World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.
1. China extends reduced tax rate for third-party enterprises engaged in pollution prevention and control
China’s Ministry of Finance, State Administration of Taxation, National Development and Reform Commission, and Ministry of Ecology and Environment have collaboratively issued Announcement No. 38 of 2023.
In order to encourage the professional and large-scale development of pollution prevention and control enterprises and better support the construction of ecological civilization, the relevant corporate income tax policies are hereby announced as follows:
(a) Qualified third-party enterprises engaged in pollution prevention and control shall be levied a corporate income tax at a reduced rate of 15%.
(b) The third-party prevention and control enterprises referred to in this announcement shall meet the prescribed conditions such as:
- Resident enterprises registered in accordance with the law in China (excluding Hong Kong, Macao and Taiwan);
- Have been continuously engaged in the operation of environmental pollution control facilities for more than one year and can ensure the normal operation of the facilities;
- Have at least 5 technical personnel who work in this field and have intermediate or above technical titles in environmental protection-related majors, or at least 2 technical personnel who work in this field and have senior or above technical titles in environmental protection-related majors;
- The annual operating income from environmental protection facility operation services accounts for no less than 60% of the total income;
- Have testing capabilities, have its own laboratory, and have instrument configurations that can meet the testing needs for conventional pollutant indicators within the scope of operational services.
The implementation period of this announcement is from January 1, 2024 to December 31, 2027.
Source: Announcement No. 38 of 2023
2. Italy seeks inputs on the implemantation of Pillar 2 Global Minimum Tax
The Ministry of Economy and Finance in Italy has initiated a public consultation concerning a preliminary legislative decree to enact the global minimum tax under Pillar 2, as stipulated by Council Directive (EU) 2022/2523 dated December 14 2022.
This set of rules was carefully created to follow the guidelines in the Directive, using the right references to Italian laws and utilizing terminology consistent with Italian legislative conventions. This encompasses the income inclusion rule (IIR), the undertaxed payment/profit rule (UTPR), and the qualified domestic minimum top-up tax (QDMTT).
According to the current draft, the IIR and QDMTT will become effective from the fiscal year succeeding the one ongoing as of December 31 2023, while the UTPR will come into effect from the fiscal year following the one in progress on December 31 2024.
The closing date for submitting comments is October 1 2024.
Source: Public Consultation
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