Category: Activity

Canadians Owning Property in the U.S. Could Cash in on the Weak Loonie

For the past few years, Canadians have been taking advantage of our dollar being worth about the same as the U.S. dollar. From buying up real estate to cross-border shopping, being on par with the U.S. dollar has had its advantages. However, in the last few months, economic factors have… – Continue reading

Tax law seen as driving Americans to renounce citizenship

Stanley Amland threw it off. So did Ingrid Bracke. Rhoda May Derksen ditched hers, too. The names, picked at random for this article from the Federal Register, are among the 3,415 Americans who renounced their U.S. citizenship or relinquished their residency permits last year. As a national debate rages about… – Continue reading

Promoting FDI through a tax treaty

In addition to its main function to eliminate double taxation, a tax treaty is also intended to promote foreign direct investment (FDI). Investors normally consider the treaty networks of a targeted investment country in deciding their investments. The more extensive the treaty networks, the more attractive for the investors. Extensive… – Continue reading

Real Estate Investment into London and Europe

The Channel Islands (Jersey and Guernsey) have long been known as leading offshore centres for the establishment of investment funds and other investment structures. In particular, Channel Island vehicles are often used for alternative investment structuring – including private equity, infrastructure and real estate. This article explains the trends in… – Continue reading

Hong Kong removes tax impediments for offshore private equity fund managers

In July 2015 the Hong Kong government gazetted changes to the Inland Revenue Ordinance (Cap 112) to extend the existing profits tax exemption for offshore funds to private equity funds. The recent amendments are a proactive move by the Hong Kong Government to encourage private equity fund managers to set… – Continue reading

Mexico used a ‘strong-arm’ tactic to coax multinational corporations into paying more taxes

Mexico’s government withheld hundreds of millions of dollars in tax refunds owed to Procter & Gamble, Unilever, and Colgate combined as it sought to coax them and other multinationals to pay more income tax locally, according to people close to the talks. After luring foreign companies with corporate tax breaks… – Continue reading

Mexico: International Transactions And Cost-Sharing Limitations In Mexico

International worldwide transactions in Mexico face a weakness as a result of an old and outdated provision which disallows for income tax purposes, the deduction of payments made abroad on a prorated basis with other parties that are not subject to Mexican income tax, such as foreign residents with no… – Continue reading

$1.8 Billion IMF Ukraine Bailout Money Deposited in Ukraine Oligarch Kolomoyskyi’s Cyprus Offshore Bank Account

Funds Discovered in Kolomoyskyi’s Cyprus Kitty Investigative reporters have discovered that IMF bailout funds intended for Ukraine have mysteriously found their way to a Cyprus bank account controlled by notorious Ukrainian oligarch Ihor Kolomoyskyi. A huge chunk of the $17 billion in bailout money the IMF granted to Ukraine in… – Continue reading

Italy Ratifies Switzerland, Monaco, Liechtenstein TIEAs

Italy’s Cabinet on August 7 approved legislation to ratify the tax agreements signed with Switzerland, Liechtenstein, and Monaco. The protocol to the existing double tax agreement between Italy and Switzerland was signed on February 23, 2015. The Cabinet noted that, once the protocol enters into force following ratification by both… – Continue reading

Baku Court Cuts Off Ismayilova’s Fiery Final Statement; Verdict Delayed

Investigative journalist Khadija Ismayilova delivered a scathing final statement in a Baku courtroom on August 31, calling Azerbaijan’s government a “repression machine” and dismissing her trial as a “scam” aimed to silence her. Before she was cut off without finishing her remarks, Ismayilova told the court that her reporting proved… – Continue reading

Cross-Border M&A Is Hot, but There’s a Trap for Tax Planners: Picking the Wrong Way to Value Intangibles Can Irk Authorities

NEW YORK, NY–(Marketwired – Aug 31, 2015) – Cross-border mergers and acquisitions are at their hottest pace since before the financial crisis. In fact, M&A volume was $1.10 trillion in 2014, up from $775.3 billion in 2013 and the highest since 2008. And intangible assets like intellectual property and goodwill… – Continue reading

Indian Court Allows Mauritius Treaty Benefits For Appellant

Rejecting “treaty shopping” claims, India’s High Court of Punjab and Haryana has ruled that India should not tax capital gains from the sale by Mauritian entities of shares held in an Indian company if they are proven resident in Mauritius. The ruling was given in Serco BPO Private Limited v…. – Continue reading

CORPORATE CLOSE-UP: LICENSING SUBSIDIARY THAT FELL PREY TO ADDBACK REQUIREMENT MUST ALSO FILE RETURN, NEW JERSEY RULES

Shifting of income between parent and subsidiary companies for the purpose of avoiding taxation has been a consistent concern for state departments of revenue. States have enacted a variety of rules to ensure that the entities involved file and pay taxes accurately. In Spring Licensing Group, Inc. v. New Jersey… – Continue reading

India: FATCA Reporting Deadline Extended

On 25 August 2015, the Indian Ministry of Finance released an order extending the Foreign Account Tax Compliance Act (FATCA) reporting filing deadline for Indian Financial Institutions to 10 September 2015 (from 31 August 2015). The FATCA Agreement between India and the United States was signed on 9 July 2015…. – Continue reading

Taxing multinationals: Patently problematic

Proposals for consistent global rules on company tax cause worries all round CLARITY or chaos? Supporters of the Base Erosion and Profit-Shifting (BEPS) project, being worked on by the OECD, argue that it will bind multinationals to a consistent set of global tax rules, providing them with less licence than… – Continue reading

India, Germany to resume talks on DTAA revision

India and Germany have agreed to resume negotiations on partial revision of double taxation avoidance agreement (DTAA), the government said on Friday. The two countries have agreed to explore possibilities of enhancing tax related information while continuing to share information on the basis of existing agreements, the ministry of finance… – Continue reading

Global tax reporting: Regulatory challenges loom

Reevaluating reporting options and investmentsSmart choices and targeted investments today may help contain the approaching resource crunch and the long term costs of compliance FATCA has placed tax reporting front and center with management committees of financial institutions, but it represents just the tip of a potentially larger iceberg. Legislation… – Continue reading

FATCA: UPDATED FAQS ON BRANCH REGISTRATION

The IRS today announced that it has updated the list of “frequently asked questions” (FAQs) concerning the FATCA regime. Specifically, the updated FAQs concern branch registration. With today’s IRS release, the IRS explained that it has clarified questions concerning how does a branch in a Model 1 IGA or Model… – Continue reading

FATCA: UPDATED VERSION ICMM; RELATED ERROR MESSAGES

The IRS announced that an updated version of the FATCA International Compliance Management Model (ICMM) as deployed in early August 2015 validates record-level processing of FATCA 8966 XML Report files, including files that were submitted before August 8, 2015. The record level processing identified errors within the files and issued… – Continue reading

LB&I: “PRACTICE UNITS” ON FOREIGN-TO-FOREIGN TRANSACTIONS, TRANSFER PRICING RULES

The IRS today publicly released two new “practice units”—i.e., training aids intended to describe for IRS agents leading practices for specific international and transfer pricing issues and transactions—providing overviews of foreign-to-foreign transactions under section 367(b) and the transfer pricing rules under section 482. The two new practice units (release date… – Continue reading

Transfer pricing audits: flipping the tested party

Introduction Transfer pricing methods and tested parties Troubling trend Tools for taxpayers Introduction In some recent transfer pricing audits the Internal Revenue Service (IRS) has ‘flipped the tested party’ after examining transactions between related US and foreign companies. Typically, this practice results in the attribution of a larger portion of… – Continue reading

Foreign companies with no permanent base may get Minimum Alternate Tax relief

Three-member AP Shah Committee has recommended extending minimum alternate tax (MAT) relief to foreign companies which do not have permanent establishment or public business in India. In an earlier version, the committee had sought to restrict MAT to foreign institutional investors and foreign portfolio investors. The committee had also not… – Continue reading

Government decides to revise convention of double taxation

Pakistan has decided to revise obsolete convention of double taxation and provision of fiscal evasion convention with the United State of America (USA) aimed at bringing the treaty at par with neighbouring countries, well informed sources told Business Recorder. Pakistan and US signed a convention on the avoidance of double… – Continue reading

No MAT for ‘Foreign Companies’ – Shah Panel suggested in revised report

Three-member AP Shah Committee has recommended extending minimum alternate tax (MAT) relief to foreign companies which do not have permanent establishment or public business in India. In an earlier version, the committee had sought to restrict MAT to foreign institutional investors and foreign portfolio investors. The committee had also not… – Continue reading