By Ricky W. P. Wong, Wong Brothers & Co
In recent years, the Chinese tax authority has intensified its efforts to control outbound inter-group service fees and royalty charges. In July 2014, the State Administration of Taxation (SAT) released an internal circular (“Circular (2014) No. 146”) asking local tax authorities to initiate detailed investigations on all significant outbound service fee payments and royalty charges made by domestic enterprises to their overseas related parties between 2004 and 2013, with a view to identifying avoidance schemes for profit shifting.
By Alan Rajah, Lawrence Grant, Chartered Accountants
The UK's unique exemption from Capital Gains Tax (CGT) for non-UK residents has been reformed with the government's realisation that tax should be paid on gains arising from the sale of UK residential properties. Currently, most foreign property owners in the UK are not subject to CGT and this article
outlines the changes to the UK's CGT regime for non-residents which will come into effect from 6 April 2015.
By Prof. Robert Anthony, Anthony Cie
The fourth amendment to the Tax Treaty between France and Luxembourg, as signed by the Ministers of Finance for the Grand Duchy of Luxembourg Pierre Gramegna and for France Michel Sapin, will further restrict potential tax evasion schemes and abuses by French financial investor centres. After an amendment in 2006 ended the non-taxation of immovable property in France owned by Luxembourg companies, another tax exemption has now been eliminated.
By Artur Plutowski, EFS Group
The latest issue of Der Spiegel (German weekly magazine) awarded Poland the European Champion due to the excellent performance of the Polish economy which has achieved GDP growth over last 6-8 years. In that period Poland became a very attractive investment location. In the last months Poland became even more attractive; it became a tax haven. Savings can be achieved by the implementation of structures including a vehicle in the form of a Limited Joint Stock Partnership (the 'Partnership').
By Artur Plutowski, EFS Group Sp.z.o.o.
The Polish Minister of Finance announced a package of tax reforms to be implemented in the coming years, covering CIT, PIT and VAT among others. The aim is to significantly reduce tax planning opportunities through the introduction of both the Controlled Foreign Corporations (CFC) concept and the General Anti-Avoidance Rule (GAAR), as well as others including changes to thin capitalisation and transfer pricing. The following presents brief comments on CFC, GAAR and thin capitalisation.
By Artur Plutowski, EFS Group Sp.z.o.o.
On 1 January 2015, Poland introduced the Controlled Foreign Corporations (CFC) regime. Clarifications to the CFC were recently published by the Ministry of Finance (MF). Among others, the CFC regime is applicable if the following conditions are met (cumulatively):
By Steve McCrindle, Haines Watts
For many years, holding companies (HoldCo) enjoyed a degree of certainty in relation to their ability to recover VAT incurred as input tax, but there is a challenge to this position from certain EU tax authorities which is creating ambiguity. This is a current issue in the UK.
By Ricky W. P. Wong, Wong Brothers & Co. Certified Public Accountants
Foreign invested enterprises (FIEs) in China can distribute post-tax profits to their foreign investors provided that certain procedures and criteria are met.
By Graeme Saggers, Nolands SA
A company that is tax resident in South Africa has the opportunity to benefit from a range of tax incentives that are available to headquarter companies (HQCs). The purpose of this regime is to minimise the tax incidence investment in Africa. The following incentives are available to HQCs and generally apply to transactions between an HQC and a foreign company in which they hold at least a 10% share.
By Graeme Saggers, Nolands SA
With effect on 1 April 2014, South Africa has amended sections of the Value Added Tax Act in an attempt to clarify and streamline certain registration requirements.
By Marc Nideröst, Treuhand- und Revisionsgesellschaft Mattig-Suter & Partner
According to a partial revision to the withholding tax law which was approved by the Swiss parliament at the end of September 2016, the notification procedure is applicable for dividend payments to a holding company with a participation of at least 20%, even if the notification has not been filed within 30 days after the due date of the dividend payment.
By Robert Worthington, Shea Nerland Calnan LLP
A recent ruling from the Canada Revenue Agency (CRA) has approved a financing structure that creates substantial tax benefits. The tax plan utilizes a hybrid instrument issued by a Luxembourg entity. It also relies on Canada's tax system which may allow for repatriation of income of foreign affliates on a tax-free basis. This planning may benefit not only Canadian companies, but also non-Canadian companies that structure through Canada and Luxembourg.
By Scott D. Davis, Prager Metis CPAs, LLC
Over the last decade, the amount of funds made available by the Federal Government and distributed to the State Government has continued to dwindle. As these Federal funds dried up further, less money has been made available to the individual states and therefore less to local towns and cities. This ongoing trend has been forcing towns and cities to come up with alternative ways to obtain the funds that the state used to provide which are required to pay for the local public services. As costs at local level rise further and the deficit of these state funds increases, locally assessed property taxes have been and continue to be used as the major way to fund these revenue deficits in local budgets each year.
By Thomas Brunner, Swiss Trust Company Ltd.
Like many other countries, Switzerland generally taxes resident individuals on their worldwide income. The income is taxed at federal level, cantonal level and communal level. The cantons and their communes independently determine the tax rates within the constitutional principles. Wealth, gift and inheritance taxes are imposed on a cantonal and communal level, but not on a federal level.
By Dr. Giovanni Bianchi, COMMA 10
In Europe, the desire to compensate for VAT exemptions is growing, as evidenced by the court cases C-216/97 Gregg; C-384/98 D/W; C-498/03 Kingscrest; C-613/2010 Debiasi, by the use of legislation in force (e.g. VAT grouping and exemption for cost-sharing associations) and by proposed legislation (postal sector COM (2003) 234 def; insurance and financial service COM (2007) 746 e COM (2007) 747 def.).
By Dr. Sergio Finulli, Comma 10
The Italian tax agency's report of 19 March 2013 dealt at length with the international standard ruling procedure aimed at international companies which proposed to reach a preliminary agreement with the Italian tax authorities on
- Determining fair market value in view of the transfer price rules (Article 110 para. 7 of Presidial decree 917/86)
- The application proposed of rules also agreed for contracts in specific individual cases concerning paying or drawing dividends, interest, royalties and other elements of profits to or from non-resident rights holders;
- The application proposed for specific individual cases of rules on attributing profits or losses to the stable organisational structure of a company domiciled in the territory of another state.
By Prof Robert Anthony, Anthony & Cie
BEPS (Base erosion and profit shifting) has become the in word following on from transfer pricing. It is on the tip of every tax professional’s tongue While international prosperity reigned, governments were not so concerned about losing tax revenue. However, premeditated aggressive tax planning triggered famous tax cases as well as new domestic anti-avoidance legislation. This was because of the industrialised use of famous high profile tax planners charging percentage fees for finding loopholes in legislation.
By Stefano Loconte and Gabriella Antonaci, Loconte & Partners
The Circular No. 21/E of Italian Revenue Agency (hereinafter “the Circular”) clarifies, through a series of explanations, the reverse charge method introduced by Italian Legislative Decree No. 24 of 11 February 2016 entered into force on May 2nd 2016.
By Dr Massimiliano Russo, Studio Signori
After a recent debate as to the possible introduction of new tax tools and incentives to attract foreign investments in Italy as well as a long period in which we have seen measures increasing the tax burden for both companies and individuals, this newly introduced legislation on the Patent Box Regime as a tax incentive is most welcome (in the following also referred to as the “incentive”). Unfortunately, as with most the newly introduced legislation in Italy, some aspects have not yet been committed and will be further regulated in future ministerial decrees. The interpretation of the newly introduced rule by tax authorities is also still awaited.
Set against the background of the deepening economic crisis within the member states of the EU, the European Commission is analyzing the development of poverty, unemployment and exclusion analyzed. Here the EU has shown a clear dichotomy: The highest values in terms of poverty and unemployment risk in the southern and eastern states, set against the relatively successful crisis management in the north, in particular in Germany, France and Poland.