[World Tax News] Japan approves Pillar Two – Global Minimum Tax Framework and more

Editorial Team – [2023] 148 taxmann.com 486 (Article)

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. Japan Parliament approves pillar two global minimum tax framework

Japan’s Parliament, on 28th March 2023, passed the Bill for the partial revision of the Income Tax Act into law.

The Bill proposes introducing a global minimum tax under Pillar 2. This proposal has been passed into law without any changes. Once the law is published in the official government gazette, it will be effective, and Income Inclusion Rule (IIR) provided for thereunder will apply for the first time to accounting periods opened on or after 1st April 2024.

Source: Bill

2. South Africa releases New Tax Dispute Resolution Rules

The South African Revenue Service (SARS) has released Notice 3146, prescribing the rules promulgated under Section 103 of the Tax Administration Act, 2011. The rules govern the procedures to lodge an objection and appeal against an assessment or decision, the procedures for alternative dispute resolution and the conduct and hearing of appeals before a Tax Board or Tax Court.

These Rules repeal the Rules published in Government Gazette No.37819 of 11th July 2014, and take effect from the date of publication.

The Official Gazette initially released the new rules on 10th March 2023, and they have since taken effect, replacing the previous rules that were published back in July of 2014. While the new rules still consist of the same core parts and sections as the prior rules, a few modifications have been made.

A significant modification in the new rules is extending the period in which taxpayers can object to an assessment. The prior 30-day limit has been increased to 80 days after the assessment date or after SARS has given reasons for the assessment, allowing taxpayers more time to formulate an objection. However, the time limit to request reasons still remains 30 days from the date of assessment.

Several modifications have been implemented in the new rules, including a provision that allows taxpayers to resubmit an objection within 20 days of being notified of its invalidity, without needing to request an extension, provided that the initial objection was filed within the 80-day period. Additionally, regarding appeals against assessments, taxpayers can now raise new grounds for appeal as long as they don’t amount to a new objection for an unchallenged part or sum of the disputed assessment.

Changes have also been made to appoint Alternative Dispute Resolution (ADR) facilitators, such as eliminating the need for a senior SARS official to establish a list of facilitators from which an ADR facilitator can be chosen. Finally, a new provision requires SARS to issue an assessment within 45 days of receiving the tax court’s decision if SARS does not appeal.

Source: Notice 3146

3. Ukraine authorizes Multilateral Agreement on the exchange of Financial Account Information

The Ukraine Parliament has approved ratifying the Multilateral Competent Authority Agreement (MCAA) for the Automatic Exchange of Financial Account Information. The Ukraine Government signed the agreement on 19th August 2022.

The MCAA facilitates the exchange of information under the OECD Common Reporting Standard (CRS). Ukraine plans to commence the exchange of information under the CRS in September 2024.

Source: Press Release