting with a non-resident) in respect of any question of law or fact in relation to the income tax liability of the non-resident, arising out of a transaction undertaken or proposed to be undertaken.

Tax incentives 

There are tax incentives for certain industries either based on their location in special economic zones or in backward areas or by the nature of the industry itself.

Ireland

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Rulings are not generally available from the tax authority.

Tax incentives

There are tax incentives available for specific activities, including, for example, a knowledge development box regime for certain IP exploitation trades, R&D tax credits and tax depreciation on the purchase of certain intellectual property.

Israel

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. Under certain circumstances, taxpayers can request a private letter ruling that would apply only to a specific issue. Rulings are published on a no-names basis.

Tax incentives

Subject to certain conditions, Israeli corporations may qualify for and benefit from certain tax incentives regimes, some of which are discussed under Participation exemption.

A corporation that qualifies as a Preferred Enterprise would be entitled to a reduced tax rate on its Preferred Income of 16%, or 7.5% if the enterprise is located in a peripheral zone. Dividend distributed from Preferred Income is subject to tax at the rate of 20% (which may be further reduced according to the applicable treaty).

A Special Preferred Enterprise is generally a Preferred Enterprise that:

  • Has been pre-approved by the Israel Tax Authority and
  • Has Preferred Income of at least NIS1 billion and revenues, on a consolidated basis, of at least NIS10 billion

A Special Preferred Enterprise may be entitled to a further reduced tax rate of 8%, or 5% if located in a peripheral zone.

New legislation, which became effective January 1, 2017, provides a new incentive regime for a Preferred Technological Enterprise. An enterprise that meets the requirements would be entitled to a reduced corporate tax on income related to its intellectual property of 12%, or 7.5% if located in a preferential zone. Dividend distributed from the preferred income would be subject to 20% tax, or 4% if distributed to a foreign corporation that owns at least 90% of the shares of the Israeli corporation. The Israeli tax on dividends may be further reduced according to an applicable treaty.

The new legislation also provides that a Special Technological Preferred Enterprise is a Technological Preferred Enterprise that is part of an affiliated group with revenues, on a consolidated basis, of at least NIS10 billion and that such corporation would be entitled to a reduced tax rate on the IP related income of 6%.

Italy

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. On certain issues, taxpayers can file a ruling request to ask for interpretation of a specific issue by the tax authorities. Companies that wish to invest no less than 20 million Euros in Italy may benefit from a special ruling procedure, designed to ascertain the tax consequences of presented investment plan and/or tax consequences of the extraordinary transactions that will be carried out to structure the proposed investment plan. Furthermore, major companies (with revenues exceeding 10 billion Euros) may enter into a cooperative compliance regime with the Italian Tax Authorities.

Tax incentives

Tax incentives are available for specific activities, including R&D credits, patent box regime and deductions for certain activities. The notional deduction for capital injection (ACE) previously available has been repealed starting from 2019.

Japan

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

The National Tax Agency provides a procedure for obtaining an advance ruling on the tax treatment of a completed or future transaction if the law at issue has not previously been clarified, but this process must occur before the tax return filing deadline for the tax period in which such transaction is carried out.

Tax incentives

There are various tax incentives for specific activities, including R&D credits and special depreciation rules.

Luxembourg

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Luxembourg operates a system known as Advance Tax Agreement, enabling taxpayers to request an advance tax decision from the Luxembourg tax authorities. An administrative fee will apply.

Tax incentives

Various incentive programs exist in Luxembourg in the areas of risk capital, audiovisual activities, environmental protection, R&D (experimental development, experimental development and cooperation, industrial research, industrial research and cooperation or fundamental research), intellectual property, professional training and recruitment of unemployed persons. Most of the promotions are granted as tax credit.

Furthermore, several incentive programs exist for certain entities: investment funds (which are subject to several exemptions), private wealth management company (Société de gestion du Patrimoine Familial or SPF) (which is exempt from Luxembourg taxation on income and NWT in Luxembourg), securitization companies (which are exempt of NWT), venture capital vehicle (Société d'Investissement en Capital à Risque or SICAR) (incorporated under a corporate form, the SICAR is subject to income tax at the normal rate with the benefit of an exemption on income and gains (eg, dividends, capital gains, liquidation proceeds, interest) under certain condition) and shipping companies (which are not subject to municipal business tax and can benefit from investment tax credits and accelerated depreciation).

Mexico

Tax holidays

In the past, there have been tax amnesty programs, generally when a new administration takes office, and the last one available was during 2013.

Tax rulings

It is possible to obtain a private letter ruling from the Mexican Tax Authorities (Hacienda), on specific technical tax issues. Generally, private rulings are effective only during the tax year for which they are granted, and only apply to the specific taxpayers that requested them.

Tax incentives

As of 2017 there is a tax incentive on R&D activities, which consists of a credit of 30% for qualifying R&D expenses, aimed at encouraging investment in this area. There are also incentives for real estate investment trusts (ie FIBRAS), movies, theater productions, and high performance sports.

Netherlands

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based general rulings are available as that is considered incompatible with international and EU standards. However, on an individual basis tax payers can request an Advance Tax Ruling or Advance Pricing Agreement from the Dutch tax authorities. The Advance Ruling practice of the Dutch Tax Authorities has been an integral part of the tax system for many years and contributes to the attractive business climate in the Netherlands.

Tax incentives

There are tax incentives for specific activities, including an IP Box regime (Innovation Box) with a reduced effective corporate income tax rate on qualifying IP income of 7%, and a payroll tax credit for innovation, competitiveness and employment.

A special tonnage tax regime applies to shipping companies.

A 0% tax liability or full exemption is provided for qualifying investment funds.

Norway

Tax holidays

Not applicable in this jurisdiction.

Tax rulings

Companies may apply for a binding advance ruling concerning tax consequences on a future transaction. A binding advance ruling will last for 5 years.

Tax incentives

Limited research and development credits are available.

A Tonnage Tax Regime is available, which implies favorable taxation of qualifying shipping companies. 

Poland

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Tax rulings are of a general or individual nature and are issued within three months of a request. Individual tax rulings may be requested by anyone who wants to confirm interpretation of tax provisions; not only by taxpayers, but also by potential shareholders, foreign investors or foreign entities considering starting business activity in Poland.

Tax incentives

There are tax incentives for specific activities, including R&D relief and investment incentives related to business activity carried out in Special Economic Zones.

Portugal

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. Taxpayers can request a private letter ruling that applies only to a specific issue.

Tax incentives

There are tax incentives for specific activities, including R&D expenses and deductions (eg Research and development (R&D) (Sistema de Incentivos Fiscais em Investigação e Desenvolvimento Empresarial or SIFIDE II), tax regime for investment support (Regime Fiscal de Apoio ao Investimento or RFAI), Pension funds, Real Estate Investment Funds (REIFs), Incentives to urban rehabilitation, Madeira International Business Centre (MIBC), Non-habitual tax residents, Golden Visa, etc).

Romania

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Taxpayers can request an individual tax ruling that applies only to a future fiscal situation. Taxpayers engaged in transactions with related parties may also request the tax authorities to issue an Advance Pricing Agreement (APA).

Tax incentives

There are tax incentives for R&D activities and for profits reinvested in technological equipment, computers and software.

Russia

Tax holidays

Tax holidays are available for particular projects (eg, Skolkovo, FIFA 2018, etc).

Tax rulings

An individual ruling may be obtained by a taxpayer from the Russian Ministry of Finance with respect to a specific situation. Such tax rulings, where issued on the basis of full and complete facts and information disclosed, are technically binding for the tax authorities. However, in practice, the binding character of the tax rulings is often ignored by the authorities or courts. That said, if the taxpayer follows the recommendation expressed in such a ruling and the tax authorities disagree with this position and charge additional taxes, then the taxpayer will be exempt from tax fines and interest for the late payment of the tax.

Tax incentives

Tax incentives are available in relation to certain activities (R&D, IT, manufacturing, etc.), for companies resident in the special economic zones, territories of advanced social and economic development, and investment projects in several Far Eastern and Siberian regions.

Regional authorities are no longer allowed to establish new reduced regional rates of the Russian profits tax. Accordingly, the application of regional low rates is now limited to the instances specified by the Russian Tax Code (eg, Special Investment Projects, Regional Investment Projects, special economic zones). The existing regional reduced tax rates introduced before January 1, 2018 will apply until January 1, 2023.

Previously, Russian regional authorities were allowed to grant tax incentives reducing the regional portion of the corporate profits tax rate to no lower than 12.5% until 2020 for certain groups of taxpayers.

Russian tax law provides for special tax regimes for small and medium-size businesses.

Special investment contracts (SpICs)

SpIC constitutes a new measure of governmental support aimed at stimulating investment in the establishment and modernization of industrial production in Russia at the federal and regional levels.

The scope of an SpIC is limited to certain industrial sectors stipulated by the decree of the Russian Government at the federal level. The list of such sectors includes automotive, metallurgy, pharmaceutical, medical, electronic, and consumer goods production and other industries.

Basic requirements for the conclusion of an SpIC:

  • The amount of capital investments – not less than RUB 750 million
  • Provision of a certain list of documents (including the business plan of the investment project) and
  • Business activity in certain industrial sectors

The key advantages of concluding an SpIC include: favorable conditions for product manufacturing, the "made in Russia" status for the products, customs and tax preferences such as a reduction of the corporate federal tax rate to 0% (the regional tax rate can be reduced to 0%), and the possibility to apply a reduced property tax rate and the like.

Implementation of an SpIC requires changes to be made to regional legislation to introduce this instrument in the region on a legislative basis. As for now such territories include Moscow, the Moscow region, St. Petersburg, the Leningrad region and certain other regions of Russia have adopted this legislation. As of January 1, 2019 there were 25 regions that adopted local legislation with respect to tax benefits associated with the SpIC regime.

Singapore

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

An advance ruling can be obtained from the Inland Revenue Authority of Singapore (IRAS) if a taxpayer wishes to seek clarity on certain issues that may arise from a proposed arrangement. The IRAS charges a fee for making such rulings.

Tax incentives

There are tax incentives for specific activities. These take the form of lower or zero tax rates being granted in respect of qualifying income for a specified number of years. Eligible companies (ie, those that meet the specified qualifying criteria) may apply for these incentives. Approval is granted at the discretion of the relevant authority. Further deductions are also available for certain R&D expenditure.

South Africa

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Taxpayers can approach the South Africa Revenue Service (SARS) for a binding advance tax ruling. However, SARS will not give a binding ruling on certain issues  (eg, transfer pricing, general anti-avoidance, matters of a factual nature, etc).

It is also possible to obtain non-binding opinions.

Tax incentives

There are tax incentives for specific activities, including R&D deductions, venture capital company contributions and special economic zones.

South Korea

Tax holidays and incentives

The corporate income tax exemption was effective on the application for foreign investments submitted on or before December 31, 2018, and it is abolished after January 2019.

Tax rulings

No broad-based rulings are available. Taxpayers can request a clear ruling with regard to a specific transaction of a taxpayer's business through the advance ruling system.

Cash grant

Effective from January 1, 2019, most tax incentives concerning corporate income tax and personal income tax for foreign investors nullified. To compensate this change, Korean government announced to dramatically increase cash grant in accordance with Foreign Investment Promotion Act. Cash grant should be provided by the central and local governments of Korea as matching fund basis.

Spain

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. These rulings are binding for the Spanish Tax Authorities.

Tax incentives

There are several tax reliefs for the engagement in certain activities such as R&D credits, employment generation credits and incentives to the film industry.

Sweden

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Companies may apply for a binding advance ruling concerning a specific tax question with the Swedish National Board of Advance Rulings. The Swedish Tax Agency offers written tax guidance to a specific question.

Tax incentives

Key foreign employees may, during a three-year period, qualify for a 25% reduction of the taxable portion of their income when working in Sweden.

Switzerland

Tax holidays

On a federal level, the confederation may provide incentives by way of tax reductions to enterprises which establish themselves in certain areas of the country that are economically underdeveloped. In addition, federal aid may be granted as security on commercial loans or as a contribution to the payment of interest on such loans.

Tax incentives

On a cantonal level, business incentives may be granted for cantonal and communal income tax purposes in connection with new business activities in the canton. Business incentives may be obtained for creating a new presence which has particular economic interest for the canton. The new business activity also must not be in direct competition with existing local businesses. Lastly, and perhaps most importantly, business incentives are generally granted in connection with the creation of new local jobs. The number of jobs which need to be created to benefit from business incentives are generally quite low (eg, beginning at 10 to 20 jobs in most cantons). Business incentives are obtained by negotiation with the competent cantonal authorities. Incentives may include up to a full or partial 10 year tax holiday on a cantonal/communal level as well as low interest loans on new buildings and easy access to work permits.

Tax rulings

Tax rulings are available for almost every aspect of taxation.

Taiwan

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

A taxpayer may apply to the tax authorities for advance tax rulings to clarify its tax issue or confirm its tax position.

Tax incentives

Taiwan offers certain tax incentives in order to promote economic development in certain industries, especially in R&D investments. Certain tax incentives are provided to investors if they are located in prescribed areas such as science parks, bonded zones and free trade zones.

Turkey

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

It is possible for taxpayers to request an advance ruling on the tax treatment of specific transactions.

Tax incentives

There is a wide range of tax incentives for certain investments with incentive certificates. Reductions on corporate tax rates, governmental support for income tax for wages, exemptions on the value-added tax and customs duty as well as refund support on value-added tax are among those incentives. The said incentives may differ based on the relevant investments' sector, scope and size.

Ukraine

Tax holidays

A 0% tax rate is applicable to small companies declaring gross annual income below UAH 3 million and that pay wages to each employee which exceeds two minimal statutory wages, under the following conditions:

  • A company is newly established 
  • Such company declares gross annual income below UAH 3 million and has 5 – 20 employees on average for three consecutive years

Tax rulings

Tax rulings (tax consultations) are generally of two types:

  • Generalized 
  • Individual

Generalized tax consultations are issued by the Ministry of Finance and provide guidance on most problematic issues.

Taxpayers can also request individual tax ruling that will be applicable to their individual case.

Taxpayers which act in accordance with generalized and/or individual tax ruling may not be imposed with sanctions. Tax consultations issued by tax authorities may be contested by a taxpayer in the court.

Tax incentives

There are tax incentives envisaged for certain businesses (eg, for companies established by organizations of disabled people and companies financed via international technical aid).

United Arab Emirates

The UAE has a large number of Emirate instated Free Zones where the usual mainland foreign ownership restrictions do not apply. Entities registered in the Free Zones are not liable to pay tax at the Emirate level for a specific period. Free Zone entities may either be exempt from tax or subject to a 0% tax rate, depending on the regulations in the specific free zone.

United Kingdom

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

No broad-based rulings are available. On certain issues, taxpayers can request a private letter ruling that applies only to the specific issue.

Tax incentives

There are tax incentives for specific activities and behaviors, including R&D credits and enhanced deductions for expenditure on certain types of environmentally-friendly installations or for investment in economically deprived parts of the UK. The patent box regime will offer a reduced effective 10% rate of corporation tax for income from certain IP which is developed or managed in the UK.  There are capital allowances at different rates on various items of machinery and plant and a new 2% allowance on building costs involved in constructing new commercial buildings.

United States

Tax holidays

Not applicable for this jurisdiction.

Tax rulings

Industry Issue Resolution may be requested to provide generally applicable guidance on frequently disputed or burdensome business tax issues affecting a significant number of taxpayers. Pre-Filing Agreements may be requested by a taxpayer for a transaction already executed, prior to filing the applicable year's tax return. Advance Pricing Agreements may be available to address transfer pricing on future transactions between related parties. A taxpayer may also request a Private Letter Ruling for guidance on specific issues as to that specific taxpayer.

Tax incentives

Tax incentives exist for specific activities, and include R&D credits and deductions for certain US production activities. US corporate taxpayers earning foreign-derived intangible income (FDII) may qualify for a reduced effective tax rate on such income. Property acquired and placed in service may qualify for 100% bonus depreciation deduction in the year of acquisition.

Zimbabwe

Tax holidays

Tax holidays are normally made available as part of a broad range of tax incentives. These tax incentives are normally provided to investors, particularly those with a qualifying degree of export orientation, or those who engage in Public Private Partnerships with the Government of Zimbabwe.

Tax rulings

It is possible to obtain advance rulings from the Zimbabwe Revenue Authority (ZIMRA) on the tax treatment of a contemplated transaction or receipt of income.

Tax incentives

Not applicable for this jurisdiction.