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Taxand's Take - your regular update on the latest issues affecting multinationals

29 Jan 2010

Welcome to the first edition of Taxand's Take - your regular update on the latest tax issues affecting multinationals. Taxand's Take is taking over from Taxand's Quarterly newsletter which has been running for several years. Accessible online this topical newsletter will be sent to you every two months. And Taxand's Take will give you just that - informed opinion on the latest tax changes and how they affect you.

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FEATURE: The Tobin Tax: Myth or Plausible Reality?

Author: Fr?d?ric Donnedieu, Chairman, Taxand

The prospect of emergence from the global financial crisis has set the scene for confrontation between those who want everything to go back to how it was before and those who claim that nothing will ever be the same again. Politicians, who generally adopt the second line of argument, try to give their views credibility by adopting a whole variety of initiatives. Alongside proposals for new regulations and the taxation of bonuses, they have brought back the idea of a Tobin tax, a widespread tax on financial transactions.

In the eyes of those in favour of this tax, it would only have benefits: it would discourage speculation without hitting the real economy and would make it possible to finance the development of emerging countries. Those who criticise the tax argue that it should be global - which seems impossible to realise - and that implementation in some countries only would simply lead to relocation of back offices.

Frederic Donnedieu, the Chairman of Taxand, examines the theory of Tobin tax, anticipates the form that it would take and exposes the potential technical problems that could arise should it be put into practice.

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CHINA: Chinese Partnership - A New Alternative... A Better One?

Thinking of investing in China? A new alternative is now available. The long-awaited Administrative Measures for Foreign Enterprise and Individuals to Establish Partnerships in China has been issued by the Chinese State Council. Effective from March 1, 2010 Chinese partnerships can be formed with:

  • two or more foreign enterprises or individuals
  • foreign enterprise(s) or individual(s) and Chinese individual(s)
  • enterprise(s) or other organisations(s)

In addition foreign enterprises and individuals are allowed to become partners in a partnership formed by Chinese individuals, Chinese enterprises or other organisations. Good news for foreign investors?

Taxand China investigates these changes and suggests possible structures for foreign investors to consider. Find out how you can take advantage.

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EUROPE: The 2010 VAT Package - How is it Impacting Businesses?

1 January 2010 was a crucial date in terms of European VAT as it signified the entry into force of the so-called "VAT Package". All 27 countries in the European Union member states have adopted the new VAT Package with rules affecting all companies, big or small, conducting business in the EU... But what are the impacts for these businesses and what additional changes have jurisdictions implemented to suit their domestic legislation?

Taxand's European Indirect Tax team investigate the finer details to understand how the changes imposed by the VAT package can benefit multinationals.

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FRANCE: Specific Transfer Pricing Regulation is now Mandatory for Multinational Enterprises Located in France

After several years of indecision, the French tax authorities have finally issued specific regulation regarding Transfer Pricing for multinational enterprises (MNEs). The new regulation, contained within the French 2009 Corrected Finance Bill, sets out compulsory obligations to which MNEs must adhere: From 1 January 2010 MNEs located in France need to prepare in advance and make available relevant transfer pricing documentation to support their related parties' transactions.

Taxand France discusses the content of the new legislation and the actions MNEs located in France will have to take in order to comply.

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SPAIN: Investors Take Note: Spanish REITs Introduce Lower Rate Tax - from 30% to 19%

There's been a major tax change submitted to the Spanish Parliament for the implementation of the Real Estate Investment Trust (the Spanish equivalent of REITs known as "SOCIMIs") regime in Spain. The basic feature of the special tax regime for SOCIMI is that they will be subject to 19% CIT instead of the regular 30% tax rate.

Dividends distributed to non-resident investors will be tax exempt. There is an obligation to distribute dividends annually. Capital gains obtained by non-resident investors on the sale of their participations in the SOCIMI would be partially tax exempt in Spain.

Taxand Spain looks at the features of the new SOCIMI and identifies how multinationals can take advantage of this by exploring potential tax planning opportunities with REITs in your territories of operation.

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UK: Bank Payroll Tax - How will it Impact Your Business?

The UK's pre-budget report delivered on 9 December 2009 announced a new Bank Payroll Tax that applies to banks and building societies on bonuses over ?25,000. The stated aim is to encourage banks to consider their capital position and make appropriate risk adjustments when setting the level of bonus payments. The concept is simple, but the implementation will be complex and have negative commercial implications for the UK's financial service industry.

Taxand UK outlines to whom this tax will apply; how it operates; and the practical implications and applications for businesses.

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The information contained in this document is intended only to be a guide. It must not be relied on in, or applied to, specific situations without previously seeking proper professional advice. Even though all reasonable care has been taken in its preparation, Taxand and all the members of this network do not accept any liability for any errors that it may contain or lack of update before going to press, whether caused by negligence or otherwise, or for any losses, however caused, or sustained by any person. Descriptions of, or references or access to, other publications within this publication do not imply endorsement of them. As provided in the US Treasury Department Circular 230, this tax newsletter is not intended, or written by any Taxand member firm, to be used, and cannot be used, by a client or any other person or entity for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

Taxand member firms have produced this tax newsletter in connection with the marketing of our tax services relating to matters discussed therein. Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. Taxand is a global network of tax advisory member firms. Each member firm is a separate and independent legal entity responsible for delivering client services.

(C) Taxand Economic Interest Grouping 2010

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