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Sabine Graziosi On July 18 2012, the Belgian Prime Minister presented the great lines of the recovery plan decided by the government. The plan, which still needs to be implemented through new legislation, includes a series of tax measures that should stimulate R&D activities and innovation and announces some administrative improvements to boost the competitiveness of businesses. The government decided to increase from 75% to 80% the partial exemption for paying withholding tax on wages paid to scientific researchers. At the moment, firms that employ scientific researchers benefit from a partial exemption from payment of withholding tax on their wages. They must transfer to the tax authorities only 25% (20% as soon as the government's recent decision is implemented) of the withholding tax due on the wage of these researchers to the tax authorities while they withhold 100% of the withholding tax that would normally be due. According to recent studies, the partial exemption of wage withholding tax is one of the most popular Belgian tax incentives in favour of R&D.

Khoonming Ho

Boris Lazic In Cyprus, taxation of royalty income is regulated by the Income Tax Law 118(I)/2002 (as amended), in accordance with which the Cyprus intellectual property (IP) company will be subject to withholding tax (WHT) if it receives royalty income from the use of IP in Cyprus. In most cases however, when a Cyprus IP company is used for the purposes of international tax structures, the IP rights are not used in Cyprus, but they are used outside the territory of the country. If the IP rights are not used in Cyprus, no WHT will be imposed in Cyprus when the Cyprus IP company, in its capacity as sub-licensee, proceeds with making a payment from the sublicensing of the IP rights to the licensee located abroad.

Ayesha Lau

Bob van der Made The European Commission (Commission) held a public consultation on double non-taxation from February 29 2012 to May 30 2012. The contributions and a summary report were published on the Commission's website in the first week of July. In mid-June the Commission invited these contributors from the academic world, non-government organisations (NGO), governments and business groups to a Commission seminar on non-cooperative tax jurisdictions, aggressive tax planning, tax fraud and tax evasion on July 17 in Brussels. On June 27, the Commission published a communication on concrete ways to reinforce the fight against tax fraud and tax evasion including in relation to third countries, to be considered only two days later at the EU leaders' summit. EU leaders concluded that: "The Commission is pursuing work on concrete ways to improve the fight against tax fraud and tax evasion and will soon present an action plan including options to that end." The Commission seminar was used by the Commission to get much needed additional input and information from stakeholders on these diverging notions just before the Commission's planned (compulsory) impact assessment to be done during the summer period. One trend observed during the seminar was the apparent mix-up by non-business participants of the notions of tax evasion, tax fraud, tax optimisation and aggressive tax planning. The lack of clear and generally agreed definitions for these different notions, and/or the use by the EU of too-broad definitions for that matter, was already highlighted by European business groups like EBIT in their submissions to the Commission consultation on double non-taxation as a matter of concern and one which leads to terminological confusion and misunderstandings.

Balazs Bekes On July 9 2012, the Hungarian Parliament voted on the financial transaction tax, which will be introduced as of January 1 2013. The new tax will apply to financial service providers with a seat or a site in Hungary, to the postal accounting centre, and, in some cases, to the Hungarian National Bank. Money transfers, collections, payments initiated by way of the beneficiary, cash disbursements, cash transfers payments, redemptions of letters of credits and checks, and central bank deposits made for a time period of between one day and two weeks will be covered by the new transaction tax.

Rajendra Nayak

Eric Roose

Elena Kostovska In late June 2012, an amended Law on Tax Procedure was adopted in the FYR Macedonian Parliament. The last time this Law was amended was in the middle of 2011 with certain changes regarding the appeal procedures. This latest set of changes was suggested by the Ministry of Finance in an attempt to clarify certain aspects related to the procedure of tax control that were previously ambiguous. With the amendments, it is now stipulated that the tax authorities can perform unannounced tax audits on the premises of the taxpayer without previous notice should they need to obtain certain information that may have been requested by a foreign tax authority.

Bryan Bailey