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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...

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...

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

Published: 24/10/2016 | news
Tags:
#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
Tags:
#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...

Japan – EU accelerate free trade agreement

Published: 21/09/2016 | news
Tags:
#EU#Japan

Japanese and European trade and industry association addressed a joint letter to the leaders of the European Union and Japan, urging them to "make all efforts to speed up" the current negotiations on a free trade agreement. 16 September letter from the Japan Business Federation, Japan Business Council in Europe and the European Business Council in Japan seeking to enter negotiations this year. EU and Japan at the recent G7 summit pledged to arrange a free trade agreement "as early as possible in 2016". Currently, the EU and Japan are negotiating a free trade for more than three years, the letter stated: "While the 16 rounds of talks and negotiations were entered into the stage of maturity, a successful conclusion is not yet visible. ... We believe that the EU Japan and familiar with the views of each other, and both sides must now be crucial to the outstanding issues. " "If in fact, the association called on leaders to do everything possible to ensure that the free trade agreement will lead to commercially meaningful market access, removal of tariff and non-tariff measures, and include an ambitious chapter on procurement." The differences that remain between...

Japan slows down sales tax hike

Published: 31/08/2016 | news
Tags:
#Japan

The Minister of Finance in Japan, Taro Aso has said that the decision to remote previously proposed ales tax has claimed because of weak increasing of consumer spending. Aso talked on press conference with his co-worker from South Korea, Yoo Il Ho. According to Japanese Finance Minister, Aso had said that although Although economic fundamentals of the Japanese economy are solid, private consumption is not enough power, compared with improving corporate earnings and employment. "He explained that the government decided to postpone the planned tax increase" because of this background." The eight percent of sales tax firstly planned increase to 10 percent in October 2015 year, but then increasing was removed on April 2017 year. On the last week the Cabinet has signed propose about delaying of hiking sales tax for nearest time. The last time when the rate was hiking it was in April 2014 year from 5 to 8 percent. The Ministry said that the Japanese government still seeks to promote fiscal consolidation, as well as the acceleration of expenditure and revenue reforms across the board and increase potential growth by further action on structural issues and the promotion...

Japan is increasing sales tax

Published: 05/08/2016 | news
Tags:
#Japan

The International Monetary Fund (IMF) has announced to continue previously started process of increasing gradual consumption tax. The eight percent rate of gradual consumption tax in Japan first time was planned to increase it for 10 percent in October 2015, but because of current plans, it won't working in near feature to October, 2019. IMF in its 2016 Article IV consultation report for Japan said that the country need to repulse of previously planning rate for 2019 year and instead of to start with previously announced rate, step-by-step increase as fast as possible. IMF said that gradual increasing of consumption tax at least for 15 percent with 0.5-1 percentage point after several time could help to balance targets of objectives of supporting growth and achieving fiscal sustainability in the long run. In the report noticed that the structure of one rate must be save for a long time and worrying about tax impact on low-income households addressed by targeted cash transfers. The stable budget consolidation of 1.5 percent in gross domestic product (GDP) per year to 2030 year will be enough to put the public debt-to-GDP ratio on a downward path, the Fund...