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Recent News

MFU Has Developed a Draft Resolution for the Operation of VAT Risk System

Published: 13/02/2018 | news
Tags:
#Taxation#Taxes#VAT

The Ministry of Finance of Ukraine has developed a draft Resolution on the further operation of the VAT risk system. This mechanism is a necessary measure aimed at the prevention of VAT embezzlement schemes and uninterrupted process of automatic VAT refund. We remind that in December last year, the work of the VAT risk system was suspended in order to develop a coordinated effective solution which would not entail new risks. So, the MFU together with the SFS have developed and agreed upon a decision that was made public on the official website of the Ministry on February 9, for public discussion. Now the draft Resolution is under consideration of people’s deputies of the Tax and Customs Policy Committee. It includes the following changes: In order to reduce the cases of suspension of the registration of tax invoices, a “cutoff criterion” of 3% and a threshold of the volume of supply for the month of 500 thousand UAH are established. Earlier, the coordination of evaluation criteria continued for some time, that allowed some payers to use a fictitious loan. It is proposed the SFS to establish criteria for risk assessment for a prompt response. In order to ensure the...

Hong Kong Intends to Join the OECD’s Multilateral Competent Authority Agreement

Published: 09/02/2018 | news
Tags:
#BEPS#Hong Kong

On February 2, 2018, the Hong Kong Special Administrative Region officially formalized the process of ratifying the OECD’s Multilateral Competent Authority Agreement (MCAA). That means that the jurisdiction will join soon the existing multilateral network of data exchange between the tax authorities of many countries and territories around the world. The Hong Kong Tax and Fees Department introduced the Ordinance on Automatic Exchange of Information on Financial Accounts (AEOI), which will optimize the process of obtaining information by the countries with which the jurisdiction agrees to exchange. This refers to the exchange both under the Common Reporting Standard (CRS) and the intercountry reporting exchange under the BEPS Plan. After joining of Hong Kong the Multilateral Agreement, the authorities of the country will be able to pass a rather formal procedure for finalizing the relations with other participants through the OECD secretariat. If we compare this process with the conclusion of separate bilateral agreements with a number of the countries, it is much faster and easier. It is important to note that until the end of this year, the old (bilateral) rules for...

Hong Kong Legislation on Significant Controllers Register Will Enter into Force in March 2018

Published: 05/02/2018 | news
Tags:
#Hong Kong#Legislation

On January 24, 2018, the Companies (Amendment) Bill 2017 was passed, which mandates incorporated companies of Hong Kong to keep a Significant Controllers Register (SCR). The new legislation will enter into force on March 1, 2018. The Hong Kong Companies Registry has set up a special section on SCR on its website containing, amongst others, a detailed Guideline on the Keeping of SCR and specific forms for the companies to use. The main requirements for the new SCR regime are listed below. Who are required to keep a SCR? All companies “formed and registered” in accordance with the the Hong Kong Companies Ordinance, including dormant companies, financial institutions, charitable organizations, companies limited by guarantee and any other types of companies incorporated in Hong Kong, except for the listed companies, and foreign companies registered under Part 16 of the Hong Kong Companies Ordinance, must keep a SCR. What should be contained in the SCR? The SCR must contain information on the significant controllers of the applicable company, namely registrable persons (i.e., a natural person or a specified entity such as a government and international organisation) and/or...

Cyprus Imposes 19% VAT on Building Land

Published: 19/01/2018 | news
Tags:
#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...

Procedural Codes will Undergo Another Changes

Published: 21/12/2017 | news
Tags:
#Tax disputes#Tax exemptions#Taxes#Ukraine

The Verkhovna Rada of Ukraine has registered changes in the Code of Civil Procedure, the Code of Economic Procedure and the Code of Administrative Court Procedure provided for by three relevant draft laws. We remind that on December 15, the Law which had already been amended by these codes came into effect. However, as it was noted in the explanatory notes to the latest drafts, it was adopted in violation of the regulation. In addition, the Law contains a number of contradictory norms, on the correction of which the proposed changes are aimed. In general, it is proposed to rewrite the editions of the CCP, CEP and CACP, which have just come into effect. During the consideration of the procedural codes in the parliament, none of the amendments proposed by the deputies was adopted, although several thousand amendments were submitted at the stage of their preparation. Instead, before voting for the Law as a whole, only amendments were brought to a vote approved by the profile...

Sales Threshold without Cash Registers Has Been Raised to 250-500 thousand UAH per Year

Published: 20/12/2017 | news
Tags:
#Tax disputes#Tax planning#Taxes#Ukraine

The Cabineta of Ministers of Ukraine has increased the threshold of the annual sales volume without using the RCT (registrar of clearing transactions) from 75-200 thousand UAH up to 250-500 thousand UAH per one structural subdivision of the subject, depending on its organizational form and activity. Such changes are provided for by the Resolution of the CMU, as reported by the information agency “Interfax-Ukraine”. As noted, it will enable business entities that have several separate objects of trade (provision of services) not to use the RCT in the event that none of them exceeds the threshold of clearing transactions. According to the explanatory note, which the IA possesses, the Resolution also provides that the enterprises which annual income exceeds UAH 1 million are required to use cash registers, regardless of the type of their activity. The document does not apply to economic entities that carry out retail trade of excisable goods, as well as technically complex household goods. The Resolution defines a list of activities that are exempted from compulsory use of the RCT, in particular the provision of public services on the territory of villages. According to the...

Automatic Blocking System of TI Will Be Temporarily Suspended

Published: 13/12/2017 | news
Tags:
#Tax disputes#Tax exemptions#Taxation#Taxes#Ukraine

The changes provided by the amendments to the draft Law “On Amendments to the Tax Code of Ukraine regarding the Balance of Budget Revenues in 2018” has been made in the procedure of the blocking system of tax invoices. According to the announcement made on December 7, 2017, the following has been done: 1. Clause 74.2 of the TCU has been deleted, which stipulates that the URTI ensures constant automated monitoring of the compliance of TI/AC with the criteria for assessing the degree of risk sufficient to suspend the registration. This provision will come into force on the day following the day of the publication of the Law. It is also noted that, within two months from the date of entry into force of the Law, the Cabinet of Ministers must: determine the procedure for suspension of the registration of TI/AC in the URTI in accordance with clause 201.16 of the TCU; ensure the revision and bringing of the normative legal acts in compliance with this Law by the ministries and other central executive bodies. In addition, the Cabinet is obliged, within a period of three months from the date of entry into force of this Law: to adopt the normative legal acts which are...

The register of data on beneficiaries of Hong Kong companies will be non-public

Published: 01/09/2017 | news
Tags:
#Corporate law#Hong Kong

On June 23, 2017, the official government publication of Hong Kong published a draft amendment in the Ordinance on the companies (Companies (Amendment) Bill 2017). One of the changes it covered was the introduction of a requirement for the companies registered in Hong Kong to collect, store and provide up-to-date information on their beneficiaries for the verification. This refers to the so-called "Registers of people with significant control over the companies". This innovation was adopted within the framework of the international policy on combating money laundering and financing of terrorism and it is designed to bring the corporate jurisdiction legislation in the line with the standards of the Financial Action Task Force on Money Laundering. By analogy with the definition given by the FATF, in anti-laundering legislation of Hong Kong, "significant controllers" are defined as individuals and legal entities that: directly or indirectly own more than 25% of the company's shares; directly or indirectly have more than 25% of the voting rights of the company; directly or indirectly have the right to appoint or remove the majority of the members of the company's board of...

Hong Kong has adopted amendments in Ordinance on companies

Published: 01/09/2017 | news
Tags:
#Hong Kong

On June 23, 2017, the official Hong Kong government publication published a draft amendment in the Ordinance on the Companies (Companies (Amendment) Bill 2017). The changes were adopted as the additional measures in combating with money laundering and financing of terrorism, and they are designed to bring the corporate legislation of jurisdiction in compliance with the international standards of the FATF (Financial Action Task Force on Money Laundering). The project provides for the introduction of two requirements for Hong Kong companies, one of which is the maintenance of public registries of the beneficiaries or "persons with significant control over the companies" (Register of People with Significant control). "Significant controllers" refer to the persons owning directly or indirectly of more than 25% of the company's assets, as well as entitled to exercise significant influence over its activities. The second change concerns the introduction of the mandatory licensing for the providers of trust and corporate services. The license, which has validity for 3 years, will need to be received within 90 days, starting from January 1, 2018. The administrative liability will be...

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,...