Deloitte Africa Tax & Legal Tax Alert Further Tax Developments in Africa
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South Africa | Deloitte Africa Tax & Legal | 2 August 2019 Deloitte Africa Tax & Legal Tax Alert Further tax developments in Africa 2 August 2019 Algeria/ Botswana/ Cameroon/ Chad/ Congo, Democratic Republic/ Eswatini/ Ethiopia/ Gambia/ Ivory Coast/ Kenya/ Mauritania/ Mauritius/ Morocco/ Mozambique / Nigeria/ Seychelles/ Tanzania/ Uganda/ Zambia/ Algeria Online declaration and payment guide The Tax Administration has recently published an online declaration and payment guide on its website. The key information provided by the guide includes; the online registration process, the online payment procedure, the online reporting procedure for a taxpayer's representative, and the procedure for tracking online payment transactions. Botswana Exchange of information agreement between Botswana and Guernsey On 26 July 2019, the Botswana - Guernsey Exchange of Information Agreement (2013) will enter into force. The agreement generally applies from 26 July 2019 for criminal tax matters and from 1 January 2020 in Guernsey and from 1 July 2020 in Botswana for other tax matters. Cameroon Treaty between Cameroon and Switzerland Negotiations for a tax treaty between Cameroon and Switzerland are underway following a meeting between officials from both countries, held in Yaoundé on 22 July 2019. African Continental Free Trade Area Agreement On 19 July 2019, the Parliament of Cameroon signed Law No. 2019/010, authorising the president to ratify the African Continental Free Trade Area Agreement (ACFTA). The ACFTA has so far been signed by 54 countries and entered into force on 30 May 2019. Chad IPA between Chad and United Arab Emirates On 26 June 2019, the National Assembly of Chad adopted a draft law authorizing the President to ratify the investment protection agreement (IPA) between Chad and the United Arab Emirates, signed on 4 September 2018. Congo, Democratic Republic Deadline set for payment of first instalment of advance tax for financial year 2019 On 25 June 2019, the general manager of the tax administration announced the payment deadline for large taxpayers for the first instalment of advance tax for the 2019 financial year. The payment deadline is 31 July 2019. The first instalment comprises 40% of the corporate income tax paid in the prior financial year (2018), including any additional related payments established by the tax administration. A taxpayer may utilise a tax credit, which, however, cannot be higher than 20% of the first instalment payable. Finally, failure to pay the above instalment on the stated due date will expose the taxpayer to a penalty of 50% of the amount of the instalment due. Eswatini Eswatini joins inclusive framework for implementing measures against BEPS According to an update of 26 July 2019, published by the OECD, Eswatini has joined the Inclusive Framework (IF) for the global implementation of the Base Erosion and Profit Shifting (BEPS) Project. The IF was proposed by the OECD endorsed by the G20 in February 2016. The IF has now been joined by a total of 132 countries. Under the framework, all state and non-state jurisdictions that commit to the BEPS Project will participate as BEPS Associates of the OECD's Committee on Fiscal Affairs. Ethiopia Proclamation amending VAT – approved by parliament On 4 July 2019, the House of People's Representatives approved Value Added Tax (Amendment) Proclamation No. 1157/2019 (the new Proclamation) amending provisions of Value Added Tax (VAT) Proclamation No. 285/2002 (the existing Proclamation). The new Proclamation includes some major changes to the existing Proclamation. Directive amending threshold for VAT reverse charge – issued On 28 June 2019, the Minister of Finance issued a Directive (the new Directive) amending Directive No. 27/2009 on the collection of value added tax (VAT) by Buyers, commonly referred to as "Directive on reverse charge". The Directive on reverse charge obliges all federal and regional government bodies, referred to as withholding agents, to purchase goods or services with the value above ETB 50,000.00 only from suppliers registered for VAT. The new Directive now increases the threshold for the value of goods or services to ETB 200,000.00. The withholding agents are also obliged to withhold VAT from the payments they make for procurements of goods or services if the value of a one-time supply exceeds ETB 5,000. The new directive became effective on 26 June 2019. Gambia IPA between The Gambia and United Arab Emirates signed According to a press release of 16 July 2019, published by the Emirates News Agency, The Gambia and the United Arab Emirates recently signed an investment protection agreement (IPA) in Abu Dhabi. Ivory Coast Ivory Coast issues clarification on Country by Country reporting On 7 May 2019, the Ivorian Tax Office issued clarification on the filing of country-by- country (CbC) reports through its Ruling. The Ruling was issued pursuant to paragraph 4 article 36bis of the General Tax Code. The submission of the first CbC reports will take place from 31 December 2019. Treaty between Ivory Coast and Vietnam – update During a meeting between officials from Ivory Coast and Vietnam, held in Hanoi on 19 June 2019, the Ivorian officials expressed their hope the two countries could soon sign a tax treaty. Kenya Treaty between Botswana and Kenya On 23 July 2019, Botswana and Kenya signed a tax treaty, in Nairobi. Mauritania New Tax Code 2019 published On 29 April 2019, the new General Tax Code (GTC) was published in Official Gazette No. 76. The new GTC will end the multiplicity of laws and regulations by consolidating all tax regulations into a single code. Mauritius Employee declaration form for exemptions, relief and deductions for 2019/2020 On 18 July 2019, the Revenue Authority released an employee declaration form (EDF) for the period 1 July 2019 to 30 June 2020 (income year from. The EDF is only applicable to employees who are entitled to an exemption, relief or deduction as determined in the EDF, in accordance with the tax measures proposed in the Budget for 2019/2020. The EDF lists exemptions, relief and deductions stating different thresholds, conditions and purposes. Guidelines for tax objection and appeal On 28 June 2019, the Mauritius Revenue Authority (MRA) published the Guidelines for Tax Objection and Appeal. Morocco New online tax service launched On 22 July 2019, The Directorate General of Taxes (DGI) published a communiqué launching the new online tax service, SIMPL. The SIMPL service allows taxpayers to upload and edit their tax and accounting statements. The service is accessible through the SIMPL-IS website, and the uploaded statements are cross-referenced on the DGI portal to ensure the integrity of the taxpayers' information contained therein. Simplified VAT refund procedure On 18 July 2019, the General Tax Directorate published an internal note detailing the application modalities of the simplified VAT refund procedure. The simplified VAT refund procedure applies for companies whose accounts are certified. The note specifies that refund requests must be accompanied by summary statements justifying the turnover achieved during VAT exemption or suspension. In addition, these statements must include, in a separate column, the registration numbers of the purchase invoices and customs documents. Taxpayers must attach an auditor's certificate to the above statements confirming the accuracy of the information contained therein and their concordance with the tax and accounting records of the company. Monthly minimum salary increase On 26 June 2019, a Decree increasing the monthly minimum salary (SMIG) was published in Official Gazette no. 6790. The Decree provides an increase of 5% from 1 July 2019 and an increase of 5% from 1 July 2020. The increase applies as from 1 July 2019 and affects the payroll contributions calculation. Law on Takaful On 9 July 2019, the upper house of the parliament approved a law governing Sharia- compliant insurance (Law on Takaful). Once approved by both houses, the Law on Takaful will be published in the Official Gazette. The Law is expected to give a boost to Islamic finance in Morocco. Mozambique Decrees issued on customs and income tax benefits for areas affected by cyclones Idai and Kenneth Recently Mozambique issued Decree 27/2019 of 11 April and Decree 45/2019 of 22 May, granting certain customs and income tax benefits for the recovery and reconstruction of the areas affected by cyclones Idai and Kenneth. Nigeria African Continental Free Trade Area Agreement signed by Benin and Nigeria On 7 July 2019, Benin and Nigeria signed the African Continental Free Trade Area Agreement (ACFTA) at the 12th Extraordinary African Union Summit, held in Niamey, Niger. The ACFTA has now been signed by 54 countries and entered into force on 30 May 2019. Imported services taxable in Nigeria – Court rules The Court of Appeal in the Lagos Judicial Division gave its decision on 24 June 2019, in the case of Vodacom Business Nigeria Limited v. Federal Inland Revenue Service (CA/l/556/2018). The Court of Appeal upheld the decision of the FHC on all three issues. On Issue 1, the Court maintained that “in so far as the bandwidth capacities are supplied in Nigeria, the foreign company carries on business in Nigeria, within the meaning of section 10(1) of VAT Act, since its services supplied in Nigeria are being utilised. The bandwidth capacities of the satellite in orbit are used in Nigeria". It concluded that the lower court was right in holding that the subject transaction is liable to VAT. On Issue 2, the Court held since NRC did not issue a VAT invoice, the duty on the Appellant to remit the VAT on the transaction remained sacrosanct. On Issue 3, the Court of Appeal upheld the decision of the lower court affirming that the destination principle and reverse charge is implied in the VAT Act. Seychelles FATCA agreement between Seychelles and United States The US Treasury Department has released the official text of the intergovernmental agreement (IGA) that the United States signed with Seychelles on 1 July 2019 for implementation of the Foreign Account Tax Compliance Act (FATCA).