Rigensis Bank

Ukrainian clients of Latvian banks have received letters demanding to talk about his tax residence. These data are the local State Revenue Service promises to transfer FTS. Latvia Banks sent Ukrainians requirements to disclose tax and financial information about themselves.

In one of these letters, which received a bank customer Rigensis (have RBC), said that since January 1, 2016 Latvia acceded to the standard automatic exchange of financial information (Automatic Exchange of Information or AEOI). In a letter to his client Rigensis Bank warns that it must pass the data of the State Revenue Service of Latvia (SRS). And that, in turn, is obliged to send this information to the tax authorities of the relevant jurisdiction. In other words, in those countries where the owners Rigensis bank accounts - tax residents, written in the letter. The first reports on the new (opened in 2017) and large accounts (balance at 31 December 2015 of more than $ 1 million) Rigensis transmit SRS in 2017, stated in the letter. For all the rest - in 2018. At the same time Ukraine is likely to begin to exchange tax information with Latvia within the AEOI, said in response to the SRS request RBC spokesman.

The letter Rigensis Bank attached form, which must fill in the recipient. In it, among other things it is necessary to enter your tax residence and tax identification number. In completing this questionnaire Rigensis bank gives its clients a month. A spokesman for the Latvian bank Rietumu Eleanor Gajlish told that their clients must also report on their tax residency.

Identify their customers, banks are forced to because of the innovations in local legislation, says the press service of the State Revenue Service of Latvia. This refers to the rules of the Cabinet of Ministers № 20, which came into force in January 2016. It says that all Latvian financial institutions must determine which jurisdiction linked open their account. Press service of the State Revenue Service stressed that this requirement applies to all customers - not just to foreigners or Ukrainians specifically.

Baltic false start

Require customers Latvian banks are now, but to share tax information with Ukraine, the country will begin no earlier than 2018 - and if there is a bilateral agreement, says an international financial consultant FCP (Financial Management) Ltd Isaac Becker. While such agreements Ukraine does not have with any other country, he added. Partner UFG Wealth Management Dmitry Maples has no doubt that in 2018 Ukraine and Latvia will sign such an agreement. He added that up to this point FTS can only request information about specific accounts of citizens in Latvia.

"Demanding report on tax rezidentctve now Latvia is running ahead of the engine" - says Becker. He believes that since Latvia wants to improve its reputation. Local banks have repeatedly drawn attention not always money to the account they acted according to the rules, explains Becker.

However, Latvia is not the only country, which began collecting tax data in advance. In particular, such information is requested from existing clients, Swiss banks, said Maples of UFG Wealth Management. In addition, banks in Cyprus, Switzerland and the United Kingdom (although there is not a common practice) required to disclose tax information when opening an account, adds Becker. The AEOI standard says that they have every right to do.

Penalties for failure to report to the bank last establishes himself, said the press service of the State Revenue Service of Latvia. The letter Rigensis Bank said that such customers may refuse further cooperation. In addition, the bank will inform the State Revenue Service on customers who do not have documented their accounts, it said in the same letter.

If you do not respond to the question of tax residence, bank, obviously just to close your account, notice of Maples UFG Wealth Management. Difficulties at the client may also arise if the bank compares the already known and new information about the customer and the final picture will be controversial, adds Gajlish.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

International reporting. Canada

Canada has signed a multilateral agreement on reporting between countries. The first exchange of information is expected to be held in June 2018.

Budget Canada 2016 includes a proposal to require companies with annual revenues of the consolidated group of USD 750 million or more, to submit annual reports on their income and taxes paid and accrued on the number of employees, capital, retained earnings and tangible assets for each tax jurisdiction in which they do business.

Canada has the opportunity to share the information contained in the reports with tax treaty partners which also comply with the necessary standards of accountability. According to the Agency Revenue Canada, this information will allow countries to improve their ability to check and detect aggressive international scheme of tax evasion, as well as contribute to making global operations affected companies more transparent and that they pay the relevant taxes in the country which is generated by their profit.

Currently 32 jurisdictions have signed the agreement on the international exchange of information.

Canada noted that the signing of the agreement is part of a four-point action plan to address tax evasion. The Action Plan includes measures to expand the sources of information, to strengthen its cooperation with international partners.

Revenue Minister Diana Lebouthillier said: "Our government in the framework of this important international agreement will support efforts around the world to strengthen the rules of international taxation and prevent tax evasion Canada is pleased to be an active participant in the work."

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Сингапур. Бюджет

Singapore’s Minister for Finance delivered the 2016 budget statement on 24 March 2016. The budget’s goals include transformation of the economy through enterprise and innovation. A number of measures would benefit small and medium-sized enterprises, including an enhancement of the corporate income tax rebate. The relevant tax proposals that would affect businesses also include changes to tax incentives (including the expansion and extension of several incentives) and measures affecting intellectual property rights.

An automation support package would be introduced to support companies’ efforts to automate, increase productivity, scale up and expand overseas. It would offer a 100% investment allowance for qualifying capital expenditure of up to SGD 10 million per project, and grants of up to SGD 1 million and enhanced financing support also would be available. It is unclear if all the proposed benefits could be applied at the same time, and the effective date for the measures is yet to be announced.

No changes are proposed to the corporate income tax rate (17% with a partial tax exemption on a company’s first SGD 300,000 of normal chargeable income), but the corporate income tax rebate would be raised from 30% to 50%.

The double tax deduction for internationalization that permits companies to deduct up to 200% of certain qualifying expenditure incurred on a range of qualifying market expansion and investment development activities would be extended by four years, until 31 March 2020.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Канада и страны ОЭСР

Banking rules will be tightened, which cost for the government and taxpayers billions each year. Missing revenue from corporate income tax in the range of $ 100 billion and $ 240 billion a year.

This year, the Government of Canada and Switzerland closer to the use of Common Reporting Standard (CRS).

This agreement will oblige the secretive bankers to share more information with Canada Revenue Agency, so to hide money abroad become more difficult.

But this is only one part of a much larger and coordinated effort on the part of many countries.

Dozens of countries of the organization for Economic Cooperation and Development (OECD), from 2013, working on closing the "gaps and inconsistencies" in their tax rules that allow large companies and very rich people do not pay their share.

Until the transaction is being developed between Canada and Switzerland was preceded by another agreement, signed in January, the free exchange of tax information on large companies.

Agreement Canada / Switzerland does not expect to see any exchange of information up until 2018 - if adopted the necessary legislation. Countries still have a long way to go before they will accept the agreement and even longer before they take the necessary laws.

Author: Olena Kutova

senior lawyer of the Finance Business Service company