Сергей Панов, Author at Finance Business Service

China canceled the income tax and established VAT

Published: Sergey Panov | 27/05/2016 | news

The taxpayers will pay VAT instead of tax on profits and that will reduce the burden on enterprises. The Chinese government has made certain changes in the procedure for taxation of companies: now companies are exempted from the need to pay income tax, but they will be required to pay value added tax. Tax reform is accompanied by the spread of the circular of the State Council and shall enter into force on 1 May 2016. For effective implementation of the new program administrations must interpreted new tax rules correctly. In turn, the companies are required to pay prescribed amounts of tax on time, refraining from evasion. According to preliminary data, the transition to the new system will affect about 10 million taxpayers who will be required to pay VAT (mostly working in construction and real estate, finance and the service sector). The authors of the bill believe that the innovation will facilitate the tax burden on many businesses. Li Keqiang, Premier Wu Yi said that the ongoing reform will have a positive impact on the profitability of companies by reducing the size of obligatory deductions to the treasury (more than 500 billion yuan for the whole of the...

Ireland is ready to reform budget process

Published: Sergey Panov | 26/05/2016 | news

The Irish Government is ready to reform the budgetary process to ensure the more regular involvement of parliament. The Government has approved proposals put forward by Finance Minister Michael Noonan and Public Expenditure Minister Paschal Donohoe. The plans were first set out in the Programme for Partnership Government, the document drawn up following months of negotiations between the new minority Fine Gael administration and the opposition parties. The main aim is to ensure that the budgetary process is underpinned by substantially enhanced parliamentary input and feedback. As part of the new budgetary cycle, the Government will publish a Spring/Summer Economic Statement (SES) in June, and will hold a National Economic Dialogue event the same month. It will publish a Mid-Year Expenditure report in July for the first time, and will circulate Tax Strategy Papers to the relevant parliamentary committees in late July. The SES will provide an updated assessment of the macro-economic and fiscal outlook, and an updated forecast on the "fiscal space" in the budget, to inform discussion on budgetary priorities. The objective of the National Economic Dialogue will be...

Japan-Panama, the tax information exchange

Published: Sergey Panov | 25/05/2016 | news

Japan and Panama have agreed to conclude an agreement on the exchange of tax information. Negotiations for this agreement were launched after the Japan-Panama summit meeting which took place on April 20 this year between Prime Minister Shinzo Abe and President of Panama Juan Carlos Varela. The two leaders shared the view that Japan and Panama must immediately begin formal negotiations on an agreement on the exchange of tax information. Currently it is likely that Japan will become the first country to sign an agreement on the exchange of tax information with Panama after the leak "Panama Papers" earlier this year. The agreement will include the rules in accordance with the general standard of the automatic exchange of tax information between countries created by the Organization for Economic Cooperation and Development. Author: Sergey Panovmanaging partner Finance Business...

Singapore-Cambodia, an agreement on the double taxation avoidance

Published: Sergey Panov | 25/05/2016 | news

Singapore and Cambodia signed an agreement on avoidance of double taxation with a view to increasing cross-border trade and investment between the two countries. The agreement clarifies the rights in relation to tax in both countries on all forms of income streams arising from cross-border business activity but also ensures that the income will not be taxed twice. Under the deal tax on dividends, interest and royalties will depend on the maximum rate of 10 percent. Some of the interest payment would be released. The agreement also includes provisions for the resolution of contractual disputes through the process of mutual agreement and provides for the exchange of information in tax matters. The Treaty will enter into force after the completion of the domestic ratification procedures in both countries. Author: Olena Kutova senior lawyer of the Finance Business Service company ...

Tax breaks in Hong Kong’s double tax agreements

Published: Sergey Panov | 24/05/2016 | news

Recently Hong Kong has signed DTA with Romania and Russia, which will cut tax for cross-border trade and investors. Due to Romanian double tax agreement, income tax of Romania can be paid from any other tax which has the same income. Withholding of tax in Romania will cut to current 16 percent to 5 or even 3 percent. The income profit earned by Hong Kong's residents will be enjoying to for full tax exemption. Due to Russian DTA from Hong Kong will income tax paid by Russian residents or companies shall be allowed as a credit against any tax payable in respect of the same income in Russia. Withholding of tax in Russia will cut from current 20 percent or 30 to even 3 percent. The cap of 5 percent will be allowed if even one of the official owner has more than 15 percent of common profit of the company. Profit from international shipping transport also will be enjoying to for full tax exemption. Hong Kong airlines which operating in Russia will pay tax only due to Hong Kong's tax rate. Author: Sergey Panovmanaging partner Finance Business...

US corporate tax reform

Published: Sergey Panov | 23/05/2016 | news

Chairman of the Senate Finance Committee Orrin Hatch held a hearing on the question of integrating the new corporate tax reform. The reforms will allow US corporations to deduct dividends paid from their tax calculations. Hatch said that "under the current system the income obtained only once on behalf of the shareholders is taxed twice because of fiction created by the law which considers the business and its owners as two separate taxpayers. In particular, the income is taxed at a rate of 35 percent. " Hatch is also noted that "the current system of double taxation has led to a number of unpredictable economic distortions which might not exist in a more integrated system" - including the bias in the selection of a business entity in relation to the corporate model. There are two main ways to integrate corporate and individual tax code to allow shareholders for the corporate tax credit or allow corporations to deduct dividends. One of the reasons why Hatch chose to follow the latter option is that it will allow companies to reduce their own effective tax rates. It is also necessary to establish the relationship between debt and equity which may help with...

UK urges to postpone the introduction of quarterly reporting

Published: Sergey Panov | 20/05/2016 | news

British Association for Taxes and Levies encourages postpones the introduction of a digital quarterly reporting at least one year. As part of the introduction of digital tax project, in 2020, the majority of enterprises, private entrepreneurs and landlords will be required to "monitor their tax affairs in digital form and update reports at least once a quarter with your digital tax records." In accordance with the statement of the association, the release of the five consultation documents on introduction of the digital tax returns, will be postponed until the European Union referendum, which will take place on 23 June. British Association of Taxes and Duties noted that such a delay could mean that the five consultations will be issued immediately, with simultaneous submission deadlines that allow for the launch of public testing in April 2017. Yvette Nunn, co-chairman of Tax Professionals Association, said: "If we assume that all consultations will be required to be represented by say at the end of September 2016 to carry out all the phases of public testing by April 2017, it will be impossible to adequately take into account the views and constructive the issues...

New Zealand, signing the report sharing

Published: Sergey Panov | 19/05/2016 | news

Revenue Minister of New Zealand, Michael Woodhouse, has said that recently signing agreement on the report exchange between countries will be increase country's tax collection capability. This agreement that provide country-by-country exchange of financial reports was recently signed by officials from New Zealand, Canada, China, Iceland, India, and Israel, totally 39 countries. Woodhouse also said that some large multinationals often use some difficult financial scheme, what helps them to escape of paying tax, called base erosion and profit shifting. This new country-by-country reporting agreement is on the centre of financial activity, allow to participants exchange information of multinationals activity. «Under that agreement, large multinationals will have to provide information relating to economic activity, including the global allocation of income and taxes paid," the Revenue Minister said. "Each revenue authority collecting this information to exchange with other countries. This also will show us a full picture of every multinational financial activity. According to this agreement it will be easier to control any tax wrongdoing». The agreement can...

Is it possible to get away from double taxation?

Published: Sergey Panov | 18/05/2016 | blog

In our article today we will try to found an answer for a popular question - how multinational companies of innovation technologies avoid a taxation? Also we will talk about one of the biggest international company nowadays. This company started with з producing PC in 1998 and pocket music player with rigid disk in 2001, this company has been developed technologies what we used to use in our daily life. Not even creative and challenging character helped them to get a success but also clever way in questions with taxation. Parliament proceeding on 2014 was announce that in period from 2009 to 2012 they could cover more than USD 44bn. Even do not pay attention that the general director said that they had any violations by their side. With that this occasion was beginning of a lot revolts as in the USA as in other countries, where this company have has an essential profit and pay misery tax. Fundamental in international taxation is based on such principle of "all income should be taxed only once." In other words, the rules relating to international taxation should not only allow to avoid double taxation, but also to avoid double tax evasion. After a short...

Australian taxation reforms

Published: Sergey Panov | 18/05/2016 | news

In their pre-election debate the leaders of Australian’s main parties proposed their own positions to taxation. In his opening statement to the leaders' debate in Sydney, Malcolm Turnbull, Prime Minister of the current Coalition Government, said that he want that their tax system can support our business. In near feature the small business company tax rate will be cut from 28.5 percent to 27.5 percent from July 1, 2016. The turnover threshold for access to the rate will be increased from AUD2m (USD1.5m) to AUD10m. The unincorporated tax discount will be increased from five percent to eight percent from July 1, 2016 and hope that the discount will be increased to 16 percent on July 1, 2026. Turnbull also said that while the Government believes in lower business taxes, "paying tax is not optional." He added that it is the way how they introduce a diverted profits tax (DTP). Bill Shorten, leader of the opposition Labor Party, thinks that is not a suitable time to provide tax cuts to large companies, also he thinks that their small business has billion dollars' turnover. Also he said that someone who earns a million dollars a year, courtesy of this Government, will pay...

Author: Сергей Панов