Understanding Economic Substance

By Alun Griffths, Forward Group Limited

The Council of the EU adopted a resolution on a Code of Conduct for business taxation, the aim of which was counteracting the effects of zero tax and preferential tax regimes around the world. In 2017, the Code of Conduct Group (Code Group) investigated the tax policies of both EU member states and third countries, assessing:

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India an Attractive Investment Destination after Slashing of Corporate Tax Rates

By Bhavesh Jindal, Ashwani & Associates, Chartered Accountants

The history of the highest corporate tax rates in India goes back to 1997, with an effective corporate tax rate of 38.05%. However, in recent times, there has been a progressive shift in this trend, wherein India is becoming a more preferred nation for investment, bolstering investor sentiment by way of various regulatory and tax reforms. The central government, basing their optimistic approach on the main theme of “Made in India” as a means of nation building, has introduced a new tax regime, slashing the corporate tax rates in India by 8%, from the prevailing 30% to 22%. Even further, for a newly set up manufacturing company incorporated on or after 01 October 2019, the tax rates have been reduced to as low as 15%.

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Andorra: A Little Paradise for Companies

By Josep Garcia, Advantia Assessors

The signing of agreements on the automatic exchange of information at the international level has removed Andorra from the list of tax havens, and it no longer features on the OECD blacklist.

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Cabo San Lucas, Baja California Sur, Mexico

Main Tax Implications for Foreign Investors in Mexico

By Mauricio Ramos Jimenez, Guerrero y Santana, S.C.

On 01 December 2018, Andrés Manuel López Obrador (or AMLO as he is commonly known) became president of Mexico after two consecutive unsuccessful presidential campaigns. AMLO has always had a leftist and populist agenda, and many feared he would make radical changes in several areas, including taxes, but what has really changed in the first months of his presidency? From a taxation perspective, not much has changed, at least not as a direct consequence of the new government.

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Rothenburg o. d. Tauber, Germany

Risk of German Limited Tax Liability Without Company Seat in Germany

By Brigitte Jakoby, Jakoby Dr Baumhof – Wirtschaftsprüfer Steuerberater Rechtsanwälte

The German Federal Fiscal Court (BFH) decided on 23 October 2018 that a company with a seat outside Germany becomes taxable in Germany if its manager has a private (second) home in Germany and is doing business for the company in Germany. In its decision, the BFH dealt with a limited capital company formed under the laws of Luxembourg. The business was conducted in Luxembourg by the managing partner. The business address in Luxembourg was also the private residence of the managing partner. But he also had a private residence in Germany and regularly visited the German suppliers in Germany.

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Plane arriving or departing Tampa International Airport in Florida

US State-to-State Business Travel Compliance and Risks

By Fernando Lopez, Prager Metis International LLC

While organisations often overlook tax-compliance requirements related to business travel, the days of simply traveling to and working in a different state or country for business without a thought to tax liabilities are coming to an end. Looking for additional tax revenue, US state taxing authorities are becoming stricter and more vigilant in monitoring business travel.

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Kassel, Germany

German Real Estate Transfer Tax Reform

By Bernhard Schwechel, FACT GmbH Wirtschaftsprüfungsgesellschaft

The Federal Ministry of Finance has released its draft tax bill on the contemplated real estate transfer tax (RETT) reform. The new rules will only apply to transactions as of 1 January 2020.

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Chittagong, Bangladesh

Navigating the Capital Gains Tax (CGT) Legislation in Bangladesh

By Ishtiaque Shaan and Moshiur Rahaman, Ahmed Zaker & Co. Chartered Accountants

As is the norm globally, capital gains arise following the transfer of “capital assets”, which within The Income Tax Ordinance, 1984 (ITO, 1984) in Bangladesh has been defined as property of any kind held by an individual or
business except the following:

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Cross-Border Arrangements with Russian Subs: What’s Important?

By Valeria Khmelevskaya and Gleb Stepanov, KBK Accounting

Currently, the Russian tax authorities tend to pay great attention to the crossborder arrangements of multinational enterprises (MNEs), and the most challenged are the intra-group services. The claims are usually related to business purpose of transactions, and whether the services were real. Cost-contribution arrangements or cost sharing are not foreseen by the Russian tax legislation in relation to Russian companies, any references and contractual provisions referring to cost allocation and the relevant keys might be grounds for denial of deduction of the relevant expenses (service fees) from the profits tax base (Russian corporate income tax) of the Russian customer entity.

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Chicago, USA

Understanding the Foreign-Derived Intangible Income Deduction (FDII)

By Howard Bakrins, Kutchins, Robbins & Diamond, Ltd. (KRD)

US corporations that generate income from export activities should consider if the foreign-derived intangible income (FDII) deduction applies. The Tax Cuts and Jobs Act (TCJA), passed in 2017, made significant changes to the taxation of foreign income of US businesses. One of these changes was the creation of the FDII deduction.

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