Bulletin 25

Printable Version

SWITZERLAND: Automatic exchange of account information with Hong Kong and Singapore could begin next year

The Swiss federal government is seeking Parliamentary approval of its agreements to automatically exchange financial account information with Singapore and Hong Kong from Autumn 2019. It is also proposing to begin non-reciprocal multilateral automatic exchange with other financial centres, including the Bahamas, from 2020, when AEOI has been introduced with all competing financial centres.

CORPORATE TAXATION: EU ministers may be developing cold feet on digital turnover tax

Plans for an interim EU-wide turnover tax on digital businesses appear to have taken a step backwards, as ministers of Member States at an ECOFIN meeting acknowledged that the US administration will regard it as a hostile act.

BENEFICIAL OWNERSHIP: Opening up British Territories’ registers ‘will be ineffective’ against financial crime

Comment is appearing on the UK government’s controversial decision to force British Overseas Territories to open their company beneficial ownership registers to the public in 2020, in contravention of its previous policy to allow the jurisdictions autonomy in their internal affairs. Law firm, White & Case, notes that the move is likely to simply shift the problem elsewhere, and will in fact hamper efforts to fight financial crime, as well as driving away legitimate business.

AUSTRALIA: Cryptocurrency exchanges must register with AUSTRAC

Cryptocurrency exchanges in Australia must now follow money laundering rules published by the Australian Transaction Reports and Analysis Centre (AUSTRAC). They must verify the identities of customers, report suspicious matters and transactions involving physical currency of AUD10,000, and keep records for seven years. A six-month grace period is allowed during which AUSTRAC will only take enforcement action if a business fails to take reasonable steps to comply, although they had to register by 14 May 2018.

US: Customer due diligence regime goes live

All US banks have, on the 11 May 2018, begun applying the US Treasury’s new customer due diligence regime, requiring them to verify the identity of new business customers’ beneficial owners. But even after four years of consultation, the rules are not easy to understand when applied to complicated ownership structures.

FRANCE: Income tax bills to be deferred next year

The postponed introduction of a pay-as-you-earn (PAYE) income tax collection system in France means that most 2018 income will escape immediate tax and social charges in 2019, except for households that already elect to pay provisional amounts on account over ten months. Taxpayers will be required this month to declare their 2017 income as usual, and will receive their bill in September or earlier, but the risk of a double imposition of income tax in 2019, when PAYE comes into effect, has obliged the government to forgo the provisional payments, due in 2019, on income earned in 2018, and the corresponding social charges.

BREXIT: EU’s Juncker Urges Belgian Citizenship for UK Staff

About 1,100 UK citizens work for the EU in Brussels and Luxembourg. Mr Juncker called Belgium a kind host and asked its prime minister, Charles Michel, to “show the same generosity when it comes to granting Belgian citizenship” to British EU staff. When the UK leaves the EU next March Britons will lose their EU citizenship. The UK and EU have already pledged to protect citizens’ rights after Brexit, but that does not mean granting nationality.

PORTUGAL: Banks must report deposits above EUR50,000

The Portuguese tax authorities can now order banks to automatically report all residents’ accounts with balances above EUR50,000, following the issue of a government decree last Thursday. The decree was originally approved in 2016, but suspended by the President until the country’s banks had regained their liquidity.

SWITZERLAND: Still the leading wealth management centre, but rivals pile on pressure

Switzerland is still the world’s biggest international wealth management centre, managing CHF1.85 trillion (USD1.84 trillion) of international assets at the end of 2017, according to accountancy firm Deloitte. However this amount is 7 per cent less than in 2010, and the jurisdiction is under pressure from the UK, with USD1.79 trillion of assets under management and the US with USD1.48 trillion. Hong Kong and Singapore are also growing their market shares rapidly.

TURKEY: Tax amnesty for businesses

Turkey’s Law No.7143 has been gazetted and is now in force, offering special treatment of tax receivables incurred before 31 March 2018. The tax authority will write off either 50 or 100 per cent of penalties, and interest due on disputed tax liabilities, if the taxpayer pays the entire original tax without delay, though the details are very complex.

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.