On 15 May 2009, the government presented a revised version of the National Budget for 2009 which includes only minor amendments to tax rules. The main proposed changes are summarized below.
Foreign tax credit
Dividends derived by resident corporate shareholders from other companies are fully exempt under certain conditions. However, from 7 October 2008, 3% of the dividends so exempt must be added back to the taxable income, representing deemed expenses incurred with respect to the exempt dividends. The proposal explicitly provides that no foreign tax credit can be claimed in respect of the tax on the exempted 3% of the dividends.
Currently, group contribution is treated as taxable income for its recipient, that is an oil-producing company or a hydro-power plant, regardless of whether or not the group contribution has been deductible for its distributor. In order to maintain tax neutrality, it is proposed that a group contribution should be taxable for the recipient only to the extent that the group contribution is deductible for the company granting the group contribution. The proposed rule is similar to the rule applicable for other entities.
Tonnage tax regime
Currently, a company can have deferred tax liabilities due to the transitional rules in respect of the applicable tonnage tax regime, but it cannot deposit funds as securities with companies outside the tonnage tax regime. It is proposed to allow such deposits with qualifying financial institutions.