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The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from official national legal publications and reliable press sources. You can find previous news by searching the Global Legal Monitor.

Belarus: Tax Code Amended

(Feb. 12, 2016) On December 30, 2015, Belarus adopted a law amending its Tax Code. The new legislation, Law No. 343-Z, came into effect on January 1, 2016, and made changes to provisions for both corporate and individual tax payers. (Belarus Tax Update 2016, SORAINEN (Jan. 2016); Viktar Strachuk, Belarus: Law Introducing Tax Amendments for 2016 – PEs; WHT on Interest Derived by Non-Resident Legal Entities, TAX NEWS SERVICE (Feb. 10, 2016), International Bureau of Fiscal Documentation (IBFD) online subscription database; Tax Code of the Republic of Belarus (as Amended up to Law of the Republic of Belarus No. 224-Z of December 30, 2014), World Intellectual Property Organization website, (click on link for text in Russian).)

Among the changes introduced, the amended Code now permits the President of Belarus to adopt legislation to impose taxes, levies, or duties, in addition to imposition through legislative amendment of the Code (Law 343-Z, art. 11). (Belarus Tax Update 2016, supra.) Also, those taxpayers employing more than 15 workers must, beginning July 1 of this year, use the electronic filing system for their tax returns. (Id.) From the same date, all value-added tax payers must use the electronic system to issue VAT invoices. (Viktar Strachuk, Belarus: Law Introducing Tax Amendments for 2016 – Details Published, TAX NEWS SERVICE (Jan. 26, 2016), IBFD online subscription database.)

Corporate Taxes

The Amending Law makes these expenses non-deductible:

  • payments made as penalties for breaching investment contracts;
  • bonuses to employees paid based on their annual performance; and
  • payments made as remuneration to a supervisory board. (Id.)

In addition, the revision makes the following items be considered non-operating taxable income:

  • any reduction in accounts payable due to out-of-court settlements;
  • any increase in accounts receivable due to such settlements; and
  • rent owed to an individual lessor if it remains outstanding for more than 12 months. (Id.)

Simplified Tax System for Small Businesses

Law 343-Z excludes more businesses from using the existing simplified tax calculation system. Now individual entrepreneurs with annual turnovers of under BYR1.5 billion (about US$68,300) may use the simplified tax system; previously, entrepreneurs with turnover of up to BYR12.7 billion (about US$578,000) a year or small retailers earning annually up to BYR4.1 billion (about US$186,700) could use the simplified system. (Id.) The tax rate in this system is now 16%, compared with 3-5% previously, and it applies to goods, services, assets, or funds received for no charge. Companies involved in online retail sales or in providing information services, such as through online catalogs or portals, for online retail sales companies may not use the simplified system. (Id.)

Permanent Establishments of Foreign Companies

The way in which a foreign business’s permanent establishment is defined in the Code has been revised. Previously, the definition was based on a company’s activities in a calendar year, but under the new provisions, a foreign business is considered to have a permanent establishment in the country if in any 12-month period it operates for 90 days. (Belarus: Law Introducing Tax Amendments for 2016 – PEs; WHT on Interest Derived by Non-Resident Legal Entities, supra.)

The amended Code has revised methods for calculating what expenditures can be deducted from the profits of a permanent establishment. Whereas in the past only operating expenses could be deducted, now non-operating expenses incurred abroad will be deductible if they would be so under Belarus’s general tax rules and if a foreign auditor confirms the accuracy of the amounts, dates, and types of expenses claimed. (Id.)

Withholding Tax for Non-Resident Legal Entities

Previously, interest income earned by non-resident legal entities from certain loan agreements was exempt from withholding tax; this is no longer the case. Those non-resident businesses that do not have a permanent establishment in Belarus can, however, continue such deductions, but only for interest earned during the 2016 calendar year, as long as they are the beneficiaries of the interest; they are not resident in offshore zones, which are determined by the President; and they are included in the Bankers’ Almanac, as published by Reed Business Information. (Id.)

Transfer Pricing

Transfer pricing methods have been expanded to include the profit split method, wherein each party is assigned a proportion of the profits based on that party’s contribution to creating the profit. (Belarus: Law Introducing Tax Amendments for 2016 – Details Published, supra; for a discussion of the profit split method, see HM Revenue and Customs, INTM421070 – Transfer Pricing: Methodologies: OECD Guidelines: Profit Split, GOV.UK (last visited Feb. 11, 2016).)

In addition, controlled transactions will be subject to reporting requirements and have been more widely defined under the revision to include:

  • real estate and housing bonds transactions;
  • foreign trade transactions with values over BYR1 billion (about US$45,500), after VAT, annually, when performed with a single partner that is an affiliated party or resident of an offshore zone or an affiliated party and a resident of Belarus not paying corporate income tax due to a special tax regime;
  • foreign trade transactions worth more than BYR10 billion (about US$455,000), after VAT, in cases in which there is a single partner and the transactions involve specific, government-identified strategic goods or when the transaction is done by a “major taxpayer,” a term defined in the Tax Code. (Belarus: Law Introducing Tax Amendments for 2016 – Details Published, supra.)

Individual Income Tax

The rate for individual income tax has been increased to 16%from the previous 13%, for expenses calculated by tax authorities as exceeding the amount of income reported by the tax payer. The individual taxpayer’s income from real estate leasing, when there is no contract, is subject to a five-fold higher rate of taxation. The rates depend on various aspects of the rental property, such as the number of rooms for let and the location. (Id.)

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South Africa: Parliament to Debate Expropriation Bill

(Feb. 12, 2016) On February 2, 2016, the Portfolio Committee on Public Works in the South African Parliament adopted the Expropriation Bill, which seeks to repeal and replace the 1975 Expropriation Act and align “the process and procedure for expropriation of property by organs of state” with the current Constitution. (Public Works Committee Adopts Expropriation Bill, PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA (Feb. 2, 2016); Expropriation Bill, Memorandum on the Objects, B 4B-2015, South African Government website.)  The vote on the legislation in the Committee followed strict party lines, with the ruling African National Congress voting in favor and the opposition parties (the Democratic Alliance and the United Democratic Movement) opposed.  It now moves to the floor of the National Assembly for debate and the final vote.  (Lethabo, Expropriation Bill Adopted, Despite ‘No Votes’ from All Opposition Parties, BOOKS LIVE (Feb. 5, 2016).)  The Economic Freedom Fighters, also an opposition party in the National Assembly, decided not to vote.  (Id.)

The Constitution

The South African Constitution prohibits “arbitrary deprivation of property.” (Constitution of the Republic of South Africa, 1996 – Chapter 2, Bill of Rights (4 Dec. 4, 1996, in force on Feb. 4, 1997), § 25, South Africa Government website).  The Constitution permits expropriation only when it is done “for a public purpose or in the public interest” and subject to compensation on the bases of agreement or a court decision.  (Id.)  The Constitution also provides that:

  … [t]he amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including –

a. the current use of the property;

b. the history of the acquisition and use of the property;

c. the market value of the property;

d. the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

e. the purpose of the expropriation.  (Id.)

Key Provisions of the New Legislation

Like the Constitution, if adopted in its current form, the legislation would permit  expropriation by the state only in limited circumstances.  It provides that notwithstanding any law providing otherwise, no expropriation may take place “arbitrarily or for a purpose other than a public purpose or in the public interest.”  (Expropriation Bill, § 2.)  According to the legislation, the term “public interest” “includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources in order to redress the results of past racial discriminatory laws or practices.”  (Id. § 1.)   The term “public purpose” is defined as including “any purposes connected with the administration of the provisions of any law by an organ of state.”  (Id.)

In circumstances where expropriation is permitted, certain procedures must be followed.  For instance, an expropriating authority that intends to take over control of a piece of property must notify all known persons that would be affected by such action in the prescribed manner and publish the notice in the Official Gazette and local newspapers.  (Id. §§ 7 & 24.)  Except in specific instances where urgent expropriation is necessary, the legislation requires the expropriating authority to attempt to reach an agreement with the owner or holder of an unregistered right in the property.  (Id. §§ 2 & 22.)  After notification is sent, the persons that would be affected by the expropriation have 30 days to engage with the expropriating authority in reaching an agreement.  (Id. § 7.)  If the parties are unable to reach an agreement on the appropriate compensation, the matter is settled in court. (Id. § 21.)

Like the Constitution, the legislation would also put in place a mechanism for determining the amount of compensation.  It states that the amount paid “must be just and equitable reflecting an equitable balance between the public interest and the interests of the expropriated owner or expropriated holder … .”  (Id. § 12.)  In addition, in determining the payable amount, all “relevant circumstances,” including “the history of acquisition and use of the  property,” its market value, and the extent of “direct state investment and subsidy” in its acquisition and improvement must be considered.  (Id.)  The legislation further spells out considerations that must not be a factor in the process of determining the payable amount, including the owner’s opposition to expropriation or any enhancements done to the property as the result of its unlawful use.  (Id.)

Reactions to the Bill

Some critics argue that the legislation accords the executive body unfettered powers to expropriate property and violates the constitutional clause on property rights.  A key part of this criticism concerns the lack of sufficient judicial oversight of the expropriation process.  According to Anthea Jeffery, head of policy and research at the South African Institute of Race Relations, the legislation would allow the expropriating authority to take private property without any judicial oversight (except in matters of compensation) by simply serving notice of expropriation without first obtaining a court order to that effect.  (Anthea Jeffery, Anthea Jeffery: New Expropriation Bill Is Out – and It Is Still Unconstitutional, BIZNEWS.COM (Feb. 18, 2015).)  She argues that, among other defects, the legislation violates the constitutional provision prohibiting the eviction of persons from their homes without a court order.  (Id.; Constitution § 26. )  She notes that in order to be in compliance with the Constitution, the legislation must be amended to require the expropriating authority to obtain a court order before issuing an expropriation notice and that the order should certify that:

  • the proposed expropriation is authorized by a law of general application and is not arbitrary;
  • it is objectively in the public interest or for public purposes;
  • the compensation proposed is indeed just and equitable, reflecting a proper interpretation and application of all relevant factors; and
  •  no person will be evicted from his home without express judicial authorization. (Jeffrey, supra.) 

The legislation has also been criticized for being too vague.  This is mainly directed at what appears to be the most important term within the legislation, ”property.”  The legislation borrows a definition from the 1996 Constitution, which simply defines the term as something not limited to land.  (Constitution § 25.)  According to the members of the Democratic Alliance, the definition is unclear and could be expanded beyond land to include intellectual property and shares of stock.  (Jenni Evans, Expropriation Bill Nears Completion, POLITICS WEB (Jan. 26, 2016).)

On the other end of the spectrum are those who deem the legislation too timid.  A key group in this category is the Economic Freedom Fighters, which “wants expropriation without compensation to white owners‚ claiming that land was stolen from black south Africans.”  (Lethabo, supra.)

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Netherlands: List of Safe Countries of Origin for Asylum Purposes Expanded

(Feb. 12, 2016) On February 9, 2016, the State Secretary for Security and Justice of the Netherlands, Klaas Dijkhoff, announced that he will add six jurisdictions to the country’s list of safe countries of origin; persons from countries on this list are deemed presumptively ineligible for asylum. The new additions are Ghana, India, Jamaica, Morocco, Mongolia, and Senegal, although Morocco and Senegal are noted as not being safe countries of origin for LGBT individuals. (Dutch State Secretary to Add to List of Safe Countries of Origin, GOVERNMENT.NL (Feb. 9, 2016).)

The countries will be added to the list through an amendment to Annex 13 of the Alien Regulations, and “[t]his will then come into force one day after publication in the Government Gazette.” (Minister for Migration, K.H.D.M. Dijkhoff, to the President of the House of Representatives (Feb. 9, 2016) (Letter of Feb. 9, 2016), GOVERNMENT.NL  (click on Expansion of National List of Safe Countries of Origin to access PDF document); Vreemdelingen Voorschrift 2000 [Alien Regulations 2000] (Dec. 18, 2000, in force on Apr. 1, 2001, as amended), Annex 13, OVERHEID.NL.)

Priority is already given to handling the applications of asylum seekers from safe countries of origin, but as of March 1, 2016, those applications will be subject to an accelerated procedure consisting of a single hearing, and they “will be rejected as manifestly unfounded.” (Dutch State Secretary to Add to List of Safe Countries of Origin, supra.)  While those turned down for asylum will be given the opportunity to show why in their particular case their country may be unsafe, they “will have to do more to make a plausible case for needing protection.”  (Id.)  Asylum seekers whose applications have been rejected will no longer be entitled to housing and may not wait for the outcome of their appeal, but must leave the Netherlands immediately.  (Id.)

Safe Country of Origin Concept

A country is deemed a safe country of origin “if it is safe enough to return to,” i.e., “if it does not carry out persecution on the grounds of race or religion, or apply torture or inhumane treatment.” (Id; What Is the List of Safe Countries of Origin?, GOVERNMENT.NL (last visited Feb. 10, 2016).) The safe country list is not fixed; depending on the safety situation there, a country can be added or removed. (What Is the List of Safe Countries of Origin?, supra.)  Safe country concepts are being used in national asylum procedures by European Member States pursuant to the implementation of the recast Asylum Procedures Directive.  (STEVEN AMMERAAL, FRANK BROEKHOF, & ANGELINA VAN KAMPEN, COUNTRY REPORT: THE NETHERLANDS 9 (Nov. 2015), AIDA [Asylum Information Database].)

Article 37 of the EU Directive states that Member States “may retain or introduce legislation that allows, in accordance with Annex I [on designation of safe countries of origin], for the national designation of safe countries of origin for the purposes of examining applications for international protection.” (Directive 2013/32/EU of the European Parliament and of the Council of 26 June 2013 on Common Procedures for Granting and Withdrawing International Protection (Recast) (Asylum Procedures Directive), 2013 O.J. (L/180) 60, EUR-LEX.) Article 36 of the Directive has a definition of safe country of origin.  (Id.)

The Dutch List

The Dutch safe country of origin list was formulated on November 3, 2015, with a view to speeding up the processing of asylum applications from the West Balkan countries. Countries that are already on the list, therefore, include Albania, Bosnia-Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia, as well as other countries in Europe, Oceania, and America.  (State Secretary for Security and Justice, K.H.D.M. Dijkhoff, to the President of the House of Representatives of the States General (Nov. 3, 2015), GOVERNMENT.NL (click on Application of the Concept of Safe Countries to access PDF document).  Countries on the European safe country of origin list, once it has been drawn up, may not also be stated on a national list; upon “the establishment of the European list the ‘duplicates’ would therefore have to be deleted from the national list.” (Id.)

Pending an investigation into the security situation in Algeria, Georgia, Ukraine, Tunisia, and Turkey, State Secretary Dijkhoff may add these jurisdictions to the list; another 15 countries may also be considered for inclusion. Egypt, however, is one of the countries that will not be put on the list for the time being, as it does not meet the safe country of origin requirements.  (Letter of Feb. 9, 2016, supra.)

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Egypt: Ministerial Resolution Regulating the Marriage of Egyptian Women to Foreigners

(Feb. 11, 2016) In December 2015, the Egyptian Minister of Justice issued Ministerial Regulation No. 9200 of 2015 to regulate the registration process for marriage contracts between Egyptian women and foreign men. The new Regulation relates to Law No. 103 of 1976 on the same subject. (Ministerial Regulation No. 9200 of 2015, 278 AL WAQA’A AL MASRYIA [EGYPTIAN AFFAIRS, published as an appendix to Egypt’s official gazette] (Dec. 8, 2015) (in Arabic).)

Article 1 of the new Regulation, the sole article in the legislation, stipulates that in order to register the marriage contract, if the foreign husband is 25 years older than his Egyptian wife, he must create a certificate of deposit in the amount of 50,000 Egyptian pounds (about US$6,400) under the wife’s name. (Id. art. 1 at p. 8.)

Reactions to the Regulation

Many human rights organizations and activists oppose the new Regulation, claiming that it essentially permits human trafficking for the purpose of sexual exploitation. Thanaa al-Saeid, a member of the National Council for Women, criticized the Regulation by stating that it only allows Egyptian women to be perceived as an expensive commodity in the trafficking market. Regardless of the amount paid by the foreign men as required by the Regulation, al-Saeid argues, it promotes short-term marriages.  (Sonia Farid, Does Egypt’s New Tourist Marriage Law Really ‘Protect Women?, AL-ARABIYA (Jan. 18, 2016).)

Nehad abu al Qumsan, a women’s rights activist, stated that foreign men enter such marriage contracts to prevent any legal problems, because, in some cases, one girl can be married off two or more times in less than a month. (Id.)

Hoda Badran, the Director of the Union for Arab Women, also criticized the concept of setting an amount of money to legalize the marriage. She stated that it is a “useless approach” that fails in protecting the rights of women or in reducing the number of those marriages. Badran also said that for many foreign men (especially from the Gulf States), 50,000 Egyptian pounds is actually a pittance, with some of them paying this amount for a few dinner outings. (Id.)

In response to the criticism, Hamdi Moawad, an Egyptian Ministry of Justice spokesman, stated that the new Regulation not only sets an amount of money to be paid to the Egyptian wife, but also requires the foreign husband to submit documents from his embassy that contain information about him, his income, and his marital status before he can be granted a marriage license. Moawad claimed that these requirements will protect the wife’s rights. (Egyptian Marriage Law Called “Legalized Prostitution,” Stowe LL.P website (Jan. 19, 2016).)

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Israel: Expansion of Police Body Search Powers

(Feb. 11, 2016) On February 2, 2016, the Knesset (Israel’s parliament) passed legislation expanding the powers of police to conduct body searches. (Authorities for Protecting Public Safety (Amendment No. 5 and Temporary Provision) Law, 5776-2016 (Amendment Law), Knesset website (in Hebrew) (click on appropriate link to view); Authorities for Protecting Public Safety Law 5765-2005 (Authorities Law), SEFER HAHUKIM [Book of Laws] 5765, No. 2022, p. 758 (in Hebrew).)

Authorization Based on a Reasonable Suspicion of Violence by Individuals or Groups 

The legislation authorizes a police officer who has “a reasonable suspicion” that a person or a group of persons is about to commit a violent offense against another person to conduct a body search of the suspected would-be perpetrators. A body search under these circumstances may be conducted to check whether the suspect(s) are unlawfully carrying a firearm.  (Amendment Law, adding § 3(B1)(1) to the Authorities Law.)

For the purpose of implementation of this authority, a reasonable suspicion may arise from, among other factors, a person’s violent behavior in a public place, including verbal violence or threats, or a behavior that is otherwise threatening or frightening. (Id.)

Authorization to Conduct Body Searches in Areas Prone to Terrorist Activity   

The Amendment Law further authorizes district commanders of the Israel Police to declare an area as an area where there is “a real concern” that a “hostile terrorist activity” will be committed. Such a declaration will result in the authorization of police to conduct a body search of a person to check if she/he is unlawfully carrying a firearm.  The authorization for the search in an area subject to the above declaration applies even if no reasonable suspicion exists, as defined under the new section 3(B1)(1) of the Authorities Law or under section 3(b) of the Authorities Law, in regard to the person subjected to the search.  Searches under section 3(b) of the Authorities Law apply to situations in which there is a reasonable suspicion that a person unlawfully carries or is about to unlawfully use a firearm in a vehicle.  (Amendment Law § 2, adding § 6B, temporary provision, to the Authorities Law.)

A declaration of an area as one where body searches may be conducted under section 6B of the Authorities Law should designate the location where suspicion of hostile terrorist activity was determined to exist. It should similarly specify the duration of the designation, which should not exceed 21 days.  The declaration may be renewed for additional periods, each time not exceeding 21 days.  The declaration period may be extended, but cannot exceed two months without the approval of the Police General Commander (PGC).  (Amendment Law § 2, adding § 6B(b) to the Authorities Law.)

The Amendment Law requires the PGC to determine procedures for how a body search should be conducted. The procedures must ensure that the search will be restricted to meeting its objective, which is the prevention of violent offenses or a terrorist act.  In addition proper notice must be given to passersby that an area is subject to the declaration described above.  (Id., adding § 6B(d) to the Authorities Law.)

The Amendment Law further requires the Minister of Public Security to submit a report to the Knesset Constitution Law and Justice Committee on an annual basis on the number and location of declarations issued under the Amendment Law. The report should include the reasons for declarations issued during the past year; the number of searches conducted; and the impact of the declarations, in the opinion of the Minister, on public safety.  (Id., adding § 6B(e) to the Authorities Law.)

Search by Police Personnel to Be of Same Gender as Person Searched 

In accordance with the Authorities Law, body searches must be conducted by a person of the same gender as the person subjected to the search, unless it is impossible under the circumstances and any delay in the search would endanger public safety or the safety of the person him/herself. (Authorities Law § 3(C)(1).)  Additionally, the parts of a person’s body that are normally covered will not be publicly uncovered unless necessary to prevent imminent danger to public safety.  (Id. § 3(C)(2).)

Rationale for the Amendment Law 

In introducing the Amendment Law for final approval, Knesset Member Nisan Slominski, Chairman of the Knesset Constitution Law and Justice Committee, stated:

The committee opined that the security situation requires providing the police additional powers to search for firearms on a person, even when there is no reasonable suspicion that the person who is subjected to the search unlawfully carries a firearm, in places subject to the regional commander’s declaration. At the same time, the committee opined that a threshold of real suspicion that a hostile terrorist activity might take place in that location was required.  The committee opined that currently it would not be appropriate to adopt the provision on searches [based on] security [concerns] as a permanent provision; this is why this provision was made [a temporary] provision for a period limited to two years.  (Press Release, Final Approval: Authorities for Protecting Public Safety Law So-Called “Stop- and-Frisk Law,” Knesset website (Feb. 2, 2016) (in Hebrew).)

Criticism of the Amendment Law was expressed by Knesset opposition members, who stated concern over the wide scope of the authorization and the possibility that the police might automatically suspect persons “with Middle-Eastern appearance, with dark skin …, members of the Ethiopian community, minorities, and the Haredi [ultra-Orthodox Jews].” (Id., statement of Knesset Members Yael German, Revital Swid, & Jamal Zahalka.)

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