Category: Loans

The U.K.’s Proposed Interest Restriction Rule—Too Much Too Soon?

The U.K. government has been consulting on a proposed “Interest Restriction” rule which will limit the amount of interest expense U.K. companies will be allowed to offset against their income for tax purposes (to 30% of their taxable earnings before interest, tax and amortization). The second consultation phase on the… – Continue reading

Republicans Take New Tack on Taxing Companies’ Overseas Profits

Democrats are likely to object to the House GOP’s and Donald Trump’s plans for sharply lower rates President Ronald Reagan once chided government’s approach to the economy as following this mantra: “If it moves, tax it.” Today’s Republicans are following Mr. Reagan’s ideas by trying the exact opposite approach. The… – Continue reading

Kuwait inks Int’l treaty to combat tax evasion

The State of Kuwait has joined the Multilateral Competent Authority Agreement for swapping taxation information according to criteria of the Development and Economic Cooperation Organization (OECD), becoming the first Arab country to ink the relevant international treaty. Kuwait Finance Undersecretary Khalifa Hamada said in a statement that he led the… – Continue reading

Assessing the Hong Kong – Russia Double Taxation Agreement: Another Step Towards Amplifying China’s Eurasian Connection

Assessing the Hong Kong – Russia Double Taxation Agreement: Another Step Towards Amplifying China’s Eurasian Connection   The long-awaited Comprehensive Double Taxation Agreement (CDTA) between Hong Kong and Russia entered into force on July 29, 2016. The agreement will take effect on April 1, 2017 in Hong Kong and January… – Continue reading

What is the future of corporate tax reform?

On June 7, AEI hosted two panels on how the US could reform the corporate tax code, the first focusing on business-level taxation and the second focusing on shareholder-level taxation. Christopher H. Hanna of the Senate Finance Committee delivered the symposium’s opening remarks, with a major focus on how the… – Continue reading

Greece to Seek Help from Bulgaria, Cyprus to Find Suspected Tax Evaders

Greece intends to sign agreements with Bulgaria and Cyprus which will allow Athens to look into suspected tax evasion by Greek-owned companies registered in the two countries, Greek newspaper Kathimerini has reported. The closer inspection of Greek-owned companies registered in Bulgaria and Cyprus will aim to find out whether they… – Continue reading

A Talk on the Benefits of Double Taxation Avoidance Agreement between Cambodia and Singapore

In May 2016, the Cambodian and Singaporean government authorities signed a new agreement to avoid double taxation with respect to taxes on income and on capital. What are the objectives and benefits of a double taxation avoidance (DTA) agreement? The “big-picture” objectives of the DTA between Singapore and Cambodia are… – Continue reading

ATO Issues Anti-Avoidance Warnings For Multinationals

The Australian Taxation Office (ATO) has issued a series of taxpayer alerts that caution large companies against using contrived arrangements to avoid their tax obligations. The first alert concerns arrangements where Australian consolidated groups use offshore permanent establishments that have entered into intra-group transactions. Deputy Commissioner Jeremy Hirschhorn explained: “Through… – Continue reading

GST will reduce tax evasion, improve business environment

The implementation of the goods and services tax (GST) will reduce tax evasion and improve ease of doing business by engendering a common market throughout the country, finance minister Arun Jaitley said on Monday, as he moved the modified constitution amendment bill in the Lok Sabha. “GST will ensure one… – Continue reading

Developing Nations Seek Tax Body to Curb Illicit Financial Flows

Despite Western opposition, the 134-member Group of 77 is continuing to pursue a longstanding proposal for an inter-governmental UN-affiliated tax body aimed at combating corporate tax dodging and curbing illicit financial flows, including money laundering and off-shore banking. The proposal has already been shot down twice by Western nations, first,… – Continue reading

Panama Papers and US initiatives to identify entity beneficial owners

In early April 2016 files leaked from a large Panama-based law firm (known as the ‘Panama Papers’) brought to the attention of many the ways in which offshore companies and structures can be used to obscure the identity of beneficial owners, some of whom have used such entities to avoid… – Continue reading

Ukraine, Malaysia sign agreement on avoidance of double taxation

An agreement on avoidance of double taxation, which was signed today between the governments of Ukraine and Malaysia, will allow enhancing business contacts and attracting investors. Ukrainian President Petro Poroshenko said this at a joint news conference with Malaysian Prime Minister Najib Tun Razak, an Ukrinform correspondent reports. “We think… – Continue reading

OECD Advises Finland On Growth-Friendly Tax Reforms

A revenue-neutral modification of Finland’s tax structure could boost the nation’s economic growth, the Organisation for Economic Cooperation and Development said in a recently released report. Finland has already adopted some measures to make the tax structure more growth friendly in recent years, the report, Boosting Productivity in Finland, said…. – Continue reading

EU considers blacklisting NZ over tax laws

Possible EU sanctions against New Zealand could make travel harder and have a massive effect on the economy. New Zealand is under investigation by the EU as it prepares a blacklist of global tax havens, Newshub revealed on Monday night. The grouping of 28 European nations has compiled a list… – Continue reading

Changes to India-Mauritius-Singapore Tax Treaties – Mind the Gap?

As many are now aware, the double tax avoidance arrangement (DTAA) between India and Mauritius was amended through the protocol released last month. The direct impact summarized in one line is as follows: India shall now tax capital gains arising from alienation of shares by a Mauritius investor acquired on… – Continue reading

Banks to hand over offshore tax files

The Trudeau government has won a round in its battle against offshore tax cheats. Two banks have agreed to give the federal revenue minister information from the accounts of a Caribbean financial institution to help the government crack down on Canadian tax evaders. The Federal Court of Canada has approved… – Continue reading

Reports of vulture funds using tax loophole investigated

Officials from the Department of Finance and the Revenue Commissioners said they are investigating recent media reports that so-called vulture funds are using a clause in Irish law to pay small amounts of tax here. Minister for Social Protection Leo Varadkar has said that the Government is “very concerned” at… – Continue reading

Macau and China add protocol to the agreement to avoid double taxation

The Macau Special Administrative Region (MSAR) and China’s State Administration of Taxation in Beijing signed an additional protocol to the agreement to avoid double taxation and prevent tax evasion, officials said in Macau. The Additional Protocol, the third, according to the statement released by the Office of the Secretary for… – Continue reading

IMF call for ‘comprehensive reform’ of US tax system

An International Monetary Fund (IMF) review has called for a comprehensive reform of the US tax system, with the aim of removing exemptions, simplifying the system, rebalancing from direct to indirect taxes, and reducing statutory rates for individual and corporate income taxes According to its annual Article IV consultation report… – Continue reading

CBDT signs 7 advance pricing agreements to cut tax litigation

The latest APAs signed with taxpayers pertain to various sectors like banking, information technology and automotives In a move designed to reduce tax litigation, the Central Board of Direct Taxes (CBDT) on Monday signed seven more unilateral Advance Pricing Agreements (APAs) with Indian taxpayers. “With today’s signing, the total number… – Continue reading

Pravin Gordhan’s 10-point solution to tax evasion

Tax and prosecution bodies must build the capacity to curb illicit activities that rob countries of tax revenues, said Finance Minister Pravin Gordhan on Thursday, speaking at the High Level Conference on Illicit Financial Flows at the University of Pretoria. Illicit money leaving Africa reduces the amount of resources available… – Continue reading

Corporate tax avoidance: New rules adopted

On 12 July 2016, the Council adopted new rules addressing some of the practices most commonly used by large companies to reduce their tax liability. The directive is part of a January 2016 package of Commission proposals to strengthen rules against corporate tax avoidance. The package builds on 2015 OECD… – Continue reading

‘Tax avoidance’ masters revealed: EXCLUSIVE

The “Big Four” global accounting firms – PwC, Deloitte, KPMG and Ernst & Young – are the masterminds of multinational tax avoidance and the architects of tax schemes which cost governments and their taxpayers an estimated $US1 trillion a year, according to an Australian taxation expert. The controversial new claims… – Continue reading

Ukraine, Austria Increase DTA Withholding Tax Rates

Ukraine and Austria have agreed to sign a protocol to their double taxation agreement to increase withholding tax rates on dividends, interest, and royalty income. The protocol increases the withholding tax rate for dividends and interest to 15 percent and five percent, respectively. Additionally, the royalty rate for patents, trademarks,… – Continue reading

US Consumption Taxes Low In Global Comparison

A recent paper from the Tax Foundation (TF) pointed out that, while most Organisation for Economic Co-operation and Development (OECD) countries lean more on tax revenue from consumption taxes, the United States relies more on individual income tax, while raising relatively little from consumption taxes. The TF noted that “this… – Continue reading

EU anti-tax avoidance directive: Measures to be introduced aimed at curbing abuse

The European Union’s Anti-Avoidance Directive, which has to be put into national legislation by 2019,is aimed at plugging loop-holes in tax systems which allow large corporations to legally avoid paying tax. While Malta has been criticised for offering competitive tax rates, despite the openness and uniformity of such competitive rates,… – Continue reading

India Revamps Its Treaty Provisions With Mauritius

The Government seeks to curb revenue loss, prevent double non-taxation, streamline the flow of investment, and stimulate the flow of exchange of information between India and Mauritius The India – Mauritius double taxation treaty was under negotiation for the last 4 years. The Treaty has now been amended by way… – Continue reading

Five More Countries Agree To Exchange CbC Reports

A further five countries have signed the OECD’s Multilateral Competent Authority Agreement for the automatic exchange of country-by-country (CbC) reports, bringing the total number of signatories to 44. The Agreement allows all signatories to bilaterally and automatically exchange CbC reports with each other, as contemplated by base erosion and profit… – Continue reading

How new EU tax laws impact Thai firms

THAI MULTINATIONAL companies will be impacted on their cross-border business activities due to rapidly evolving tax laws in Europe and Asia-Pacific. For instance, the European Union (EU) achieved a groundbreaking result on June 20 by agreeing to a package of tax measures to combat corporate tax avoidance, which will be… – Continue reading

IRS inversion rules face blowback

A regulatory effort by the Obama administration to crack down on tax deals is facing backlash from business groups and lawmakers on both sides of the aisle. While the Internal Revenue Service (IRS) rules were intended to combat inversions — transactions in which a U.S. company combines with a foreign… – Continue reading

EU agrees on tax avoidance measures aimed at multinationals

European Union member states have struck a deal on new rules designed to eliminate the most common corporate tax avoidance practices. The measures in the Anti-Tax Avoidance Directive target the main forms of tax avoidance practiced by large multinationals and builds on global standards developed by the Organisation for Economic… – Continue reading

What Brexit is Likely to Mean for Taxes, Trade and More

Regardless of whether you were surprised, overjoyed, dismayed or showed any other emotion (perhaps anger as you saw world markets tank), Brexit is here. Yes, we’re talking about the British exit from the European Union. We are not sure why the media coined the term “Brexit,” when it’s not only… – Continue reading

Taiwan-Italy Tax Treaty Takes Effect from 1 January 2016

With an aim to avoiding double taxation, improving the investment environment for Taiwan, and increasing the attractiveness of foreign investment into Taiwan, the Ministry of Finance in recent years has focused on entering into tax treaties with other jurisdictions. Following tax treaties signed with Italy and Austria, Taiwan entered into… – Continue reading

Putin Endorses Agreement on Double Taxation Avoidance With Singapore

Russian President Vladimir Putin has signed a law on ratifying Russia-Singapore agreement on the avoidance of double taxation and prevention of fiscal evasion with respect to the income taxes, according to the official internet portal of legal information. The accord reached on November 17, 2015 in Moscow is aimed at… – Continue reading

Canada willingly makes tax deals with tax havens

The seeds of Canadian corporations hiding billions of dollars in offshore tax havens were sown more than 40 years ago, after the Canadian government pursued a series of tax treaties with tiny Caribbean and European nations. The 92 tax treaties now signed with countries such as Barbados, Jamaica and Malta… – Continue reading

New double tax treaty will help French businesses operating in Singapore, says expert

A new double tax treaty between France and Singapore will be of particular help to French companies operating in Singapore, especially in the construction industry, an expert has said. Franck Lagorce, an expert in French tax at Pinsent Masons, the law firm behind Out-law.com was commenting following an announcement from… – Continue reading

BEPS Takes Center Stage At US OECD Tax Conference

Hundreds of policymakers, business executives, and senior tax officials met at the OECD International Tax Conference to discuss the recommendations proposed under the base erosion and profit shifting (BEPS) project and their impact on trade and investment. The conference, which was held in Washington DC on June 6-7, 2016, was… – Continue reading

Income tax: Know your taxes and exemptions

CHENNAI: The hardest thing in the world to understand is the income tax, is what Albert Einstein had famously said. Amid the long list of taxation categories, to assimilate what is taxable and what is exempted is hard. Even harder is to pay them, of course. As the June 15… – Continue reading

Italy: New international tax ruling in Italy

Multinational companies doing business in Italy, Italian companies doing business abroad and non-resident companies which intend to invest in Italy may use the new international tax ruling procedure to reach an advanced agreement with the Italian Tax Authorities regarding the taxation of income derived from cross-border transactions. Recently, Legislative Decree… – Continue reading

Singapore, France Tax Treaty Enters Into Force

The double taxation avoidance agreement between Singapore and France entered into force on June 1, 2016. Under the deal, withholding tax on dividends would be capped at 15 percent in general; and at five percent where the beneficial owner is a company that owns directly or indirectly at least ten… – Continue reading

India-Mauritius tax treaty: An end and a new beginning

Recent news of India and Mauritius signing a Protocol to amend their 33 year old tax treaty caused seismic changes in the tax world. Though not completely unanticipated, the change is significant for foreign investors to go back to the drawing board and reassess their structures. The tax treaty between… – Continue reading

Cyprus says ‘very close’ to revising tax treaty with India

In a step forward, Cyprus has said it is “very close” to revising the bilateral tax treaty with India as the island nation has accepted “in principle” proposals made by the Indian side on taxing capital gains. Cyprus, a source of significant foreign fund flows into the country, said rising… – Continue reading

Panama Papers Point to Tax Evasion

It was quite a revelation when leaked documents, made public in April, showed that Mossack Fonseca, a Panamanian law firm, had helped 14,000 clients worldwide create offshore accounts to conceal assets or dodge taxes. On Monday, a report by The Times found that there were at least 2,400 clients based… – Continue reading

Global Tax Update – June 2016

Asia Pacific The January – March edition of tax highlights for the Asia Pacific region highlights industry developments from Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia and Singapore including: Australia’s new tax system for Managed Investment Trusts The final stage of China’s B2V reform to be rolled out from… – Continue reading