Taxation

Withholding tax on interest paid to non-residents

By Graeme Saggers, Nolands

The introduction of a withholding tax on interest paid to non-residents in South Africa was first announced in 2012. Since then it has seen a number of delays as legislation and systems have been refined. However, it finally came into official effect on 1 March 2015. The withholding tax is applied to all interest to foreign residents (excluding those with permanent establishments in South Africa or who are present in South Africa for more than 183 days in a year) which was or is paid or became due and payable after 1 March 2015.

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Taxation

Investment funds in some countries may claim Polish CIT refunds

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.

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Taxation

How to save money with a salary split

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).

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Taxation

The debate surrounding Swiss lump sum taxation and the importance of the use of trusts

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.

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Taxation

Amendments to thin capitalisation legislation

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.

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Taxation

Cross-border inheritance tax problems within the European Union

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.

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Taxation

After FATCA comes GATCA

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.

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Taxation

The challenging and changing world of property taxes in the USA

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.

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Taxation

Tax Structuring Opportunities Through Canada and Luxembourg

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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.

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Taxation

UK Tax residence – things have changed if you are planning to come to the UK

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Liability to UK income tax and capital gains tax is dependent on the residence status of the individual. The term 'residence' appears many times in UK tax legislation but until now this has never been properly defined in that legislation. Instead, for almost 200 years the courts have been establishing a range of factors which can affect the determination of an individual's residence status. How long an individual spends in the UK in a tax year is important to this decision as well as the principle of whether they are coming to the UK temporarily.

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