Bulletin 5

Printable Version

IRELAND: Offshore amnesty to end in May –

The Irish Revenue has announced that after 30 April Irish residents will no longer be able to obtain reduced penalties or amnesty for declarations of their offshore assets. From that date, persons with tax liabilities on undisclosed offshore assets may also be liable to higher penalty rates and criminal prosecution.

GERMANY: Offshore disclosure rules to be introduced in 2018 –

The German federal government has adopted a bill giving the tax authorities new powers to obtain detailed information about business relationships between German taxpayers and ‘letter box’ companies in offshore jurisdictions. Starting 1 January 2018, German residents will be required to disclose holdings of 10 per cent or more, or a directly or indirectly held stake worth more than EUR150,000, in companies or funds located outside the European Union. Non-disclosure will attract penalties of up to EUR25,000, and the statute of limitations period for tax evasion will double to 10 years.

TURKEY: Offshore tax amnesty deadline extended for six months –

Turkey’s tax amnesty, originally scheduled to end on 31 December, has been extended until 30 June this year. It allows individuals and legal entities to repatriate their money, gold, foreign currency, securities and other capital market instruments without being subject to any tax audit, tax assessment or investigation.

HONG KONG: Beneficial ownership rules will reflect UK legislation –

The Hong Kong government has launched a consultation on amendments to the Companies Ordinance requiring locally incorporated companies to obtain and hold up-to-date beneficial ownership information for public inspection upon request, and to maintain a register of ‘people with significant control’. The money laundering regulations are also being extended to solicitors, accountants, real estate agents, and trust and company service providers.

EUROPEAN UNION: Commission challenges national restrictions on cross-border professionals –

The European Commission has launched a programme intended to reduce barriers to the cross-border provision of professional services, including legal, accountancy and tax advice. It states the need to ‘establish whether new national professional requirements are necessary and balanced’ and includes a proposal to ‘streamline and clarify how member states should undertake a comprehensive and transparent proportionality test before adopting or amending national rules on professional services.’

EUROPEAN UNION: Cross-border freezing orders now available –

EU Regulation 655/2014 applies from 18 January 2017. The regulation allows a creditor in any EU member state to issue a freezing order against a debtor in another member state. The proposed European Account Preservation Order (EAPO) can be granted by a court within 10 days, without notifying the debtor in advance. EAPOs issued in one member state will be recognised in all other member states, except the UK and Denmark, which have opted out.

MEXICO: Amnesty for taxpayers who repatriate offshore accounts –

On 18 January, Mexico announced a programme to encourage taxpayers to repatriate offshore funds. Participants will pay a one-off 8 per cent tax on repatriated funds and must keep them invested in Mexico for at least two years.

US: Foreign nationals at risk of arrest on US business trips –

Regulatory enforcement experts at law firm Clifford Chance have examined the US authorities’ increasing focus on prosecuting foreign nationals, in connection with alleged corporate wrongdoing, while travelling in the US. The most recent example is the arrest on 7 January 2017, at Miami Airport, of Oliver Schmidt, a German citizen and former general manager of Volkswagen, in connection with that company’s emissions scandal. Clifford Chance advises that, when there is reason to suspect that an investigation is under way, it is advisable to consult counsel regarding whether or not, and when, it may be appropriate to contact US authorities, and whether or not travel to the United States is prudent.

EUROPEAN UNION: Still no agreement on hybrid mismatch rules –

EU legislation to prevent multinational companies using so-called hybrid mismatch techniques to avoid corporation tax, which was due to be finalised this month, is blocked because of a dispute over exemptions for regulatory capital and the final implementation date, reports Bloomberg BNA. The matter was passed over at the Council of Ministers meeting on 27 January 2017, the first to be chaired by the Malta presidency.

US: ‘Seriously delinquent’ tax debtors face passport revocation from March 2017 –

The US Internal Revenue Service (IRS) will, from March 2017, implement the passport revocation and restriction powers against tax debtors that it was granted by the Fixing America’s Surface Transportation Act of 2015. People who owe ‘seriously delinquent tax debt’ will, in late March, begin receiving IRS letters warning them that they are being reported to the State Department, which can then deny, revoke or limit the usability of their passports.

SOUTH AFRICA: Special voluntary disclosure opportunity now in effect –

President Jacob Zuma signed into law, on 11 January 2017, the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016, which creates South Africa’s Special Voluntary Disclosure Programme (SVDP). The final rules of the SVDP have now been gazetted. Applications for SVDP relief can be submitted via the South African Revenue Service-filing system, for both tax and exchange control purposes, until the expiry date of 31 August 2017.

OECD: The OECD is watching closely to make sure countries comply with new rules requiring country-by-country reporting of multinationals’ tax and profits –

The most widely adopted measure of the organization’s sweeping plan to curb tax base erosion and profit shifting by multinational companies, reports Bloomberg. Country-by-country reporting, the 13th action item of the Organization for Economic Cooperation and Development’s 15-point Action Plan on Base Erosion and Profit Shifting, calls for companies to report to tax authorities on the amount of taxes paid and profits earned in each country of operation, and for countries to automatically exchange that information with other governments while ensuring confidentiality.

CANADA: When did Canada become a tax haven? –

According to recent media reports based on the Panama Papers, some see Canada as a tax haven. It may seem unlikely when Canadians review how much tax they paid to the government in 2016 but evidently, Canada’s reputation and economy is a good venue for hiding wealth, reports Huffington Post. It helps that Canada has tax agreements or tax information exchange agreements with 115 countries — the most in the world. It means that the treaties in place can be leveraged to ensure little to no tax is paid in Canada or the originating country. And our corporate registration systems allow the actual owners to remain anonymous.The Canada Revenue Agency is working to crack down on tax evasion and avoidance. According to the CRA, Canada has one of the highest voluntary compliance rates in the world. More than 29 million personal tax returns were filed last year so the system does work.

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.