tax notes international - Tuck School of Business - Dartmouth College
tax notes international - Tuck School of Business - Dartmouth College
tax notes international - Tuck School of Business - Dartmouth College
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ARGENTINA<br />
the most significant exemptions relate to contracts for<br />
the incorporation <strong>of</strong> companies in Buenos Aires, as<br />
well as their capital increases and liquidations; all contracts<br />
aimed at papering public listing <strong>of</strong> securities; and<br />
guarantee agreements that secure other <strong>tax</strong>able instruments,<br />
life insurance agreements, labor agreements,<br />
export related agreements, and so on.<br />
Financial Transaction Stamp Tax<br />
This <strong>tax</strong> is triggered on all loans or credits that a<br />
financial institution is party to that imply a delivery or<br />
receipt <strong>of</strong> principal (or funds in general) that triggers<br />
interest over time and that are registered and recorded<br />
by such financial entities. The <strong>tax</strong>able amount is<br />
deemed to be the figures used to calculate the interest<br />
times the <strong>tax</strong> rate, which is the standard one <strong>of</strong> 0.8<br />
percent per year. So the <strong>tax</strong> burden is proportional to<br />
the term the <strong>tax</strong>able transaction remains in place: The<br />
larger the term, the higher the <strong>tax</strong> burden.<br />
The persons contracting with the financial entities<br />
are deemed to be the <strong>tax</strong>payers and such entities are<br />
deemed to be the collecting agents. Accordingly, they<br />
are subject to joint and several liability.<br />
Specific exemptions apply to this <strong>tax</strong>able event, the<br />
most significant being that related to transactions subject<br />
to the instrumentality <strong>tax</strong>: To the extent such burden<br />
is triggered, even in a different jurisdiction, there<br />
will be no financial transaction <strong>tax</strong> on the same transaction.<br />
Also, bank deposits in savings accounts, time<br />
deposits, and checking accounts are exempt, as well as<br />
mortgage deeds and other security agreements used to<br />
secure <strong>tax</strong>able transactions.<br />
As <strong>of</strong> the enactment <strong>of</strong> Law 2997, <strong>tax</strong>payers are<br />
required to monitor the stamp <strong>tax</strong> legislation in the city<br />
<strong>of</strong> Buenos Aires in conjunction with the one applicable<br />
in other provinces to ensure they take advantage <strong>of</strong> <strong>tax</strong><br />
planning options or at least avoid double <strong>tax</strong>ation<br />
when transactions that are executed in one location<br />
have effects in a different one.<br />
Bangladesh<br />
♦ Cristian Rosso Alba, Rosso Alba,<br />
Francia & Ruiz Moreno, Buenos Aires<br />
Government Revokes Import Tax on<br />
Renewable Energy Imports<br />
Bangladeshi Prime Minister Sheikh Hasina Wajed<br />
on January 15 announced that all <strong>tax</strong>es and duties assessed<br />
on imports <strong>of</strong> solar power generating equipment<br />
have been revoked to encourage the use <strong>of</strong> renewable<br />
energy as the country continues to struggle with power<br />
shortages.<br />
Previously, imports <strong>of</strong> renewable energy equipment<br />
were subject to a 3 percent import duty and a 15 percent<br />
VAT.<br />
The withdrawal <strong>of</strong> the import <strong>tax</strong>es is part <strong>of</strong> the<br />
country’s new renewable energy policy, which was approved<br />
in December 2008. The policy also provides for<br />
a five-year corporate <strong>tax</strong> holiday for income from renewable<br />
energy projects. The government’s goal is for<br />
the country to derive 5 percent <strong>of</strong> its electricity from<br />
renewable sources by 2015 and 10 percent <strong>of</strong> its overall<br />
electric supply by 2020.<br />
In addition to commercial-scale solar energy plants,<br />
the government also seeks to promote the use <strong>of</strong> microlevel<br />
solar energy for domestic use. More than 300,000<br />
households are using solar energy equivalent to 15<br />
megawatts, accounting for less than 1 percent <strong>of</strong> the<br />
country’s total electricity generation <strong>of</strong> around 3,500<br />
megawatts.<br />
Hasina also heads the Ministry <strong>of</strong> Electricity, Oil,<br />
and Mineral Resources.<br />
♦ Aziz Nishtar, Nishtar & Zafar Advocates, Karachi<br />
Cambodia<br />
Tax Breaks Targeted to Critical<br />
Garment Industry<br />
The Cambodian government has announced that it<br />
will <strong>of</strong>fer <strong>tax</strong> breaks targeted to the clothing industry<br />
(accounting for 320,000 jobs in a country <strong>of</strong> 14.2 million)<br />
as a way to address the global financial crisis’s<br />
impact on Cambodia, according to media reports.<br />
Because the Phnom Penh government lacks cash, it<br />
reportedly cannot undertake the kind <strong>of</strong> stimulus packages<br />
seen in neighboring countries like Thailand, Malaysia,<br />
and Singapore.<br />
In addition to the <strong>tax</strong> breaks, the government plans<br />
to invest in infrastructure such as power plants, rural<br />
roads, irrigation systems, and telecommunications in an<br />
attempt to establish the kinds <strong>of</strong> structures the country<br />
will need when growth returns. According to the Economic<br />
Institute <strong>of</strong> Cambodia (a Phnom Penh think<br />
tank), up to 66 percent <strong>of</strong> the workforce works in the<br />
rural sector at some point during the year.<br />
The projects are to be funded through donor contributions,<br />
according to a January 26 article on<br />
Bloomberg.com. Contributor countries in December<br />
2008 pledged $950 million in aid for fiscal 2009, a 40<br />
percent increase over fiscal 2008. The money will go<br />
toward Cambodia’s $1.8 billion 2009 budget, which<br />
includes the infrastructure expenditures. Cambodia’s<br />
fiscal year runs January 1 to December 31.<br />
388 • FEBRUARY 2, 2009 TAX NOTES INTERNATIONAL<br />
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.