Bulletin 46

Printable Version

BENEFICIAL OWNERSHIP: UK promises to campaign for public registers as global standard

The UK Minister for the Commonwealth and the United Nations, Lord Ahmad, has assured British Overseas Territories (OTs) that they have until 2023 to establish publicly available registers of beneficial ownership, during which time the UK will be campaigning to have public registers accepted as a global standard. Ahmad told reporters in Bermuda that constitutional conflict between the OTs and the UK is unlikely because the territories will not be left at a competitive disadvantage, although at the same time the Cayman Islands Premier, Alden McLaughlin, has warned UK politicians not to ‘interfere in devolved local matters’.

ENFORCEMENT: Finland pursues secret holders of US bank accounts

Three US banks have received summonses ordering them to disclose information about bank accounts owned or operated by residents of Finland. The ‘John Doe summonses’, so-called because they refer to unknown persons, were obtained by the US Internal Revenue Service at the request of the Finnish government, which cannot trace the owners of payment cards that are only used for PIN-authorised transactions. The US Department of Justice says previous investigations of 120-150 Finnish taxpayers who used foreign payment cards have yielded ‘extremely high rates of tax non-compliance’.

MONEY LAUNDERING: UAE completes preparations for FATF inspection

Abu Dhabi Global Market has tightened its regulatory framework for combating money laundering, terrorist financing and the financing of unlawful organisations, as part of the United Arab Emirates’ (UAEs’) preparation for its assessment by the global Financial Action Task Force (FATF) in June or July this year. The amendments follow the recent revisions made by the Dubai Financial Services Authority in October 2018, and the UAE’s Federal Law No. 20 of 2018, implemented in January 2019.

MIGRATION: Over 100,000 wealthy individuals moved residence last year

Some 108,000 high-net-worth individuals migrated from their home countries in 2018, an increase from 95,000 the previous year, according to the AfrAsia Bank Global Wealth Migration Review 2019, conducted with market research and consultancy firm New World Wealth.

AUSTRIA: Four-year plan for tax cuts

The Austrian government has presented plans for tax reforms to be phased in by 2023, with reductions in the higher-rate personal income tax rates and a cut in corporate income tax to 21 per cent.

FRANCE: Le Flat-rate now applies to savings and investment income

French taxpayers need to take special care this year in the declaration of savings interest and investment income, with the introduction of the single flat-rate 12.8 per cent tax at the beginning of the year. The Prélèvement Forfaitaire Unique tax is imposed at source by banks and financial institutions, unless the taxpayer opts to pay at income tax scale rates. In addition, social charges of 17.2 per cent are payable, making a combined rate of up to 34 per cent for those with taxable annual income over EUR250,000.

SWISS BANKING: UBS shareholders protest against French fine

Shareholders of the Swiss bank UBS last week voted down a motion providing board directors and senior management with formal discharge of liability for the bank’s debts, apparently in a reaction to the EUR4.5 billion fine imposed on UBS by the French government in February for helping wealthy clients evade taxes. UBS is appealing the judgment.

INDIA: Rules tightened on beneficial ownership disclosure

A recent amendment to India’s Companies (Significant Beneficial Owners) Rules 2018 requires every ‘significant beneficial owner’ of a company to have declared their interest to the company by the 9 May 2019.

LUXEMBOURG: Corporation tax cut could trigger additional tax on German investors

Luxembourg’s 2019 budget law (Bill 7450) came into force on 1 May 2019, reducing corporate income tax by one percentage point to 17 per cent from the 2019 tax year. The effect could be to trigger Germany’s controlled foreign corporation rules, leading to additional taxation of German investors’ passive income from Luxembourg capital companies.

CRYPTOASSETS: UK launches consultation on legal uncertainties

The UK Jurisdiction Taskforce has launched a consultation on the status of cryptoassets and smart contracts under English and Welsh law, seeking comment on the perceived legal uncertainties surrounding cryptoassets as property. It plans to prepare an authoritative legal statement to demonstrate either that English and Welsh law already provides sufficiently certain foundations for cryptoasset ownership, or to highlight uncertainties to be addressed through legislation. The consultation closes on 21 June 2019.

ECONOMIC SUBSTANCE: Bermuda to be grey-listed pending CIV substance reforms

Bermuda is likely to be removed from the EU list of non-cooperative jurisdictions in tax matters at the meeting of EU finance ministers in May 2019. However, it will then be placed on the so-called Annex II grey-list, along with the Bahamas, British Virgin Islands and Cayman Islands, because of EU concerns about their economic substance criteria for collective investment funds (CIVs).

Source: STEP

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