Lawyer blog - Finance Business Service

Main Aspects of Automatic Exchange of Financial Information under the CRS

Published: 27/07/2018 | blog

Tags:

#Banks #Business #Confidentiality #Exchange of tax information #Legislation #Tax planning #Tax reporting #Taxation #Ukraine

In September 2017, a significant event for financial institutions around the world took place - the first automatic exchange of information for tax purposes in accordance with the CRS (Common Reporting Standard). The source of information exchange were banks, as well as other financial institutions (pension funds, investment and insurance companies, etc.). The second large group of countries is also joining the process of automatic information exchange in 2018. CRS provides for an annual automatic exchange of tax information between Member States of the Multilateral Cooperation Convention between the competent authorities on automatic information exchange under the CRS (MCAA Convention). The exchange of information on accounts of legal entities and natural persons will be made automatically, annually and on the principle of residency (in contrast to the FATCA law, which uses the principle of citizenship). The essence of the exchange is that banks collect information on financial activities on corporate accounts of the companies, individual accounts of natural persons, private funds and trusts, and then transfer it to the tax authorities of their country, which send this...

Transfer of Money from Offshore Companies: Why You Should Think about Your Offshore Investments

Published: 10/07/2018 | blog

Tags:

#BEPS #Currency control

The tax authorities of our country (and not only ours) have been trying not for the first year to prove that it is not necessary to work with offshore companies. But business representatives continue to use them for their offshore investments. In this material, let’s talk about the reasons for this “love” and the current trends in the use of offshore companies. Is it legitimate to use offshore structures? Legislation of Ukraine does not prohibit the use of offshore companies. Of course, we are not talking about the situations where taxes are not paid at all (aggressive tax planning). The settlements with partners from offshore companies will undoubtedly cause questions from the tax service. But, we repeat, there is no ban on this kind of transaction. Schemes of work with the use of offshore structures Let’s pay attention to offshore schemes, which have proved to be the most widespread. Let's start with trading schemes. [InsertImageLightGallery path='/wp-content/uploads/2018/07/scheme3.jpg' root='0'] The practical benefit of using this kind of schemes is in a variety of options for optimizing income tax, VAT and customs-related payments in the Ukrainian company....

Gaming business in Sweden

Published: 18/06/2018 | blog

Tags:

#Legislation #Sweden #Taxes

The Government of Sweden has decided to review its policy on gaming by adopting a bill on the legal regulation of gaming, the entry into force of which is planned for January 1, 2019. The bill was supported by over 90% of the present members of Swedish Parliament. The only political force that voted against was the Left Party (ex-Communists). Nevertheless, it did not affect the final result. The result of the adoption of this bill was the transition of Sweden to a regulated market of gaming both online and offline. The new rules provide for changes in tax rates, increased requirements for operators and introduction of a licensing system in the country. The history of the development of gaming business in Sweden is very interesting. The control over gaming has been carried out and is carried out by the only state company Svenska Spel. The state owns all the rights to open and regulate the gaming business, private companies in Sweden are forbidden to make gaming business. The company Svenska Spel regulates the market of lotteries, poker, bingo, as well as the market of land casinos, which belong to its subsidiary company Casino Cosmopol AB. Initially, it was planned to open six...

Leasing of Real Estate by a Natural Person

Published: 25/05/2018 | blog

Tags:

#Real estate #Taxes

Many citizens who own residential and non-residential real estate intend to lease it. But they have some questions: is it necessary to register as an entrepreneur in this case, are there any peculiarities in taxation and are there any restrictions? According to Art. 319, 320 of the Civil Code of Ukraine - the owner owns, uses, disposes of his property at his own discretion and has the right to make any actions with respect to his property that do not contradict the law, including using his property for entrepreneurial activities. As we can see, the realization of the right to lease his own real estate by a natural person can be carried out both within the framework of entrepreneurial activity (by a natural person-entrepreneur) and outside of entrepreneurial activity (without registration by a natural person-entrepreneur). We will consider in detail, what is the difference between a natural person and a natural person-entrepreneur, when leasing his own real estate. Natural person The features of taxation of income of a natural person from leasing of real estate is regulated by art. 167, art. 170 of the Tax Code of Ukraine, Resolution of the Cabinet of Ministers of Ukraine No....

Analysis of exchange of tax information and investment in exchange for citizenship, taking into account the first results of the discussion organized by the OECD

Published: 24/05/2018 | blog

Tags:

#Asset Management #Business #Citizenship #Confidentiality #De-offshorization #Double taxation #Financial statements #Investments #Legislation #OECD #Offshore accounts #Offshore schemes #Offshores #Residence Permit #Tax planning #Tax reporting #Taxation

Back in the first quarter of 2018, namely on February 19, 2018, a draft of advisory document was published on the official website of the Organization for Economic Cooperation and Development (OECD), which called on all interested parties to join the discussion on the OECD strategy for combating the loopholes on using the Common Reporting Standard (CRS, Single standard of tax information exchange) in the “citizenship by the investment” (CBI - granting citizenship in exchange for investments) and “residence by the investment” (RBI - granting a residence permit in exchange for investments). To date, more than 70 jurisdictions in the world offer these schemes. On April 17, 2018, a 96-page document was published on the OECD website (PUBLIC INPUT RECEIVED ON MISUSE OF RESIDENCE BY INVESTMENT SCHEMES TO CIRCUMVENT THE COMMON REPORTING STANDARD), which, in fact, summarized the first results of the discussion and the contents of the official letters to the organization. More than 20 structures were the speakers, including: AFME office in London (Association of Financial Markets in Europe, it brings together the largest agents in the capital markets in the region); ...

Is It Worth Implementing Distributed Ledger Technologies Worldwide?

Published: 22/05/2018 | blog

Tags:

#Blockchain

The existence of account books in paper form is measured not by one millennium. In fact, this is a kind of “database” in which the transactions are registered. With the development of computer technology, when the account books have become digital, it has become more convenient and easier to use them. At the same time, throughout the history, the operations and reporting have been subjected to thorough checks by central authorities. In our time, cryptography and software algorithms are applied in working with accounting data. Distributed Ledger Technologies (DLT), including Blockchain, is an innovative, effective and secure way of exchanging assets (finance, securities and personal data). Rapidly capturing almost all spheres of business, including healthcare, energy, logistics, telecommunications and the financial sector, DLT contributes to the intensive decentralization of modern business. Mechanism of Distributed Ledger Technology (DLT) Distributed Ledger Technology is a decentralized digital register containing blocks that are linked by a network of computer nodes. Thus, Blockchain technology is a decentralized account book, in each block of which the information...

Which countries get into the offshore list?

Published: 18/05/2018 | blog

Tags:

#Black list #Offshores

As a result of widespread use of offshore schemes in business, many countries of the world have faced a serious problem: huge capital began to pass around the state budget. In order to protect the economic system, the states make up the lists of offshore jurisdictions - the so-called “black lists” of offshores. The countries and territories included in this list are subject to close monitoring and a special system of taxation. As a rule, they are characterized by the availability of fixed tax benefits for non-resident companies up to the complete exemption from taxation of all profits, a high level of confidentiality of information with respect to business owners, the lack of requirements for the submission of accounting and financial reporting, as well as insufficient cooperation with other countries in relation to exchange of information. The lists of offshores of different countries are different, but they often include a “traditional” block of countries, generally accepted for all state lists. Among such countries are: Dominica, Panama, Seychelles, Belize and others. The Ukrainian current legislation has two lists of unreliable states: The list of offshore...

The Fifth Anti-Money Laundering Directive Has Been Adopted

Published: 17/05/2018 | blog

Tags:

#Business #Confidentiality #Corporate law #Law and the corporate m&a #Legislation

After the approval of the agreed text by the Parliament on April 19, 2018, the European Council adopted a Directive on 14 May, 2018, regulating the European rules aimed at preventing money laundering and terrorism funding. These rules are the fifth in a series and the latest update of the European Anti-Money Laundering Directive, for which they have received the name 5AMLD. 5AMLD is aimed at improving the security in Europe by stopping the financing of criminal activities without preventing the normal functioning of payment systems. It is partly a response to the terrorist attacks in Europe in 2016 and introduces such major changes into the directive 2015/849: verification of the client for virtual currencies; public access to information about the real owners of companies; strengthening of transaction checks with the participation of third countries with a high level of risk; cooperation between financial intelligence units; reduction of the threshold for identification of owners of prepaid cards from 250 to 150 Euro; extension of the Directive to all tax advisers, agents, dealers, as well as suppliers of electronic wallets and cryptocurrency...

Tax planning: optimization, minimization and avoidance of taxes

Published: 16/05/2018 | blog

Tags:

#Taxation

Taking into account an extremely unstable tax legislation of Ukraine, more and more business owners are thinking about tax planning for their enterprise or holding. Tax planning is the process of choosing the most optimal form of taxation and reducing the tax burden on business by using certain methods. Methods of tax planning for business The methods or ways by which tax planning is implemented can be conditionally divided into: tax optimization; tax minimization; tax avoidance. The main principle of these methods is that they should not go beyond the legal field, that is, their implementation is carried out exclusively within the framework of the current legislation. However, not everyone can clearly see the line between the tax optimization, tax minimization, tax avoidance and tax evasion. Many people, implementing tax planning, are guided precisely by the tax avoidance, which has a very fine line with such a concept as tax evasion. And this, in turn, often leads to problems with fiscal authorities and in some cases ends with additional charges, fines, and sometimes criminal cases. It should be noted that tax planning is widely used throughout the world...

Offshore for Trading Activities: Is It Necessary

Published: 16/05/2018 | blog

Tags:

#Business #Corporate law #De-offshorization #Export #Import #Legislation #NBU #Offshores #Tax planning #Tax reporting #Taxation Transfer pricing

Until recently, offshore companies have been actively used by the Ukrainian entrepreneurs in international trade to reduce the tax burden and keep business confidentiality. We will consider in this blog whether the situation has changed in the conditions of global deoffshorization, and in particular, tightening of the Ukrainian legislation. The field of trade has always been the simplest and most popular for offshore applications. One of the main goals of using offshore schemes in export-import transactions was to regulate the customs value of the goods, and, accordingly, the company’s trading profits. Offshore companies in such schemes were used as intermediaries between the seller and the buyer for the understatement of the value of goods during the export and overstatement - upon import. However, the process of deoffshorization has reached our country. The provisions for the control of transfer pricing started working in the Ukrainian legislation. The Cabinet of Ministers has approved and periodically reviews the list of the countries with preferential taxation (it includes both classic offshores and jurisdictions, the income tax rate for the companies which have 5 or more...

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