On 21 March 2018, the Swedish government put forward proposals for new corporate tax regulations. The key proposal is to limit the deduction for corporate interest expenses. The right of deduction will be based on a so-called EBITDA-rule and will be accompanied by a decrease in the corporate tax rate.
The German Federal Constitutional Court ruled in its decision on 10 April 2018 that the method for the determination of the assessment basis of German land tax is in breach of the German Constitution. The current method of determining the fiscal values remains applicable however until at least 31 December 2019.
On 23 March 2018, President Trump signed the Consolidated Appropriations Act of 2018 (the Omnibus Act), an omnibus government spending bill which includes several technical corrections of previously enacted tax provisions related to FIRPTA, REIT spin-off transactions, REIT income tests and the partnership audit rules. The Omnibus Act also includes new low-income housing tax credit provisions.
Where foreign companies receive dividend payments from German subsidiaries, the hurdles for claiming an exemption from withholding tax have been lowered following the issue of a circular by the German Ministry of Finance.
The new DTT seeks to modernise the rules applying. The current treaty between Luxembourg and France was signed as long ago as 1 April 1958. The new DTT is fully “post-BEPS”. It implements the new approaches developed at international level during the OECD/G20 BEPS Project, now reflected in the 2017 version of the OECD Model Tax Convention, and in the Multilateral Convention to Implement Tax Treaty Related Measures (“the MLI”), signed by both Luxembourg and France in June 2017.
The European real estate industry is experiencing a seismic shift in its centre of gravity – from real estate as a financial asset, to real estate as a product and more significantly, to real estate as a service.
Tax and legal aspects of real estate investments around the globe
Effective from 25 July 2018, the Hungarian Parliament has adopted further favourable changes to foster the establishment of Real Estate Investment Trusts (REITs).
The REIT structure varies country-by-country, and it is constantly evolving. PwC have contributed the UK chapter of this European Public Real Estate Association analysis of global REITs.
The Finnish Government have published their proposals to implement the EU Anti-Tax Avoidance Directive I (restricting interest relief), which is expected to come into force 1 January 2019. This represents a major development for the real estate industry as most real estate investors have until now been outside the scope of the Finnish interest capping rules.
On 18 September 2018, the Dutch Ministry of Finance announced a number of important changes and amendments to the Dutch tax legislation for 2019 and onwards, including the abolition of the current Dutch Dividend Withholding Tax Act and the introduction of a new conditional withholding tax on dividends. On Budget day, the Dutch government also issued a legislative proposal regarding the Dutch implementation of the ATAD. On 15 October 2018, the Dutch Government announced that the proposed changes have been reconsidered which has resulted in the withdrawal of the proposal to abolish the dividend withholding tax. In order to stimulate the Dutch investment climate, alternative measures have been proposed.