www.bethelfinance.com
In her speech to the recent Asia-Pacific Regional Tax Conference in Singapore, Teo Josephine, Minister of State for Finance and Transport, discussed taxation issues in the region that are important to businesses, including double taxation agreements( DTAs) and trasfer pricing.
She pointed out how Singaporean companies are internationalizing their businesses. In 1990, Singapore's cumulative stock of foreign direct investment (FDI) abroad was about SGD16 bn (USD 12,9 bn) and, by 2000, had only grown to about SGD100 bn. However, in the last decade, that FDI has grown quickly to reach over SGD400 bn, with inward FDI totaling just over SGD650 bn.
Asia accounts for more than half of Singapore's FDI abroad, and, as of end of 2011, the top three outbound investment destinations for Singaporean companies within Asia were China, Malaysia and Indonesia, which together accounted for 60%.
With more Singaporean businesses internationalizing, Josephine Teo confirmed that cross-border business transactions and investment activities have also increased in volume. More companies have foreign sources of income and are subject to tax rules in more than one tax jurisdiction.
To overcome possible instances of double taxation, she also confirmed that Singapore has developed a wide DTA network, to facilitate cross-border businesses by providing greater tax certainty and by reducing the cost of doing business both in Singapore and overseas. To date, Singapore has signed 74 comprehensive DTAs, and is still looking to expand that network.
However, she noted that " treaties alone are not enough and implementation matters just as much. Tax authorities worldwide have increased their enforcement activities to ensure that transfer prices have not been set to avoid tax. With the imposition of stricter penalties and documentation requirements, as well as increased audit activities, transfer pricing has now become a leading risk management issue for cross-border businesses."
In Singapore, if in doubt, she added, businesses can approach the Inland Revenue Authority of Singapore to seek upfront tax certainty on their pricing arrangements through Advance Pricing Arrangements. Where necessary, the Inland Revenue Authority of Singapore also helps businesses resolve cross-border transfer pricing disputes through Mutual Agreement Procedures with Singapore's treaty partners.
From 2007 to March this year, Inland Revenue Authority of Singapore has concluded 10 transfer pricing cases under a Mutual Agreement Procedures, and 27 bilateral Advance Pricing Arrangements involving seven other jurisdictions.
" Businesses will be pleased to know that Inland Revenue Authority of Singapore intends to deepen its transfer pricing capability to assist businesses with cross-border transfer pricing issues," Josephine Teo concluded. " We support cross-border businesses that are engaged in activities with real economic substance. General anti-avoidance provisions in our tax regime are set up to prevent abusive business transactions, and to ensure that our corporate sector remains healthy and robust."
Thursday, April 4, 2013
Wednesday, April 3, 2013
Canada-Panama Free Trade Agreement In Force
www.bethelfinance.com
Canadian Ministerfor International Trade, Ed Fast has welcomed the entry into force of the Canada-Panama free trade agreement on April 1, 2013, eliminating more than 90% of Panamanian tariffs on Canadian exports.
Fast said : " Canada's Economic Action Plan, with its focus on creating jobs, growth and long-term prosperity in every region of our country, includes opening new markets that increase Canadian exports."
" Starting today, this historic agreement will benefit Canadian exporters by immediately eliminating tariffs on more than 90% of Canadian goods exported to Panama. Workers and businesses in a wide range of Canadian sectors, such as aerospace, pharmaceuticals, pulp and paper and agriculture and agri-food, will benefit from talking Canada's trading relationship with Panama to the next level.
" The trading relationship between Canada and Panama continues to grow by leaps and bounds, heaving increased by 62% in less than four years," added Diane Ablonczy, Canadian's Minister of State for Foreign Affairs. " This agreement is further proof of our Government's commitment to a robust presence in the Americas that increases economic opportunities for Canadians and delivers real benefits and prosperity for people throughout our hemisphere."
In less than six years, the Canadian Government has concluded free trade agreements with 9 countries: Panama, Peru, Honduras, Colombia, Jordan and European Trade Association member states of Iceland, Norway, Liechtenstein and Switzerland. In addition, Canada is engaged in ongoing free trade negotiations with the European Union, Japan, India and members of the Trans-Pacific Partnership- Brunei, Chile, Australia, Mexico, Malaysia, Peru, New Zealand, USA, Vietnam and Singapore.
Canadian Ministerfor International Trade, Ed Fast has welcomed the entry into force of the Canada-Panama free trade agreement on April 1, 2013, eliminating more than 90% of Panamanian tariffs on Canadian exports.
Fast said : " Canada's Economic Action Plan, with its focus on creating jobs, growth and long-term prosperity in every region of our country, includes opening new markets that increase Canadian exports."
" Starting today, this historic agreement will benefit Canadian exporters by immediately eliminating tariffs on more than 90% of Canadian goods exported to Panama. Workers and businesses in a wide range of Canadian sectors, such as aerospace, pharmaceuticals, pulp and paper and agriculture and agri-food, will benefit from talking Canada's trading relationship with Panama to the next level.
" The trading relationship between Canada and Panama continues to grow by leaps and bounds, heaving increased by 62% in less than four years," added Diane Ablonczy, Canadian's Minister of State for Foreign Affairs. " This agreement is further proof of our Government's commitment to a robust presence in the Americas that increases economic opportunities for Canadians and delivers real benefits and prosperity for people throughout our hemisphere."
In less than six years, the Canadian Government has concluded free trade agreements with 9 countries: Panama, Peru, Honduras, Colombia, Jordan and European Trade Association member states of Iceland, Norway, Liechtenstein and Switzerland. In addition, Canada is engaged in ongoing free trade negotiations with the European Union, Japan, India and members of the Trans-Pacific Partnership- Brunei, Chile, Australia, Mexico, Malaysia, Peru, New Zealand, USA, Vietnam and Singapore.
Tuesday, April 2, 2013
Gibraltar Finalizing EU Corporate Tax Talks
www.bethelfinance.com/rm
Minor amendments will be required of Gibraltar's Income Tax legislation to bring it in line with international best standards as assessed by the European Union's Code of Conduct Group of Business Taxation, Gibraltar's Chief Minister Fabian Picardo has said.
Speaking to reports in Brussels, Picardo was quoted by the Gibraltar Chronicle as saying : " I believe we are literally at the stage of final tweaking of words in an amendment that may affect one or two sections of the Income Tax Act. I therefore expect that we will very shortly be putting a final draft to officials in the Code Group for an informal view. From the indications that we have, it will likely be a favorable one."
The Code of Conduct Group's assessment follows shortly on the heels of scrutiny of the Guernsey,Jersey and the Isle of Man's zero-ten corporate tax regimes, which concluded with separate but identical rulings that their deemed distribution provisions were "harmful." The provisions in question ensure that tax is paid on individuals' holdings in profit-making companies as their respective holdings appreciate. Under the regime, "deemed distribution" is presumed by the government and individual income tax is liable on the amount irrespective of whether a distribution has in fact been disbursed to the shareholder.
It is anticipated that after making the changes deemed necessary to its tax regime, Gibraltar's corporate tax framework-as in the case of Jersey, Guernsey and the Isle of Man - will be formally endorsed by the Code of Conduct Group and subsequently European Finance Ministers, but not before, Picardo anticipates, a "politically-motivated" challenge from Spain.
Minor amendments will be required of Gibraltar's Income Tax legislation to bring it in line with international best standards as assessed by the European Union's Code of Conduct Group of Business Taxation, Gibraltar's Chief Minister Fabian Picardo has said.
Speaking to reports in Brussels, Picardo was quoted by the Gibraltar Chronicle as saying : " I believe we are literally at the stage of final tweaking of words in an amendment that may affect one or two sections of the Income Tax Act. I therefore expect that we will very shortly be putting a final draft to officials in the Code Group for an informal view. From the indications that we have, it will likely be a favorable one."
The Code of Conduct Group's assessment follows shortly on the heels of scrutiny of the Guernsey,Jersey and the Isle of Man's zero-ten corporate tax regimes, which concluded with separate but identical rulings that their deemed distribution provisions were "harmful." The provisions in question ensure that tax is paid on individuals' holdings in profit-making companies as their respective holdings appreciate. Under the regime, "deemed distribution" is presumed by the government and individual income tax is liable on the amount irrespective of whether a distribution has in fact been disbursed to the shareholder.
It is anticipated that after making the changes deemed necessary to its tax regime, Gibraltar's corporate tax framework-as in the case of Jersey, Guernsey and the Isle of Man - will be formally endorsed by the Code of Conduct Group and subsequently European Finance Ministers, but not before, Picardo anticipates, a "politically-motivated" challenge from Spain.
Lapid said: I won't let Israel become Cyprus or Greece
www.bethelfinance.com
Finance minister vows to ensure the middle class would cease carrying the burden of budget cuts on their shoulders; adds if the middle class is not protected the economy will come to a halt and the deficit will grow.
Painful cuts would have to be made in order to close the budget deficit of NIS 30 billion, but the middle class would not carry those cuts on their shoulders, Finance Minister Yair Lapid said on Monday, on his Facebook page.
In a lengthy post Lapid described a meeting that he held recently at the Finance Ministry where he told the gathered bureaucrats that their job "was not to balance Excel spreadsheets but rather to help Mrs. Cohen."
Ricky Cohen, Lapid explained, is a 37-year-old high school teacher from Hadera with three children. Ricky and her husband who works in hi-tech earn a little over NIS 20,000 a month.
Lapid said that Mrs. Cohen represented the Israeli middle class who works and pays taxes and carries "the weight of the entire Israeli economy on its back."
Mr. Lapid wrote that he encouraged the bureaucrats in the ministry to think of ways to help Mrs. Cohen "improve her quality of life, decrease her cost of living, and make her feel that her taxes are really working for her."
The finance minister echoed a statement that he made on his Facebook page last week, saying that slashing the deficit would involve difficult decisions. Referring to Israel's Mediterranean neighbors who have undergone economic crises, Lapid added that he had to make those difficult decisions because he was not prepared that on his watch Israel would reach the same harsh economic situation as in Greece and Cyprus.
Meretz MK Esawi Freige criticized the finance minister, saying Lapid was being presumtuous about the earnings of the country's middle class. " It seems That an income of NIS 20,000 really is not a lot of money for Yair Lapid and his millionaire friends," Freige said.
Freige added that a family earning NIS 20,000 a month is not considered middle class, it is far from it. " The average income for an Israeli houshold is around 10,000 NIS a month, and the majority of Israeli employees earn NIS 6,000 a month," he said.
Freige said, Lapid ought to break out of his bubble, take a look around the country and meet with Israeli communities of all types-not just with the wealthy in North Tel Aviv.
Last month the finance minister posted a statement on his Facebook page in which he stated that " it's time to deal with the overdraft," adding that he would devote his first year on the job to decreasing it. Dealing with it sooner rather than later would ensure that the painful cuts would not last as long, Lapid said.
Finance minister vows to ensure the middle class would cease carrying the burden of budget cuts on their shoulders; adds if the middle class is not protected the economy will come to a halt and the deficit will grow.
Painful cuts would have to be made in order to close the budget deficit of NIS 30 billion, but the middle class would not carry those cuts on their shoulders, Finance Minister Yair Lapid said on Monday, on his Facebook page.
In a lengthy post Lapid described a meeting that he held recently at the Finance Ministry where he told the gathered bureaucrats that their job "was not to balance Excel spreadsheets but rather to help Mrs. Cohen."
Ricky Cohen, Lapid explained, is a 37-year-old high school teacher from Hadera with three children. Ricky and her husband who works in hi-tech earn a little over NIS 20,000 a month.
Lapid said that Mrs. Cohen represented the Israeli middle class who works and pays taxes and carries "the weight of the entire Israeli economy on its back."
Mr. Lapid wrote that he encouraged the bureaucrats in the ministry to think of ways to help Mrs. Cohen "improve her quality of life, decrease her cost of living, and make her feel that her taxes are really working for her."
The finance minister echoed a statement that he made on his Facebook page last week, saying that slashing the deficit would involve difficult decisions. Referring to Israel's Mediterranean neighbors who have undergone economic crises, Lapid added that he had to make those difficult decisions because he was not prepared that on his watch Israel would reach the same harsh economic situation as in Greece and Cyprus.
Meretz MK Esawi Freige criticized the finance minister, saying Lapid was being presumtuous about the earnings of the country's middle class. " It seems That an income of NIS 20,000 really is not a lot of money for Yair Lapid and his millionaire friends," Freige said.
Freige added that a family earning NIS 20,000 a month is not considered middle class, it is far from it. " The average income for an Israeli houshold is around 10,000 NIS a month, and the majority of Israeli employees earn NIS 6,000 a month," he said.
Freige said, Lapid ought to break out of his bubble, take a look around the country and meet with Israeli communities of all types-not just with the wealthy in North Tel Aviv.
Last month the finance minister posted a statement on his Facebook page in which he stated that " it's time to deal with the overdraft," adding that he would devote his first year on the job to decreasing it. Dealing with it sooner rather than later would ensure that the painful cuts would not last as long, Lapid said.
Friday, March 29, 2013
Cyprus will not leave the euro
www.bethelfinance.com/rm
Cyprus has no intention of the leaving the European single currency, the country's president says.
President Nicos Anastasiades said: "In no way will we experiment with the future of our country."
He said the financial situation was "contained" following the 10bn euro bailout deal with the EU and IMF.
Banks opened on Thursday for the first time in nearly two weeks amid severe new rules imposed as part of the bailout deal.
Queues formed of people trying to access their money, but the mood was generally calm.
By Friday, banks had returned to their normal working hours and there were no longer reports of big queues.
"We have averted the risk of bankruptcy," Mr Anastasiades said on Friday. "The situation, despite the tragedy of it all, is contained."
He told a meeting of civil servants: "We have no intention of leaving the euro."
But he accused other members of the eurozone of making "unprecedented demands that forced Cyprus to become an experiment".
Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for the bailout, and has become the first eurozone member country to bring in capital controls to prevent a torrent of money leaving the island and credit institutions collapsing.
As well as a daily withdrawal limit of 300 euros, Cypriots may not cash cheques and those leaving the country will only be allowed to take 1,000 euros with them.
Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month.
Depositors with more than 100,000 euros will see some of their savings exchanged for bank shares.
Foreign Minister Ioannis Kasoulides said on Thursday that such controls could gradually be lifted over the course of the month.
But many economists predict the controls could be in place for much longer.
Cyprus has no intention of the leaving the European single currency, the country's president says.
President Nicos Anastasiades said: "In no way will we experiment with the future of our country."
He said the financial situation was "contained" following the 10bn euro bailout deal with the EU and IMF.
Banks opened on Thursday for the first time in nearly two weeks amid severe new rules imposed as part of the bailout deal.
Queues formed of people trying to access their money, but the mood was generally calm.
By Friday, banks had returned to their normal working hours and there were no longer reports of big queues.
"We have averted the risk of bankruptcy," Mr Anastasiades said on Friday. "The situation, despite the tragedy of it all, is contained."
He told a meeting of civil servants: "We have no intention of leaving the euro."
But he accused other members of the eurozone of making "unprecedented demands that forced Cyprus to become an experiment".
Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for the bailout, and has become the first eurozone member country to bring in capital controls to prevent a torrent of money leaving the island and credit institutions collapsing.
As well as a daily withdrawal limit of 300 euros, Cypriots may not cash cheques and those leaving the country will only be allowed to take 1,000 euros with them.
Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month.
Depositors with more than 100,000 euros will see some of their savings exchanged for bank shares.
Foreign Minister Ioannis Kasoulides said on Thursday that such controls could gradually be lifted over the course of the month.
But many economists predict the controls could be in place for much longer.
Cyprus capital controls
- Daily withdrawals limited to 300 euros
- Cashing of cheques banned
- Those travelling abroad can take no more than 1,000 euros out of the country
- Payments and/or transfers outside Cyprus via debit and or credit cards permitted up to 5,000 euros per month
- Businesses able to carry out transactions up to 5,000 euros per day
- Special committee to review commercial transactions between 5,000 and 200,000 euros and approve all those over 200,000 euros on a case-by-case basis
- No termination of fixed-term deposit accounts before maturity
Thursday, March 28, 2013
Jersey continues to maintain a high rank, among all major competitors offshore
www.bethelfinance.com
Jersey has retained its top spot as the highest ratted offshore jurisdiction in the latest biannual Global Financial Centers Index ( GFCI ) despite an overall fall in the rankings for the Channel Islands amid fierce onshore competition.
Among offshore jurisdictions, Jersey placed highest in 28th place, next followed by Guernsey (31st), the Cayman Island (41st) and the Isle of Man (43rd). London retained its place as the top financial center, above New York, Hong Kong and Singapore.
Jersey reported that although its overall rating had improved since the last Global Financial Centers Index report, in which it ranked 20th, particularly strong performances from a number of major cities, including Paris, Vienna and Kuala Lumpur, saw its position relative to other financial centers fall. jersey now places just behind Melbourne, Paris and Munich and ahead of Oslo and Qatar.
Geoff Cook, the head of Jersey Finance - the promotional agency for Jersey's financial services industry, said : " In the last eight consecutive Indexes, Jersey has been the highest rated offshore jurisdiction. It is encouraging that Jersey continues to maintain such a high ranking, ahead not only of all the main offshore competitors, but also above a number of financial centers in EU jurisdictions, such as Malta and Dublin."
" Recent market conditions and a remarkable period of regulatory change have presented significant challenges for offshore centers and the Crown Dependencies in particular. This is reflected in the latest rankings, and in the number of onshore city centers moving up the rankings. While this is a remainder of just how competitive the market is for finance centers globally, the fact that Jersey's rating has increased yet again is an indication that is continues to perform well and is still perceived very positively by others in the marketplace."
Jersey has retained its top spot as the highest ratted offshore jurisdiction in the latest biannual Global Financial Centers Index ( GFCI ) despite an overall fall in the rankings for the Channel Islands amid fierce onshore competition.
Among offshore jurisdictions, Jersey placed highest in 28th place, next followed by Guernsey (31st), the Cayman Island (41st) and the Isle of Man (43rd). London retained its place as the top financial center, above New York, Hong Kong and Singapore.
Jersey reported that although its overall rating had improved since the last Global Financial Centers Index report, in which it ranked 20th, particularly strong performances from a number of major cities, including Paris, Vienna and Kuala Lumpur, saw its position relative to other financial centers fall. jersey now places just behind Melbourne, Paris and Munich and ahead of Oslo and Qatar.
Geoff Cook, the head of Jersey Finance - the promotional agency for Jersey's financial services industry, said : " In the last eight consecutive Indexes, Jersey has been the highest rated offshore jurisdiction. It is encouraging that Jersey continues to maintain such a high ranking, ahead not only of all the main offshore competitors, but also above a number of financial centers in EU jurisdictions, such as Malta and Dublin."
" Recent market conditions and a remarkable period of regulatory change have presented significant challenges for offshore centers and the Crown Dependencies in particular. This is reflected in the latest rankings, and in the number of onshore city centers moving up the rankings. While this is a remainder of just how competitive the market is for finance centers globally, the fact that Jersey's rating has increased yet again is an indication that is continues to perform well and is still perceived very positively by others in the marketplace."
Wednesday, March 27, 2013
China Should Broaden Its Tax Base
www.bethelfinance.com/rm
Stephen Groff, Vice-President of the Asian Development Bank, in a speech at the China Development Forum 2013, declared that the first step for China to take should be to broaden its tax base.
He noted that greater efforts are needed to address major constraints, despite the fact the China "has undergone significant fiscal reforms in recent years that have helped to build a solid fiscal position."
Fiscal revenues have increased from less than 10% of GDP in the 1990s to 20% of GDP currently, but Stephen Groff commented that they are still relatively low compared to OECD countries, making it difficult to allocate adequate public resources to basic social services.
While social spending has increased rapidly in recent years, he said that it too remains relatively low. About 35% of government revenue is spent on social security, education and healthcare, compared with an average of 52% in other middle-income countries. Moreover, recent reforms have focused on expanding the coverage of benefits rather than restructuring the benefits themselves.
While the Government is piloting some important initiatives, such as the introduction of a property tax on luxury housing in Shanghai and Chongqing, Groff called these taxes " a step in the right direction," but "the ultimate goal must be a genuine property tax based on home values and universally imposed on all urban homes."
Furthermore, he added that the pilot program to introduce a VAT on services in selected cities and sub-sectors has proved highly successful, but the scope of the pilot is restricted to 12 cities and municipalities.
He believed that, while economic growth should be sustained, further fiscal reforms will be necessary to support economic rebalancing and narrow the income gap.
Firstly, Stephen Groff said that "the tax base should be broadened. Recent reforms increasing tax thresholds have reduced the number of personal income tax payers to less than 3% of the population. Tax evasion is high, and collection and enforcement are low."
"More importantly," he pointed out, "the base leaves policy-makers with no powerful income distribution tool. Last year, the share of personal income tax i China's total fiscal revenues reached less than 6%, far below the OECD average of 24%. The income tax base can be broadened through measures to curtail tax evasion, reduce the informal sector in the economy, and strengthen tax administration."
Secondly, Groff looked for an increase to the progressivity of taxation. Currently, VAT is China's single largest source of tax revenue but is regressive,while more direct taxation could be more effective in adjusting income differences, and therefore be more equitable.Taxing capital gains and property, introducing inheritance/gift taxes and an environment tax, would also help to balance income distribution.
Thirdly, he considered it essential that there should be an overhaul to be tax revenue sharing system between the central and local governments. One approach, Groff recommended would be to increase existing transfers of fiscal resources from the central government and the share of VAT revenue accruing to local governments to ensure sufficient funds for an adequate provision of social services at the local level. "Without such reforms'" he concluded, "large disparities in public social spending per person will emerge, and perpetuate inequality."
Stephen Groff, Vice-President of the Asian Development Bank, in a speech at the China Development Forum 2013, declared that the first step for China to take should be to broaden its tax base.
He noted that greater efforts are needed to address major constraints, despite the fact the China "has undergone significant fiscal reforms in recent years that have helped to build a solid fiscal position."
Fiscal revenues have increased from less than 10% of GDP in the 1990s to 20% of GDP currently, but Stephen Groff commented that they are still relatively low compared to OECD countries, making it difficult to allocate adequate public resources to basic social services.
While social spending has increased rapidly in recent years, he said that it too remains relatively low. About 35% of government revenue is spent on social security, education and healthcare, compared with an average of 52% in other middle-income countries. Moreover, recent reforms have focused on expanding the coverage of benefits rather than restructuring the benefits themselves.
While the Government is piloting some important initiatives, such as the introduction of a property tax on luxury housing in Shanghai and Chongqing, Groff called these taxes " a step in the right direction," but "the ultimate goal must be a genuine property tax based on home values and universally imposed on all urban homes."
Furthermore, he added that the pilot program to introduce a VAT on services in selected cities and sub-sectors has proved highly successful, but the scope of the pilot is restricted to 12 cities and municipalities.
He believed that, while economic growth should be sustained, further fiscal reforms will be necessary to support economic rebalancing and narrow the income gap.
Firstly, Stephen Groff said that "the tax base should be broadened. Recent reforms increasing tax thresholds have reduced the number of personal income tax payers to less than 3% of the population. Tax evasion is high, and collection and enforcement are low."
"More importantly," he pointed out, "the base leaves policy-makers with no powerful income distribution tool. Last year, the share of personal income tax i China's total fiscal revenues reached less than 6%, far below the OECD average of 24%. The income tax base can be broadened through measures to curtail tax evasion, reduce the informal sector in the economy, and strengthen tax administration."
Secondly, Groff looked for an increase to the progressivity of taxation. Currently, VAT is China's single largest source of tax revenue but is regressive,while more direct taxation could be more effective in adjusting income differences, and therefore be more equitable.Taxing capital gains and property, introducing inheritance/gift taxes and an environment tax, would also help to balance income distribution.
Thirdly, he considered it essential that there should be an overhaul to be tax revenue sharing system between the central and local governments. One approach, Groff recommended would be to increase existing transfers of fiscal resources from the central government and the share of VAT revenue accruing to local governments to ensure sufficient funds for an adequate provision of social services at the local level. "Without such reforms'" he concluded, "large disparities in public social spending per person will emerge, and perpetuate inequality."
Subscribe to:
Posts (Atom)