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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Taxation

Zürich

Substance requirements from a Swiss withholding tax perspective (2)

By Alexey Pyatov, Treuhand- und Revisionsgesellschaft Mattig-Suter & Partner

Swiss withholding taxes (WHT) are relevant for outbound payments from Swiss subsidiaries to international holdings. Dividends bear a 35% tax rate that can be only decreased by a Treaty or EU-Directive if particular requirements are met. The Swiss Federal Tax Authority (SFTA) checks for substance before allowing a WHT reduction. General considerations are a confirmation of tax residency, beneficial ownership and tax avoidance via Treaty shopping.

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Taxation

Ultimate Beneficial Ownership in the Netherlands

By Andre Groeneveld and Edward Hendrickx, EJP auditors & tax lawyers

Every Ultimate Beneficial Owner (UBO) with an ownership of 25% or more in a company will be registered as from this summer. This implies that the Chamber of Commerce in the Netherlands keeps a record of who has an ownership in which company and how large that share actually is (in parts of 25%).

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Taxation

R&D tax benefits in the Netherlands

By Robin de Raad, Zirkzee Group

The Netherlands is famous for its attractive tax structures as well as the possibility of obtaining certainties in advance from the Dutch Tax Authorities. However, international developments on international taxation issues could have an impact on certain R&D tax benefits. Is it still attractive to establish R&D activities in the Netherlands?

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