Bulletin 29

Printable Version

SWITZERLAND: Stock exchange prepares digital assets trading market

The organisation that runs the Swiss stock exchange will next year launch a trading platform offering integrated end-to-end trading, settlement and custody services for digital assets such as virtual currencies. The regulated exchange will host all elements of blockchain trading under one roof, so that other financial assets such as bonds and equities can be digitised and attached to a digital token to store their value and allow swift transaction between parties.

INDIA: Government declares 40 per cent tax on offshore companies with Indian place of effective management

Last month, the Indian federal government issued guidance stating that a foreign company whose place of effective management is determined to be in India must pay the 40 per cent corporation tax rate on its entire global income. The notification is retrospective to tax filings already made for the year ending 31 March 2017.

GERMANY: Non-residents to be taxed on property company disposals

Draft clauses in Germany’s Annual Tax Act 2018 will impose new taxes on the sale of property companies owned by foreign-based taxpayers. Until now, Germany has had no explicit right to tax profits from the sale of shares in property companies where the property is in another country. If passed, the new regulations will apply after 31 December 2018.

UK: Investor visa applications soar, boosted by Chinese super-rich

So-called Tier 1 applications for UK residence visas increased by nearly 50 per cent to 400 in the year to 31 March 2018, despite the tightening of the eligibility rules in 2015. Chinese investors continue to be the most common applicants for the visas, which allow visitors to remain in the UK for 40 months if they invest more than GBP2 million in the UK economy.

TAX TRANSPARENCY: OECD updates criteria for blacklisting non-transparent financial centres

The OECD Global Forum last month amended its criteria for identifying jurisdictions that it regards as not having satisfactorily implemented its tax transparency standards, and which are thus candidates for blacklisting. As well as the three objective criteria set in 2016, it has added three more, based on a jurisdiction’s compliance with automatic exchange of information standards. The blacklist will be updated at the end of 2019.

UK: Reforms force thousands of non-doms to leave UK tax net

The number of individuals claiming non-domiciled taxpayer status in the UK dropped sharply from around 120,000 to 91,100 in 2016-2017, according to the UK tax authority’s latest estimates. About half of the 30,000 who dropped out of non-dom status have switched their status to domiciled taxpayer, while the other half left the UK tax system entirely, probably because of the drastic reforms to non-dom taxation introduced in that tax year.

UK: Further confirmation that UK will implement EU 5AMLD

The UK government has again confirmed that it will adopt the EU Fifth Anti-Money Laundering Directive (5AMLD), enacted earlier this year. Lord Henley, a Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy, noted in a private letter to Margaret Hodge MP that the January 2020 deadline for transposition of the directive falls within the implementation period of Britain’s exit from the UK. HM Treasury is planning consultations in winter 2018/19 and spring 2019.

MONEY LAUNDERING: FATF ordered to clarify position on crypto assets

The international Financial Action Task Force has been told to clarify how its money laundering standards apply to crypto assets, virtual currency providers and related businesses, after a meeting of G20 countries’ finance ministers stated the need for urgent action to address the ‘real and growing’ money laundering, terrorist financing and tax evasion risks from crypto assets. FATF will report back in October 2018, focusing on customer due diligence, fund transfers, supervision and enforcement.

US: Legislators remove beneficial ownership registration clauses from controversial bill

Bill HR 6068 now passing through the US Congress, originally introduced to create a national directory of beneficial owners of legal entities, has been amended by the deletion of all its transparency clauses.

TAX INFORMATION EXCHANGE: EU citizen alleges CRS account data sharing is unlawful

An Italian-domiciled woman has lodged an official complaint with the UK’s Information Commissioner, alleging that the disclosure of her personal and financial information to other countries under the OECD’s Common Reporting Standard is incompatible with the European Union’s General Data Protection Regulation.

MOLDOVA: Tax amnesty unpopular with EU authorities

Moldova’s Parliament has enacted a tax amnesty law inviting residents to disclose previously undeclared income and assets without fear of prosecution, on payment of a 3 per cent tax. However, the policy has not found favour with the European Union, which considers that the legislation is incompatible with current reforms aimed at corruption, money laundering and organised crime. The Council of Europe’s Moneyval organisation says it was never consulted on the law’s compatibility with money laundering and counter-terrorist financing standards.

CYPRUS: Authorities attempt to withdraw banking facilities from shell companies

Cyprus’s Central Bank is drafting a directive stating that financial institutions should no longer open new accounts or maintain existing accounts with shell or letter-box companies. It has already issued an advisory circular to the effect that banks should not offer accounts to trading companies with no effective place of business and management and hence no substance in Cyprus, unless the bank keeps a record of its justification for doing so.

CORPORATE TAX: UK sees boom in diverted profits tax receipts

The UK tax authority collected GBP388 million of diverted profits tax in the 2017/18 tax year, almost 40 per cent higher than in the previous year. The tax, introduced in 2015, is imposed on multinational companies’ foreign profits by deeming them reportable in the UK if they have been artificially diverted abroad.

Sources: STEP | IFC Review

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