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...

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); ...

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...

How to choose a foreign bank and open an account in it in 2018: will it be easy?

Published: 17/04/2018 | blog

Tags:

#Asset Management #Business #Confidentiality #De-offshorization #Export #Import #OECD #Offshore accounts #Offshore schemes #Offshores #Tax planning

What is important to know when choosing a foreign bank in 2018 Recently, an increasing number of citizens, concerned about their future, the future of their family or business, face the issue whether it is possible to open an account in a foreign bank and what is required for this? Which bank to choose for this: European, offshore bank, etc.? Historically, (and sometimes it is quite justified) the trust to a foreign bank is higher than to local institutions, and obtaining, for example, a loan is possible on more favorable terms than in Ukrainian banks, moreover, many people wish to keep the confidentiality of their actual income. Regardless of whether you want to open a foreign bank account online in offshore or onshore jurisdictions, a number of aspects need to be considered and analyzed when choosing a bank. That is why the company Finance Business Service works with more than 100 banks around the world. We ask only really necessary questions in the process of selecting banks for our clients. The current situation in the banking shows that financial institutions are increasingly facing problems of unexpected loss of correspondent accounts in US dollars. In general, the US is...

Implications of Brexit for Customs and VAT Rules

Published: 19/03/2018 | blog

Tags:

#Accounting #Business #Export #Import #Legislation #Reforms #Tax planning #Taxation

In a press release of January 29, 2018, the Council of Europe announced the second set of additional directives on the negotiations detailing the position of the EU-27 (27 EU Members without the UK) regarding the transition period with respect to Brexit. These directives give the Commission the authority to initiate discussions with the UK on the terms of Brexit and establish a transition period, no longer than until December 31, 2020. During the transition period in the UK, full and constant application of the EU legislation is provided. However, the state will no longer participate in the EU administration and the decision-making process. On January 30, 2018, the EU Commission published a document warning the companies of the key challenges in the customs and VAT that they will have to be overcome when the United Kingdom is not a Member of the EU. If no other transition period is agreed between the EU and the UK, the European Customs and VAT regulations in the UK will no longer apply from March 30, 2019, as the UK officially announced its intention to leave the EU on March 29, 2017. This document provides a brief overview of the customs and VAT implications that will arise...

Reforming VAT Rules for Online Sales in the EU

Published: 02/03/2018 | blog

Tags:

#Business #Import #Legislation #Reforms #Tax planning #Tax reporting #Taxation #VAT

On December 5, 2017, the European Council adopted amendments to the legislation regulating VAT rules for online sales of goods and services in Europe, developed by the European Commission a year ago. These legislative changes were adopted within the framework of the strategy of “single digital market” and aimed at simplification of the payment of VAT on purchases of goods and services on the Internet by the European consumers. The changes assume: simplification of the current Mini One Stop Shop (MOSS) mode for cross-border telecommunications, broadcasting and electronic services transition to taxation at the place of destination (location of the recipient) and simplified reporting through MOSS for remote sales of goods introduction of an obligation to pay VAT for electronic interfaces (for example, platforms) that facilitates the delivery of low-value goods imported or sold in the EU by the suppliers from outside the EU Since the new legislation consists of a two-tiered package of measures, it comes into force in two phases: in 2019 and 2021. From 2019, the changes will touch the MOSS system. There is an exception that allows micro-enterprises of the EU to pay for...

European VAT on Provision of Electronic, Telecommunications Services, as well as Television and Radio Broadcasting Services

Published: 19/02/2018 | blog

Tags:

#Business #Export #Import #Legislation #Reforms #Tax planning #Taxation #VAT

The format and methods of delivery of many goods refer them to the category of services, especially if they are transmitted over the Internet, such as e-books, music downloads, streaming of content. The regime of VAT for this particular subcategory of services provided electronically has undergone significant changes lately. In this blog, we will consider the requirements of the current European legislation, and we will try to cover the coming changes in this area in the next ones. In accordance with the European legislation, came into effect from January 1, 2015, telecommunications, television and radio broadcasting, as well as electronic services, are subject to VAT at the location of the client, whether it is a business or a consumer, located in or outside the EU . However, in order to ensure the correct taxation of these services, the supplier needs to determine the status of his client (whether he is a VAT payer), as well as his location. The easiest and most reliable way to define whether a customer is a business or a consumer is to ask him for a VAT number. Suppliers can check the VAT numbers of their customers using the website of the VAT Information Exchange System...

European VAT On Providing Services

Published: 24/01/2018 | blog

Tags:

#Accounting #Business #Export #Import #Legislation #Tax planning #VAT

The companies which have customers in the European countries have to determine the state in which their income is subject to VAT and related consequences with respect to the indirect tax. The supply of “services” is defined as something that is not a “commodity”. Each supply of services should be analyzed in the light of the rules of the place of delivery in order to ensure the right accounting of VAT by the right person in the proper jurisdiction. It is especially important on making global sales that may lead to VAT obligations, and the rules of the place of delivery are the starting point for this. As in the case of goods, there are different rules for determining the place of delivery (as well as, accordingly, the place of their taxation) for the services provided to the business (B2B) and services to the end user (B2C). As a general rule, the provision of B2B services is taxed at the location of the client. In this case, the customer must provide the VAT number to the service provider, otherwise such a transaction is considered as B2C. If the client is a resident of a third country (not EU Member State) and does not have a European VAT number, he must provide...

Unblocking Tax Invoices: Will It Be the Same for Everyone?

Published: 17/01/2018 | blog

Tags:

#Tax disputes #Tax planning #Taxation #Ukraine

Before New Year, our legislators traditionally adopt and publish numerous changes in the tax legislation. The change from 2017 to 2018 was no exception. Thus, on December 7, 2017, the Law of Ukraine No.2245-VII “On Amending the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenue in 2018” was adopted and officially published on December 30, 2017 (newspaper “Golos Ukrainy” No.248 (6753) dated December 30, 2017). The Law provides for the numerous changes in the tax legislation. The most expected change for business, perhaps, was the abolition of the “blocking” of tax invoices from January 1, 2018, at least until March 1, 2018. It became possible in connection with the exclusion of clause 74.2, article 74, of the Tax Code of Ukraine, which provided for the continuous automated monitoring of tax invoices and adjustment calculations for compliance with the criteria for the risk assessment sufficient to stop the registration of such tax invoices/adjustment calculations. In addition, paragraph 201.16 Art. 201 of the Tax Code of Ukraine has also been amended, according to which (new edition) “registration of a tax...

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