Greetings and Happy Tuesday! This is Tax Roast, a weekly newsletter that brings you the latest updates and insights from the international tax world from tax experts (and coffee enthusiasts) who are walking the tax advisory path.

And do not forget to check out our coffee of the week, because there is no tax news without a good cup of coffee :)

International Tax Update

Mexico / 2024 tax benefits announced

The Mexican Tax Administration Service (SAT) has provided tax and administrative benefits for fiscal year 2024 to taxpayers engaged in primary sector activities (i.e., agriculture, forestry, livestock farming or fishing) and ground transportation of goods and passengers. The full overview of benefits can be accessed through the official gazette HERE.

Netherlands / Decree on Public CbCR Directive

On 1 March 2024, the Netherlands gazetted an Implementation Decree on thePublic CbCR Directive. This Directive requires qualifying multinational enterprises (MNEs) doing business in the European Union to publicly disclose certain income tax information. The first financial year of public reporting will be the year starting on or after 22 June 2024.

The Decree obliges the ultimate parent company of multinationals with a total consolidated revenue of more than EUR 750 million (in each of the last 2 consecutive financial years) to prepare and publish annually a separate profit tax report for the entire group of companies of the multinational. Stand-alone companies with more than EUR 750 million in revenue, which are not part of a group, also must prepare and make public such report.

Ecuador/ List of Tax Havens

The Tax Authority of Ecuador has updated the list of tax havens as can be read HERE. The Tax Authority included the following countries and territories, which are deemed to be considered tax havens:

• Republic of Albania;

• Republic of Armenia;

• Georgia; and

• Gibraltar.

New Zealand / No simplified TP approach for Amount B under Pillar 1

The New Zealand tax authority has released a statement that it will stay with existing New Zealand domestic transfer pricing rules and will not apply the OECD's simplified and streamlined approach to the application of the arm's length principle to baseline marketing and distribution activities. The simplified approach was published by the OECD/G20 Inclusive Framework on BEPS on 19 February 2024.

Fun Tax Fact of the Week

Global minimum tax / Pillar 2 bootcamp

This week we cover the last remaining entity classification called Joint Venture (JV). In accounting, companies have different ways of handling joint ventures (JVs) depending on their level of control. When a company has control over a JV, it combines its outcomes with those of other group companies. On the other hand, if a company has significant influence but lacks control over a JV, it uses the equity method to account for its stake in the JV, preventing the combination of results. The initial investment is recorded at its cost and adjusted based on the JV's performance, which has a direct impact on the consolidated accounts.

Within the consolidated statement of profit or loss, the dividend income from the JV is replaced with a single entry that represents the parent company's share of the JV's profit. Following the general regulations, if a multinational enterprise (MNE) group lacks control over a JV, its share of the JV's income is not evaluated line by line. However, Pillar Two introduces a unique regulation that includes JVs reported under the equity method in the consolidated financial statements, but only if the Ultimate Parent Entity (UPE) owns at least 50% of the JV. If the UPE's ownership falls below this threshold, the special JV rule does not apply.

Leadership principles for top managers at Big Multi Inc. 🏢

Rule #8 - Performance review

Oh, the annual performance review, that glorious time of year when you get to sit down with your employees and pretend like you care about their progress and development. It's truly a momentous occasion that everyone looks forward to with bated breath. Because let's face it, what could be more important than spending hours discussing goals and objectives that will ultimately be forgotten as soon as the meeting is over?

Now, let's talk about some tips for managers on how to conduct this oh-so-crucial performance review. First and foremost, make sure to keep the atmosphere as tense and uncomfortable as possible. This will really help to set the tone for the meeting and ensure that your employees are on edge and ready to defend themselves against any criticism you throw their way. Remember, it's all about keeping them on their toes!

Next, be sure to focus on the negatives. After all, why waste time discussing all the things your employees are doing well when you can just harp on their shortcomings? This will really help to boost their morale and make them feel valued and appreciated. And don't forget to be vague and non-specific with your feedback. It's much more fun to watch them squirm as they try to decipher what exactly you're talking about.

Lastly, don't forget to set unrealistic goals for the upcoming year. This will really help to motivate your employees and make them feel like they're constantly falling short. And if they do manage to achieve these impossible goals, just raise the bar even higher. Because nothing says "I value your hard work" like constantly moving the goalposts. So there you have it, some helpful tips for managers on how to conduct the annual performance review.  

Tax Roast of the week

Invite the crew for a coffee☕

We never say no to a good cup of coffee! So, if you loved this edition and you would like to support us, you can invite our crew for a cup of coffee here.

Coffee corner☕

We have gone through some important topics (types of coffee, coffee cups, and roasting techniques), let's now speak about the coffee machines.

Different cultures prefer different ways of making a good coffee. An Italian espresso is very different from a Turkish coffee; a black filter is also not the same as a French press; a lungo in Italy and café in France are not identical, not to mention that these are also different from a good Italian moka. 

The different varieties of coffee drinks are prepared through different processes. In the coming weeks we will go through the most basic coffee machines. 

Let's start with a personal favourite: the Italian Moka pot. If you have been in Europe before, you must have seen this coffee maker. Ii is a timeless classic piece of design. It has a history of almost a 100 years and the very original model is still under production and made from the same material (aluminium) sold as "Moka Express".  

It contains three parts: a water container part (bottom), a basket to be filled with ground coffee (in the middle) and a pot with a top (top part). When the water in the bottom container is heated it rushes through the basket to the top part where the coffee drink is collected. With some practice how much, how fine ground coffee to be used, how quickly and how much heat to apply, etc. very elegant, typical coffee can be brewed with a surprisingly nice crema on the top. It can be used anywhere: at home, at camping/ hiking, the sky’s the limit.

Enjoy your morning coffee!

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