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The Cabinet of Ministers Excluded 5 Countries from Offshore List

Published: 08/02/2018 | news

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On January 31, at the meeting of the Ukrainian government, it was decided to exclude 5 countries from the list of offshore companies, namely Estonia, Latvia, Georgia, Malta and Hungary. We remind that on January 19, the Ministry of Finance of Latvia announced that the inclusion of this country in the list of offshore zones was unreasonable. Earlier, Ukraine included Estonia in the list without notification of the Estonian government, so the Prime Minister of the state Jüri Ratas reacted by a statement on the need to remove the jurisdiction immediately from the offshore list. It took place on January 26, during his meeting in Davos with the Prime Minister of Ukraine Vladimir Groysman and the Minister of Finance of Ukraine Aleksandr Danilyuk. In total in 2017, Ukraine expanded the list of the countries, the operations with counterparties of which are subject to control in the administration of the law of transfer pricing, to 25 countries. Guadeloupe, Guatemala, French Guiana, the Commonwealth of Dominica, the Dominican Republic, Estonia, Iran, Cuba, Laos, Latvia, Lebanon, Mauritius, Malta, Morocco, Monaco, the United Arab Emirates, Singapore, Georgia and Hungary were added to...

Offshore Transactions No Longer Subject to Additional Bank Checks

Published: 01/02/2018 | news

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#Offshores #Taxation #Ukraine

The NBU has forbidden financial institutions to apply the requirements of the Regulation on the procedure of analysis by the banks and verification of documents (information) on financial transactions and their participants (Resolution No.369) to the transactions, one of the parties of which are persons registered in the offshore zones. On January 24, the financial institutions received the corresponding Clarification No.25-0008/4731, signed by the director of the financial monitoring of the National Bank of Ukraine, Igor Beryoza. The document was sent out in the form of an electronic message. The letter states that from January 1, 2018 banks should not define such operations as risky ones, which means they are not required to conduct additional checks and request the documents from the clients. This change is justified by the fact that the order of the Cabinet of Ministers, effective from September 16, 2015, with which the list of offshore countries and territories was enshrined, lapsed at the beginning of this year. At the same time, the updated list, determined by a separate order, was not included in the relevant resolution of the National Bank. In other words, the list of...

Another 6 Countries Have Joined the BEPS Multilateral Convention

Published: 31/01/2018 | news

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#BEPS #Offshores #Taxation

On January 24, 2018, another six states signed the Multilateral Convention for the Implementation of Activities under the BEPS Plan (MLI Convention). In this regard, the countries were able to amend promptly their agreements on avoidance of double taxation, taking into account the recommendations developed by the OECD in the framework of the plan of action to counteract the base erosion and withdrawal of profits from taxation. Barbados, Côte d'Ivoire, Jamaica, Malaysia, Panama and Tunisia joined the MLI Convention, after which the total number of signers reached 78. It is also worth noting that Algeria, Kazakhstan, Oman and Swaziland have announced their intention to sign the Convention in the near future. In addition, other jurisdictions are actively working on signing the agreement in June this year, as the press service of the OECD reports. To date, four jurisdictions - Austria, the Isle of Man, Jersey and Poland - have ratified the Convention, which will enter into force three months after the fifth part of jurisdictions transfers the instruments of ratification to storage. The Convention, developed as part of large-scale negotiations involving more than 100 countries and...

Since January 1, 2018, Amount of Official Payments Has Been Increased in the BVI

Published: 25/01/2018 | news

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#Legislation #Offshores

In connection with the entry into force of amendments to the Law on Commercial Companies of 2004 (as amended in 2005), since January 1, 2018, the official fees have been increased in the BVI, levied from business companies in the Register of Corporate Affairs. These changes were adopted and published by the Government of the British Virgin Islands at the end of 2016. Initially, it was assumed that the amount of official payments will be increased from July 1, 2017, but in March of last year, the entry into force of the changes was postponed until January 1, 2018. The increase in the amount of following payments is among the most notable changes: Accordingly, the fines for late payment of annual fees have also been increased, since they are set as a percentage of the annual fee. The amount of payment for the restoration of the company in the Register has also been significantly increased. Some new duties have been introduced, including: for the primary registration of a copy of the register of company participants; for registration of changes in the register of participants; for registration of an application for consent to use a limited in the use word or a...

The European Union Excluded 8 Countries and Territories from the “Black List” of Offshore Zones

Published: 24/01/2018 | news

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#Black list #Grenada #Macau #Offshores #Panama #UAE

The European Union excluded 8 countries and territories from the “black list” of offshore zones, as it was reported on the official website of the Council of the European Union on January 23. The following countries were removed from the list: Barbados, Grenada, the Republic of Korea, Macau, Mongolia, Panama, Tunisia and the United Arab Emirates. As it was noted in the message, the exсlusion was justified taking into account the expert assessment of the obligations undertaken by these jurisdictions to eliminate the shortcomings identified by the European Union. In each case, the commitments were backed up by the letters signed at a high political level. At the same time, the above countries and territories belong to a separate category now, subject to close monitoring. We remind that on December 5, 2017 the EU announced its intention to exclude 17 jurisdictions from the “black list” of offshore zones that do not take appropriate measures to ensure financial transparency and combat tax crimes. Thus, 9 of the planned 17 countries and territories remained on the list, namely American Samoa, Bahrain, Guam, Marshall Islands, Namibia, Palau, Saint Lucia, Samoa and Trinidad and...

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...

The European Union Intends to Exclude 8 Countries from the “Black List” of Offshore Zones

Published: 17/01/2018 | news

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#Black list #EU #Offshores #Tax disputes #Офшори

The European Union is discussing the possible exclusion of eight countries from the “black list” of offshore zones. It is reported by the IA Reuters, referring to the documents at its disposal. According to the agency, Panama, UAE, South Korea, Barbados, Grenada, Macau, Mongolia and Tunisia can be removed from the list. Such a proposal is justified by the fact that these countries have agreed to change their tax policy. In addition, an exclusion from the list of Bahrain was discussed, but in the end, it was decided to leave it on the list. On Tuesday, January 16, the issue was discussed at the ambassadorial level. And next week the proposal will be considered by the EU finance ministers. In early December, the last ones published a “black list” of countries that did not want to cooperate with the EU in the field of tax reporting, as reported by the UNIAN. The list includes 17 countries, namely: American Samoa, Bahrain, Barbados, Grenada, Guam, Macau, Marshall Islands, Mongolia, Namibia, United Arab Emirates, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and South Korea. Offshore zones are on the territory of the most part of these states. We remind that...

OECD Has Published Comments Regarding Taxation of Offshore Indirect Transfers

Published: 11/12/2017 | news

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#Offshore accounts #Offshore schemes #Offshores #Офшори

The Organization for Economic Cooperation and Development has published the comments that were received during the consultation on the draft of a new tool regarding the taxation of the so-called Offshore Indirect Transfers. We remind that the last ones constitute transactions for the sale of a legal entity located in one country and owning any immovable asset located in another country, by a non-resident of the country where the asset is located. The developed tool is part of the OECD program to assist developing countries in creating their own tax policies for Offshore Indirect Transfers. The Organization for Economic Cooperation and Development has justified its actions by the concern that such countries may have difficulties in administration of tax systems because of a lack of appropriate competencies and resources. Thus, the attempts to minimize the tax burden have become more frequent among the multinational corporations, and there is no single principle for considering these transactions. In addition, the issue is not regulated by the BEPS (Base Erosion and Profit Shifting), the action plan of the OECD on the counteract of the tax base erosion and profit shifting from...

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...

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