Author: Алёна Каменецкая

According to a recent announcement of the Dutch Ministry of Finance, the fiscal unity regime of the state may be amended with retroactive effect to October 25, 2017, 11.00 hours. It has been caused by the recent release of the opinion of EU Advocate General Campos Sánchez-Bordana in C-398/16 and C-399/16 cases. In both cases, the question is to what extent the current Dutch fiscal unity regime does not comply with EU law (in particular, concerning the freedom of establishment) in the context of any difference in approaches between the companies belonging to fiscal unity, on the one hand, and the companies that are not related to it, on the other. As a result of the release of the opinion and in order to avoid a significant negative impact on the budget, the Dutch Ministry of Finance announced that the fiscal unity regime will be amended with retroactive effect to October 25, 2017, 11.00 hours, if according to the decision of the European Court, along with the opinion of the Advocate General, in C-398/16 or C-399/16 cases, the Dutch fiscal unity regime violates EU legislation. We note that at this stage the matter is not about the draft legislative proposal, but only a...

On July 14, 2017, the Parliament of Cypriot amended the current legislation on granting tax resident status to foreigners. We should remind that foreign tax residents of Cyprus benefit from the agreements on avoidance of double taxation signed by the state, and they also benefit tax exemptions when receiving dividends, interest and royalties. Until recently, the main condition for obtaining this status was staying on the island for at least 183 days a year. The adopted innovation provides for the possibility for individuals to become a Cyprus tax resident, staying on its territory for only 60 days a year, while observing a number of conditions. So, in order to obtain a Cyprus tax residency under the 60-day rule, which took effect on January 1, 2017, you must: remain in Cyprus for at least 60 days during the tax year in question; not reside in any other single state for a period or periods exceeding 183 days; not be tax resident in any other state; carry out business activities, work in Cyprus or be a director of a company that is tax resident in Cyprus at any time during the tax year in question (at the same time, if a person ceases to conduct business or employment...

The NBU continues the gradual mitigation of exchange restrictions, as it is reported on the website of the regulator. We remind that until recently, the transfer of foreign currency for the placement of guarantee deposit outside Ukraine for the provision of transactions has been allowed only to banking institutions participating in the international payment systems. Now, according to the decision of the Board of the National Bank, such operations on the basis of an individual license of the NBU can be carried out by both banks and non-bank financial institutions. In addition, the procedure for the application of exceptions to the prohibition of early loan repayment and loans in foreign currency received by the residents of the country from non-residents has been specified. Such exceptions include all payments under certain credit agreements or loan agreements, that is, the payments on the principal amount, taking into account interest and other payments provided for under the agreement. It is expected that the innovations, fixed by the Resolution of the NBU Board of October 10, 2017 No.101 and entered into force on October 12, 2017, will contribute to the creation of favorable...

On August 30, 2017, an international team of researchers notified the Estonian government of a security vulnerability of the ID cards issued to around half of the Estonian population. The potential risk concerns the ID cards issued since October 2014 (including cards issued to e-residents), i.e. about 750,000 cards. In this regard, the Department of the Estonian Information System Authority has taken temporary measures to restrict some features of the ID cards of this period of release. Since there were no real cases of unauthorized use of the ID cards, today the vulnerability is theoretical. A security breach was discovered in connection with the advancement of the “e-Estonia” national initiative, designed to bring citizens into the digital ecosystem of public and private services built upon the security and authentication. The Estonian ID card unifies access to a host of services. Using this card, the citizens can carry out banking operations, vote, file their tax returns, apply for state benefits, apply to serve in the armed forces and fulfil many other actions remotely. Business owners can use the ID cards to file their annual reports, apply for licenses, and so on,...

On September 27, the Minister of Finance of Ukraine, Alexander Danilyuk, met with the representatives of the Organization for Economic Cooperation and Development (OECD) to discuss the implementation of the Action Plan on Base Erosion and Profit Shifting (BEPS) and joining of Ukraine to the automatic exchange of information between fiscal authorities (AEOI standard). With this visit, the OECD representatives launched the first common program for the implementation of the international standards for information exchange and BEPS activities. According to Alexander Danilyuk, the Ministry has developed a detailed Roadmap for the introduction of the Minimum Standard of the Plan, according to which Ukraine will join the MLI (Multilateral Instrument) before the end of this year. The implementation of the Steps 6 and 14 of the Minimum Standard of the Plan will contribute to improving the mechanisms for combating the artificial use of the additional benefits of the international conventions in order to exempt profits from taxation. The corresponding amendments will be introduced in more than 60 existing international conventions on the avoidance of double taxation. It is also worth...

On September 4, 2017, the Central Bank of China, together with the National Commissions on Securities Regulation and five other local authorities, issued a Circular prohibiting the implementation of the ICO. According to the statement of the regulator, this decision was made in order to avoid financial risks. We remind that in the market of crypto currency, along with the concept of IPO (initial public offering), the concept of ICO (initial coin offering) appeared. The latest operations involve raising capital by a company working with blockchain technology, by issuing not digital shares, but digital tokens. The feature of this type of investment is the absence of limit on the amount of funds invested, that is, any person who has a crypto-currency purse on a trading platform can invest even a tiny amount. In this case, if investing in the shares, the investor buys a share in the company, then the members of the ICO acquire only the internal coin. In addition, the primary offers of crypto currency tokens are a kind of unauthorized (which means illegal) fundraising and may be linked to financial pyramids and other frauds, and in the event of a company failure, the investors are not...

The European Commission has developed a new system of legislative verification of foreign direct investments. The President Jean-Claude Juncker announced it in his speech in front of the European Parliament in Strasbourg on September 13, 2017. Such an initiative was caused by the growing concern of some EU countries (primarily France, Germany and Italy) with regard to the investments from non-EU countries. To date, these investments are often targeted at strategically important sectors of the economy (for example, energy, telecommunications and technology). In his speech, the President confirmed that the EU will remain open to the foreign direct investment (FDI), but an "energetic and effective policy" should be developed pursuing two objectives: "to ensure an equal playing field with the rest of the world and protect the most important European assets from the investments that damage the legitimate interests of the EU or its individual members". The verification system proposed by the European Commission is aimed at improving cooperation and coordination between the Member States that check transactions affecting the security or public order. The President set out the developed...

On September 7, 2017, a regulatory framework was developed for the new Dutch Corporate Governance Code, which will enter into force on January 1, 2018. The companies registered in the Netherlands will have to report the compliance with the new corporate legislation in their annual management reports. The adopted Code is based on the principle of "to observe or explain". The most notable features of it are: focus on the creation of long-term values; provisions for enhanced risk management; new rules for effective management and supervision; introduction of culture and behavior within the framework of corporate governance; simplified wage rules; new rules of relations with shareholders; clarification of the requirements for the quality of explanation. Based on the new legislation, the new corporate governance tools were developed, including the rules regulating the activities of the supervisory boards and their committees, as well as a corporate governance checklist that allows companies to assess their compliance with the current...