By Olga Selmer, Nörenberg • Schröder
On 7 March 2013, the German Ministry of Finance issued guidance notes in which it specified organisational integration as one of the requirements for the existence of a VAT group, in addition to financial and economic integration. The new definitions are being embraced by professional circles as, prior to these changes, the question as to whether organisational integration should be a requirement in establishing a VAT group was the one that most divided opinion.
Germany and France are planning a shared corporation tax, including a harmonized basis for assessment and tax rates. The results of a proposal, which is to be developed jointly, should be implemented from 2013. In any case, this is what what decided by German Federal Chancellor Dr. Angela Merkel and the French President Nicolas Sarkozy at their summit meeting in August 2011.
By Bernhard Schwechel, FACT GmbH
In January 2017, the German Cabinet proposed a new draft bill against harmful practices in connection with transfers of rights and licensing of intellectual property rights (so called licence barrier). It will have a material impact on the tax deductibility of royalties and licence fees owed to related persons.
By Bernhard Schwechel, FACT GmbH Steuerberatungsgesellschaft, Wirtschaftsprüfungsgesellschaft
The fact that corporate operations are increasingly recorded electronically and all records legally requiring preservation are in fact preserved prompted fiscal authorities to issue a letter from the Federal Ministry of Finance (BMF) on 14 November 2014, which articulates proper accounting requirements for ITbased accounting systems (principles regarding the proper keeping and preservation of books, records and documents in electronic format and regarding data access (GoBD)).
By Elizabeth V. Zanet and Philip R. Hirschfeld, Ruchelman P.L.L.C.
A real estate investment trust (REIT) is a tax-favourable entity used for investment in real estate and real estate mortgages. One advantage of the REIT is that, unlike a typical corporation, an REIT generally is not subject to entity-level taxation if it distributes its earnings and profits as dividends to its shareholders, since an REIT can claim deduction for such dividends. As a result, an REIT generally may avoid the double taxation that applies to corporations.
By KC Chia, KC Chia & Noor
“Journey of a thousand miles begins with a single step […] It does not matter how slowly you go as long as you do not stop.” Confucius - The Malaysian government will follow in the footsteps of more than 160 countries worldwide by implementing the Goods and Services Tax (GST), which will become effective from 1 April 2015, giving a lead time of approximately nine months for businesses in Malaysia to prepare and comply.
By Aditya Kumar, Ashwani & Associates
The current indirect tax structure is the major impediment to India’s economic growth and competitiveness. Tax barriers in the form of CST, entry tax, and restricted input tax credit (credit) have fragmented the Indian market. Cascading effects of taxes on cost make indigenous manufacture less attractive. Complex multiple taxes also increase the cost of compliance.
By Paul Malin, Haines Watts
HM Revenue & Customs (HMRC) in the UK are continuing their fight against all forms of tax evasion and aggressive tax avoidance. HMRC’s track record in this area is at best mixed but this may now be changing to their advantage.
By José Carreras Benitez, Integroup S.C.
The Mexican economy is and has consistently been growing as a result of the rapid expansion of the middle class due to education and the maturing of Mexico as an economic powerhouse. Companies from Europe and the USA are investing billions of dollars into the Mexican economy. Mexican government knows that global businesses are coming and the Base Erosion and Profit Shifting (BEPS) Action Plan suggestions have been implemented in order to protect the tax system as well as giving same protection to the Mexican partners of the Organisation for Economic Co-operation and Development (OECD). Below is a brief description of one of them:
By Oliver Biernat, Benefitax GmbH
High-income earners working for several entities of international groups in different countries may profit from a salary split. Normally the salary is paid in the home country only and the involved group countries split or reimburse the costs among each other. An interesting alternative is to have several labour contracts with each respective group company the employee works for on a regular basis (salary split).
On 1st May a Royal Decree was published, implementing incentives for companies establishing their international headquarters (IHQ) and international trading centres (ITC) in Thailand. The idea behind the scheme is to attract businesses to establish their headquarters or a trading hub in Thailand, thus bringing more tax revenues, skilled jobs and know-how to the Land of Smiles.
By Graham Busch, Lawrence Grant
Corporation Tax Rates
The main rate of Corporation Tax will fall from 26% to 25% from April 2012, 24% from April 2013 and 23% from April 2014. The small companies' rate remains at 20%.
By Fabio J. Guzmán Ariza, Guzmán Ariza
Dominican tax law is mainly territorial: taxes are collected on income from Dominican sources or on income received by Dominican residents from sources abroad. The Dominican Constitution treats foreign and local investors equally under the law.
By Ashish Bairagra, PeriGrow Consulting
Since 2012, India has been levying tax on transactions which involve transfer of shares or interest in a foreign entity, if it derives its value substantially from assets located in India (the Vodafone controversy). However, there was ambiguity about the term substantially.
By Carina Langegger, Prodinger & Partner
The question that frequently arises when multi-national corporate groups work on projects across several borders is: Which country has the right of taxation?
By Eric Longley & Harold Peterson, Prager Metis International LLC
The text of the OECD Model Tax Convention is closely followed by most international tax treaties. In doing so it provides consistency of approach removing the need for recourse to the competent authority rules where there is a dispute as to interpretation between taxpayers and domestic tax authorities. Even so there are still interpretational issues that can aid and/or trap the unwary or uninitiated.
By Artur Plutowski, EFS Group Sp.z.o.o.
Last year the European Court of Justice (ECJ) issued a judgement in case DFA Investment Trust Company vs. the Head of Tax Chamber in Bydgoszcz (C190/12). Generally, the case concerned investment funds benefiting from exemption in income tax (CIT). In particular, it referred to whether such exemption may depend on where the registered office of the investment fund is located.
By Prof Dr Roberto M. Cagnazzo, Studio Tributario Cagnazzo
The Italian Tax Authorities have accused Google, Amazon and Facebook of tax avoidance. According to the Authorities, these internet giants have set up hidden permanent establishments in Italy and escape the payment of the taxes due in the country.
By Stefano Loconte and Emanuele Tozzi
With effect from 1 January 2016 (for calendar year taxpayers) Italian enterprises with a foreign permanent establishment can opt for the branch exemption regime (Art. 14, Legislative Decree no. 147/2015). Under this optional regime the income attributable to the foreign branch will be treated as tax exempt income in Italy. Of course, in case of a tax loss, it will not be deductible from the taxable income of the head office.
By Andrea Enrico Maria Eliseo and Prof Stefano Loconte, Loconte & Partners
In addition to the aesthetic return generated by art, there are many good reasons to consider art as an attractive asset class in terms of long-term investments. Art retains value and generates moderate real return, which is why art and collectible assets represent sizable assets for many high net worth individuals (HNWIs).