Bulletin 13

Printable Version

GUERNSEY: Register of beneficial ownership now live

The Beneficial Ownership of Legal Persons (Guernsey) Law 2017 came into force on 15 August, and the associated limited-access electronic registry service is now live. It imposes a statutory duty on resident agents to keep an up-to-date record of the beneficial owners of legal entities for which they are responsible, essentially setting a 25 per cent threshold for beneficial ownership.

TAX TRANSPARENCY: EU’s blacklist of ‘uncooperative’ jurisdictions close to completion

The European Commission’s Tax Code of Conduct Committee is discussing the sanctions that EU member states will apply to its forthcoming blacklist of jurisdictions used by multinational companies for tax avoidance. Leaks suggest that each Member State will have a choice of withholding taxes, tighter controlled foreign company rules, limits on tax-deductible expenses, and restrictions on the participation exemption.

HONG KONG: Anti-profit-shifting plan abandons ‘light touch’ regulatory strategy

The Hong Kong government’s recent policy paper on implementation of the OECD/G20 base erosion profit shifting (BEPS) package indicates that an amendment bill covering transfer pricing, country-by-country reporting, and dispute resolution will be put to the Legislative Council by the end of 2017. The paper proposes a significant expansion of the previous transfer pricing code, allowing adjustments of profits or losses of an enterprise where arm’s-length pricing would have given a different tax result.

CANADA: Practitioners object to stricter voluntary disclosure conditions

The Canadian Bar Association and the Chartered Professional Accountants of Canada have criticised plans for significant changes to the government’s voluntary tax disclosure programme. They urge the government to abandon its requirement that a taxpayer applying to use the VDP must name its professional advisor.

UK: Guidance on submitting country-by-country reports

HM Revenue & Customs has set out the procedure to be followed by multinational companies operating in the UK when preparing and submitting their country-by-country income and expenditure reports.

IRELAND: Beneficial ownership register delayed by at least three months

The Irish Republic has confirmed that it has missed the 26 June deadline for implementing the beneficial ownership register provisions of the Fourth EU Money Laundering Directive (4MLD). Its register will not be introduced until the fourth quarter of this year, and there will be an extended period of at least three months for companies to make their beneficial ownership filings after the launch, with the deadline falling in early 2018. It is not yet clear whether the general public will have full access to the register.

UK: Companies worldwide must beware of Britain’s new extraterritorial offences

Companies, LLPs and partnerships anywhere in the world could be prosecuted in the UK and fined unlimited amounts under the Criminal Finances Act, which comes into force at the end of September. The principal new offence is failing to prevent the facilitation of tax evasion, whether the taxes are UK or foreign imposed.

COLOMBIA: Tax amnesty open until end of 2017

Colombia has launched an amnesty for undisclosed assets and income during calendar years 2015 to 2017. It will remain open until 31 December, during which time taxpayers will pay only 13 per cent of the value of their undeclared assets or fabricated liabilities, plus accrued interest and a supplementary tax.

TAX EVASION: International financial industry at risk from new UK offence

Law firm Carey Olsen has issued a warning to Channel Islands businesses regarding the new UK corporate criminal offence of failing to prevent the facilitation of tax evasion, included in the Criminal Finances Act and scheduled to come into effect on 30 September. The firm says it is vital that businesses put in place bespoke measures that will prevent the facilitation of tax evasion offences by its associated persons, given the strict liability and extra-territorial nature of the offence.

RUSSIA: Mansion offered for sale in bitcoins

A client of Russian property marketing company Kalinka is offering his home for sale in bitcoins at a price equivalent to USD8 million. Kalinka says there is no precedent for such a transaction and its legal department is investigating whether the sale of a property for cryptocurrencies is legal in Russia.

UK: Official statistics on non-dom numbers and incomes released at last

The first-ever official figures regarding UK non-domiciled individuals indicate there were 85,400 resident non-doms in 2014-2015, of whom 54,600 were claiming taxation on the remittance basis. Resident non-doms paid a total of GBP8.7 billion in UK income tax and national insurance contributions, and GBP250 million in capital gains tax.

EUROPEAN UNION : Member states have launched 1,300 investigations of Mossack associates

The European Parliament’s PANA committee, set up to examine the implications of the so-called Panama Papers leak, has published a study on EU Member States’ capacity to fight tax crimes, in which it includes tax avoidance and money laundering. The report reviews measures taken by Member States in response to publication of the documents stolen from Panama law firm Mossack Fonseca, finding that at least 1,300 inquiries, audits and investigations have been launched into the 3,000-plus EU-based taxpayers and companies linked to the firm.

LUXEMBOURG: Patent box law offers 80 per cent tax relief

A draft law has been introduced into Luxembourg’s Parliament setting out details of its new intellectual property (IP) regime, which provides 80 per cent tax relief on net income derived from qualifying IP. Patents and copyrighted software qualify, but marketing-related intangible assets, such as trademarks or domain names, do not. The new regime should apply from fiscal year 2018.

PORTUGAL: Limits on cash payments

Portuguese residents are now forbidden to make or receive cash payments above EUR3,000. The corresponding limit for natural persons not resident in Portugal and not acting as entrepreneurs or merchants is EUR10,000. Corporation tax and personal income tax bills higher than EUR1,000 must be paid from a traceable bank account. It is not yet clear whether the limits apply to gifts, grants and donations as well as purchases.

US: Trump repeats promises on corporate tax reform

US president Donald Trump claimed in a speech last week that US-owned companies are holding between USD3 trillion and USD5 trillion of profits offshore to avoid paying US corporation tax on repatriation. The White House said Fortune 500 corporations alone are holding more than USD2.6 trillion in profits offshore to avoid USD767 billion in federal taxes, though these numbers are disputed.

Sources: STEP | IFC Review

Please contact David Marinelli should you wish to discuss any matter relating to jurisdiction & compliance risk management or asset protection pertaining to your business or your clients.