Bulletin 43

Printable Version

CYPRUS: No ‘gold-plating’ in draft mandatory disclosure bill

Cyprus’ finance ministry has circulated a draft Bill to transpose the EU directive on the mandatory disclosure and exchange of cross-border tax arrangements (DAC 6) into national law by the end of 2019. The Bill includes no additional provisions beyond those required by the directive. It exempts intermediaries protected by legal professional privilege, thus shifting the obligation to taxpayers.

MONEY LAUNDERING: Norway and Italy close to full compliance

The international Financial Action Task Force has reported that both Norway and Italy have made good progress in establishing its recommended legal, regulatory and operational framework. Norway has failed to reach full compliance on only five of the 40 recommendations, while Italy is ‘partially compliant’ on only two.

FATCA: Sponsored entities and trustees must re-examine compliance rules

The US Department of the Treasury has made significant changes to the rules requiring sponsored entities, trustees of trustee-documented trusts and financial institutions (FIs) to certify their compliance with the Foreign Account Tax Compliance Act (FATCA). Certifications for periods ending 31 December 2017 should be made on or before 31 March 2019. Special rules apply for foreign FIs in so-called Model-1 IGA jurisdictions: Denmark, France, Germany, Italy, Mexico, the Netherlands, Norway and Spain.

EUROPEAN UNION: Commission rules UK’s CFC regime granted state aid

Dozens of multinationals will have to repay the tax benefits they obtained from the UK’s controlled foreign companies (CFC) tax regime after 2012, following a European Commission decision that the group finance company exemption amounted to unlawful state aid.

BRITISH VIRGIN ISLANDS: Economic substance code to be released in ‘late April’

The BVI government’s guidance on the Economic Substance (Companies and Limited Partnerships) Act 2018 will appeared in April 2019. The so-called economic substance code will help BVI entities determine whether they are carrying on a ‘relevant activity’ under the Act, and if so whether they meet the applicable substance requirements.

SOUTH AFRICA: Foreign trust distributions now taxable in residents’ hands

South Africa’s Taxation Laws Amendment Act 2018 came into effect on 1 March 2019, bringing income or capital gains from foreign trusts to South African tax residents into the tax net. The revenues, previously exempt from tax, will be taxed in the hands of either the resident donor or resident beneficiaries.

UAE: Cabinet resolution implements new anti-money laundering regime

The United Arab Emirates government has issued Cabinet Resolution No.10 of 2019, implementing the new anti-money laundering (AML) legislation enacted in late 2018. It introduces a risk-based approach to AML; mandates client due diligence (CDD) at the start of the business relationship for all transactions in excess of AED55,000, or wire transfers in excess of AED3,500; enhanced CDD for high-risk clients including politically exposed persons; a requirement to identify the ultimate beneficial owner of a client company; and many others.

BAHAMAS: Amendments to international exchange of information rules

Prime Minister of the Bahamas Peter Turnquest introduced the Automatic Exchange of Information Act (Amendment) Bill 2019 into the House of Assembly. It extends the minimum period of time for which a reporting financial institution is required to keep financial account information from five years to six, to be automatically exchanged with counterparts in a partner country. Also introduced was the Multinational Entities Financial Reporting Act, allowing Bahamian subsidiaries of multinational groups to report country-by-country accounting information to the Finance Ministry 12 months after their fiscal year end, instead of on 31 March 2019.

Source: STEP

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