Austrian Tax Deal Will Withstand

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The Swiss Parliament´s President Hans Altherr thinks that the Swiss tax deal with Austria will withstand a popular vote.

Altherr expresses his optimism regarding the tax treaty between Switzerland and Austria in an interview with “Vorarlberger Nachrichten”. The treaty is signed and ratified, but a popular vote may still prevent the deal. In Switzerland, the young socialists and a citizens forum want to hold a popular vote on the tax treaty.
There is some resistance against the tax deal with Germany, but not with Austria, Altherr explains. The treaty with Germany would be much more far-reaching. The bilateral tax treaty should bring Austria up to € 1.0bn. For Austria, this would mean a loss of tax intake of more than € 1.0bn.

Until the end of September , the opponents of the tax deal between Switzerland and Austria have to collect 50,000 signatures of Swiss citizens. At the moment, there are 25,000 signatures. After the German federal state North-Rhine Westphalia has bought a CD from UBS, the opponents hope to motivate the Swiss people for voting against the deal. The opponents fear that Switzerland may give up its bank secret and its tax sovereignty.
A popular vote would take place on November 25. Otherwise the deal with Austria would enter into force in 2013. The citizens movement and the young socialists do not only criticize the tax deal with Austria, but also those with Germany and the U.K. Swiss political scientists do not excluded that the tax deal with the U.K. and Germany may be rejected, but that with Austria may be approved. Unlike German authorities, Austrian authorities do not buy CDs containing data of domestic tax evaders.
Altherr thinks that the Swiss financial hub may be weakened in the short therm. However, this may be an advantage in the long term. “What is crucial is that we underline our competence and our services, but not the legal loopholes.”

 

Support FATCA: New Intergovernmental Agreement

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Taxpayers with foreign accounts will want to take note of an agreement recently developed by the U.S. and several other countries, including France, Germany and the U.K. The "model intergovernmental agreement" is intended to implement FATCA, or the Foreign Account Tax Compliance Act. FATCA requires foreign financial institutions to report to the IRS information on accounts or insurance or annuity contracts with values above set amounts, and that are held by U.S taxpayers, or by foreign entities in which U.S taxpayers hold a substantial ownership interest.

The purpose of FATCA, which was signed into law in 2010, is to reduce the risk that U.S. taxpayers use accounts outside the U.S. to evade taxes. The recent agreement  is an important step to combating tax evasion based on the automatic exchange of information.

For foreign financial institutions, FATCA has presented serious administrative and legal challenges. Among other requirements, it asks them to identify U.S. accounts, and then report to the IRS the account holder's name, address and taxpayer identification number, the account number and balance, and in some cases, gross receipts and withdrawals from the account.As the intergovernmental agreement itself states, "FATCA has raised a number of issues, including that FATCA Partner financial institutions may not be able to comply with certain aspects of FATCA due to domestic legal impediments."

For the moment, two versions of the agreement were released: reciprocal and non-reciprocal. Both establish a framework within which financial institutions can report account information to their own tax authorities, which then will be automatically exchanged under existing bilateral tax treaties or tax information exchange agreements. They also call for the development of a common reporting and exchange model.

The reciprocal version of the model, as its title suggests, also provides for the United States to exchange the information it currently collects on accounts held in U.S. financial institutions by residents of partner countries. It states the U.S.' commitment to improve transparency and enhance the exchange relationship with its partner countries, by pursuing regulations and supporting legislation that would achieve equivalent levels of reciprocal automatic exchange. This version will be available to some countries with which the U.S. has an income tax treaty or tax information exchange agreement. 

In France, Germany, Italy, Spain,  U.K. and the U.S. released a communique, which endorses the model agreement and calls for bilateral agreements based on the model. It reads, in part, "France, Germany, Italy, Spain, the United Kingdom and the United States will, in close cooperation with other partner countries, the OECD and where appropriate the EU, work towards common reporting and due diligence standards to support a move to a more global system to most effectively combat tax evasion while minimizing compliance burdens."

Netherlands and Ethiopia sign a double taxation agreement

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After more the an year of discussions, Ethiopia and the Netherlands have signed a double taxation agreement (DTA) with the aim of boosting bilateral economic cooperation, trade and investment.

The Ethiopian Finance and Economic Development State Minister, Alemayehu Gujo, and Netherlands ambassador to Ethiopia, Hans Blankenberg, signed the agreement in Addis Ababa on 10 of August 2012.
The DTA exempts individuals and businesses in the two countries from paying taxes in both countries, and is intended to enable both nations to benefit from increased capital flows, trade of technology, goods and services.

The agreement also includes provision for the exchange of tax information between the two countries, and has an arbitration clause for the resolution of disputes and it is based on the Organization for Economic Cooperation and Development Model Convention.

The withholding tax payable on interest and royalties paid from one country to the other has been fixed at 5%, as has the withholding tax payable on dividends where a shareholder from one country holds more than 10% of a company in the other.

Alemayehu said that this agreement will take the already close relations between the two countries to a higher level, while Blankenberg added that it would help to enhance their relationship by providing Dutch investors in Ethiopia with certainty over the tax treatment of their investments.

Bangladesh and India are close to sign a tax treaty

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India and Bangladesh are close to signing three agreements, including a protocol to amend the avoidance of double taxation treaty, which is expected to give a major boost to bilateral trade, said officials at the Indian foreign ministry yesterday.
The most important of the three agreements is the Double Taxation Avoidance Taxation Convention protocol, which will amend the Double Taxation Avoidance Agreement. The agreement has been in place since 1991.
Considerable progress have been done on the three deals since last Tuesday's meeting of the Foreign Office Consultations (FOC) here, where Bangladesh Foreign Secretary Mijarul Quayes and his Indian counterpart Ranjan Mathai led their respective delegations.
At the meeting, Mathai conveyed India's willingness to see early signing of the three agreements.
New Delhi has taken a positive view of the trajectory the India-Bangladesh relations has taken of late, including a flurry of meetings on infrastructure in June to examine infrastructures at land customs stations and the proposed Border Haats.
A meeting to review the line of credit was held last month in New Delhi with the purpose of fast-tracking implementation of the projects. Shipping secretaries of the two countries decided to renew the protocol on inland water transit and trade by a further two years.
The two sides are cooperating in facilitating the return of mortal remains of the freedom fighters of 1971. Recently, a delegation from Bangladesh was in India to discuss modalities with concerned ministries and state governments.
The joint technical committee, set up to explore the possibility of electricity trade between Bangladesh and India and to recommend associate transmission systems on both sides of the border, met recently.
India regards the outcome of these meetings and the sustained engagement between the two sides on substantive and specific issues of mutual concerns as having added a momentum to the bilateral relations.

India, Indonesia discuss South China Sea, ink tax treaty friday

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Indonesia and India inked a treaty on avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and discussed strategic bilateral and regional issues.
External Affairs Minister SM Krishna and his Indonesian counterpart Marty M Natalegawa co-chaired the fourth meeting of the India-Indonesia Joint Commission and identified specific areas in which both countries would be working together to take the relationship to the next high level.
"Prior to the Joint Commission Meeting, Foreign Minister Marty and I had very useful discussions on the current status of our bilateral relations and exchanged views on regional and international issues,"said Krishna to press meeting interaction with his Indonesian counterpart.
Natalegawa said efforts were on by the ASEAN countries to come out with a code of conduct for the South China Sea after the disappointment at the recent ASEAN summit in Phnom Penh, Cambodia.

Philippine-Germany Tax Treaty Up

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The Philippines and Germany concluded the final round of negotiations on the revision of the agreement for the avoidance of double taxation with respect to taxes on income and capital.
The Department of Foreign Affairs (DFA) said the new tax treaty have the scope to protect against the risk of double taxation where the same income is taxable in the Philippines and Germany.
It is also aimed at preventing fiscal evasion and fostering cooperation between Philippine and other tax authorities by empowering their respective tax laws. An effective international tax treaty is expected to facilitate trade and investments.
“This new tax treaty will provide German investors with certainty and guarantees in the area of taxation,” Philippine Ambassador to Germany Maria Cleofe R. Natividad declared . “It will bolster our economic diplomacy efforts here in Germany.”
Bureau of Internal Revenue Commisioner Kim S. Jacinto-Henares led the  Philippine delegation during the negotiations. The other persons included in the delegation were Undersecretary Carlo Carag of the Department of Finance, Assistant BIR Commissioner Marissa Cabreros, Atty. Charadine Bandon of the BIR International Tax Division, and Director Mersole Mellejor of the Department of Foreign Affairs.
Ambassador Natividad represented the Philippine Embassy during the negotiations. She was joined by Third Secretary Azela Arumpac and Finance Attache Generosa Balocating.
The German delegation was headed by Dr. Wolfgang Lasars of the Federal Ministry of Finance. He was assisted by Ms. Simone Richter, a senior tax expert from the same Ministry, and Mr. Heinz-Josef Johansmeier, a legal expert from the Federal Foreign Office (FFO), Mr. Sven Green (FFO) and Ms. Nadine Lichtblau of the Federal Ministry of Economy and Technology.
All outstanding problems were resolved during the last round of negotiations, with both parties agreeing on the adoption of new standards in the tax treaty.
The Philippine and German delegations agreed to ensure early completion of their respective domestic requirements for the ratification of the new treaty. The new agreement is expected to be signed in Germany , first period of the next year.
Germany is an important economic partner of the Philippines. From January to November 2011, total trade was valued at $2.9 billion, with Germany as the biggest export market for Philippine goods in Europe.
German companies operating in the Philippines include Continental Temic, Siemens, Lufthansa Technik, Daimler Benz, BMW, Bayer, and Bosch.

Bethel Finance: Strong growth at Teva as Yanai era ends

www.bethelfinance.com Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) reported strong growth in revenue and profit for the first quarter of 2012, as CEO Shlomo Yanai left the company today. Teva reported net revenue of $5.1 billion, up 25% from $4.1 billion in the corresponding quarter of 2011. Non-GAAP profit was $1.3 billion ($1.47 per share) up 39% from $900 million (1.04 per share) in the first quarter of 2011. Teva president and CEO Shlomo Yanai said, “After five extremely rewarding years as Teva’s CEO, I will be stepping down today. It has been an immense privilege to lead Teva’s outstanding global team through such an exciting period. Together we turned Teva into a highly diversified global pharmaceutical company, with an expanded geographical footprint and additional lines of business. Over the last few months I have had the great pleasure of working closely with my successor, Dr. Jeremy Levin, to ensure a smooth transition. I am very confident that Jeremy will lead Teva to even new heights and I wish him every success.” Commenting on the results Yanai said, “2012 is off to a good start for Teva. We enjoyed a quarter of strong growth for our branded products, in our US generics business, and in the developing markets Teva operates in. All of these served to offset weaker generics sales in Europe, which resulted primarily from the macro-economic conditions in that region." Revenue in the US in the first quarter of 2012 was $2.8 billion (54% of total revenue), up 46% from the first quarter of 2011, as a result of strong revenue of both generic products, including the launch of seven new products not sold in the first quarter of 2011, and branded products, primarily due to the inclusion of Cephalon. Revenue in Europe in the first quarter of 2012 was $1.3 billion (26% of total revenue), down 2% from the first quarter of 2011, but up 3% in local currency terms. Revenue in Europe benefited from the inclusion of Cephalon products and sales synergies following the successful integration of the acquisition, as well as stronger revenue from branded products, primarily Copaxone. Revenue in the rest of the world (including Canada, Israel, certain markets in Eastern Europe, Latin America and Asia) in the first quarter totaled $1 billion (20% of total revenue), up 21% from the first quarter of 2011. In local currency terms, this revenue grew 23%. The growth in revenue resulted primarily from the inclusion of Taiyo and Cephalon, as well as from a strong performance in Eastern Europe, Latin America and Israel. Branded products revenue in the first quarter was $2.1 billion, up 54% compared to $1.4 billion in the first quarter of 2011. The increase in branded products revenue was mainly due to the inclusion of Cephalon sales (mainly Provigil with $291 million in revenue, Treanda with $148 million and Nuvigil with $84 million). Most of Teva’s major branded products also had strong revenue. Global revenue recorded by Teva for multiple sclerosis treatment Copaxone rose 8% to $909 million from $838 million in the first quarter of 2011. Global in-market sales of Copaxone rose 4% to $941 million. Azilect revenue recorded by Teva rose 9% to $72 million, while global in-market revenue rose 7% to $96 million. Teva will distribute a cash dividend for the first quarter of 2012 of NIS 1.00 per share. The record date will be May 21, 2012, and the payment date will be June 1, 2012. Tax will be withheld at a rate of 25%.