Capital Tax Consulting

UK Tax Disclosure Facilities for Undeclared Foreign Assets

capitaltaxconsulting — Wed, 10 Apr 2013 13:13:00 GMT

In the latest of what now is a series of agreements with other countries, the UK has recently announced a new disclosure facility for UK taxpayers who hold undisclosed assets in the Isle of Man. The UK's HMRC made the first agreement with Liechtenstein several years ago. The Liechtenstein agreement allows for much-reduced penalties and freedom from prosecution for anyone who qualifies and makes the necessary declarations to HMRC during the initial period of the agreement. It also secured the cooperation of the Liechtenstein government to prevent further undeclared assets being held there. HMRC followed up with a second agreement with Switzerland which is different in scope but in principle allows for tax to be deducted by banks and paid to HMRC in exchange for anonymity. It does not however 'wipe the slate clean' or offer freedom from prosecution. The Isle of Man agreement bears some similarity to the Liechtenstein agreement but, like the Swiss agreement, does not rule out prosecution if tax offences have been committed.

With all these agreements the devil is in the detail – making a declaration without following strictly the terms of the relevant agreement may invalidate any entitlement to reduced sanctions. It is therefore essential that anyone considering making a disclosure take expert professional advice at the earliest opportunity. Please get in touch with Capital Consulting if you would like further information.

Payment terms will be legally determined in the Netherlands

capitaltaxconsulting — Tue, 12 Mar 2013 08:29:45 GMT

Payment terms in contracts between all companies, and between companies and governments will be legally stipulated. The current law only requires that the payment terms may not be unreasonable.

What will change?

1. Business-to-Business (B2B)

• If not determined by contract, the invoice must be paid within 30 days after the date of receipt mentioned on the invoice;
• An extended payment term of a maximum of 60 days may be agreed upon in the contract;
• An extended payment term of more than 60 days is only allowed if it can be shown that the term isn't disadvantageous for either party.

2. Companies and governments

The invoice must be paid within 30 days after the date of receipt. Deviation from this period is in effect not possible.

3. No or late payments

Does the counterparty pay the invoice and what if the counterparty pays the invoice late? If this is the case, you may ask for standard compensation for collection costs. You do not have to send a warning letter.
Did you not agree on the amount of the compensation? In this case the compensation will be a percentage of the invoice. The minimum amount of the fee is €40. In addition to that, you may charge statutory interest.

4. Minimum payment term

There is and will be no minimum payment terms. You will have to agree with the counterparty on the payment terms. It is possible to pay in advance. The minimum payment terms may however not be unacceptable for either party.

The change will take effect on March 16, 2013. This is the closing date on which the legislative proposal of the directive must have entered into force.

Understanding labour leasing in Switzerland

capitaltaxconsulting — Wed, 06 Feb 2013 16:33:00 GMT

Boasting a wide range of industries and renowned for its high quality of life, Switzerland has become a top contracting destination. The rules governing mobility of labour have opened up considerably in recent years, meaning that any national of an EU State may work in Switzerland with minimal paperwork. However, Switzerland is also well-known as one of the most regulated countries in Europe from a labour perspective.

Swiss labour leasing law applies to all placements, both temporary and permanent, of personnel in Switzerland and imposes several key rules:

A foreign labour-leasing company (e.g. agency, consultancy) may not place personnel at the premises of a Swiss end client
A Swiss labour-leasing company may only place personnel at the premises of a Swiss end client if in possession of a valid Swiss labour leasing licence
A Swiss company may not use a foreign labour-leasing company to provide personnel

These rules are strict and unambiguous and mean that foreign agencies wishing to do business in Switzerland are left with only two options: open a local office and obtain a labour leasing licence, or make use of a local partner.

While the former option seems preferable, there is considerable cost involved: other than initial investment in opening a new office, the process of obtaining the labour leasing license itself is far from cheap and the recent strength of the Swiss franc means running costs are higher. A critical mass of business must be reached in order to make it a viable option. The latter option, on the other hand, requires a high level of trust as the local partner will often be a recruitment agency itself. In addition there is a ‘Catch 22’ associated with an arrangement with a local partner because, as a Swiss company, it may fall foul of the ban on recruiting via a foreign labour-leasing company. Specialist advice is a must.

Companies found to be in breach of Swiss labour leasing law are punishable by fine: the Swiss authorities will pursue Swiss companies first (typically the end client) and then any foreign companies found to be in breach. The contractor or employee will not usually be held liable for breaches unless they are deemed to be a principal of a company involved (director or owner of a foreign limited company working in Switzerland on contract, for example) and/or unless they are not complying with local tax and social security regulations.

Both the agency and the end client are responsible for complying with Swiss regulations and procedures; both would therefore be well-advised to seek expert local advice before any contracts are signed. That said, with compliant procedures in place and a sound knowledge of the local contract opportunities, Switzerland could be viewed as an expanding, profitable marketplace.

For more information on conducting business in Switzerland please feel free to contact us on +41 32 732 9700 or send an email to info@capitaltaxconsulting.com

Donation to Médecins sans Frontières

capitaltaxconsulting — Wed, 30 Jan 2013 11:11:08 GMT

At the end of 2012 Capital Consulting decided to substitute email Christmas cards for some of the cards we would normally send by post. Email cards being cheaper to prepare and send than cards by post (even cheaper because they were prepared and sent for us at no charge by Escrivo Internet Consulting), Capital decided to make a donation to a charity. The charity we have chosen is Médecins sans Frontières (www.msf.ch) and we have today sent a donation to help them fulfil their mission which is to help save life and relieve suffering, while maintaining dignity, by bringing care to people in precarious situations and helping them to regain their independence.

Swiss Income Tax Brackets To Be Left Unchanged

capitaltaxconsulting — Wed, 15 Aug 2012 09:51:23 GMT

Switzerland will not adjust its federal income tax brackets going into 2013, leaving them at those determined back in September 2011, according to an announcement from the Swiss federal authorities.

By law, the Federal Department of Finances is required to adjust federal income tax thresholds and deduction allowances to compensate for inflation, with a view to avoiding the effects of 'fiscal drift' (Progression à froid/Kaltes Progression), unless there is deflation.

The figures set by the Swiss CPI Index (1982 = 100) each June 30th are used for the purposes of calculating personal income tax brackets. However, this year, national CPI Index has declined by 1.7bps to 160.2.

The law provides that compensation for fiscal drift - a situation whereby rising wages push more people into paying tax at higher rates, thus acting as an automatic tax increase - are calculated every summer, but that in cases of deflation, no adjustments can be made until the CPI index surpasses again its level prior to the deflation. In other words, if inflation comes back in 2013, the next adjustment for fiscal drift will have to take into account the June 2011 inflation levels, and not the June 2012 levels.

Story taken from www.tax-news.com

Ireland Opens its Doors to Bulgarian and Romanian Nationals

capitaltaxconsulting — Thu, 02 Aug 2012 08:29:05 GMT

Ireland's Department of Jobs, Enterprise and Innovation (DJEI) has issued a new regulation that grants immediate unrestricted work authorisation to Bulgarian and Romanian nationals.

According to the European Commission of Employment, Social Affairs and Inclusion, member states of the European Union can implement measures to integrate the newest member-state nationals of Bulgaria and Romania (also known as accession-country nationals).

However, under transitional measures, all EU member states must grant full freedom of movement and access to labour markets to Bulgarians and Romanians no later than 1 January 2014.

On 20 July, the DJEI officially announced its decision to move forward the mandated transition date and abolish immediately all employment permit requirements for Bulgarian and Romanian national workers.

Ireland now permits nationals of any European Economic Area (EEA) member state, and nationals of Switzerland, to work without requiring prior authorisation.

While employment permits will no longer be required for EEA and Swiss nationals, nationals intending to reside in Ireland for stays exceeding three months should review Irish residence guidelines.

Companies wishing to sponsor Bulgarian and Romanian nationals for assignments will not be required to initiate any work authorisation prior to their arrival in Ireland.

Story taken from: www.relocatemagazine.com

Germany's SPD Set On Opposing Swiss Tax Deal

capitaltaxconsulting — Thu, 02 Aug 2012 07:02:12 GMT

Threatening a collapse in the Bundesrat, Germany’s main opposition party the Social Democrats (SPD) remain opposed to the tax deal concluded between Switzerland and Germany, aimed at resolving the longstanding issue of undeclared, untaxed assets held by German residents in Switzerland.

The Social Democrats are calling for greater concessions from the Confederation and for tougher action to be taken against tax evaders.

According to North Rhine-Westphalia’s Minister for Federal Affairs Angelica Schwall-Düren (SPD), progress made so far in the ongoing negotiations between the coalition government and opposition parties is not enough to secure the backing of the SPD-led states.

Insisting that the text in its current form is simply not ready to be put to the vote, Schwall-Düren underscored that North Rhine-Westphalia would prefer to do without the agreement rather than vote in favour of the accord as it stands.

Angered by the SPD’s stance, and reflecting the view of Chancellor Merkel’s Christian Democratic Union (CDU) party, Bavaria’s Minister for Federal Affairs Emilia Müller (CDU) warned that a collapse of the tax deal would lead to a loss of revenues for the German tax authorities of billions of euros.

The SPD must give up its opposition to the agreement, Müller demanded, emphasizing that the SPD’s “unrealistic” position will merely serve to endanger vital infrastructure and education projects in Germany.

The German cabinet adopted the bill implementing the bilateral tax agreement with Switzerland at the end of April.

Describing the bilateral tax treaty as a 'landmark' in Swiss-German relations, the German finance ministry said at the time that the deal will ensure the equal treatment of the wealth of German citizens, whether located in Germany or in Switzerland, and will restore tax equity for the past by means of a lump sum taxation.

Following significant concessions from Switzerland, the cornerstones of the agreement are now as follows:

Following entry into force of the treaty, the capital deposits of German taxpayers located in Switzerland will be taxed at the same rate as applied to capital investments in Germany;
In the future, German heirs will either agree to a 50% tax levied on inheritances, or to a full disclosure;
The taxation of wealth will in future be assured by means of an exchange of tax information, which goes beyond the international Organization for Economic Cooperation and Development standards, to ensure that no new deposits of undeclared wealth are hidden in the Confederation;
As regards the past, German residents can opt either for a flat tax imposed on capital or to submit a self-declaration. Otherwise, cases will be pursued; and
If German taxpayers relocate wealth from the Confederation to a third country, Germany will be able to obtain information from Switzerland regarding the precise flow of money, following entry into force of the treaty.

According to the German finance ministry, the provinces will receive a significant portion of the revenues accruing from the agreement.

A first instalment of CHF2bn (USD2.2bn) is due to be paid to the German state directly following entry into force of the accord.

Defending the agreement as the best and most comprehensive means of resolving the situation, the ministry warned then that failure to implement the agreement would be the worst outcome for all parties involved, as millions of irretrievable tax assets would continue to be lost every year.

Yet without the backing of federal states led by the SPD and the Green Party, the coalition will be unable to secure the necessary majority in the Bundesrat, or upper house of parliament, to adopt the text. Further negotiations between government and opposition parties are expected.

Story taken from: www.tax-news.com

Check out our July Newsletter

capitaltaxconsulting — Tue, 03 Jul 2012 10:03:43 GMT

Check it out here

Taxing Issues - July 2012

capitaltaxconsulting — Tue, 03 Jul 2012 10:01:00 GMT

In this month's edition:

Making Compliance Attractive
Netherlands 30% Ruling
Columbian Investment Oasis
France and Columbia country profiles

You can download this edition of Taxing Issues here.

To view this file you will need Adobe Acrobat reader.

Latvia Country Update

capitaltaxconsulting — Thu, 21 Jun 2012 07:40:51 GMT

Check out our updated Latvian Country Profile