International Tax Compliance Regulations
By Ross D. R. Forrester, Westcourt Chartered Accountants
The Australian government encourages businesses to operate in Australia and for Australian businesses to expand offshore. Honest resident taxpayers enjoy generous concessions on red tape and taxes. People who attempt to evade their compliance face significant penalties.
By Ashishkumar Bairagra, M L BHUWANIA AND CO LLP
In dia is known for its strict international tax compliance applicable to residents as well as non-residents who are liable to file their tax returns in India. Landmark judgements include the case of Vodafone (on indirect purchase), Asia Satellite (on satellite charges), Formula One (on permanent establishment [PE]), Morgan Stanley (on dependent agent PE) and the most recent case of Master Card (on service PE).
By Jimmy Budhi, KAP Jimmy Budhi & Rekan
Indonesia entered into an international tax treaty taxation which required the country to participate in the implementation of the Automatic Exchange of Financial Account Information and established legal legislation concerning access to financial information for tax purposes prior to 30 June 2017.
By Sergio Finulli and Andrea Angheleddu, COMMA 10
Italian residents pay taxes on all their income, irrespective of where it is earned, on the basis of the worldwide taxation principle, while non-residents only pay taxes on the income earned by them in Italy.
By Haruki Yoshida, IDEA International Accounting Office
Japan is a member of OECD and Japanese tax law respects international rules. Arm’s length transaction is the basis for transfer pricing, and tax law requires supporting documents to demonstrate that transactions are fairly performed. Tax haven protection law is implemented to prevent tax avoidance by setting up a corporation in tax haven countries.
By Prof Sergio Guerrero Rosas, Guerrero y Santana, S.C.
The Mexican tax system is one of the most complex and complete tax systems in the developing world, as it’s composed of a diverse set of procedures, rules, and contributions that need to be complied with. The main institution responsible for controlling and supervising the fulfilment of these requirements is called Servicio de Administracion Tributaria (SAT).
By Stephen Rutherford, Blackmore Virtue & Owens
There are two components which establish the New Zealand tax jurisdiction:
1. A New Zealand resident is liable for tax on all assessable income, whether derived from New Zealand or overseas, and
2. A non-resident is liable for New Zealand income tax only on income that is derived from New Zealand.
By Graeme Saggers, Nolands
South Africa, as a developing country, regards foreign direct investment as a key economic driver and thus is committed to putting measures in place to ensure the ease of doing business in the country. The international tax compliance regulations are therefore designed to be simple and effcient whilst protecting the country’s tax base.
By Santaiago Lapausa, JC&A Abogados
The Code of Good Tax Practice, released by the State Tax Agency in 2010, sets out a series of recommendations and guidelines to enhance transparency and mutual trust. Law 31/2014 amending the Capital Companies Law, established specific tax responsibility for the managing bodies and introduced obligatory tax governance rules.
By Alan Rajah, Lawrence Grant, Chartered Accountants
The International Tax Compliance (Amendment) Regulations 2019 came into force in the UK on 16 May 2019. This instrument amends the International Tax Compliance Regulations 2015 (SI 2015/878) (“principal regulations”), which came into force on 15 April 2015 and require financial institutions in the United Kingdom to report information on certain non-resident account holders to Her Majesty Revenue & Customs (HMRC) for exchange under international arrangements.
By Kevin E. Thorn, Thorn Law Group PLLC
The United States has long been known as The Land of Opportunity. Indeed, the US is filled with opportunities for people around the globe looking to do business. The requirements to conduct business in the US are the same for foreigners as for US citizens; however, there are extra considerations to which non-US persons must pay attention. There are seemingly limitless numbers of returns and reports that US businesses must file, and often dire consequences for not meeting them. Filing obligations are determined by multiple factors, such as the business’s structure, location, and operations conducted. It is imperative to consult with experienced US counsel to ensure you do not run afoul of the diverse and complex rules for businesses.
By Nidi Andreia da Cruz and Doriluzi da S. Borges, PRA Global
According to the World Bank’s Doing Business report, Brazil has one of the most complex tax systems in the world. Taxes are charged on three levels: federal, state and municipal. The federal constitution and laws set forth general rules for all taxes; however, each state and municipality have powers to enact their own laws and regulations for the collection of state and municipal taxes, respectively.
By Larry Shuen Fai Ng, ALLNISON Auditing & Consulting Co., Ltd.
Compared to its neighbouring countries, Cambodia is relatively new in opening itself to the global market. Therefore, there have been very limited regulations and policies addressing matters related to international tax compliance. However, this has not caused limitations in the investment activities of foreign investors. Except for the investment in immovable property such as land holding, in general, the country has no restrictions to the foreign participation and activities in investments.
By Kanish A. Thevarasa and Joe Moëd, Kanish & Partners, Chartered Professional Accountants
Canada’s tax system imposes reporting and compliance obligations on any entity or individual owning assets or operating businesses within Canada (whether or not they are Canadian-resident), as well as on Canadian-resident taxpayers with interests outside Canada.
By Richard Jahoda, Grinex Czech Republic
The Czech Republic is one of the most developed industrialised countries in Central and Eastern Europe. Its strong industrial tradition dates to the nineteenth century, when the region was the economic motor of the Austro-Hungarian Empire. Czechoslovakia was the most prosperous country in the Eastern Bloc and after its dissolution the Czech Republic continued achieving economic success.
By Prof Robert Anthony, Anthony & Cie
France is a member of the OECD and has signed an exchange of information agreement and complies with base erosion profit shifting agreements, known as BEPS. It has transfer pricing legislation, anti-tax avoidance legislation, and, of course, a considerable number of tax treaties to avoid double taxation. This can apply to inheritance tax (which is less frequent) as well as corporate and personal taxation. France is a member of the European Union and complies with sales tax legislation as well as foreign-controlled corporation rules.
By Oliver Biernat, Benefitax GmbH
When foreigners want to do business in Germany, they have several possibilities. The basic form of doing business is to sell to German customers and meet the conditions to register for Value Added Tax purposes only. This may also apply to online sellers as operators of internet marketplaces have to provide information on companies whose turnover is subject to German turnover tax. Those affected need to apply for a VAT ID number and submit regular VAT declarations.
By Ricky W. P. Wong, Wong Brothers CPA Limited
Hong Kong adopts a territorial basis for taxing profits derived from a trade, profession, or business carried on in Hong Kong under Section 14(1) of the Inland Revenue Ordinance (“IRO”). Profits tax is only charged on profits which arise in or are derived from Hong Kong. No tax is levied on profits arising abroad, even if they are remitted to Hong Kong.
By Dr Anita Ihász Kovácsné, KRS Attorneys at Law
The main international tax compliance act (Act XXXVII) shall be applied to certain matters relating to the assessment of taxes, the collection of taxes and other charges, and the avoidance of double taxation, between EU member states and other international administrative cooperation. Those legal EU acts which affect the taxation procedure and cooperation between the tax authorities of EU member countries are mainly regulated in Act CL of 2017 on the rules of taxation. Moreover, Hungary has concluded international treaties for the avoidance of double taxation with more than 80 foreign countries – including all countries of the EU. The EU directives on taxation are implemented regarding taxation of companies in the Act on Corporate Tax and Dividend, regarding private individuals in the Act on Personal Income Tax, and regarding VAT in the Act on Value Added Tax.