Warsaw, Poland

Beneficial Ownership and Actual Business Activity

By Wojciech Jaskuła, Penteris

The definition of beneficial owner (BO) has changed the tax landscape in the EU. Severe obligations have been imposed on companies who are now obliged to verify numerous premises, when payment abroad is made, in order to determine whether BO conditions are met and, therefore, if a lower WHT tax rate or exemption might be applied.

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Bangkok, Thailand

Thailand’s Board of Investment (BOI) is a Road to Foreign Ownership, Even if Incomes Remain Taxed

By James Fraser, MBMG Group

The Board of Investment (BOI) offers a wide range of tax and, interestingly, non-tax incentives to promote targeted business initiatives in sectors across the board. To help reduce the initial investment costs and improve the overall rate of return to investor, the BOI offers an exemption or a reduction of import duties on new machinery, materials and components, and zero corporate income tax for up to 10 years, as well as exemption on dividend withholding tax and, in some cases, personal income tax.

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Amsterdam, The Netherlands

Go Dutch After Brexit! The Advantages of Incorporating a Dutch B.V.

By Britt Vrijburg, JAN© Accountants and Business consultants B.V.

At the end of 2020, all seemed signed and sealed. UK Prime Minister Boris Johnson had promised that British entrepreneurs would finally be free to trade after Brexit. This turned out to be completely wide off the mark. British entrepreneurs are now looking for a way to avoid the enormous amount of paperwork and unforeseen VAT charges. The early adaption of awareness-raising measures and incentives has been crucial for the continuation of their business. The most frequently discussed solution? Go Dutch!

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Ahmedabad, India

Taxation Amendments Affecting Foreign Investment

By Janvi Khatri, Zinzuwadia & Co. CA

Indian Direct Taxation was amended in a big way by The Finance Act, 2020, which can affect the computed cost of investment made in India. The changes will be made applicable from the current financial year, hence are highlighted here for your understanding:

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New Home Office Reform in Mexico

By Prof Sergio Guerrero Rosas, Guerrero y Santana, S.C.

The chamber of deputies recently approved reforms to the Federal Work Law, whose purpose is to regulate telework, or “home offce”. These reforms began in January 2021, providing more precision to the definition of telework, that consists of performing paid activities, in a place different to that or those of the employer, using information and communication technologies.

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Frankfurt, Germany

Considerations of Financing Inbound Investments into Germany

By Oliver Biernat, Benefitax GmbH

When foreign investors set up a German subsidiary, they often neglect the possibility of financing the company with a higher equity than the minimum nominal share capital, which is usually EUR 25,000 for a GmbH (German limited company). Building up trust and making a company profitable may take a couple of years and, looking at the relatively high costs in Germany, this may require much more funding. Liquidity is normally provided by shareholder loans, as it is intended to deduct the interest from (future) profits of the subsidiary and thus save taxes. This is generally fine, but here are a few reasons why investors should consider injecting more equity.

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Can Preparatory/Auxiliary Activities be a Permanent Establishment in Italy?

By Roberto M. Cagnazzo, Three & Partners Auditing & Accounting

The Italian Supreme Court has recently stated that the situation in which a de facto director carries out a plurality of activities in the Italian territory that represent a complete cycle with its own economically significant result for the foreign company, must be considered a permanent establishment. The execution of a business activity must be intended, in a broad sense, to include all those services or any activity referable to the economic interest of the foreign company in Italy.

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Munich, Germany

Tax Residence According to the OECD Model Convention

By Brigitte Jakoby, Jakoby Dr. Baumhof – Wirtschaftsprüfer Steuerberater Rechtsanwälte

Former case studies during our ITPG meetings showed that working out the tax residence of individuals can be tricky. Therefore, this article deals with the legal principles of Art. 4 OECD-MA 2017 as the basis of the tax residence of individuals or legal entities.

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Moscow, Russia

The OECD’s Multilateral Instrument (MLI): An Update from Russia

By Valeria Khmelevskaya, KBK Accounting

Beginning from 2021, Russia has started actual application of MLI in relation to 27 nations: among them Austria, Belgium, Denmark, and some other European countries. At the same time, Russia shall not apply MLI to Germany or Switzerland and it is likely that the relevant double taxation treaties (DTT) with these countries shall be extended and revised at the bilateral level. In the case of Switzerland, the benefits might be reduced in a similar way as with Malta, Luxembourg, Cyprus, etc. (non-application of participation exemption regarding dividends and withholding tax on interest). Unlike Switzerland, Germany shall not suffer such limitation of benefits as one of Russia’s significant trade partners.

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Kassel, Germany

Germany: Implementation of Multilateral Instrument (MLI)

By Bernhard Schwechel, FACT GmbH Wirtschaftsprüfungsgesellschaft

In 2016, the OECD presented the Multilateral Instrument (MLI), which is intended to implement measures against Base Erosion and Profit-Shifting (BEPS) in a majority of double-taxation agreements simultaneously. The aim is to create international minimum standards to prevent the abuse of double taxation agreements (DTAs).

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