Bulletin 47

Printable Version

CRYPTOCURRENCIES: Facebook to launch virtual currency in 2020

Social media company Facebook plans to launch its own virtual currency, GlobalCoin, next year. It will be used as a worldwide digital payments system, and will be available initially in around a dozen countries by the first quarter of 2020.

GERMANY: Homes and offices searched in nationwide tax swoop

German prosecutors seized documents and electronic devices from eight homes and six Hamburg-based asset managers’ offices on the 15 May 2019, in a tax evasion investigation of clients of a former Deutsche Bank offshore business.

SWITZERLAND: Referendum approves corporate tax reform

A referendum held in Switzerland on the 19 May accepted the government’s Federal Act on Tax Reform and AHV Financing corporate tax reforms by 64.4 per cent in favour. From 1 January 2020, the special low-tax regimes granted to 24,000 foreign companies will be repealed in an effort to keep Switzerland off the European Union’s blacklist. Cantons will be able to set their own corporate tax rates, with Vaud already having voted to accept a new rate of 13.79 per cent. The law also introduces a ‘patent box’ regime to grant tax relief to research and development.

MONEY LAUNDERING: EU imposes extra measures on subsidiaries in ‘secretive’ third countries

EU Delegated Regulation 2019/758 was gazetted in the EU Official Journal this month, introducing extra anti-money laundering (AML) requirements for financial institutions (FIs) operating in certain non-EU countries. From 3 September 2019, FI’s foreign subsidiaries will have to impose additional AML measures if the third country’s data protection or banking secrecy law prevents the disclosure of customer-specific information as required under the EU Fourth Anti-Money Laundering Directive.

PROFESSIONAL CONDUCT: IBA and OECD produce guidance on international legal work

The International Bar Association and the OECD have published a joint report, setting out ethical principles they consider should be followed by lawyers working on international commercial structures, in the light of the controversies relating to the so-called ‘Panama’ and ‘Paradise Papers’. They include due-diligence to avoid inadvertently facilitating illegal conduct; no misuse of the duty of confidence and privilege; proper client due-diligence; discouragement of potentially illegal conduct by clients; checking for multi-jurisdictional risks; and checking of beneficial ownership.

BUSINESS TAXATION: OECD plan for minimum tax rates may be agreed next year

Talks on an international minimum corporate tax system will be held at next month’s meeting of G20 countries, and again at the G7 meeting in August, according to German Federal Minister of Finance Olaf Scholz. The discussions will aim at agreeing such a system with the other 128 OECD jurisdictions in summer 2020. The Irish Minister for Finance, Paschal Donohoe, has indicated his preference for an OECD solution to digital economy taxation rather than unilateral actions.

LOW-TAX JURISDICTIONS: Luxembourg imposes reporting requirements on companies operating in blacklisted countries

The Luxembourg tax authority is the first to announce sanctions against jurisdictions designated by the European Union as non-cooperative for tax purposes. Starting from the 2018 tax year, Luxembourg resident companies are required to state in their tax return if they have entered into transactions with related enterprises in jurisdictions included on the EU blacklist, and must provide details of those transactions on request.

SWITZERLAND: Automatic exchange agreed with 19 more countries

Switzerland’s Federal Council has agreed to automatic exchange of information (AEOI) of financial accounts with a further 19 jurisdictions, with the exchange starting in 2021. The countries are Albania, Azerbaijan, Brunei, Dominica, Ghana, Kazakhstan, Lebanon, Macao, the Maldives, Nigeria, Niue, Oman, Pakistan, Peru, Samoa, Saint Maarten, Trinidad and Tobago, Turkey and Vanuatu. The Federal Council plans to review whether the countries meet the requirements of the AEOI standard before beginning information exchange, in time for the corresponding federal decrees to be submitted to its parliament for approval in the 2019 autumn and winter sessions.

LOW-TAX JURISDICTIONS: Campaigning group publishes ranking of ‘aggressive’ financial centres

The lobbying group Tax Justice Network has published a ranking of what it calls ‘the world’s most important tax havens for multinational corporations, according to how aggressively and how extensively each jurisdiction contributes to helping the world’s multinational enterprises escape paying tax’.

PERU: Legal advisors can be held jointly liable for corporate tax debt

Further details have emerged regarding the bringing into effect of Peru’s general anti-avoidance rule (GAAR) on 7 May, under Supreme Decree 145-2019-EF. Among other things, it specifies the conditions under which a company’s legal advisors will be held jointly liable for a tax debt incurred when the GAAR is enforced.

Source: STEP

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.