Philadelphia, USA

IRC Section 965 Transition Tax Audits: Don’t Be Caught Off-Guard

By Ronald Kalungi, Drucker & Scaccetti, P.C.

The Tax Cuts and Jobs Act (TCJA) of 2017 amended section 965 of the Internal Revenue Code (IRC) by imposing a one-time tax on US persons owning stock in certain foreign corporations with untaxed earnings as of the date the TCJA came into force. At the time of its enactment, this transition tax was estimated by Congress’s Joint Committee on Taxation to raise USD 338.8 billion in tax revenue during the fiscal years 2018 through 2027. The revenue yield from this tax has actually been much lower than expected. The Tax Inspector General for Tax Administration (TIGTA) reported that as of 08 November 2018, taxpayers had reported only USD 30.2 billion in section 965 tax and paid only USD 11.2 billion (deferring USD 22.7 billion). This poor revenue yield has made the transition tax one of the principal focal areas of audit compliance efforts by the Internal Revenue Service (IRS) – efforts that shouldn’t catch affected taxpayers off guard.

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Chicago, USA

Relief Procedures for Certain Former US Citizens

By Howard Bakrins, Kutchins, Robbins & Diamond

On 06 September 2019, the IRS released its Relief Procedures for Certain Former Citizens and frequently asked questions (FAQs) (available at www.irs.gov/individuals/ international-taxpayers/reliefprocedures- for-certain-formercitizens), which allow certain persons who have relinquished, or intend to relinquish their US citizenship (expatriation), to comply with their US income tax and reporting obligations without having to remit any unpaid taxes and penalties.

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British terraced houses in London

Changes in CGT Reporting for Foreigners Owning Property in the UK

By Alan Rajah, Lawrence Grant

Since 06 April 2020, both UK residents and non-UK residents have a 30-day capital gains filing and tax payment deadline if there is a sale/disposal of a residential property, which also includes gifts of properties. An individual return must be completed per disposal, in addition to the annual selfassessment tax return, increasing the compliance burden for taxpayers.

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University of Dhaka, Bangladesh

Reducing Tax Burden: Investment in Capital Market

By Shafiqul Alam and Mushfiqur Rahman, Ahmed Zaker & Co. Chartered Accountants

Investing in the capital market (i.e., share market) has some inherent risks. However, what if such investments helped reduce one’s tax burden in addition to creating gains from stock trading? The Bangladeshi Government has set its taxation policies in such a way that everyone is encouraged to invest in shares and maybe achieve just that.

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Southafrica

Change in Law Affecting South African Tax Residents Working Abroad

By Graeme Saggers, Nolands

Like many other developing countries, it is common for South Africans to seek employment outside the country’s borders in more developed economies. There are South African expatriate communities in most countries around the world. As from 01 March 2020, a well-known law governing how South African expatriates are taxed will undergo a significant amendment.

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How should businesses in Bangladesh face their Minimum Tax obligations?

By Ishtiaque Shaan, Ahmed Zaker & Co.

One of the most important Sections of Bangladesh’s income tax legislation, The Income Tax Ordinance, 1984 (ITO, 1984) is Section 82C, which covers the area of Minimum Tax for both unincorporated and incorporated businesses. As the name suggests, Minimum Tax, is the minimum amount of corporation tax that businesses will have to pay the National Board of Revenue (NBR) regardless of their profits/losses in any financial year.

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Italy: Tax Benefits for People Who Transfer to Italy

By Thomas Pichler, Pichler Dejori Comploj Partner

For several years now, the Italian tax system has provided favourable measures for workers who decide to transfer their residence to Italy. In July 2019, a new preferential tax regime, introduced with Legislative Decree No. 34/2019, expanded those benefits in terms of percentage of income tax exemption (from 50% to 70%) and facilitated the subjective requirements. The new regime is now also accessible to workers who do not have a university degree or do not hold any management positions. Accordingly, professional athletes (e.g., soccer players) and artists (e.g., singers or actors) can also now benefit from those tax benefits.

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Dhaka, Bangladesh

Double Taxation Relief Available for Individuals and Organisations in Bangladesh

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

Increased globalisation and proliferation in international trade have made international tax planning opportunities more relevant than before. Double Taxation Avoidance Agreements (DTAAs) are regular, bilateral tax agreements between countries, created to avoid double taxation of the same income by outlining the taxing rights of each country regarding cross-border income streams and by providing tax credits/exemptions.

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Zürich, Switzerland

The Use of a US LLC: Smart Move or Poison Chalice for Foreign Persons?

By Darlene F. Hart, US Tax & Financial Services Group Ltd.

The filing requirements and practical application of US LLCs for foreign owners may force many foreign nationals to reconsider their options. As of 01 January 2017, limited liability companies (LLCs) formed in the United States that are treated as disregarded entities and wholly owned by foreign persons, are subject to new IRS reporting requirements.

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