Category: Dividends

Ukraine: Ukraine Ratifies Protocol Amending Double Taxation Treaty Between Ukraine And Switzerland

On 18 September 2019, the Parliament of Ukraine ratified a protocol (the Protocol) of amendments to the double tax treaty between Ukraine and Switzerland (the DTT) which had been signed by the states on 24 January 2019.  ... - Continue reading

Canada: Canada Ratifies The Multilateral Instrument

On June 7, 2017, Canada along with numerous other jurisdictions signed the Organisation for Economic Co-operation and Development’s (“OECD”) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI” or “multilateral instrument”). The multilateral instrument is the culmination of work undertaken as part of the OECD/G20 BEPS Project to equip governments with domestic and international instruments to address tax avoidance.   ... - Continue reading

Cyprus: The Cyprus Investment Programme And The Benefits

The Cyprus Investment Programme is rapidly becoming one of the EU’s most popular residence schemes.

  • Non Cypriot citizens (and their families) can acquire Cyprus Citizenship by investing €2.5 million* in Cyprus.
*In one specific set of circumstances as detailed below in the financial criteria, the investment required is €2.0 million. A non-Cypriot citizen who meets one of the financial criteria detailed below can apply for Cypriot citizenship ‘through naturalization by exception’.
  • Following the application, Cyprus citizenship will be granted in six months, assuming the application has been completed accurately and the correct documentation filed.
  • The applicant needs to be in posession of a residence permit for a period of six months before obtaining the citizenship.
... - Continue reading

HMRC collects record £191bn in income tax

The taxman is raking in record amounts in income tax as the latest figures reveal Britons paid an extra £11bn in 2018/19. Income tax receipts have soared to a record £191bn, according to figures published, a 6% increase from the previous year. Britons are paying almost 30% more income tax… – Continue reading

Tax on reserve to hit cos’ business expansion: ICAB

The imposition of 15 per cent tax on reserve and retained earnings of listed companies will reduce capital and expansion scope of the companies, said the Institute of Chartered Accountants of Bangladesh on Saturday. The ICAB made the statement in its post-budget review. Finance minister AHM Mustafa Kamal placed the… – Continue reading

Cyprus: Cyprus–Kazakhstan First-Time Double Tax Treaty: Cyprus Ratifies

On 24 May 2019, Cyprus ratified the first-time double tax treaty it had signed with Kazakhstan on 15 May 2019 (the DTT). Certain legal procedures now need to take place in both states following which the DTT will ‘enter into force’. The DTT will be ‘in effect’ as from the… – Continue reading

Switzerland: The Brazil And Switzerland Double Tax Treaty: Why Is It So Significant?

Background The Brazilian and Swiss Governments signed a Double Tax Treaty (DTT) on 3 May 2018. Switzerland is one of the biggest investors in the Brazilian market and Brazil and Switzerland have already signed an Automatic Exchange of Information Agreement, which came into force on 1 January 2018. This new… – Continue reading

Has the New Inland Revenue Act paralysed the Double Tax Treaty Network of Sri Lanka? Part 2

7.What are Mutual Administrative Assistance Agreement (MAAAs) The new IRA defines the “Mutual Administrative Assistance Agreement” to mean a tax information exchange agreement or other international agreement for mutual administrative assistance in relation to taxation matters. Section 75 (5) of new IRA “Mutual administrative assistance agreement” means a tax information… – Continue reading

The use of UK holding companies in international group structures – tax considerations

From a commercial viewpoint it is important that the Holdco is located in a reputable jurisdiction when seeking to access international equity and debt capital markets. The choice of Holdco location will also be relevant in circumstances where private equity investment is envisaged or where a trade sale is planned…. – Continue reading

Taiwan wealth management update

There have been a number of recent legal and regulatory changes in Taiwan that have impact from a wealth management perspective. Tax Rates Changes effective 2018 Effective 1 January 2018, the new tax rates for Taiwan are: Local foundation tax rule tightened Effective 1 January 2018, dividend for local foundations… – Continue reading

Withholding Corporate Income Tax in China

In China, withholding Corporate Income Tax (CIT) is applied to the following China-sourced incomes derived by non-resident enterprises without establishments in China, or to that derived by non-resident enterprises with establishments in China but whose income is not related to these establishments: Dividends, bonuses, and other equity investment proceeds; Interests,… – Continue reading

Ukraine and Qatar sign agreement on avoiding double taxation

Foreign Minister of Ukraine Pavlo Klimkin and Finance Minister of Qatar Ali Shareef Al-Emadi have signed an agreement on avoiding double taxation and preventing income tax evasion between the government of Ukraine and Qatar. According to a Thursday posting on the website of the Finance Ministry of Ukraine, avoiding double… – Continue reading

China Sets Out How To Determine Beneficial Owner For Treaties

On February 3, 2018, China’s State Administration of Taxation set out new rules on the disallowance of tax treaty benefits where an entity fails to demonstrate it is the beneficial owner of Chinese assets from which passive income is derived. A beneficial ownership requirement is introduced in treaties to prevent… – Continue reading

Swiss Taxpayer Wins US Tax Treaty Refund Dispute

The United States District Court for the District of Columbia on January 31 ruled in favor of Starr International Company in a case concerning an erroneous refund paid to the taxpayer, which the IRS sought to reclaim. In 2011, the IRS erroneously issued a USD21m refund to Starr International Company,… – Continue reading

Apple Could Get a $4 Billion Boost From Tax-Law Quirk

Microsoft, Cisco might also benefit from GOP bill ‘loophole’ Law gives some firms edge in paring offshore cash tax tab Companies that stockpiled trillions of dollars offshore free of U.S. income tax may get one last break before paying up — provided their fiscal years don’t follow the calendar year…. – Continue reading

New PPT rule in the OECD’s Multilateral Instrument to displace Canadian GAAR?

In this Update On June 7, 2017, Canada signed the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) The MLI will modify up to 75 of Canada’s bilateral tax treaties, including adding a broad anti-avoidance rule to these treaties (the… – Continue reading

French Lawmakers Adopt 2018 Finance Bill

French deputies have adopted at first reading the 2018 Finance Bill, which includes several of the Government’s key tax measures. The bill, adopted by the National Assembly on October 24, will reduce compulsory levies by EUR10.3bn (USD12.1bn) by the end of 2018. The bill includes the abolition of the wealth… – Continue reading

New regulation forces Indonesians to sell their foreign shell companies

On the back of the Indonesian government’s issuance of its new controlled foreign company (CFC) regulation on July 26, many Indonesians are likely to sell their foreign shell companies because of the enforcement of double tax payments. The CFC regulation authorizes the government to charge a dividend tax on foreign… – Continue reading

OECD Criticizes Estonia’s Dividend Tax Measure

The OECD has taken issue with the Estonian Government’s plans to reduce the rate of tax on distributed dividends for established companies, warning that the measure could complicate the tax system and discriminate against small firms. Under recently enacted legislation, tax on distributed dividends will be reduced from 20 percent… – Continue reading

Japan, Russia Agree New Double Tax Pact

The governments of Japan and Russia signed a new convention on the elimination of double taxation on September 7. The convention replaces the 1986 agreement between Japan and the former Soviet Union. It lowers withholding tax rates on cross-border income from trade and investment – in most cases to zero… – Continue reading

Switzerland, Belgium To Begin Exchanging Tax Info

The Swiss Federal Council has announced that an information exchange amendment to the double tax agreement with Belgium has entered into force. On August 7, the Council said the additional agreement to amend the DTA had entered into force on July 19. It contains an administrative assistance clause in accordance… – Continue reading

US government delays Obama earnings-stripping rule deadline

The change converts tax-deductible interest payments employed by the schemes into taxable stock dividends. The U.S. government on Friday gave companies an extra year to comply with an Obama-era regulation meant to crack down on corporations that try to minimize their U.S. tax bills by shifting profits abroad to countries… – Continue reading

Australia Changes Tax Stance on Employee Share Schemes

The Australian Taxation Office has reversed its stance on the tax treatment of trustee dividend-equivalent payments to participants in employee share schemes. The ATO’s June 8 draft guidance, Draft determination TD 2017/D2, deals with circumstances in which an employer establishes a trust to provide shares to employees under an employee… – Continue reading

UK: The UK Company: A New Alternative For International Investors?

This article is the first of a series of articles that looks at tax aspects of the UK company which make it an attractive international business company, or “IBC”. This generic label, and its acronym, are normally associated with the BVI company, and its international competitors. An essential feature of… – Continue reading

Withholding tax on dividends – A bagful of uncertainties and complexities?

Muscat: One of the many changes that the Royal Decree 9 of 2017 (RD) has made in the Oman Income tax law is the introduction of withholding tax (WHT) on payment of ‘dividends on shares’ by Omani companies. This amendment requires Omani companies distributing dividends on shares to foreign persons… – Continue reading

[News Focus] Multinational firms using royalties to avoid tax: expert

Multinational firms in South Korea tend to transfer much higher proportions of their revenues to their headquarters overseas in dividends and royalties than their Korean counterparts, an expert said Monday. Payments in royalties and dividends are categorized as expenses, which in turn lowers their reported earnings to the Korean authorities…. – Continue reading

UK Budget Anti-Avoidance Measure Will Fail, CIOT Says

A significant cut to the dividend tax allowance announced in the UK Budget will not deter people from incorporating their own business to take advantage of lower corporation tax rates, the Chartered Institute of Taxation (CIOT) has said. The Government will reduce the tax-free dividend allowance, which affects owner managers… – Continue reading

Russian Federation: Confirmation Of Direct Investment In Capital To Apply A Reduced Tax Rate On Payment Of Dividends

On 30 December 2016 the Commercial Court of Voronezh Oblast delivered a judgement in case No. А14-10190/2014 (the “Decision”) under the claim of Ilyushin Finance Co. Open Joint Stock Company (the “Company”). The case is an example of a broad interpretation of the list of documents confirming entitlement to a… – Continue reading

Netherlands: Trends I Netherlands Moves Away From Fiscal Offshore Industry

The Netherlands is slowly but surely steering away from facilitating the use of its corporate income tax system by companies that are set up merely to obtain tax benefits. These companies, which often do not actually carry out activities in the Netherlands, have contributed to the perception among policy makers… – Continue reading

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… – Continue reading

RF Supreme Court consolidates court practice on the application of transfer pricing and thin capitalization rules

On February 16, 2017, the Presidium of the Supreme Court of the Russian Federation approved the Review of Court Practice in the Consideration of Cases Involving the Application of Certain Provisions of Section V.1 and Article 269 of the Tax Code of the Russian Federation (the “Review”). There is no… – Continue reading

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…. – Continue reading

Abusive Tax Structures, Make Way For Budget 2017’s Transfer Pricing Combat Weapons

Among other things, Union Budget 2017 will be remembered for two firsts – the introduction of secondary adjustment and thin capitalisation rules. Both are transfer pricing provisions which will have a far-reaching impact on corporates. Secondary Adjustment Since the concept of secondary adjustment is introduced for the first time in… – Continue reading

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,… – Continue reading

New Double Tax Treaty signed between Montenegro and Portugal

Montenegro has concluded double taxation treaties with more than 35 countries, and this number continues to grow. The most recently signed treaty is the one concluded with Montenegro. The agreement affects persons who are residents of one or both of the contracting states and applies to the Portuguese personal income… – Continue reading

Russia Removes Hong Kong From List of Offshore Tax Zones

The Russian government will no longer consider Hong Kong a Chinese-affiliated tax haven that doesn’t share tax information. Russia will strike Hong Kong from its list of offshore jurisdictions following ratification of a double tax treaty signed by the two parties last January and ratified by Russia in July, according… – Continue reading

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… – Continue reading