Сергей Панов, Author at Finance Business Service

Canada, OECD countries are taking steps to the direction of closing tax loopholes for the rich

Published: Sergey Panov | 09/03/2016 | news

Banking rules will be tightened, which cost for the government and taxpayers billions each year. Missing revenue from corporate income tax in the range of $ 100 billion and $ 240 billion a year. This year, the Government of Canada and Switzerland closer to the use of Common Reporting Standard (CRS). This agreement will oblige the secretive bankers to share more information with Canada Revenue Agency, so to hide money abroad become more difficult. But this is only one part of a much larger and coordinated effort on the part of many countries. Dozens of countries of the organization for Economic Cooperation and Development (OECD), from 2013, working on closing the "gaps and inconsistencies" in their tax rules that allow large companies and very rich people do not pay their share. Until the transaction is being developed between Canada and Switzerland was preceded by another agreement, signed in January, the free exchange of tax information on large companies. Agreement Canada / Switzerland does not expect to see any exchange of information up until 2018 - if adopted the necessary legislation. Countries still have a long way to go before they will accept...

MNCs corporate taxation

Published: Sergey Panov | 04/03/2016 | news

On March 1, 2016, UK's HM Revenue and Customs (HMRC) published a policy document explaining how the rules of corporate tax in the country apply to transnational corporations. The article states that, as a rule, the foreign company must pay UK corporation tax, if it has a permanent establishment (PE) in the UK, or economic profitable activity is carried out in the UK. The document stresses that the many different elements contribute to the economic activity of the multinational company, including sales, employees, technology, physical assets and intellectual property. It says that if a company has a customer in the UK, it does not mean that it carries out its economic activity there. The document also explains the example of the fact that the presence of the British web site does not mean that non-resident company has a permanent place of business or a dependent agent in England. HMRC says that the concept of PE and as a multi-national company are taxed in different countries is not new, but noted that "what has changed is the way in which businesses operate, not least because of their ability to make sales online in many different countries....

Switzerland, US Agree FATCA

Published: Sergey Panov | 03/03/2016 | news

Switzerland and the United States agreed on a new Foreign Account Tax Compliance Act (FATCA), with the exception of accounts belonging to lawyers and notaries. In accordance with the provision of the agreement, an account maintained for specific purposes by lawyers and notaries to their customers (ie accounts that are for certain activities) will be excluded from the scope of the new law. The financial institution account management will not be required to identify interested customers by providing written confirmation of a lawyer or notary that the accounts fall under the scope of the exemption clause. According to the Swiss Federal Council, this will ensure that professional confidentiality of lawyers and notaries will be maintained under Swiss law. Swiss Bankers Association will amend the relevant processes documentation to allow banks implement new products. Negotiations on the introduction of the new agreement are underway. In contrast to the current transaction, the new agreement will provide for the automatic exchange of information between the tax authorities. Author: Olena Kutova senior lawyer of the Finance Business...

Luxembourg announces corporate tax reduction

Published: Sergey Panov | 02/03/2016 | news

The Luxembourg government has announced a package of tax measures that will be introduced next year including the reduction of the corporate tax and changes to the personal income tax. The government plans a gradual corporate tax rate reduction by three percent. Starting with the two percent cut to 19 percent by January 1, 2017. And since January 2018, the rate will drop to 18 percent. In addition, a lower rate of 15 percent will be available for the "young, innovative companies ", annual taxable income that does not exceed EUR 25,000 per year. Nevertheless, the company's ability to carry losses forward to offset against future income will be limited in 2017. Existing law allows unlimited number of losses of previous years. Starting next year, the accumulated losses can be carried forward only for 10 years and use to compensate for a maximum of 80 percent of profits. The government also intends to revocation of provisional 0.5% percent crisis tax in 2017 and make income tax system more "fair" by reducing tax rates. However, the tax on high incomes which exceed EUR 150000 would be 41% and revenues more than EUR 200,000 - 42 percent. Author:...

EU, EFTA discuss free trade

Published: Sergey Panov | 02/03/2016 | news

Legislators of the European Free Trade Association (EFTA) met with European Union Trade Сommissioner to discuss priorities in the free trade zone. EFTA Parliamentary Committee met with Commissioner Cecilia Malmstrom on February 23. They discussed a new strategy of Commission, "Trade for all" which aims to make EU trade policy more effective in providing new economic opportunities, as well as more transparent, in terms of opening negotiations to strengthen public control. Rather than focus on the interests of the EU trade policy will uphold EU values. The participants discussed the ongoing negotiations on the partnership of the transatlantic trade and investment partnership. The Committee also met with sever members of the European Parliament including Viviane Reding, the rapporteur on the Provision of trade services agreement. Also, Committee members found out how the European Parliament is involved in the international negotiations of a trade agreement. EFTA countries are Iceland, Liechtenstein, Norway and Switzerland. Author: Olena Kutova senior lawyer of the Finance Business Service company ...

Double tax treaty between Cyprus and Switzerland

Published: Sergey Panov | 01/03/2016 | news

The first Cyprus-Switzerland double tax treaty (DTT), signed in 2014, entered into force in October 2015 with its provisions taking effect as from January 1, 2016. Under the treaty there is no withholding tax (WHT) on interest and royalties. There is also no WHT on dividends in those cases where the beneficial owner of the dividends is: a company (other than a partnership), the capital of which is wholly or partly divided into shares, holding directly at least 10% of the capital of the company paying the dividends for an uninterrupted period of at least one year (the time period criterion may be satisfied post the date of the dividend payment), or a pension fund or similar institution recognized as such for tax purposes, or the government, a political subdivision, local authority, or the central bank of one of the two Contracting States. Per the treaty, a 15% WHT on dividends applies in all other cases. Irrespective of this, per the provisions of Cyprus’ domestic tax legislation, Cyprus does not apply WHT on dividend payments out of Cyprus at all times. Author: Sergey Panovmanaging partner Finance Business...

Held a debate on the future of VAT in the EU

Published: Sergey Panov | 29/02/2016 | news

The European Commission held a debate on reform of the VAT framework on February 24. The Commission was preparing to publicate an Action Plan on VAT. The European Union's value-added tax system "needs reform", said the commission. It needs to close the difference between theoretical VAT revenue receipts and the actual. This was estimated at EUR180bn (USD198bn) in 2013. It was result from avoidance, cheating and providing by the states of the European Union of reduced VAT and tax benefits. The VAT system creates administrative burdens nowadays, noted the European Commission, especially for small businesses and online companies. It said, that the VAT system should to be modernized in today's digital environment because of innovative business models and technological progress. The Commission issued a Roadmap earlier on February. Roadmap of the release of its Action Plan for a simple and efficient system of VAT to the single market that is going to be in March 2016. The Action Plan is intended to summarize the achievements made since the 2011 and set out the direction for future work. The principle of the new rules it is the destination...

Financial Institutions Tax (FIT) in Poland

Published: Sergey Panov | 29/02/2016 | news

The Polish Parliament adopted the bill introducing a new tax on financial institutions (called also a bank levy). The bill was passed for signature of the President. It entered into force from February 1, 2016. Generally, the tax applies to banks, credit unions, lending institutions, as well as insurance/reinsurance companies. The new tax applies also to Polish branches of foreign banks (credit institutions) and foreign insurance/reinsurance companies. The funds are out of scope. According to the new law, the tax base is defined as the surplus of total assets disclosed in the financial institution’s accounting books exceeding certain amount calculated at the end of each month. In the case of banks and credit unions, as a rule, the tax base will be decreased by the amount of their equity. Author: Sergey Panovmanaging partner Finance Business...

Property tax reform for UK

Published: Sergey Panov | 29/02/2016 | news

The International Monetary Fund said, that the United Kingdom should make changes to its medium-term fiscal consolidation strategy. Reducing of tax expenses could improve the tax regime's efficiency, increase tax neutrality and to free up revenues, the IMF has said in its 2015 Article IV report. The report also said that further property tax reform could decrease the shortage of housing. It recommended easing the tax burden on real estate transactions and increase the fees that are based on the property value.Also recommended to reduce tax rebates on the property of a single occupier. The IMF said that the reduction of the bias of tax code toward debt could contribute financial stability. Author: Olena Kutova senior lawyer of the Finance Business Service company ...

Offshore trust – structure, provisions

Published: Sergey Panov | 18/05/2015 | news

A founder (who can be also a beneficiary), under a special agreement passes the valuables to the control of a trustee, who shall perform operations with them, bringing the maximum profit to the beneficiaries or other, relevant to instructions of the founder. Trustee services are paid by the beneficiaries or trust founder, usually as a percentage of the profits. The object of trust can be any property, both movable and immovable. The property expressly prohibited by the legislation of trust’s country of foundation is excluded from this relationship. The founder may transfer his property during his lifetime (lifetime trust), and provide such transfer after his death (testamentary trust). The trustee is responsible for the conditions of the trust agreement and, as a rule, gets wide powers to manage the estate of the founder, but can also get specific instructions on the distribution of trust income and capital between the beneficiaries upon the occurrence of certain conditions, clearly specified by the founder. Such conditions are usually included in the so-called founder’s letter of wishes, addressed to the trustee. The founder also has the right to make...

Author: Сергей Панов