Category: Statutory

India clicks on digital economy with equalisation levy

While equalisation levy appears to be a step to counter double non taxation and protect India’s share of taxation, in its current form it may impact an Indian taxpayer more than foreign MNCs The growth of digital economy entails many benefits, but also poses various tax challenges. These include the… – Continue reading

Facebook to pay more UK tax

Facebook has caved to the tax pressure. The company is likely to pay millions more in U.K. taxes after making changes to its corporate structure that will stop revenue earned in the U.K. from being routed through Ireland. Facebook had been accused of “profit shifting,” a common practice for multinational… – Continue reading

Mauritius lead in Zim investments

MAURITIUS has emerged as the biggest source of investment into Zimbabwe, accounting for projects worth $4,56 billion in the past five years. According to statistics released at an investment strategic meeting in Harare this week, a ZBCtv report indicated Mauritius was leading in terms of investments into the country while… – Continue reading

6 Critical Checkpoints to Meet the Impending FATCA Deadline

The US government, in an effort to reduce offshore tax evasion, has taken extraordinary steps to implement FATCA, the Foreign Account Tax Compliance Act. This includes the hiring and training of over 3,000 IRS examiners newly tasked with process verification and tax audit efforts. The implications for US businesses can… – Continue reading

“Relentless in pursuit of tax evasion and avoidance”: HMRC sets out plan to 2020

In its departmental plan for 2015-2020 published last month, HMRC set out it’s role “to help the honest majority to get their tax right and make it hard for the dishonest minority to cheat the system”. One of the headline objectives for this period is: “maximise revenues due and bear… – Continue reading

20 Caribbean, Latin American Nations Named Major Money Laundering Countries

Twenty Caribbean and Latin American nations have been named by the U.S. as “major money laundering” countries in the 2016 International Narcotics Control Strategy Report (INCSR) from the U.S. State Department released Wednesday, Mar. 2, 2016. A major money laundering is defined by statute as one “whose financial institutions engage… – Continue reading

South Africa CRS Regulations Come Into Effect

The South African Revenue Service (SARS) has issued final regulations that require certain financial institutions (FIs) to report on accounts held or controlled by foreign residents from March 1, 2016. The OECD’s automatic tax information exchange standard, the Common Reporting Standard (CRS), which the regulations are in response to, obliges… – Continue reading

Nigeria: Why Tax Avoidance Does Untold Damage to Business

For now… corporations, as responsible global citizens, should endeavour to pay their fair share of taxes to avoid threats to their own long term sustainability. Multinational companies like Google, Starbucks, Facebook, Amazon and other global corporations are constantly coming under public fire for avoiding taxes on their British sales. For… – Continue reading

A closer look at the flat tax

Another form of taxation that has gotten greater attention during the last two presidential election campaigns is the flat tax. A flat tax is a plan that will apply the same rate to every taxpayer, regardless of the income they have earned. At present, federal taxes are calculated on a… – Continue reading

Further clarity on GAAR for FIIs

The industry was hoping GAAR might be postponed again, especially in the light of slowing down of the world economy In a signal to foreign institutional investors, the Union Budget has made a commitment to implement General Anti Avoidance Rules (GAAR) on taxes only from April 1, 2017. “The investment… – Continue reading

IRS Issues 2016 Non-Resident Withholding Tax Guide

The US Internal Revenue Service (IRS) has updated Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, which covers the obligations of the persons responsible for withholding tax (withholding agents). It is specified that the Publication is for withholding agents who pay income to foreign persons, including nonresident… – Continue reading

Govt negotiating issues relating to DTAA with Mauritius

Outstanding issues relating to the existing Double Taxation Avoidance Agreement (DTAA) are under negotiation between India and Mauritius through the mechanism of Joint Working Group (JWG), Parliament was informed today. “India has proposed changes in the existing DTAA to address concerns relating to treaty abuse, around tripping of funds, double… – Continue reading

No double taxation agreement with Panama; Maltese domicile subject to tax on worldwide income

Maltese individuals resident and domiciled for tax purposes, that is people whose permanent residence is in Malta, are required to pay tax in Malta on their worldwide income, according to the Income Tax Act. This essentially means that Minister Konrad Mizzi is required to pay tax on foreign earnings. However… – Continue reading

Pakistan, Czech Republic implement convention to avoid double taxation

Pakistan and Czech Republic have implemented a convention to avoid double taxation and prevent tax evasion, the Federal Board of Revenue notified on Monday. An official said the convention on avoidance of double taxation will come into force on July 1. “This is an epoch-making event in the consolidation of… – Continue reading

Union Budget 2016 – International tax proposals

With the adoption of the BEPS package, OECD and G20 countries laid the foundations of a modern international tax framework under which profits would be taxed where economic activity and value creation occurs. It is now time to focus on implementation of the recommended changes in a consistent and coherent… – Continue reading

Budget 2016: 9% tax rate regime for India’s first International Financial Centre

The pet project of Prime Minister Narendra Modi – the International Financial Services Centre (IFSC) – housed in the Gujarat International Finance Tec City – has received a boost in the Union Budget 2016/17. The long pending tax issue has been decided with 9 per cent minimum alternate tax (MAT),… – Continue reading

Talking Tax in Shanghai

In Shanghai, Wolfgang Schäuble is urging his fellow G20 countries to put new rules to tackle tax avoidance into law. Back home, business leaders worry that German companies could be left exposed by the new rules if they are introduced unilaterally or go too far. The finance ministers of the… – Continue reading

Important changes and developments in German double tax treaties

1. New double tax treaty between Germany and the Netherlands: tax authorities now bear burden of proof regarding tax- evading or tax-avoiding arrangements A new Double Tax Treaty (DTT) has been in place between Germany and the Netherlands since 01 January 2016. Art. 23 of the DTT introduces an important… – Continue reading

Using tax money to raise taxes

If a member of Congress told you that he was going to use some of your hard-earned tax dollars to support an international organization that demands that you pay higher taxes, what would you say? Unfortunately, the question is not hypothetical, because that is exactly what is now happening. Congress… – Continue reading

Double taxation avoidance treaty with Qatar: What is in it for Nigeria?

The federal government of Nigeria and Qatar have signed an agreement for the avoidance of double taxation on income and capital gains for investments between the two countries. In addition to the elimination of double taxation on business income, similar treaties between Nigeria and other countries provide for a lower… – Continue reading

Rationalise taxes on media, entertainment sector: Experts

Budget 2016 should rationalise entertainment tax, exempt newsprint from VAT and end double taxation on temporary transfer of movie rights to television channels, experts said. “Currently, entertainment industry players such as DTH and cable service operators are reeling under the heavy burden of multiple taxation and levies such as licence… – Continue reading

BEPS Action Plan 3: Designing effective controlled foreign company rules

A “controlled foreign company” (CFC) is, as the name implies, a foreign company or subsidiary owned by a parent company which is situated in a country different from the parent company’s country of residence. The tax laws of many countries, including the Philippines, do not tax the CFC’s parent company… – Continue reading

Are all FDIs real foreign investment?

While the various reforms initiated by the Centre has led to a significant increase in FDI inflows into India, the Economic Survey feels the need for a closer examination of such FDI flows to determine whether there has been any instances of tax evasion. The survey noted that out of… – Continue reading

France seeking €1.6 billion in Google back taxes

France is seeking €1.6 billion in back taxes from Google, criticised for its use of aggressive tax optimisation techniques, a source at the finance ministry has said. “As far as our country is concerned, back taxes concerning this company amount to €1.6bn,” the official, who spoke on condition of anonymity,… – Continue reading

Experts hail withdrawal of ‘unworkable’ withholding tax

THE withdrawal of a withholding tax on service payments to foreigners, decried by many as unworkable, has been widely welcomed. The Treasury acknowledged that the tax had introduced “unforeseen issues, uncertainty on the application of domestic law and taxing rights under tax treaties”. The withholding tax was introduced into legislation… – Continue reading

Budget 2016: How base erosion and profit shifting (BEPS) brings HR function into focus

Tax function of an organisation was traditionally run from the tax director’s room. Transfer Pricing (TP) was governed by contracts between related parties and this at times resulted in profits moving to legal entities that had contractual rights but had no significant people functions. There were instances of IP Holding… – Continue reading

Would the real tax havens please stand

“It is tantamount to an economic blockade”. That’s how Antigua and Barbuda’s Prime Minister, Gaston Browne, described the current withdrawal from Caribbean indigenous and offshore banks of correspondent relationships by US banks. His sentiments were echoed by Dean Barrow and Freundel Stuart, the prime ministers of Belize and Barbados respectively…. – Continue reading

Zambia signing its way out of tax revenues-ActionAid Zambia

A new report from ActionAid titled ‘Mistreated’ released this week has revealed that Zambia has 13 restrictive tax treaties that dramatically restrict the government’s power to tax global companies doing business on our soil and therefore unfairly limit our country’s potential to collect tax revenue. The report also found that… – Continue reading

TIME IS TICKING ON DISCLOSING YOUR OFFSHORE ASSETS

For those taxpayers with undisclosed foreign assets, time is running out. With the introduction of FATCA and a global standard for the automatic exchange of information between countries’ tax authorities, it is unlikely that undisclosed foreign assets will remain as such for long, resulting in serious consequences for the taxpayer…. – Continue reading

Trump, Sanders Agree on Ending Deferral of Overseas Earnings

During a political season in which populist fury and anger at big business is running high, two presidential candidates want to eliminate the ability of multinational firms to keep earnings overseas and avoid U.S. taxes. They also just happen to be the two most surprising and disruptive candidates in the… – Continue reading

‘Tax me if you can’: Tax activism of a different kind

It’s unlikely anybody was particularly surprised when Finance Minister Pravin Gordhan announced a number of initiatives to increase the amount of tax revenue; from sugar tax to a “tyre levy” to an increase in a number of existing sin taxes. But it’s perhaps the relaxing of voluntary disclosure rules that… – Continue reading

Tony Wickenden: What the Finance Bill 2016 means for tax avoidance

In this final instalment considering the draft clauses from the Finance Bill 2016 most relevant to financial planners, I am going to turn my attention to the ever-popular subject of tax avoidance and evasion. Every Budget and Finance Bill has plenty to say on this subject. As in the previous… – Continue reading

Who’s got guts enough to go after Canada’s tax-dodging corporations?

In its time, the Irving empire has had plenty of federal contracts — all of them lucrative, many of them controversial. So it wasn’t a surprise to hear that a federal cabinet committee is reviewing Irving’s $26 billion sole-source (but still unsigned) contract to build a fleet of warships for… – Continue reading

UK tops global table of damaging tax deals with developing countries

Treaties limit the tax poorer nations can place on British companies doing business within their borders, says ActionAid. The UK has signed a high number of tax deals with some of the world’s poorest countries, potentially depriving those states of millions in tax revenues every year, according to an analysis… – Continue reading

Country by Country Reporting – Any contours?

Transfer pricing (TP) issues have never been such a critical part of the global economic agenda as they are today. Following the release of the report addressing Base Erosion and Profit Shifting (BEPS) in February 2013, OECD and G20 countries (including India) adopted a 15-point Action Plan to address BEPS… – Continue reading

Budget 2016: Will the govt amend domestic tax laws to help the bleeding infrastructure sector

If January is a month of New Year resolutions, February can be said to be a month of New Financial Year expectations with Indian Government announcing its fiscal policy strategy, including taxation regime for the next financial year. The Union Budget of 2015-16 was the first full budget presented by… – Continue reading

US Democrat Bill Takes Further Aim At Inversions

On February 23, US House of Representatives Ways and Means Committee Ranking Member Sander Levin (D – Michigan) and Budget Committee Ranking Member Chris Van Hollen (D – Maryland) introduced legislation aimed at reducing the number of corporate tax inversions by limiting the use of “earnings stripping.” Tax inversion techniques… – Continue reading

BUDGET2016 – IS THERE ROOM TO PAY MORE TAXES?

Anthea Scholtz calls for a careful balance between ‘spending’ and ‘revenue-generating’ activities. All eyes will be on Parliament on 24 February 2016 when South Africa’s annual national Budget will be presented by the newly re-appointed Minister of Finance Pravin Gordhan. The Budget speech has over the years given South Africans… – Continue reading

Start-ups Hope Budget Will Follow up on Modi’s Promises

NEW DELHI: With Prime Minister Narendra Modi promising tax cuts and a $1.5-billion fund for India’s start-up eco-system, young entrepreneurs hope that the Budget 2016-17 will have some concrete steps to foster new businesses. “Implementation of nationwide GST (Goods and Services Tax) will help in simplifying the entire tax structure,… – Continue reading

Countries that accept BEPS minimum standards may participate in global tax effort, OECD says

Any country that agrees to adopt the OECD/G20 base erosion profit shifting (BEPS) project minimum standards and pay an annual fee will be allowed to participate in future BEPS project work, according to a plan agreed to by the OECD today. The OECD’s framework for BEPS plan implementation, to be… – Continue reading

Budget 2016: Foreign investors seek a non-adversarial and stable tax regime

Is India back on the world map as a lucrative investment jurisdiction? Does the world see the Make in India dream becoming a reality? Well, the $222 billion investment pledges received during the Make in India week do resonate the revived positive sentiment! In fact, recent policy measures have clearly… – Continue reading

Taxation reform has to be holistic

The government reportedly wants to extend to three years the holding period for investments in listed shares to qualify for capital gains tax exemption. This accepts the need to change the present capital gains tax regime but might not be the best way to go about it. It would discriminate… – Continue reading