AFRICA: Africa Tax Administration Forum revises Pillar One Proposals
The African Tax Administration Forum (“ ATAF ”) has sent revised Pillar One proposals to the OECD Inclusive Framework, responding to both the Inclusive Framework Blueprint Report released for public consultation in October 2020 and the recent US proposals to revise the blueprint proposals.
Elements of the ATAF proposal are similar to the US recommendations. For instance, both proposals bring all business sectors (except those excluded in the Pillar One Blueprint) into the scope of Amount A and exclude differentiation in profit allocation between Automated Digital Services and Consumer Facing Businesses.
ATAF proposes a single global threshold rule for all multinational enterprises (“ MNEs ”) generating global sales revenue above a certain amount, irrespective of their business activities, but still subject to the proposed Pillar One Blueprint exclusions. It is of the view that the Amount A proposal which is based on a single market revenue threshold for all economies is complex, inequitable and would result in very little reallocation of taxing rights to market jurisdictions, especially smaller ones. According to ATAF, its proposal would address the complexities of the global threshold rule and with its simplification the threshold could be lowered to EUR250-million.
ATAF also recommends that the reallocation of profits, which it refers to as "Amount D", be calculated as a portion of the MNE’s total profits instead of its residual profit. Amount D is to be allocated to a market jurisdiction to the extent it exceeds the arm’s length profits reported in the market jurisdiction for the relevant period.
BOTSWANA: Convention and Protocol on Mutual Administrative Assistance in Tax Matters enter into force
The multilateral Convention on Mutual Administrative Assistance in Tax Matters , as amended by the 2010 protocol , will enter into force in respect of Botswana on 1 October 2021, following Botswana depositing its instrument of ratification with the OECD on 15 June 2021. The convention and the amending protocol will generally apply from 1 July 2022 for Botswana.
BOTSWANA: Income Tax and VAT Penalties and Interest Amnesty Regulations promulgated
The Minister of Finance has promulgated the Income Tax and VAT Penalties and Interest Amnesty Regulations of 2021 in the Extraordinary Gazette of 8 June 2021 and the Botswana Unified Revenue Service subsequently published related guidelines for the amnesty period running from 1 July 2021 to 31 December 2021.
The guidelines cover eligible penalties and interest, eligible taxpayers […]