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Cyprus Imposes 19% VAT on Building Land

Published: 19/01/2018 | news

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#Cyprus #Taxes #VAT

From January 2, 2018 in Cyprus, the new VAT Law has entered into force, providing for changes in the main VAT Law No.95(I)/2000. The document introduces VAT at a standard rate for the sale of building land, as well as leasing/rental of business premises on the conditions specified in the law. It also introduces the reverse charge mechanism for VAT-subject supplies of land and property under a loan restructuring/force-sale arrangement, which will mostly influence financial institutions. Imposition of VAT at the standard rate of 19% on building land The standard VAT rate of 19% will be applied in the following cases: transfer of ownership; transfer of indivisible land portion; transfer of ownership via contract or sale agreement or agreement which specifies that the ownership will be transferred in the future or leasing agreement with buyout option. The above shall apply to non-developed building land which is meant for the construction of one or more structures in the course of carrying out a business activity. More clarifications are still needed for the application of the law, such as the circumstances whereby a transfer is not considered to be a part of a person’s...

Ministry of Finance Reforms Institution of Financial Liability for Tax Violations

Published: 30/11/2017 | news

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#Cyprus #VAT

Recently the Ministry of Finances of Ukraine, together with the experts from the interactive tax platform TaxLink, has developed a bill “On Amendments to the Tax Code of Ukraine regarding the improvement of the prosecution system for violation of tax laws”. The essence of the document is to reform the liability for tax violations provided by the current legislation. First of all, the bill introduces more effective mechanisms for the settlement of tax disputes in cases when the violation of tax law happened not due to the fault of the payer. In addition, it is proposed to introduce the principle of fault liability of taxpayers which is inherent in all branches of Ukrainian legislation, in contrast to the current liability of the payer without fault. Therefore, the last one will be considered guilty if found guilty that he was able to comply with the relevant rules and regulations, but did not take the necessary measures for this. In this regard, when considering the verification materials by the supervisory authority, the documents of the taxpayer may be subject to the examination that show his due diligence. Another significant innovation is the introduction of the system of...

Undistributed profit in Latvia is exempt from CIT

Published: 01/09/2017 | news

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#CIT #CIT #Dividends

On the 4th and 11th of July, 2017 the Cabinet of Ministers of Latvia approved a number of draft laws providing for the significant changes in the tax legislation of the country which will enter into force on January 1, 2018. The most significant of them will be the application of the CIT 0% rate for the reinvested profits. In other words, the enterprise will be subject to the corporate income tax only if it pays dividends or other payments for the purpose of actual distribution of the profits (conditionally distributed profit). Therefore since 2018, the company's profits are exempted from CIT, but it has to pay 20% of the income tax from the amount of dividends. At the same time, the shareholders will not have to pay personal income tax (PIT). Although, according to the bill, the CIT rate is 20%, and the tax base should be divided by a factor of 0.8, the effective tax rate actually equals 25%. It is notably that CIT will be applied not only to the dividends in the traditional sense, but also to the "deemed dividends", which are considered a new concept in Latvian tax legislation, and comparable with the dividends to the costs. Here it is important to note that the last ones...

UK and Colombia: Agreement about Avoidance of Double Taxation

Published: 09/11/2016 | news

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#Double taxation

UK and Colombia signed an agreement on avoidance of double taxation November 2, which is designed to support trade and investment by setting the upper limit of income tax on cross-border income. The agreement was signed by the Financial Secretary of the Treasury, Jane Ellison, and Colombian finance minister Mauricio Cárdenas. Income which was received through the international border, potentially exposed to tax in two countries, giving birth to the problem of double taxation. Agreement on avoidance of double taxation ensures that it is fixed, and the income earned in one country is taxed only once, not twice. Eliminating the risk of double taxation will give greater confidence for employees and companies between Britain and Colombia about which taxes they pay and where. The agreement will reduce barriers for international trade and investment, and promote growth and jobs. Also, an agreement of avoidance of double taxation includes provisions to help both countries work together to solve evasion and tax avoidance. The agreement provides that dividends accruing to the pension fund under certain circumstances, dividends will be subject to income tax at a rate of zero percent....

Germany and Costa Rica in order to avoid double taxation on January 1

Published: 07/11/2016 | news

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#Costa Rica #Double taxation #Germany

German Ministry of Finance of 24 October confirmed that the double tax avoidance, the contract between Germany and Costa Rica, will be applied from January 1, 2017. The agreement, which was signed on 13 February 2014, is the first such agreement between Germany and Costa Rica, and contains the OECD standard for the exchange of information between the tax authorities of the two countries. The tax on dividends will generally be limited to 15 percent. However, the rate of five percent would apply if the dividend recipient is a company (other than partners), which directly owns at least 20 percent of the shares of the paying company. Income tax on the interest payments, as a rule, is limited to five per cent. At the same time, the withholding tax on royalties will be capped at 10 percent. Author: Olena Kutova senior lawyer of the Finance Business Service company ...

Japan and Austria have agreed on an international agreement on the avoidance of double taxation

Published: 24/10/2016 | news

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#Austria #Double taxation #Japan

The Government of Japan and Austria have agreed in principle to amend its dual agreement on the avoidance of taxation, in order to further develop trade and investment between the two countries. The new agreement will allow, in accordance with the procedure of mutual agreement, to ensure the settlement of the double tax disputes. Also, the new agreement will reduce the rate of withholding tax at the source of investment income (dividends, interest and royalties), as well as to expand cooperation between the tax authorities of the two countries by providing assistance in collection of taxes. The Organization for Economic Cooperation and Development, in its final report, recommended that countries adopt a binding international agreement on avoidance of double taxation, to the dispute resolution mechanisms have become more efficient. Japan and Austria are among the 20 countries which have declared their commitment to the project. Changes to the Agreement shall enter into force after the completion of the approval process in both countries. Author: Olena Kutova senior lawyer of the Finance Business Service company ...

In Japan double tax go into force

Published: 03/10/2016 | news

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#Double taxation #Japan

Protocol double tax agreement tax between Japan and India came into force on 29 September. The Protocol updates the provisions on the exchange of tax information existing contract. It also amends the list of state financial institutions or central banks eligible for exemption from income tax at source of interest payments presentation in Article 11. The revised pact is active in Japan since 1 January 2017, and in India from April 1, 2017. The new double tax agreement with Germany Japan also entered into force on 28 September. The new contract provides for more favorable conditions for companies engaged in trade or investment between the two territories. Agreement again provides tax exemption at source for interest and royalties. Income from dividends will be removed if the company which receives income has a 25 percent share in dividends at least 18 months. Dividend income might otherwise qualify for a reduced rate of five per cent if the company which receives the dividends are held at least five percent of the company paying the dividends for at least six months. Otherwise, it will apply the rate of 15 percent. For updated provisions on the exchange of tax...

Ireland drew US attention to changes in the agreement on double taxation

Published: 29/08/2016 | news

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#Double taxation #Ireland #USA

Department of Finance of Ireland began meeting on the changes in the tax agreement with the United States. The Department explained that the update is seen as necessary in accordance with the decision of the United States to upgrade its model tax treaty. The United States took into account the recommendations on the update within reduce their tax base and shift profits. For example, in 2016, the model does not reduce withholding taxes on payments to highly mobile income - income that taxpayers can easily shift around the globe through deductible payments such as royalties and interest rates - which are made by persons who enjoy low or no tax in respect of income in accordance with the preferential tax regime. In addition, a new article obliges the partners to the extent necessary to make changes to the contract, if the changes cause a doubt one of the partners in the domestic law. Model 2016 also includes measures to reduce the tax benefits of corporate inversions. The update also included the US regulations, which provide that disputes between countries in the application of a double taxation agreement should be resolved through binding arbitration through...

DTA entered into force between Russia and Hong Kong

Published: 08/08/2016 | news

Tags:

#Double taxation #Exchange of tax information #Hong Kong #Russia

Comprehensive agreement for the avoidance of double taxation (CDTA) was signed in January of this year between Hong Kong and Russia, which came into force on 29 July 2016. According to the sources, this agreement shall remain in force for Hong Kong each year since its signing to double taxation, which took place on or after April 1, 2017. The CDTA is informed about what is required to support efforts to expand the tax obligations undertaken by the two countries in the framework of the «Belt and Road», which is a project of the Chinese government for the economic development aiming at the integration of trade and investment between the approximately 60 countries in Eurasia. In the absence of the CDTA program, of Hong Kong companies income, which conduct their entrepreneurial activities with the help of permanent missions in Russia and taxed in both places if their earnings was received in Hong Kong. On this basis, in the new agreement, double taxation is eliminated, and now any Russian tax paid by the companies on their earnings, will be allowed to tax payable in Hong Kong. Besides, in accordance with this agreement, the rate in Russia on income tax on royalties,...

Ukraine and Malaysia, double tax treaty

Published: 29/07/2016 | news

Tags:

#Double taxation #Ukraine

Ukraine need to sign agreement about double tax avoidance with Malaysia what will limit tax rate for dividends, interest, and royalties. According to the deal, the tax rate for dividends will be limited to 15 percent. Special rate for 5 percent will be used for dividends taking from company if it has more than 20 percent of whole company capital paying dividends. Interest and income will depend on maximal tax rate in 10 percent and 8 percent agreeably. The agreement project also include contributions about tax information based on standard developed by the Organisation for Economic Cooperation and Development. The agreement will be signed during official visit of Ukrainian President, Petro Poroshenko, to Malasia 3-5 of August, 2016 year. Ukraine hope to make the same deal with Qatar and other countries and to look through acting agreements with Belgium, Great Britain to the end of 2016 year. Author: Sergey Panovmanaging partner Finance Business...

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