By David J Kidd, Citroen Wells
After a long period of consultation, the UK controlled foreign company (CFC) rules have been substantially overhauled. The new legislation applies for accounting periods beginning after 1st January 2013. This means that implementation at a detailed compliance level is now beginning for the first time for many UK companies. Thus a brief overview of the essential elements of the new rules may be of interest.
By Mark Pattimore, Heritage Corporate Services Limited
Britain is pressing ahead with plans to have a publicly-accessible, central register of the individuals who ultimately own, and control, UK companies. Will this move to transparency increase trust in UK business as the government hopes or have investors running for cover?
By Peter J. Scalise, Prager Metis International LLC
The United States Research and Experimentation Tax Credit (hereinafter “RTC”) Program was added to the U.S. Internal Revenue Code (hereinafter “I.R.C.”) in 1981 to incentivize qualified research and development expenditures within the United States and its possessions (e.g., United States Virgin Islands, Puerto Rico, Guam, etc.). As a direct result of the overwhelming success of the program at the Federal-level, most states now offer a research tax incentive (e.g., credit or deduction) as well. These combined Federal and Multi-State research tax incentives exponentially help companies tax effect their actual expenditures to design and develop their next generation “best in class” products as well as their manufacturing process improvements.
EU residents receiving goods from Germany will have to get used to confirming the delivery an extra time on a new form for the German minister of finance. Without this so-called confirmation of delivery for exports to the EU, VAT for the goods will remain payable in Germany for the supplier in the future.
By Toon Hasselman, Limes International B.V.
A trial procedure for an advance VAT ruling for cross-border transactions has been set up between 13 EU countries (Belgium, Cyprus, Estonia, France, Hungary, Latvia Lithuania, Malta, The Netherlands, Portugal, Slovenia, Spain and the United Kingdom) until 31 December 2013. This ruling should be of special interest to companies that engage in complex transactions, where conflicting interpretations between the tax authorities of the EU countries concerned may cause problems, especially in regards to double taxation. The ruling request should be made in the participating EU country where the company is registered for VAT purposes.
By Abdullah Demir & Michael Brändli, Walser & Partner AG
The issue of transparency and information exchange has been on the international tax agenda for a number of years. It is being driven forward with great momentum by key international standard-setting bodies such as the Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN), in international forums including G5 and G20, and also by the European Union (EU).
By Rodolfo Sánchez-Arellano, New Corporate Approach, S.C.
In February of this year, the OECD released the Standard for Automatic Exchange of Financial Account Information, which is starting to be known as GATCA as its goals are similar to the FATCA legislation which was recently implemented in the USA. The OECD recently announced that 47 countries declared an automatic exchange of information between their jurisdictions on 6 May 2014.
By Marián Augustín, AT Partners, k.s.
The latest amendment to the Slovak VAT Act has introduced customer liability for VAT charged on goods or services supplied in Slovakia, if the supplier has not paid (or has become unable to pay) the VAT when the customer knew or should have known that the VAT could not be paid to the tax authority.
By Graeme Saggers, Nolands SA
Section 31 of the Income Tax Act, which addresses transfer pricing in South Africa, was recently amended and has been in effect as of March 2014. Prior to that, the law included a 3:1 ratio of loan-to-equity safe harbour provision, which meant that the interest incurred by a South African company on the portion of a loan that exceeded three times the value of equity would be deemed to be excessive.
By Graeme Saggers, Nolands SA
Strictly speaking, what has been announced is not an amnesty but a “Special Voluntary Disclosure Programme (SVDP)”. However, it will operate in a similar manner to an amnesty, representing an opportunity for taxpayers to declare previously undeclared offshore income and benefit from reduced penalties and protection from criminal prosecution.
By Carina Langegger & Manfred Leitinger, Prodinger & Partner
Following the amendments made to the Austrian VAT Act in 2012, changes occurred for the worse with regards to VAT on rentals and to the input VAT adjustment period, in cases of change of property use.
By Filip Camps, Acco
As from January 1, 2013, a new Belgian law entered into force that changed the Belgian VAT-code. In particular, it regulates the new measures regarding the invoicing rules and changing the applicable rules in relation to self-billing. The VAT authorities consequently issued an official announcement in 2013 on the subject to the simplified self-billing rules in which the amended measures were explained.
By Tim Clarke, Moodys Gartner Tax Law LLP
Is the Canada Revenue Agency bound by a settlement made in the course of a tax dispute? Surprisingly, the answer is not always. Unlike UK and U.S. practice, the CRA may not make compromise settlements. Only “principled” settlements are permissible based on the facts and the law as the CRA finds them. A reviewing court may refuse to ratify if the parties’ understanding of the law is flawed1).
By Ashish Bairagra,M. L. Bhuwania & Co.
While TP regulations evolve around the world, it is extremely difficult for companies to judge the expectations of the tax authorities with respect to TP documentation. The need to defend the arm’s length price of transactions in the TP documentation has increased due to the intense global spotlight on what is now called “Base Erosion and Profit Shifting” (BEPS).
By Marc Nideröst, Treuhand- und Revisionsgesellschaft Mattig-Suter & Partner
Switzerland is one of the most attractive locations for domiciles in Europe. The effective corporate tax rate varies between 11.6% of pre-tax profits in Wollerau, Canton of Schwyz (often seen as one of the most favourable tax municipalities in Switzerland), to 24.1% of pre-tax profits in the City of Geneva. The average corporate tax rate is at 17.92% of pre-tax profits (base 2014).
By Artur Plutowski, EFS Group Sp. z o.o.
In summary, the revision of reporting obligations under the BEPS results in the following changes to transfer pricing:
- Local file: an entity of a multinational group (annual revenue or costs above EUR 20 million) will be required to provide: a master file report containing standardised information relevant to all group members and (ii) a local file specifically related to transactions carried out by said entity.
By Sergio Guerrero Rosas, Guerrero y Santana, S.C.
In order to make its tax terms more attractive to foreign investors, Mexico has altered its adjustment mechanism (similar to the windfall profits tax in other countries) for oil exploration bidders, which will occur should oil prices rise beyond certain levels or if hydrocarbon discoveries turn out to be greater than anticipated. As a result,
a pre-tax profit margin of 20% (up from 15%) has been set before that adjustment mechanism kicks in.
By Lisa Handfield, Moodys Gartner Tax Law LLP
The British Columbia Supreme Court, Yoshizawa, N. et al. vs. Beaton, recently heard a case relating to goods and services tax (GST), which is Canada's version of the VAT. As a rule, Canada imposes GST at a rate of 5 % to most goods and services sold/rendered within the country. However, there are exceptions including used residential property.
By Henry Charles, Citroen Wells Chartered Accountants
The European Commission is consulting in order to collect information on the progress made in European Union (EU) countries in tackling cross-border inheritance tax (IHT) problems. What is the problem? In the EU some people can effectively pay IHT twice or more in different countries. Why is that? EU countries have to respect EU treaties and in particular are not allowed to discriminate against EU citizens when imposing IHT. However, they are not obliged to harmonise or coordinate their policies on IHT and two or more countries can impose their taxes in parallel.
By Richard Jahoda, Grinex Czech Republic
The Czech Republic strives to attract high-tech businesses and to support research & development projects. It therefore offers two different types of tax incentive.