Bulletin 34

Printable Version

MALTA: Malta ranks first in economic growth in Eurozone

Malta registered the greatest economic growth in the Eurozone in the first half of 2018, according to a report published by the international agency DBRS. In a report published on the 18th of September, the DBRS said that the Malta ranks first in the Eurozone in terms of economic growth, followed by Latvia and Slovenia. Italy, Belgium and France ranked last.

SPAIN: EU 4AMLD fully transposed into law

Spanish Royal Decree-Law 11/2018 has come into force, bringing into effect the provisions of the EU Fourth Anti-Money Laundering Directive. Measures requiring reporting of beneficial ownership of private companies have been in force since March this year.

MONEY LAUNDERING: EU adopts criminal enforcement directive

The European Council has formally adopted a directive requiring Member States to introduce criminal law provisions against money laundering. Directive PE-CONS 30/18 sets a four year maximum jail term for money laundering offences; enables jurisdictions to wind up or otherwise penalise legal entities for money laundering; and clarifies which Member State has jurisdiction in cross-border investigations.

CITIZENSHIP: OECD names 21 high-risk golden passport schemes

The OECD has named 21 jurisdictions that offer ‘golden passport or visa schemes’ that it regards as potentially high-risk, in that they give wealthy individuals access to low income tax on their global assets but do not require them to spend much time in the jurisdiction. It says such citizenship- or residence-by-investment schemes can be abused to misrepresent an individual’s tax residence, thus endangering tax enforcement by the automatic exchange of information.

MONEY LAUNDERING: FATF demands regulation of virtual asset providers

The global Financial Action Task Force (FATF) has formally amended its policy recommendations to make clear that virtual asset service providers should be licensed or registered and subject to anti-money laundering regulations and compliance monitoring, and must conduct customer due-diligence including ongoing monitoring, record-keeping, and reporting of suspicious transactions.

IRELAND: Finance bill introduces 12.5 per cent exit tax on offshored assets

The Finance Bill 2018, published last week, introduces a controlled foreign company (CFC) regime with a 12.5 per cent exit tax on unrealised capital gains, complying with the EU Anti-Tax Avoidance Directive

CORPORATE TAXATION: Franco-German plan proposes compulsory minimum tax rate

France and Germany are lobbying international organisations to set a global minimum rate of corporation tax among industrialised countries, alongside rules to stop profit-shifting by multinational companies, the German Finance Minister Olaf Scholz has announced. It is being proposed as an alternative to the EU’s plan for a special tax on ‘digital companies’

JERSEY: First jurisdiction to publish ‘economic substance’ legislation

Jersey’s government has tabled legislation designed to satisfy the ‘economic substance’ test set by the EU Code of Conduct Group (Business Taxation). Jurisdictions that grant businesses tax residence without making them demonstrate adequate economic substance are at risk of being put on the EU ‘non-cooperative’ blacklist, when it is revised at the end of this year.

RESIDENCE: Lobbying organisation dismisses OECD criticisms of investment-visa schemes

The Investment Migration Council has published a detailed rebuttal of the OECD’s recent criticism of certain residence- and citizenship-by-investment programmes. It notes that tax is not an issue for most users of such schemes, as most applicants do not actually change their tax residence or they move completely to their new place of residence and are then tax residents there. In any case, it says, citizenships granted by EU Member States account for a large part of the global movement of individuals for tax purposes, without any use of investment-based schemes, and can be equally used or abused for circumventing tax-reporting obligations.

MONEY LAUNDERING: UK adds Bahamas to watchlist

The UK government has added the Bahamas to the list of foreign jurisdictions regarded as posing risks through their unsatisfactory money laundering controls, requiring firms to use special due-diligence procedures when dealing with Bahamian entities.

IRELAND: Dublin on brink of ratifying anti-profit-shifting agreement

Irish Prime Minister Leo Vardakar has signed an order moving Ireland closer to ratifying the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS). It states that Ireland, whose corporate tax rate is among the lowest in the industrialised world, will ‘engage constructively with any measures to work towards international tax reform,’ and ‘will work with our international partners in tackling aggressive international tax planning through [BEPS]’. The order will be included in Finance Bill 2018.

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.