Bulletin 33

Printable Version

PANAMA: Exchange of information begins

Panama has commenced its automatic exchange of information in order to meet OECD global standards, the government has announced. The country will be exchanging information with 33 countries. Panama’s Chief Financial Officer, David Hidalgo, said that it was important for the country to ‘respect these standards and our commitments so as not to be on a black list of tax havens.’

MALTA: Maltese wages and inflation to rise as labour market expands

EC autumn forecast says Malta’s strong GDP growth is set to continue, with wages strengthening and inflation progressively rising. Malta’s strong labour market is expected to lift wages and increase prices, the European Commission’s autumn forecast is predicting. The Commission said that increase in employment in Malta is expected to remain strong, but to start moderating as economic growth eases.

NETHERLANDS: Low-tax jurisdictions named for CFC dividend tax

The Dutch government has published a list of ‘low-tax jurisdictions’ that will be subject to the country’s new source tax on overseas entities that have no substance. The existing dividend withholding tax will be abolished. The listed jurisdictions are those with corporate income tax rates less than 7 per cent, namely Anguilla, the Bahamas, Bahrain, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Kuwait, Palau, Qatar, Saudi Arabia, the Turks and Caicos Islands, the United Arab Emirates, and Vanuatu.

GERMANY: Trade tax exemption for third-country dividends breaches EU law

Germany’s ‘activity clause’ for taxation of third-country sourced dividends is contrary to European Union rules on free movement of capital, the European Court of Justice (ECJ) has ruled. According to tax accountants PwC, the ECJ’s judgment in EV (C-685/16) establishes that an activity clause with no ‘motive test’ is unlawful if the provisions regulating the tax exemption for domestic dividends do not also include such a clause.

SWITZERLAND: Corporate tax reform plan goes to referendum next May

A referendum on Switzerland’s proposed new corporate tax system, known as Tax Proposal 17, is to be held on 19 May 2019, with a view to bringing the law into force on 1 January 2020. The Federal Act on Tax Reform and AHV Financing will repeal the country’s existing special corporate tax regimes in an effort to keep Switzerland off the European Union’s blacklist, which will include jurisdictions that offer preferential rates to foreign companies as well as jurisdictions that practice tax secrecy. Proposal 17’s predecessor was rejected in a national referendum in February 2017.

CITIZENSHIP: Booming demand for investor passports

The Economist magazine has published an analysis of the burgeoning global industry now offering citizenship and residence to wealthy international investors. More than 100 countries now offer a residence-by-investment programme and over a dozen others offer citizenship – including Austria, Cyprus and Malta, soon to be joined by Moldova and Montenegro, despite the European Commission’s current investigation into the business.

EUROPEAN UNION: Cash-control regulation adopted

The Council of the European Union announced on Tuesday (2 October 2018) that it has formally adopted new legislation regulating the controls on cash entering or leaving the Union. The regulation will meet the Financial Action Task Force’s latest international standards on combating money laundering.

EUROPEAN UNION: Further changes made to tax blacklist

The European Union’s Economic and Financial Affairs Council (ECOFIN) has updated the EU list of non-cooperative jurisdictions in taxation matters in response to changes made by three countries: Liechtenstein, Peru and Palau.

SWITZERLAND: BEPS convention approved

The Swiss Federal Council has approved the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), which aims to prevent abuse of the international tax treaty system, through enabling countries to modify existing bilateral treaties to put new integrity rules in place. The Council has said this will lead to various of the country’s existing double tax agreements (DTAs) being amended.

EUROPE: EU to consider blacklisting its own Member States

The European Union’s Code of Conduct Group on Business Taxation has been told to assess EU Member States themselves for possible inclusion on the EU blacklist of jurisdictions that use harmful or unfair tax practices.

BELGIUM: Beneficial ownership reporting deadline put back four more months

The Belgian finance ministry has deferred the deadline for companies and other entities to report their beneficial owners to a central register to 31 March 2019. The original date was 30 November 2018, although all EU Member States were supposed to have implemented the EU’s Fourth Anti-Money Laundering Directive by June last year.

SWITZERLAND: Two million financial accounts disclosed to foreign governments

The Swiss Federal Tax Administration has disclosed details of two million financial accounts to partner jurisdictions under the global rules for automatic exchange of information. It is the first time the country has ever revealed bank account information in such quantities, though Switzerland is still refusing to share data with some jurisdictions it regards as not sufficiently secure.

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.