www.bethelfinance.com/rm
OECD - The Organization for Economic Cooperation and Development has welcomed two new members to the Global Forum on Transparency and Exchange of Information for Tax Purposes : Kingdom of Lesotho and Azerbaijan.
As the 119th and 120th members of the Global Forum, they will participate in the peer review process which encourages all countries to adopt effective exchange of information in tax matters.
OECD Secretary-General Angel Gurria declared : " We are delighted to welcome Azerbaijan and the Kingdom of Lesotho as new Global Forum members. They will now be sitting at the table with countries from every continent - all jurisdictions determined to make tax systems transparent and fair to all. The growing membership of the Global Forum indicates that all regions of the world value its efforts to strengthen global tax co-operation."
The Global Forum's objective is to ensure that all jurisdictions adhere to the same high standard of international co-operation in tax matters and that governments come together to fight and prevent tax evasion. With the support of the G-20 nations, since 2010 the Global Forum has published 88 peer review reports containing 616 recommendations to help jurisdictions improve their co-operation in tax matters. As a result, more than half of the countries reviewed have already introduced or proposed changes to their laws.
Thursday, February 28, 2013
Wednesday, February 27, 2013
French Finance Minister Rules Out Further Austerity In 2013
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Pierre Moscovici, French Finance Minister, has excluded the idea of introducing additional fiscal measures in France in 2013, beyond those that have already been agreed.
Alluding to the structural adjustment that has already taken place over the period 2010-2013, Moscovici made clear that it would simply not be adequate for the French economy to impose further measures this year. Moscovici indicated that a further fiscal effort will, however, be required in 2014 and in subsequent years.
Moscovici's remarks came in response to the European Commission's winter economic forecast for France. The European Commission has forecast growth this year of just 0,1% and has predicted a deficit of 3,7% GDP ( gross domestic product) , well above the Government's ambitious deficit target for 2013 of 3%.
For 2014, the European Commission has predicted growth of 1,2% and a public deficit of 3,9% of GDP.
Highlighting the deterioration of the economic situation in the eurozone as a whole, Minister Moscovici underlined the need to rebalance European economic policy in favor of growth, announcing that the would seek approval from France's European partners to delay until 2014 plans to return the country's deficit to below 3%.
Pierre Moscovici, French Finance Minister, has excluded the idea of introducing additional fiscal measures in France in 2013, beyond those that have already been agreed.
Alluding to the structural adjustment that has already taken place over the period 2010-2013, Moscovici made clear that it would simply not be adequate for the French economy to impose further measures this year. Moscovici indicated that a further fiscal effort will, however, be required in 2014 and in subsequent years.
Moscovici's remarks came in response to the European Commission's winter economic forecast for France. The European Commission has forecast growth this year of just 0,1% and has predicted a deficit of 3,7% GDP ( gross domestic product) , well above the Government's ambitious deficit target for 2013 of 3%.
For 2014, the European Commission has predicted growth of 1,2% and a public deficit of 3,9% of GDP.
Highlighting the deterioration of the economic situation in the eurozone as a whole, Minister Moscovici underlined the need to rebalance European economic policy in favor of growth, announcing that the would seek approval from France's European partners to delay until 2014 plans to return the country's deficit to below 3%.
Tuesday, February 26, 2013
Bermuda Relaxes Beneficial Owner Reporting Rules
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The Bermuda Monetary Authority ( BMA ) has announced that it has increased the threshold above which beneficial owners of stakes in companies or partnerships, or companies that are subject to exchange control requirements, must reveal personal information to the Authority, to 10% from 5%.
Until the latest change, which takes immediate effect, in the formation process all entities were required to submit to the Authority a personal declaration form for beneficial owners of a company or partnership who owned 5% or more of voting interests or rights.
Jeremy Cox, CEO of the Bermuda Monetary Authority said: " This filing has been in effect for several years and the Authority has managed this process on behalf of the Government. The authorities in Bermuda have received further clarification on recent revisions to the international standard for identifying and disclosing information on beneficial owners, which has established the disclosure threshold at 10% or more of voting rights."
"We are now in a position to apply this standard across the board in Bermuda. This means that the disclosure threshold [ has changed ] and entities will now be required to provide personal declaration forms for persons who own or control 10% or more of voting rights in a company or partnership, rather than the previous 5% level."
Cox said that the new 10% threshold will also apply for companies that are subject to exchange control seeking approvals from the BMA to transfer securities. " Under the Exchange Control Act-1972 the BMA is in fact the Controller and has to date reviewed all persons who own 5% or more of securities in these entities when they request securities transfer permissions. The threshold has now changed to 10% for such requests", he said.
Cox explained: "for persons submitting securities transfer request who own less than 10% of an entity, the Authority will still provide approvals under its current general permission policy. So basically there is no change in this context for those who do not meet the revised threshold."
The Bermuda Monetary Authority ( BMA ) has announced that it has increased the threshold above which beneficial owners of stakes in companies or partnerships, or companies that are subject to exchange control requirements, must reveal personal information to the Authority, to 10% from 5%.
Until the latest change, which takes immediate effect, in the formation process all entities were required to submit to the Authority a personal declaration form for beneficial owners of a company or partnership who owned 5% or more of voting interests or rights.
Jeremy Cox, CEO of the Bermuda Monetary Authority said: " This filing has been in effect for several years and the Authority has managed this process on behalf of the Government. The authorities in Bermuda have received further clarification on recent revisions to the international standard for identifying and disclosing information on beneficial owners, which has established the disclosure threshold at 10% or more of voting rights."
"We are now in a position to apply this standard across the board in Bermuda. This means that the disclosure threshold [ has changed ] and entities will now be required to provide personal declaration forms for persons who own or control 10% or more of voting rights in a company or partnership, rather than the previous 5% level."
Cox said that the new 10% threshold will also apply for companies that are subject to exchange control seeking approvals from the BMA to transfer securities. " Under the Exchange Control Act-1972 the BMA is in fact the Controller and has to date reviewed all persons who own 5% or more of securities in these entities when they request securities transfer permissions. The threshold has now changed to 10% for such requests", he said.
Cox explained: "for persons submitting securities transfer request who own less than 10% of an entity, the Authority will still provide approvals under its current general permission policy. So basically there is no change in this context for those who do not meet the revised threshold."
Monday, February 25, 2013
Cayman Seeks To Quash Fund Investment Taboo
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The Cayman Islands' Chamber of Commerce has challenged critics of the tax affairs of the new US Treasury Secretary Jack Lew, following reports that he had held investments in a Cayman Islands investment fund domiciled in Ugland House, during his private sector career.
Those in opposition say the appointment of Lew highlights the duplicity of the Obama Administration's response to offshore investments following ceaseless pre-election criticism of the tax affairs of the Republic presidential candidate Mitt Romney.
In a bid to dispel myths surrounding Cayman investment, the territory's Chamber of Commerce stated: "At this juncture, it is perhaps worth asking why people are still surprised that Americans, including both Republicans and Democrats, have money invested in Cayman investment funds, when it is certainly the case that all Americans who have a pension fund will likely have their money indirectly invested in a Cayman private equity or hedge fund."
"There is nothing wrong with that at all. As the 2008 Government Accountability Office's Report attests, Cayman is the domicile of choice and a center of excellence for some of the world's leading international investment funds."
"Cayman investment funds are an important part of helping to solve the pension funds' need for investment diversification and the global allocation of capital. Some of this capital is, for example, invested in important infrastructure projects in emerging market countries. As a consequence Cayman helps US fund managers manage money for foreign investors, thus supporting jobs and service providers based in the US." "It is high time that Cayman's important role in the global economy and capital markets is better understood by policy makers."
The Cayman Islands' Chamber of Commerce has challenged critics of the tax affairs of the new US Treasury Secretary Jack Lew, following reports that he had held investments in a Cayman Islands investment fund domiciled in Ugland House, during his private sector career.
Those in opposition say the appointment of Lew highlights the duplicity of the Obama Administration's response to offshore investments following ceaseless pre-election criticism of the tax affairs of the Republic presidential candidate Mitt Romney.
In a bid to dispel myths surrounding Cayman investment, the territory's Chamber of Commerce stated: "At this juncture, it is perhaps worth asking why people are still surprised that Americans, including both Republicans and Democrats, have money invested in Cayman investment funds, when it is certainly the case that all Americans who have a pension fund will likely have their money indirectly invested in a Cayman private equity or hedge fund."
"There is nothing wrong with that at all. As the 2008 Government Accountability Office's Report attests, Cayman is the domicile of choice and a center of excellence for some of the world's leading international investment funds."
"Cayman investment funds are an important part of helping to solve the pension funds' need for investment diversification and the global allocation of capital. Some of this capital is, for example, invested in important infrastructure projects in emerging market countries. As a consequence Cayman helps US fund managers manage money for foreign investors, thus supporting jobs and service providers based in the US." "It is high time that Cayman's important role in the global economy and capital markets is better understood by policy makers."
France's Pellerin Eyes Digital Tax In 2014 Budget
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French Digital Economy Minister Fleur Pellerin has recently announced her intention to include plans for an Internet tax in the country’s 2014 budget.
According to Pellerin, the objective is to be able "to integrate something" into next year’s finance law. At a time when such effort is demanded from businesses and citizens in France, it is "extremely important" that certain multinationals, which have up to now been virtually exempt from taxation, are required to contribute in the different countries in which they generate their profit or turnover, the minister argued.
Underlining the need to "completely revise" existing tax concepts, given that current taxation is not at all adapted to the digital economy, Pellerin insisted that to avoid this "tax exile" it is vital to restore equity between actors, namely those who pay and those who do not. It is not simply a question of taxing the digital economy as a means of finding solutions for the rest of the economy, Pellerin pointed out.
Despite Pellerin’s resolve and determination to swiftly address the issue, the proposed timeframe appears rather ambitious, particularly given that there is no evident solution and in view of the fact that there is no consensus on any one particular proposal.
Last year, President of the French Senate finance committee Philippe Marini submitted a legislative proposal advocating the introduction of a tax on online advertising. Dismissing the idea at the time, Digital Economy Minister Pellerin maintained that the idea was simply not "ripe" at this stage.
On January 18, 2013, the French Finance Ministry unveiled details of a report on taxation of the digital economy, submitted by state councilor Pierre Collin and Government auditor Nicolas Colin.
Commissioned in July last year, the report "offers a detailed and striking vision" of the rise in the digital economy and the importance of "the exploitation of personal data" in this growing sector. The report exposes the problem of profit relocation or shifting by companies, warning that this phenomenon will only increase if nothing is done to tax their activity in France.
The report called for a new tax to be introduced as a matter of urgency, based on the amount of personal information collected by Internet companies such as Google, which is used to direct personalized advertising and other services to users.
At the time, the Government made clear that the idea of a national tax based on the use of personal data is to be explored in detail in parallel with other proposals that have already been in order to solve the issue, including notably the idea of taxing electronic trade.
Pellerin has repeated, however, that US Internet giants must remain the target of any proposed tax. The Government must ensure that the future levy does not merely serve to increase the fiscal burden on French actors who are already experiencing difficulties, Pellerin warned.
French Digital Economy Minister Fleur Pellerin has recently announced her intention to include plans for an Internet tax in the country’s 2014 budget.
According to Pellerin, the objective is to be able "to integrate something" into next year’s finance law. At a time when such effort is demanded from businesses and citizens in France, it is "extremely important" that certain multinationals, which have up to now been virtually exempt from taxation, are required to contribute in the different countries in which they generate their profit or turnover, the minister argued.
Underlining the need to "completely revise" existing tax concepts, given that current taxation is not at all adapted to the digital economy, Pellerin insisted that to avoid this "tax exile" it is vital to restore equity between actors, namely those who pay and those who do not. It is not simply a question of taxing the digital economy as a means of finding solutions for the rest of the economy, Pellerin pointed out.
Despite Pellerin’s resolve and determination to swiftly address the issue, the proposed timeframe appears rather ambitious, particularly given that there is no evident solution and in view of the fact that there is no consensus on any one particular proposal.
Last year, President of the French Senate finance committee Philippe Marini submitted a legislative proposal advocating the introduction of a tax on online advertising. Dismissing the idea at the time, Digital Economy Minister Pellerin maintained that the idea was simply not "ripe" at this stage.
On January 18, 2013, the French Finance Ministry unveiled details of a report on taxation of the digital economy, submitted by state councilor Pierre Collin and Government auditor Nicolas Colin.
Commissioned in July last year, the report "offers a detailed and striking vision" of the rise in the digital economy and the importance of "the exploitation of personal data" in this growing sector. The report exposes the problem of profit relocation or shifting by companies, warning that this phenomenon will only increase if nothing is done to tax their activity in France.
The report called for a new tax to be introduced as a matter of urgency, based on the amount of personal information collected by Internet companies such as Google, which is used to direct personalized advertising and other services to users.
At the time, the Government made clear that the idea of a national tax based on the use of personal data is to be explored in detail in parallel with other proposals that have already been in order to solve the issue, including notably the idea of taxing electronic trade.
Pellerin has repeated, however, that US Internet giants must remain the target of any proposed tax. The Government must ensure that the future levy does not merely serve to increase the fiscal burden on French actors who are already experiencing difficulties, Pellerin warned.
Thursday, February 21, 2013
Bahamas To Introduce Value Added Tax
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In its Budget for 2012/2013, the Bahamas Government has announced that it will introduce a value-added tax, to broaden the tax base, from July 1, 2014.
The Government explained that VAT is to be introduced to offset the eventual reductions to import duty rates that will accompany the Bahama's accession to the World Trade Organization, and to being to consolidate the territory's finances.
From July 1, 2014, the Bahamas will apply a 15% VAT to a broad range of goods and services - the median rate in other Caribbean territories that have implemented VAT.
VAT will replace the Hotel Occupancy Tax, but a concessionary rate of 10% will apply to the business of hotels, including food and drink sold on their permises.
Excise duties will fall by around 15% on goods that will be subject to VAT when the regime is introduced.
A zero rate will apply to exports and the international transport of goods and passengers. Exempt goods and services will included:
- Food and agricultural products that benefit from duty-free status under the Tariff Act;
- Other imports that benefit from the same, above status;
- Heath and education services;
- Financial services;
- Social and community services.
VAT filling and payment will be required on a monthly basis, and the VAT threshold will be set at USD 50,000-requiring 3,800 local businesses to register to collect and remit VAT revenues to the Government.
In its Budget for 2012/2013, the Bahamas Government has announced that it will introduce a value-added tax, to broaden the tax base, from July 1, 2014.
The Government explained that VAT is to be introduced to offset the eventual reductions to import duty rates that will accompany the Bahama's accession to the World Trade Organization, and to being to consolidate the territory's finances.
From July 1, 2014, the Bahamas will apply a 15% VAT to a broad range of goods and services - the median rate in other Caribbean territories that have implemented VAT.
VAT will replace the Hotel Occupancy Tax, but a concessionary rate of 10% will apply to the business of hotels, including food and drink sold on their permises.
Excise duties will fall by around 15% on goods that will be subject to VAT when the regime is introduced.
A zero rate will apply to exports and the international transport of goods and passengers. Exempt goods and services will included:
- Food and agricultural products that benefit from duty-free status under the Tariff Act;
- Other imports that benefit from the same, above status;
- Heath and education services;
- Financial services;
- Social and community services.
VAT filling and payment will be required on a monthly basis, and the VAT threshold will be set at USD 50,000-requiring 3,800 local businesses to register to collect and remit VAT revenues to the Government.
Thursday, February 14, 2013
More certainty in Singapore tax rules
www.bethelfinance.com
Governments are embracing tax reforms to simplify their tax systems
We often express how desirable it is to have certainty in tax codes. We also lament how tax rules have become more complex and wish that they could be simplified. But does certainty mean heaving simpler tax rules? Can taxation really be kept simple when business operations and transactions are becoming more complex?
As Pascal Saint-Amans, director of the OECD, Centre for Tax Policy and Administration, said in a recent dialogue: " In French we talk about ' le realism du droit fiscal ' because realistically if business is complex, then that taxation of that business must be complex. In fact, my view is if taxation isn't complex, it isn't fair. But there is no good reason to overcomplicate the rules."
With governments trying to bridge the widening gap between spending and incomes, there have been an ever-increasing number of complex changes to tax laws and regulations. No wonder businesses worldwide are feeling a mounting sense of uncertainty. Yet, in the midst of this storm of changes, governments are also embracing tax reforms to simplify their tax systems, so that they are more competitive and relevant to businesses.
Take the US for example. House Ways and Means Committee Chairman Dave Camp, in an interview with Ernst & Young, had remarked : "We are not competitive internationally - it is a huge burden, compliance costs are out of sight, it's very complex - and if we can address that, we can get a tax code that's modernised, fair, simple, and really grows the economy and creates jobs. " Well, at least in the short term, the recent fiscal cliff deal offers greater tax certainty and respite for American taxpayers.
Governments are embracing tax reforms to simplify their tax systems
We often express how desirable it is to have certainty in tax codes. We also lament how tax rules have become more complex and wish that they could be simplified. But does certainty mean heaving simpler tax rules? Can taxation really be kept simple when business operations and transactions are becoming more complex?
As Pascal Saint-Amans, director of the OECD, Centre for Tax Policy and Administration, said in a recent dialogue: " In French we talk about ' le realism du droit fiscal ' because realistically if business is complex, then that taxation of that business must be complex. In fact, my view is if taxation isn't complex, it isn't fair. But there is no good reason to overcomplicate the rules."
With governments trying to bridge the widening gap between spending and incomes, there have been an ever-increasing number of complex changes to tax laws and regulations. No wonder businesses worldwide are feeling a mounting sense of uncertainty. Yet, in the midst of this storm of changes, governments are also embracing tax reforms to simplify their tax systems, so that they are more competitive and relevant to businesses.
Take the US for example. House Ways and Means Committee Chairman Dave Camp, in an interview with Ernst & Young, had remarked : "We are not competitive internationally - it is a huge burden, compliance costs are out of sight, it's very complex - and if we can address that, we can get a tax code that's modernised, fair, simple, and really grows the economy and creates jobs. " Well, at least in the short term, the recent fiscal cliff deal offers greater tax certainty and respite for American taxpayers.
Wednesday, February 13, 2013
OECD seeks to plug holes in global tax laws
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A sweeping overhaul of international corporate tax rules was urgently needed to stop big companies dodging payments to cash-strapped governments, the Organisation for Economic Co-operation and Development (OECD) said yesterday.
Governments face a growing outcry from voters to force big companies with extensive international business to pay more tax as evidence mounts that many multinationals use differences between countries’ rules to reduce their tax bill.
The OECD said multinational firms were increasingly reporting profits in different countries from where their incomes was earned to avoid taxes.
The trend comes against the backdrop of falling business tax rates as OECD governments trimmed their statutory corporate income tax rates to an average of 25.4 percent in 2011 from 32.6 percent in 2000.
However, the effective tax rate paid by companies is often far lower due to deductions, allowances and a range of measures that firms use to reduce the tax they pay to authorities.
The OECD also warned in a report that governments were not alone in losing out.
“If you are a multinational you will be able to reduce your taxes substantially because the international tax architecture is completely out of date,” OECD director of tax policy Pascal Saint-Amans said
“However, if you are a purely domestic business, then you will have a lot more difficult time and will be at a competitive disadvantage.”
British legislators are mulling changes to the law following revelations about how companies such as Apple, Starbucks, Google and Amazon use complex inter-company transactions to reduce their tax bills. UK legislators grilled tax officials from top accounting firms last month over their role in helping big companies avoid tax.
France is also studying new ways to collect more tax from global internet companies, which often serve consumers in high-tax countries with subsidiaries in low-tax jurisdictions to reduce their tax.
The OECD report called for a rethink of international rules that go back to the 1920s to overcome the constraints of existing bilateral tax treaties.
“The idea is to come up with proposals that can be quickly implemented, perhaps a multilateral convention that could replace the 3 000 bilateral conventions,” Saint-Amans said.
The OECD offered to draft proposals for tackling the problem so governments could work towards introducing new rules within two years.
Saint-Amans said support among governments was growing for a deep review of international guidelines from the OECD for transfer pricing, which is how companies charge for services and goods among units in the same group.
He also saw growing demand to revise rules for determining how much business a company must do in a country to pay taxes there.
Reuters: “If we want change and it is not going to take 10 years, then maybe we need a multilateral instrument that sweeps aside the existing conventions,” Saint-Amans said. “If there is political support to go in this direction, then two years would be good.”
Thursday, February 7, 2013
Israel postal service imposes higher courier rates on remote businesses
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Customers in peripheral locales to pay 50% than more than central aria residents for the same service.
Companies subscribing to Israel Post's "business to business distribution" courier service are being charged as much as 50% more beginning this month - but only those located outside the country's main population center. Rates were previously uniform throughout the country.
Businesses in 50 localities such as Jerusalem, Tel Aviv, Kfar Sava and Kfar Qasem will continue paying NIS 26 before value added tax on 50 to 100 items per month. But those in places like Rehovot, Hadera, Haifa, Tiberias and Nazareth will be charged NIS 28 for the same service, while businesses is remote locations like Eliat, Safed and Kiryat Shmona will need to pay NIS 30.
The price soars to NIS 39 for smaller localities in the furthest regions although the service offered there remains inferior : It will still take three business days for packages to arrive at their destinations, according to the national postal company, while those sent from other less remote regions are delivered the following business day.
Courier srevices offered by Israel's postal company is exposed to competition and therefore isn't subject to government regulation.
"Israel Post offers its customers the best price in the market, responded the government-owned company.It was decided to change the way princing is set according to travel distances due to discrepancies between the inputs invested for each delivery and the existing price."
The Communications Ministry explained that the service is limited to subscribers, subject to full competition and that its rates are not set by the government.
Customers in peripheral locales to pay 50% than more than central aria residents for the same service.
Companies subscribing to Israel Post's "business to business distribution" courier service are being charged as much as 50% more beginning this month - but only those located outside the country's main population center. Rates were previously uniform throughout the country.
Businesses in 50 localities such as Jerusalem, Tel Aviv, Kfar Sava and Kfar Qasem will continue paying NIS 26 before value added tax on 50 to 100 items per month. But those in places like Rehovot, Hadera, Haifa, Tiberias and Nazareth will be charged NIS 28 for the same service, while businesses is remote locations like Eliat, Safed and Kiryat Shmona will need to pay NIS 30.
The price soars to NIS 39 for smaller localities in the furthest regions although the service offered there remains inferior : It will still take three business days for packages to arrive at their destinations, according to the national postal company, while those sent from other less remote regions are delivered the following business day.
Courier srevices offered by Israel's postal company is exposed to competition and therefore isn't subject to government regulation.
"Israel Post offers its customers the best price in the market, responded the government-owned company.It was decided to change the way princing is set according to travel distances due to discrepancies between the inputs invested for each delivery and the existing price."
The Communications Ministry explained that the service is limited to subscribers, subject to full competition and that its rates are not set by the government.
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