Bulletin 12

Printable Version

MONEY LAUNDERING: Most EU states failed to meet 4MLD implementation deadline

The European Commission has written to 17 member states criticising their failure to transpose the Fourth EU Money Laundering Directive into national legislation by the 26 June deadline. Apparently, only the UK, France, Germany, Italy, Spain, Slovenia, Sweden, Austria, Belgium, the Czech Republic and Croatia have implemented the directive, which, among other things, requires all jurisdictions to maintain national registers of company and trust beneficial ownership. Fourteen countries have not implemented the directive at all, and three have done so only partially.

CORPORATE TAXATION: Google overturns billion-dollar French tax bill

A French court has struck out the EUR1.12 billion bill imposed on Google by the French tax authorities. The Paris Administrative Tribunal ruled that Google did not have a permanent establishment in France during the 2005-2010 period, and so was acting lawfully by booking advertising sales at its European headquarters in Ireland.

UK: Date revealed for offence of failure to prevent tax evasion

The corporate criminal offence of failure to prevent tax evasion in the UK’s Criminal Finances Act legislation will take effect on 30 September 2017, under statutory regulations introduced into parliament yesterday (12 July 2017). The offence applies to evasion of tax in overseas jurisdictions – not just the UK – and the commencement date is the same as that for the first international automatic exchanges of information under the Common Reporting Standard.

UK: Jersey subsidiaries of UK parent ruled to be UK tax resident

The UK’s First Tier Tax Tribunal has held that the Jersey-incorporated subsidiaries of a UK parent company were under the parent’s effective central management and control for residence purposes, even though board meetings to decide their actions took place in Jersey. The tribunal found that the transactions presented to these board meetings had no commercial justification for those companies, and so their decisions must have been taken at the instruction of the UK parent company (Development Securities (No.9) Ltd v HMRC, 2017 UKFTT 565 TC).

BELGIUM: Corporation tax cut forces government to raise personal taxes

The Belgian government’s decision to cut the corporate income tax rate from 34 to 25 per cent will be paid for by extra taxes on high-net-worth individuals. These include a new 0.15 per cent annual tax on securities accounts; taxes on reimbursed share capital; and the extension of the so-called ‘Cayman tax’ on income received by trusts, foundations and other entities established in low-taxed jurisdictions.

VIRTUAL CURRENCIES: Bitcoin split poses accounting puzzle

Earlier this week, the virtual currency Bitcoin was split into two forms: the original Bitcoin, and the new Bitcoin Cash. All holders of the original Bitcoin should now receive an equivalent amount of Bitcoin Cash, posing difficult questions as to how it is declared for legal and tax purposes. The acquisition value of Bitcoin Cash is arguably zero, so investors could already be holding substantial unrealised gains, according to James Brockhurst of London law firm Forsters LLP.

ITALY: First person to receive non-dom status

The first person to be granted resident non-domicile status under the non-dom regime established earlier this year in Italy is a high-net-worth individual who was formerly registered as a non-dom in the UK. He has been non-tax resident in Italy for the past nine years.

FRANCE: Repeal of 3 per cent distribution tax

France’s finance ministry has announced it intends to repeal the 3 per cent tax on dividend distributions, following a recent European Court of Justice decision that the tax may breach the EU Parent-Subsidiary Directive. The repeal will probably appear in the draft Finance Bill 2018, to be published in September 2017.

PROPERTY INVESTING: Prime London market has maintained price increases, except for most expensive properties

The idea that prime Central London property prices are generally falling is untrue, according to property researchers London Central Portfolio. Only the top 20 per cent of the market is stagnant, with prices still rising in all other sectors, it says. Properties in the top 10 per cent of the market, where prices average GBP6.5 million and stamp duty has on average doubled, have seen an 8 per cent decrease since the market peaked in the third quarter of 2014.

GERMANY: ECJ challenge to anti-treaty shopping rules

The European Court of Justice is being asked to consider a Dutch company’s claim that German rules against tax-treaty shopping are incompatible with EU law. The provisions under challenge state that Germany can impose withholding taxes on payments to foreign companies unless certain conditions (the shareholder test and the business income test) are satisfied, though these conditions are not applied equally to German-resident companies.

EUROPEAN UNION: Finance ministers to debate taxing Airbnb

It is reported that EU finance ministers are preparing a joint proposal from France and Germany on the taxation of home-sharing platforms, such as Airbnb.

Sources: STEP | IFC Review

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