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Taxand's Take - Your regular update on the latest issues affecting multinationals
Welcome to the latest edition of Taxand's Take - your regular update on the topical tax issues affecting multinationals. Accessible online this newsletter is 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.
EUROPE - Germany & UK Sign New Tax Deal Impacting Offshore Bank Accounts with Switzerland
In August 2011, after a long period of negotiations, Germany, the UK and Switzerland finally concluded important tax deals to clamp down on tax evasion by German and UK residents concealing bank deposits in Switzerland. A final withholding tax will be charged on future income from savings and investments on an anonymous basis. "Old wealth" hidden from the German and UK tax authorities will be regularised through an anonymous one-off payment or through disclosure. Swiss banks will make a guaranteed payment of CHF 2 billion to the German tax authorities and CHF 500 million to the UK Inland Revenue. Germany, the UK and Switzerland will also improve their mutual cooperation on tax matters. The treaty is expected to be signed by the parliaments of the three countries in the following weeks. It will probably become effective at the beginning of 2013. Taxand Germany, Taxand Switzerland, Taxand France, Taxand Luxembourg, and Taxand UK take a look at the deal and its impact on individual taxpayers with offshore bank accounts.
GREECE - Revival of 2010 Tax Amnesty Scheme to Benefit Economy
The Greek Tax Amnesty Law has been resurrected, and offers enterprises the option to settle their unaudited fiscal years ending 31 December 2009. The scheme applies to companies whose fiscal year ends on or prior to 31 December 2009. Businesses with fiscal years ending after 31 December 2009, will not benefit from this scheme. However unlike 2010, the revised tax amnesty scheme is available to a wider circle of enterprises, namely, enterprises with reported annual gross revenues in excess of EUR 20 million but not more than EUR 40 million. It is also available to enterprises whose shares are listed on the Athens Stock Exchange. Taxand Greece discusses the revival of the 2010 tax amnesty scheme and specifically how it will be calculated.
UK - Taxation of Intellectual Property - Recent UK Reform
The introduction of a patent box regime taxing relevant profits at 10% in the UK has brought renewed focus to the management of UK intellectual property. Proposed reform to the UK controlled foreign companies (CFC) legislation has also necessitated a review of intellectual property management and the tax implications of centralised holding companies to fund manage and exploit intellectual property. Taxand UK details the proposed changes to UK legislation impacting intellectual property and explains why it is critical time for multinational groups with UK operations to consider the new guidance and compliance obligations - it is also a critical time to review the planning opportunities afforded by the new guidance.
FINLAND - New Finnish Government Adjusts Tax Rates
In June 2011 the new Finnish government reached an agreement on the governmental programme. The agreement includes the fiscal policy for the next four years, aiming to secure financing for welfare services and to balance the national economy while strengthening economic growth and employment. In September the government published the 2012 budget proposal. The budget proposal includes several tax changes, most of which would come into force already from the beginning of 2012. Taxand Finland reviews the impending tax reforms and what they will mean for MNCs and individuals operating in Finland.
INDIA - COMPENSATION TAX - New Social Security Rules for International Workers
The Ministry of Labour and Employment made fundamental changes to the social security rules in India and, specifically, to the "Employees' Provident Fund" with effect from 1 October 2008. The scope of the scheme was broadened to compulsorily cover International Workers under the purview of India's social security regime. This has resulted in considerable unrest in the business and expatriate communities, since businesses and expatriates would each have to pay 12% of the expatriate's "salary" as employer and employee social security contributions, respectively. The initial version of the scheme that was notified in 2008 suffered from a fair degree of legislative ambiguity which was, to a large extent, clarified by subsequent amendments and Frequently Asked Questions. Taxand India describes the key features of the scheme as it stands today.
MEXICO / US - US Tax Credit on Mexican IETU Available
42 of the 43 countries, with which Mexico has signed a treaty for the avoidance of double taxation (double tax treaty), have accepted that the Mexican flat rate business tax ("IETU" as per its initials in Spanish) is covered by the corresponding double tax treaties. The IETU is considered to be comparable to income tax. Taxand Mexico reviews the IETU and in particular discusses the impact this is having on US taxpayers investing in the country.
CYPRUS / UKRAINE - Double Tax Treaty & Beneficial Ownership
On 2 December 2010 Ukraine's Tax Code introduced a definition of beneficial ownership when applied to double tax treaties. Taxand Cyprus and Taxand Ukraine comment on how this will affect multinationals investing in Ukraine through Cypriot companies.
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 of its firms 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 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 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 organisation of tax advisory firms. Each firm in each country is a separate and independent legal entity responsible for delivering client services.
(C) Taxand Economic Interest Grouping 2011