Category: Residence

Westpac crackdown on foreign buyers and money laundering

Property buyers will be quizzed about their tax residency under new anti-money-laundering rules being introduced by Westpac and its subsidiaries St George Bank, Bank of Melbourne and BankSA. Mortgage brokers, who act as intermediaries between the banks and buyers, are being told that from this week they must also ask...

What happens if you are from the UK or own assets in the UK?

Beware of the dreaded inheritance tax and changes to it from April 2017! Approximately 1.3 million Britons now live in Australia and Brexit may only increase this number! Many think that moving to Australia means they no longer need to worry about UK tax, but often they are not fully...

CARICOM seeks FATCA delay, but law may prove irrelevant

The Caribbean Community is looking at spending nearly quarter of a million dollars on a Washington-based consultant to lobby the Trump administration about the Foreign Accounts Tax Compliance Act. Cayman appears unlikely, however, to be affected by any lobbying – or even FATCA repeal – in the wake of last...

Next off the block – AEOI

You might have thought you have enough on your plate getting to grips with anti-money laundering rules closely followed by FATCA – but it’s not over yet! Next off the block is the Automatic Exchange of Financial Account Information in Tax Matters (AEOI). The AEOI, which we first provided an...

GAAR & POEM- Combating Tax Avoidance

The Central Board of Direct Taxes (CBDT) has on 24th January 2017 issued final guidelines for determination of “Place of effective management”(POEM). On 27th of January, again CBDT released clarifications on “General Anti Avoidance Regulations” (GAAR). POEM is effective April 01,2016 whereas GAAR is effective from April 01,2017.POEM can be...

Combatting Foreign Tax Evasion With New Filing Requirements for Foreign-Owned Disregarded Entities: Tax Update, Volume 2017, Issue 2

The new regulations expand the filing requirements for Form 5472 to include disregarded entities with foreign owners when there are certain reportable transactions. If a non-U.S. person (individual or corporation) owns 100 percent of the stock of a U.S. corporate subsidiary, the subsidiary needs to obtain an employer identification number...

Five things agents and developers need to know about the non-dom tax changes

From 6 April 2017, non-dom owners of UK property will be liable to inheritance tax (IHT) at 40% on any UK residential property they own. This has always been the case where a non-dom (broadly an individual who is resident in the UK but who has their permanent home abroad)...

Inflation: How government is collecting more tax revenues by stealth

These three CGT exclusions have remained unchanged for five years. Over the last few years government has collected a significant amount of tax revenue by not fully adjusting the personal income tax tables for inflationary increases in earnings, thereby increasing the effective tax rate of individuals. A middle-class individual earning...

MPs approved exchange of information

The parliament transposed the EU regulation, whose aim is to secure comprehensive and effective administrative collaboration between tax administrations via mandatory automatic exchange of information. International corporations will be required to submit reports about their activities in every EU country in which they do business. This stems from the amendment...

Bills, cars, bank accounts: the Italian Revenue Service will chase evaders who pretend to be abroad

The Italian Revenue Agency is stepping up its fight against international tax evasion. The tax authority will focus on undeclared funds and income held abroad by Italian taxpayers who have become resident abroad since January 1, 2010. Controls will be based on selected lists, which will first target the most...

3 Key Tax Rules Governing Typical Business Deductions

What is a business expense deduction? A business expense deduction is a deduction allowed for ordinary and necessary expenses paid or incurred in connection with an individual’s trade, business or profession. IRC Section 62(a)(1) operates to assure that all trade or business expenses, deductible as delineated under specific IRC Sections,...

New Zealand: New Zealand To Enact Tighter Foreign Trust Disclosure Rules

The New Zealand Parliament has passed a Bill which, following royal assent, will meaningfully increase disclosure obligations for NZ resident trustees of NZ foreign trusts. The Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill, was passed by Parliament on 14 February 2017. The Bill contains important provisions relating...

Luxembourg: Luxembourg’s New Transfer Pricing Rules: Some Compliance Required!

On 22 December 2016 the Luxembourg Parliament passed article 56bis of the Luxembourg Income Tax Law (LITL). This provision gives taxpayers and tax authorities more guidance on how to apply the arm’s-length principle. The new article can be seen as a transposition of OECD BEPS reports (actions 8-9-10) released in...

Companies Get Draft Instructions for U.S. Global Tax Reports

U.S. multinational companies with more than $850 million in annual consolidated gross income now have draft instructions for filing IRS reports on their global tax and profits. The Internal Revenue Service added instructions to the draft Form 8975 and accompanying draft Schedule A it released in December 2016, companies that...

New tax measure takes aim at Offshore Trusts

A bombshell hidden in the detail of the 2017 Budget review relates to the taxation of offshore trusts. It refers to the 2015 Budget review in which it was announced that measures would be introduced to the tax treatment of foreign companies held by interposed trusts. No specific countermeasures were...

Amendments to Profit Tax Law in Republic of Srpska of Bosnia and Herzegovina

The National Assembly of the Republic of Srpska (RS) adopted amendments to the Profit Tax Law on 28 December 2016. The main changes have become effective as of 1 January 2017 and will be briefly presented in this article. With the amendments, the Law clarifies the definition of “taxable person”...

Opportunity for Refund of Late Interest charged on Failed Withholding Tax Notifications

Background Switzerland levies federal withholding tax at the rate of 35% on certain capital income, including dividend distributions of Swiss corporations. The federal withholding tax is fully refundable for Swiss resident recipients, provided that they (i) are beneficially entitled to and (ii) correctly declare respectively account for the taxable income....

What AEOI means for banking customers in Hong Kong

With the arrival of the new year, don’t be surprised if your bank asks for information about yourself and your accounts that you didn’t have to provide before. These questions signal an important development as banks in Hong Kong and around the world prepare to share certain information with tax...

UK: Offshore Trust Deadline Looming For UK Non-Doms

Individuals who will be deemed UK domicile from 6 April 2017 should be considering their options with regard to offshore trusts as a matter of priority. On 5 December 2016, the UK Government published the Reforms to the taxation of non-domiciles: further consultation outcome, which provided clarity on the following...

BEPS big bang complexity for income tax treaties – on a delayed fuse

The OECD made its end-November 2016 deadline to release the text of the multilateral treaty to give effect to the BEPS Actions which involve changes to tax treaties, see here. The 49 page treaty text, which is commonly referred to as the multilateral instrument or MLI, and 85 page explanatory...

Treasury figures show capital gains concession dwarfs superannuation tax breaks

Main residence exemption costing budget $61.5bn, almost double the $33bn lost to super concessions The federal government’s tax breaks for home owner-occupiers are dwarfing tax breaks for superannuation. New figures show the capital gains tax concession on the family home is now worth $61.5bn, almost double the $33bn lost to...

India: OECD’s Additional Guidance On The Implementation Of Country-By-Country Reporting

A key outcome of the Organisation for Economic Development and Co-operation’s (OECD’s) final Report on Action Plan 13 (Transfer Pricing Documentation and Country-by-Country reporting) is the commitment of OECD and G20 countries to introduce Country-by-Country (CbC) reporting along with the associated master file and local file documentation for large Multinational...

The ‘indirect transfer provisions’ monster

The most important task of the Finance Minister in the 2017-18 budget is to tame the “Indirect Transfer Provisions” monster born out of amendments to Section 9 of the Income Tax Act, 1961. In response to the Supreme Court’s judgement in the famous Vodafone case, the Finance Act, 2012 amended...

Income-tax dept issues norms to determine residency status of companies

New guidelines aim to check tax evasion, ensure foreign firms are not taxed on their global income. New Delhi: The income-tax (I-T) department on Tuesday issued the final guidelines for place of effective management (PoEM) rules that seek to determine the residency status of a firm for calculating its tax liability. The...

OECD’s MLI: will tax treaty benefits apply to private equity investors?

The OECD recently released a public discussion draft entitled the “BEPS Action 6 Discussion Draft on non-CIV examples” to clarify when investors like private equity funds, real estate funds and hedge funds should be entitled to tax treaty benefits. The release of the 2017 Discussion Draft is timely, given that...

From Israel to Canada: New Tax Treaty to Help Structure Investments

On December 21, 2016, the new Canada–Israel tax treaty entered into force. The new treaty was signed on September 21, 2016 in New York, and replaces the existing treaty that dates from 1975. For most purposes, the provisions of the new treaty took effect as of January 1, 2017. Overall,...

2017 Budget Law: tax relief for individuals who decide to fix their tax residence in Italy

The 2017 Italian Budget Law introduces a tax relief for individuals transferring their tax residence to Italy, in accordance with similar regimes adopted by other countries such as the United Kingdom, Switzerland and Portugal. The relief is part of a package of measures intended to facilitate investment in Italy and...

Automatic Exchange of Information and Common Reporting Standards in Malaysia

In efforts towards global transparency, over 100 countries have agreed to automatically exchange information relating to financial accounts (AEOI) with each other under the Convention on Mutual Administrative Assistance in Tax Matters (Convention). The OECD had also developed the Common Reporting Standards (CRS) which set out the common information to...

Expose the true beneficiaries

THE Panama Papers, the world’s biggest leak, highlighted the complex ways used by companies and individuals to conceal who the actual beneficiaries of a company are. Some of them put their money into offshore accounts such as in Labuan, which is also an off-shore financial centre and tax haven. One...

Special tax regime for Non-Habitual Portuguese Resident individuals

Portuguese income tax law provides for a 20% reduced rate and, in respect to income obtained abroad, a full tax exemption, for certain types of income derived by individuals having the status of Non-Habitual Portuguese Residents (NHPR). Any individual that in a certain year becomes tax resident in Portugal will...

The favourable tax regime of new Italian residents

The 2017 Budget Law introduced (starting from fiscal year 2017) favourable provisions for people wishing to become tax residents in Italy. It is aimed at wealthy individuals who wish to bring in new capital resources. The regime is inspired by the non-domiciled resident regime which is in force in the...

Cyprus: Country-By-Country Reporting Under Base Erosion And Profit Shifting Action 13

Cyprus signed the Organisation for Economic Co-operation and Development’s Multilateral Competent Authority Agreement for the Automatic Exchange of Country-by Country Reports between its member states on 1 November 2016 after approval by the Council of Ministers at its meeting held on 28 September 2016. Following publication in the government gazette...

Switzerland: Federal Council Adopts Dispatch On Exchange Of Country-By-Country Reports

On 23 November 2016, the Swiss Federal Council adopted the dispatch on the Multilateral Agreement on the exchange of Country-by-Country Reports (CbCRs) and draft federal implementing legislation. The proposal is aimed at implementing the minimum standard of the G20 countries and the OECD to combat base erosion and profit shifting...

Black money across the border: Why Pakistan’s elite are quivering as UAE demands tax information

According to unofficial estimates, more than $2 billion has flowed into Dubai real estate from Pakistanis every year for the past three years. Last week, account holders in a major UAE bank began receiving letters alerting them that soon they would be required to furnish information “with a view to...

Italy to target non-doms with new tax regime

Italy is to introduce a remittance-style tax regime aimed at attracting non-domiciled high net worth residents, just as the UK makes its rules in this area less attractive post the Brexit vote. The new measure in Italy’s Finance Bill for 2017 was approved by parliament last week, before its prime...

PBC urges Dar to ask FBR to go easy on super tax

Pakistan Business Council (PBC) has approached Finance Minister Ishaq Dar to stop the Federal Board of Revenue (FBR) from recovery proceedings of Super Tax against non-resident companies on dividend income from their investments in Pakistan. Sources told Business Recorder here on Tuesday that the PBC has urged the Finance Minister...

Ukraine: Tax Residency Status: Issues To Consider When Moving Abroad

Recent social and economic developments have had a powerful impact on many Ukrainian citizens and businesses and have led them to look for a better life beyond the borders of Ukraine. Obviously, Ukrainians moving abroad is not something new. Periods of economic crisis in almost every state are usually accompanied...

Bermuda is world’s worst corporate tax haven, says Oxfam

Four UK territories in list ‘undermine Britain’s efforts to be responsible member of the international community’ Bermuda is the world’s worst corporate tax haven, according to a list by Oxfam, which includes three other UK territories among those it names and shames. The charity’s list of the “world’s worst” 15...

Italy: Italy Set To Introduce A Territorial System Of Taxation

Italy is considering a proposal to introduce a territorial system of taxation to attract high net worth individuals, including successful individuals in the sports, arts, and fashion and design sectors, who could be interested in moving to Italy to take part in these thriving sectors. The new measure is contained...