Taxation

Need for an Effective Tax Compliance System in Germany?

By Bernhard Schwechel, FACT GmbH

Germany’s Tax Authorities issued a decree in 2016 on the procedure for amending a tax return under sec. 153 of the General Tax Code (AO). It raised the issue of an internal control system for tax purposes and contains general guidance about the conditions that must be fulfilled to use the provision, as well as the criteria for distinguishing between a simple amendment procedure and a voluntary self-disclosure procedure (VSP).

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Taxation

Budget 2018 dodges on amalgamation path of tax avoidance

By CA Anjali Kukreja, RN Marwah & Co LLP Chartered Accountants

Tax law before Budget 2018 amendment: Provisions of section 115-O of the Income Tax Act, 1961(„Act‟) provide for application of Dividend Distribution Tax („DDT‟) @ 15% (plus applicable surcharge and cess) on the amount of dividend (declared distributed or paid by a domestic company). Further, provisions of section 115-Q provide that the expression dividend for the purpose of section 115-O would include deemed dividend under section 2(22)[sub-clauses (a),(b),(c) and (d)] of the Act.

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Taxation

Heidelberg

The BEPS Multilateral Instrument

By Heike Kempf, WSB Wolf Beckerbauer Hummel & Partner Steuerberatungsgesellschaft mbH

The OECD Base Erosion and Profit Shifting (BEPS) Programme involves over a 100 countries collaborating on its implementation. BEPS Action 15 is the development of The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Countries can use the MLI to implement various treatyrelated measures.

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Taxation

Italian Super-Depreciation and Hyper-Depreciation Rules Extended to 2018

By Roberto M. Cagnazzo, Studio Tributario Cagnazzo

The Italian Budget Law 2018 has extended the super-depreciation and the hyper-depreciation provisions to all new tangible assets purchased or leased under a finance lease agreement from January 1, 2018 to December 31, 2018. In addition, the assets purchased or leased by the longest terms of June 30, 2019 (in case of super-depreciation) and December 31, 2019 (in case of hyper-depreciation) can benefit of the mentioned provisions on condition that the order of the asset has been accepted by the supplier and at least 20% of the purchase price has been paid by December 31, 2018.

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Taxation

Federal Tax Law Compliance for Cannabis Businesses: Section 280E (I)

By Emily Burns, Offit Kurman

In 1961, the United States Supreme Court held that even income generated from illegal activity is subject to federal taxation, which means cannabis businesses must pay federal income taxes, just like federally-legal businesses. However, because the possession, manufacture, and distribution of marihuana [1] remains illegal under federal law, cannabis businesses are subject to unique tax rules. This is the first of two blog posts covering the unique tax law restrictions applicable to businesses operating in the cannabis industry.

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Taxation

Kassel, Germany

Multilateral Instrument Signed

By Bernhard Schwechel, FACT GmbH

On 7 June 2017, almost 70 countries including Germany signed the so-called ‘Multilateral Instrument’ (MLI) in Paris. This is a product of the OECD’s BEPS project and designed to dynamically adjust a multitude of existing bilateral double taxation treaties (BDTs) between member countries to internationally accepted standards - faster than would be possible using individual bilateral negotiating procedures.

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Taxation

Frankfurt

New German License Barrier

By Oliver Biernat, Benefitax GmbH

Implementing BEPS action plan 5, Germany will introduce partial or entire non-deductibility for preferentially taxed intra-group royalties (license barrier) as of 1 January 2018. The aim of the new Sec. 4j in the German Income Tax Act is to protect the German tax base during the transitional period until 30 June 2021, during which time countries will still be allowed to continue extending current benefits to existing beneficiaries of IP regimes.

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Taxation

Prague, Czech Republic, Christmas Market

New Transfer Pricing Guidelines Issued

By Richard Jahoda Jr, Grinex Czech Republic

The highly anticipated new edition of the OECD’s Transfer Pricing Guidelines was issued on 10 July 2017. It mainly reflects a consolidation of changes resulting from the BEPS project. Probably the greatest change in the 2017 edition is in the chapter on the arm’s length principle, in part explaining the identification of commercial or financial relations.

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