Surviving the Global Meltdown Find out what governments worldwide are doing to help companies save taxes and minimize job cuts. — Vyoma Nair Many countries are becoming forward thinking and rolling out new measures or extending current ones to help companies survive the global slump. Belgium Belgium has various incentives to encourage R&D activities. For example, the patent income deduction allowing royalties to be taxed at 6.8% or even lower.
pensate for relocating to France or have 30% of their global compensation tax exempt. Luxembourg Among many measures, reduction in corporate taxes is one aimed specifically at increasing employment — a tax credit for hiring unemployed workers is extended for three more years to December 31, 2011 and the tax credit increased from 10% to 15%.
Another incentive, reducing employment costs, allows companies that meet the qualifying criteria to retain a percentage of the wages taxes withheld (i.e. not pay these over in full to the tax authorities). The retention percentage is increased to 65% from 25% for certain employees.
Netherlands For taxable income less than 250,000 EUR, the corporate tax rate is being temporarily reduced to 20% retroactive from January 1, 2008. This applies for the year 2008 only.
Brazil Regulations allow Brazilian legal entities to offset their social contribution on net income (CSLL) liability by 25% of the book depreciation claimed on certain fixed assets. This benefit, which ended in late 2008, has been extended to fixed assets acquired up to December 31, 2010.
Norway Unfortunately, not all the changes are positive. Norway proposes exit tax rules. Exit charges will apply if a company transfers its operating headquarters to another country, assets are transferred to a tax exempt country, or assets are transferred from a foreign companies’ Norwegian subsidiary.
Canada From early 2008, the corporate tax rate fell from 22.5% to 19.5%. Tax will continue to reduce annually until the corporate tax rate is 15% from January 01, 2012.
Switzerland The Canton of Vaud has introduced a credit of profit tax against capital tax. U.S. companies are particularly interested in this since U.S. foreign tax credit only applies to profit tax and not to capital tax.
France To make France more attractive to foreign workers, they are now allowed to either receive a tax exempt bonus to com-
For more information on how you can benefit from different taxes regimes, please visit www.globaltaxexperts.com
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