By Artur Plutowski, EFS Group Sp.z.o.o.
Last year the European Court of Justice (ECJ) issued a judgement in case DFA Investment Trust Company vs. the Head of Tax Chamber in Bydgoszcz (C190/12). Generally, the case concerned investment funds benefiting from exemption in income tax (CIT). In particular, it referred to whether such exemption may depend on where the registered office of the investment fund is located.
By Oliver Biernat, Benefitax GmbH
High-income earners working for several entities of international groups in different countries may profit from a salary split. Normally the salary is paid in the home country only and the involved group countries split or reimburse the costs among each other. An interesting alternative is to have several labour contracts with each respective group company the employee works for on a regular basis (salary split).
By Thomas Brunner, Swiss Trust Company Ltd.
Like many other countries, Switzerland generally taxes resident individuals on their worldwide income. The income is taxed at federal level, cantonal level and communal level. The cantons and their communes independently determine the tax rates within the constitutional principles. Wealth, gift and inheritance taxes are imposed on a cantonal and communal level, but not on a federal level.
By Tim Clarke, Moodys Gartner Tax Law LLP
Is the Canada Revenue Agency bound by a settlement made in the course of a tax dispute? Surprisingly, the answer is not always. Unlike UK and U.S. practice, the CRA may not make compromise settlements. Only “principled” settlements are permissible based on the facts and the law as the CRA finds them. A reviewing court may refuse to ratify if the parties’ understanding of the law is flawed1).
By Abdullah Demir & Michael Brändli, Walser & Partner AG
The issue of transparency and information exchange has been on the international tax agenda for a number of years. It is being driven forward with great momentum by key international standard-setting bodies such as the Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN), in international forums including G5 and G20, and also by the European Union (EU).
By Graeme Saggers, Nolands SA
Section 31 of the Income Tax Act, which addresses transfer pricing in South Africa, was recently amended and has been in effect as of March 2014. Prior to that, the law included a 3:1 ratio of loan-to-equity safe harbour provision, which meant that the interest incurred by a South African company on the portion of a loan that exceeded three times the value of equity would be deemed to be excessive.
By Henry Charles, Citroen Wells Chartered Accountants
The European Commission is consulting in order to collect information on the progress made in European Union (EU) countries in tackling cross-border inheritance tax (IHT) problems. What is the problem? In the EU some people can effectively pay IHT twice or more in different countries. Why is that? EU countries have to respect EU treaties and in particular are not allowed to discriminate against EU citizens when imposing IHT. However, they are not obliged to harmonise or coordinate their policies on IHT and two or more countries can impose their taxes in parallel.
By Rodolfo Sánchez-Arellano, New Corporate Approach, S.C.
In February of this year, the OECD released the Standard for Automatic Exchange of Financial Account Information, which is starting to be known as GATCA as its goals are similar to the FATCA legislation which was recently implemented in the USA. The OECD recently announced that 47 countries declared an automatic exchange of information between their jurisdictions on 6 May 2014.
By Scott D. Davis, Prager Metis CPAs, LLC
Over the last decade, the amount of funds made available by the Federal Government and distributed to the State Government has continued to dwindle. As these Federal funds dried up further, less money has been made available to the individual states and therefore less to local towns and cities. This ongoing trend has been forcing towns and cities to come up with alternative ways to obtain the funds that the state used to provide which are required to pay for the local public services. As costs at local level rise further and the deficit of these state funds increases, locally assessed property taxes have been and continue to be used as the major way to fund these revenue deficits in local budgets each year.
By Robert Worthington, Shea Nerland Calnan LLP
A recent ruling from the Canada Revenue Agency (CRA) has approved a financing structure that creates substantial tax benefits. The tax plan utilizes a hybrid instrument issued by a Luxembourg entity. It also relies on Canada's tax system which may allow for repatriation of income of foreign affliates on a tax-free basis. This planning may benefit not only Canadian companies, but also non-Canadian companies that structure through Canada and Luxembourg.
