All interested parties have been invited to submit their comments and proposals on the draft of the CIT Law to the Federal Ministry of Finance.
The draft of the CIT Law addresses changes in the following areas:
- Tax base (including the adjustment of expenses, income adjustments, capital gains and losses, tax loss);
- Taxation of company reorganisations and liquidation (status changes of the taxpayer; tax treatment of the liquidation);
- Avoidance of double taxation;
- Tax incentives (for new employments and scholarships);
- Assessment and collection of income tax (including definition of the tax period and the tax return procedure);
- Transfer pricing (new methods for determining transfer prices which occur in the transfer between related parties regulated by the OECD model); and
- Tax penalties.
Even though the above-mentioned aspects of the CIT Law are now under review, the CIT rate will remain set at 10%.
The reason for the adoption of a new CIT Law is primarily to modify and improve the former legal provisions. The amendments will be aimed at correcting the deficiencies identified during the application of this law which led to uncertainty and issues with compliance with other legislation in the country.
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