What is important to know when choosing a foreign bank in 2018

Recently, an increasing number of citizens, concerned about their future, the future of their family or business, face the issue whether it is possible to open an account in a foreign bank and what is required for this? Which bank to choose for this: European, offshore bank, etc.? Historically, (and sometimes it is quite justified) the trust to a foreign bank is higher than to local institutions, and obtaining, for example, a loan is possible on more favorable terms than in Ukrainian banks, moreover, many people wish to keep the confidentiality of their actual income.

Regardless of whether you want to open a foreign bank account online in offshore or onshore jurisdictions, a number of aspects need to be considered and analyzed when choosing a bank. That is why the company Finance Business Service works with more than 100 banks around the world. We ask only really necessary questions in the process of selecting banks for our clients.

The current situation in the banking shows that financial institutions are increasingly facing problems of unexpected loss of correspondent accounts in US dollars. In general, the US is only a part of the global pressure on the international banking sector, we should not forget about the OECD program on automatic information exchange, and about the guidance of the BEPS. The complexity of automatic exchange for international banks is not only in the risk of losing a significant number of customers, but also in understanding what and whom to provide as part of the exchange. Tension in the banking sector is clearly traced through the complication of the procedure of opening accounts and building of long-term cooperation, directly influenced by the financial regulators of international banks.

In such a situation, real risk diversification is possible only if you have a spare foreign bank account. It is worth mentioning the risks of owning a bank account in only one country. The vivid examples are the hacker attacks on financial institutions of different countries, the volatile policy of central banks, often aimed at reducing the number of financial institutions in the country, etc. The main criteria for choosing a bank

  1. Before choosing the most suitable bank for opening an account, first of all, you should determine the goals that you need to achieve using this account. They can be very diverse:
    • Saving of personal funds;
    • Private investment of private funds;
    • Earnings on the Internet or online commerce;
    • Sale of goods and services to foreign partners, etc.

    If the purpose of opening an account is a standard commercial activity with a large number of incoming and outgoing payments, then the most important criteria for choosing a bank will be the speed of the transfers carried out by the bank and the convenience of managing the account; in particular - the availability of a remote account management system (Internet bank), as well as the average cost of one transaction. It is also important to clarify whether the bank is working with the list of currencies you need. In the case when the main task of opening an account is to keep the financial resources already earned by the entrepreneur, usually attention is given to the bank’s reliability rating. The interest on the deposit will be relatively low in the banks of high reliability category (“AA” and higher), which is due to the conservative investment policy of the banks of this group. If an entrepreneur raises the issue to make his free funds, untapped in the main business, continue to “work”, creating additional income, then one should consider the option of opening an account in one of the investment banks that place client’s funds professionally in international stock markets, getting relatively high interest income.

  2. Is it necessary to visit a bank to open an account? Many customers prefer to open an account without going to the bank. Opening of accounts is possible remotely, subject to certain requirements of the bank. In addition, in some cases, you should be prepared for the possible need to meet with a representative of the bank in Kyiv or in one of the regional offices of the bank, for example, in Europe (depending on the bank).
  3. Tariffs, cost of service, availability of necessary bank products When analyzing tariff rates, it is necessary to pay attention to the availability of additional bank commissions, for example, for considering a package of documents for opening an account, etc. At the same time, it is important to clarify the fate of these resources, if the bank refuses to open an account - as the tariffs of banks may specify that these commissions are not returned. The banks of Europe (Liechtenstein, Switzerland, Austria, etc.), being respectable and reliable - mainly refer to savings banks. Tariffs for their services are much more expensive than in commercial banks with a priority rate for conducting banking operations. The availability of certain bank products may sometimes become a key factor when choosing a bank. Some banks offer cards that do not contain the owner's name, some cards require special transfer from the account, others are attached directly to the account, etc. Brokerage accounts will be necessary for transactions with securities, FOREX-accounts - for the operations in foreign currency markets.
  4. Do you want to give minimum information about yourself and your business to the bank? The general trends in the world financial system are such that now almost all banks request a lot of detailed information about the business and its ultimate beneficiaries. Banks are forced to comply with the requirements imposed on them by law, otherwise they can incur catastrophic amounts of fines, remain without a license ... The list goes on. Be very careful if your counselor / lawyer recommends working with the bank, arguing that “this bank does not ask anything”. There is a big risk that then you will look for the specialists to return your money earned for years of hard work.
  5. Bank secrecy. If this is one of the main criteria for you and your business, then, on choosing a bank:
    • pay attention to the international agreements of the jurisdiction in which the bank you are interested in is registered, about mutual assistance and the provision of information to other countries;
    • choose a country with high standards of bank secrecy and strict laws regarding the disclosure of bank secrecy (Switzerland, the Cayman Islands, Hong Kong, Singapore, etc.)
  6. The availability of personnel with the knowledge of the Russian language, Russian-speaking Internet banking, technical support in Russian. This is an important point for many customers.

Conclusions

We wish to think, when preparing to become a client of a foreign bank, a potential client chooses his own bank himself. But the reality is that everything is exactly the opposite in banking for non-residents. The bank always makes a decision to open or not to open a bank account for you as non-resident. And it will not risk the existing customer base, the license, the freedom of the bank’s executives and the Compliance officers, because they are responsible (up to their freedom) to ensure that risky and problematic clients not to be included in the number of bank’s customers. Banks have their own and often quite vague list of characteristics that should be initially inherent to a potential non-resident client.

The company Finance Business Service is ready to help you and take painstaking and extensive work on itself. We suggest answering the questions of a specially designed brief for the professional choice of a foreign bank to open an account. It includes a number of issues, best adapted to the general banking standards and requirements. Based on the answers provided, we analyze and select the most suitable financial institution in accordance with your goals and plans.

Note:

By registering a company abroad with the help of Finance Business Service, you receive special tariffs for the package of services, while the standards of the constituent instruments of the companies registered by us meet the strictest requirements of international banks. Thus, the documents will be ready for immediate submission to the bank you need.

The existing European mechanisms for arbitration resolution of tax disputes on double taxation, prescribed in tax agreements and in accordance with the EU Arbitration Convention, do not always result in effective resolution of tax disputes. The recent monitoring carried out by the Council of the European Union revealed certain shortcomings, especially in relation to accessibility of dispute resolution mechanisms, as well as the length and effective conclusion of the procedure. According to the European Commission, the estimated figure of tax disputes on double taxation in the EU is about 900, with approximately 10.5 billion euros at stake.

In this regard, on October 10 this year, the EU Council approved the Directive to resolve tax disputes (hereinafter - the Directive). The directive is aimed at changing the current situation, when the scope for mandatory arbitration in dispute resolution is limited to the issues of transfer pricing adjustments and the profit distribution of related persons. Thus, legal persons and natural persons will be able to resolve all disputes related to the interpretation and application of agreements that provide for the elimination of double taxation of income and capital.

Among the key objectives of the new rules under the Directive are the following:

  • Creating an obligation on Member states to take decisions on all disputes originating in tax treaties and affect the tax position of businesses and citizens;
  • Providing an opportunity for taxpayers to unblock procedures at national courts;
  • Clearly defined timelines and standard period for each arbitration phase;
  • Extending the scope to all tax disputes between Member States that derive from tax treaties and other international agreements;
  • Mandatory notification of the taxpayers and publication of reviews of arbitration decisions.

To achieve these objectives, the Directive provides for the following:

  • Member States will now have a legal obligation to take conclusive and enforceable decisions under the improved dispute resolution mechanism; and if they do not meet such obligations, the national courts will take such decisions;
  • Taxpayers having tax treaty disputes can initiate a procedure whereby the Member States which have concluded the current agreement must attempt to resolve the dispute amicably within two years;
  • If no decision has been found at the end of the two-year period, the competent authority of each Member State must set up an Advisory Commission to arbitrate;
  • If the competent authorities fail to set up the Advisory Commission to arbitrate, the taxpayer can bring an action before the national court to appoint such Advisory Commission.

The Advisory Commission (as agreed by the relevant competent authorities or appointed by national court of the Member States concerned) consists of one chair, maximum of two representatives from each competent authority, and a maximum of two independent persons of standing. The Commission will have six months to deliver a final, binding decision that is immediately enforceable and resolves the dispute.

The Directive will be applicable to matters submitted after 1 July 2019, on issues related to the tax year starting on or after 1 January 2018.
Multinationals should welcome the Directive as a step towards improving access to tax dispute resolution mechanisms within the European Union. The new Directive establishes a European mechanism in which multinationals can access to resolve all tax treaty related disputes. It expands on the scope of existing mechanisms in the EU Arbitration Convention to cover not just disputes concerning profit adjustments of associated enterprises but also other tax treaty related disputes. In particular, disputes between Member States that are not related to transfer pricing that cannot be resolved bilaterally will be resolved by default through mandatory arbitration under the new Directive.

These changes in Europe work alongside the minimum standards agreed under Action 14 of the OECD BEPS Action Plan to improve the effectiveness and timeliness of mutual agreement procedures under tax treaties. The adoption of the new Directive means that European countries have gone further than the minimum standards, which did not include mandatory arbitration in dispute resolution. It is expected that the adoption of this Directive will put further pressures on the countries to agree their positions in mutual agreement procedures. Thus, the Directive will increase legal certainty, while creating a more friendly environment for business and investment in the European Union.

The adoption of the Directive is a timely improvement of dispute resolution mechanisms available to taxpayers, both for double taxation cases and cases involving difficulties in interpreting tax agreements. The Directive will cover a wider range of disputes, and Member States will have clear deadlines to agree on a binding solution going forward. This is likely to be important in the post BEPS environment, where tax certainty is difficult to obtain on a unilateral basis and where taxation disputes are likely to increase as tax administrations begin regular and focused audit practices on cross-border transactions.

In recent years, the world community has realized the importance of the corporate transparency. The Panama Papers, high scandals with corruption and tax evasion have caused a radical shift in the attitude towards anonymous companies. The creation of the registers of beneficial owners (hereinafter referred to as "the UBO registers") is considered as the main instrument for increasing transparency. This idea underlies the EU legislation, FATF recommendations, G20 initiatives, the OECD project to combat on Base Erosion and Profit Shifting.

For the EU Member States, the obligation to establish the UBO registers, stipulated by the fourth Anti-Money Laundering Directive (AMLD IV), entered into force on June 26, 2017. However, there are still many questions about how the UBO registers will work in practice. The European states independently define in the national legislation such terms as "legal entity", "legal structure" and "UBO". The concern about data confidentiality is also increasingly growing in Europe, as the countries are discussing who should be allowed access to the registers and for what purpose. Will they provide information only to law enforcement and regulatory authorities, or yet to financial institutions within the framework of the client verification procedure? Each country also decides independently whether the register will be public. At present, it boils down to an interpretation of that idea who has "legitimate interests".
For example, in Germany, since October 1, 2017, the Transparency Register has been introduced. It contains the information on the identity of beneficial owners and detailed information on the share held by the legal entities, partnerships, as well as with respect to the foreign trusts and funds without legal capacity, which purpose is to serve their founders. The register will be available to the government agencies, individuals who are required to verify the clients and the third parties, such as journalists, public organizations and potential commercial partners, provided that any such third party can demonstrate a legitimate interest in the access to the information.
Great Britain has introduced a register of people with considerable control. This register was introduced one of the first - April 6, 2016, but it contains less information than the UBO register (for example, it does not include information about the beneficial owners of the trusts). The registry data is publicly available, but the British law provides for the ability to close registry data in cases when a company or partnership has reason to believe that the disclosure of the controller may endanger the controller or his relatives.
Following the UK, the UBO registers are being introduced in the British-dependent territories. All crown lands and overseas territories have signed an agreement to enhance the exchange of information on the beneficial owners and controllers between the law enforcement agencies. Thus, only this year such commitments in the national legislation have been introduced by the Governments of Jersey, Guernsey, the Isle of Man, the British Virgin Islands and the Cayman Islands. In these countries, the requirements for the companies to maintain the UBO register have already been introduced. The rest offshore British-dependent territories are ready to provide the British authorities with information on the beneficial owners upon request.
As a result of pressure from the Organization for Economic Cooperation and Development, other offshore jurisdictions also introduce into their legislation a requirement for the companies to maintain the UBO registers. So, in the Seychelles, the amendments to the Law on International Business Companies have been adopted in July 2016. The amendments provide for each Seychelles company to maintain the UBO register, keep it at the registration address in the Seychelles and provide data from the register to law enforcement and regulatory authorities upon the request. The similar requirements have also been introduced into the legislation of Belize, having adopted the amendments in the Law on International Commercial Companies, which came into effect from July this year.
In March 2017, the Companies Act has been amended in Singapore, demanding to keep the registers of the beneficiaries and nominees not only for the companies registered in Singapore, but also foreign companies operating in Singapore. Following Singapore, the government of Hong Kong plans to introduce the relevant changes into its legislation. According to the results of public hearings held by the State Financial Services Bureau, the Parliament has developed the amendments to the Companies Act, which were published in the form of a bill in the official newspaper in June 2017. After the adoption of this law, the companies established in Hong Kong will have to provide the information on beneficial owners only to the competent authorities.
In Russia, the requirement to maintain the UBO register came into force at the end of 2016. The companies must keep the information on the beneficial owners for five years. They are obliged to provide this information at the request of “Rosfinmonitoring”, tax authorities and other authorized state bodies.
In Russia, the requirement to maintain the UBO register came into force at the end of 2016. Companies must keep information on beneficial owners for five years. They are obliged to provide this information at the request of “Rosfinmonitoring”, tax authorities and other authorized public authorities.
Ukraine was among the leaders in this race to disclose the ultimate beneficiaries. The Law on amendments to certain legislative acts of Ukraine regarding the determination of the ultimate beneficiaries of the legal entities and public figures was adopted in 2014, and the May of 2015 was established as the deadline for the fulfillment of the obligation to provide the data on the ultimate beneficial owners to the state register. Moreover, all the data provided were entered in the open register.
The UBO registers simplify the process of customer verification, so they could be extremely valuable for a number of organizations conducting detailed inspections (for example, banks and other financial institutions). But there must be a 100% certainty for this that data can be relied on from the register without being exposed to an increased risk. Unfortunately, the request for additional information from the individuals when creating a company does not guarantee the accuracy, timeliness and completeness of the information provided. To reduce the chances for those who wish to provide false or inaccurate information about the beneficial owner in state registers, special technologies that are already used in the private sector should be used (for example, cross-checking, large data, artificial intelligence used to prevent fraudulent Internet purchases).
Currently, there are many other gray areas around how each state implements the requirement to introduce the UBO registers into the national legislation. On the main issues - who is the beneficiary owner, who is the administrator of the register, its controller - each state has a certain freedom in interpretation. All this complicates the use of the information from the official sources, which is rather scattered. It should also be taken into account that state authorities can be also corrupt and protect a certain business or politicians, and no one will ever know about it unless a leakage similar to the Panama Papers occurs.
The real value of the information about the beneficial owners of the companies is the creation of one centralized register. Thus, the Article 30 of the AMLD IV suggests that by 2019 the UBO registers of the EU member states can be linked through the European Central Platform, providing an integrated source of the UBO information throughout the EU. It is still not clear how exactly this will work, but the European Commission is tasked with drawing up a report on the assessment of the technical conditions and the order of ensuring the interconnection by June 2019.
As for the rest of the countries, unlike the EU, it is, of course, impossible to establish universal obligations for all of them. However, the voluntary initiatives already exist, and the countries will join them under the pressure of international and public organizations. After the Global Anti-Corruption Summit in London in May 2016, the OpenOwnership was created - a project to create an open Global Register of Property Rights, the data from which will be interconnected between jurisdictions, industries and with other data sets. The creator and manager of the Global Registry is a consortium consisting of leading international organizations for the struggle for transparency: Transparency International, OpenCorporates, Global Witness, Worldwide Web Foundation, Open Contracting Partnership, ONE Campaign and B Team. The first country that officially confirmed its readiness to integrate data on the beneficial owners of companies into the Global Register was Ukraine in April of this year.
Only in the last year the mankind has significantly advanced in the direction of increasing the transparency of corporate ownership. And this trend is only increasing. The most civilized countries either have already introduced the requirements for the maintenance of the UBO registers, or they are at a certain stage of consultations on this issue. While access to the data remains one of the most controversial issues, the countries are striving to find the right balance between maintaining the principle of transparency and fears about the safety of the potentially vulnerable individuals and cyber security. However that may be, it is becoming increasingly difficult to hide the information about the owners of the company through offshore zones and nominal shareholders. The business will have to revise its corporate structures and learn to work in full transparency, including the ability to track any transactions. The companies need to create a literate history today for both enterprises and their beneficiaries.

On July 27, the list of organizational and legal forms of foreign counterparties on the countries / territories was officially published (and therefore entered into force), operations with which can be recognized as controlled for the purpose of control of transfer pricing (TP). This list was approved by the Resolution of the Cabinet of Ministers of Ukraine No. 480 of July 4 of this year (hereinafter - the List) for the implementation of the provisions of the Tax Code of Ukraine on TP, namely the clause "d" 39.2.1.1 art.39, and it is another criterion for the recognition of the operation as controlled one. If we look more widely, this can be seen as the next step of our government within the framework of global campaign on de-offshoring, namely to fulfill the commitments to implement the BEPS plan (its minimum standard), which Ukraine assumed with the acquisition of an official BEPS membership from 1 January, 2017.

The list includes more than 90 organizational and legal forms from 26 countries and territories. The absolute majority of organizational and legal forms on the list are partnerships (about 80% of total amount). There were also some forms of investment funds and companies, limited liability companies, associations, international companies, etc. It is noteworthy that the List includes the forms of the companies not only of those jurisdictions that are traditionally used in tax planning schemes (for example, the British LLP or the UAE free zone company), but also organizational and legal forms in the jurisdictions with traditional tax load (Germany, France, Poland) and even exotic for our perception types of the companies of Asian countries (Korea, Japan, Israel).

The Government used the data of the OECD report on taxation of partnerships, as well as the information bases of the International Bureau of Fiscal Documents, to compile the List. The main criterion was the payment of profit tax.

That is, from now on, the fiscal authorities believe that if a non-resident is established in one of the organizational and legal forms of one of the states specified in the List, he does not pay the tax on the profit of the enterprise, including the income outside the state of registration, and / or he is not a tax resident of the country of registration. Accordingly, all the transactions of the Ukrainian taxpayers with such counterparties, with the volume of more than 10 million UAH for the reporting period will be recognized as controlled, and therefore the TP rules will be applied to them.

The only way to avoid control is to prove the opposite, that is, the payment of tax by a non-resident in the country of registration in the reporting year. Then business transactions with this non-resident in this reporting period will be recognized as uncontrolled, if, of course, there is compliance with other criteria defined by law. This possibility is provided for by the part 2 par. 39.2.1.1 art.39 of the Tax Code.

The bad news is that neither the procedure for confirming the tax payment nor the list of documents by which such payment can be confirmed has been established. And this means that, in practice, a taxpayer may face difficulties in proving the fact of paying a tax in the country of registration to the Ukrainian fiscal authorities.

The matter of the possibility of applying the provisions of agreements on avoidance of double taxation to the payments of such non-residents is not less important. Most likely, it will become difficult to use in practice the advantages of the international agreements in the tax sphere for non-residents, whose organizational and legal form is included in the List.

Another important issue - which reporting period will the transactions with counterparties be started to monitor, which organizational and legal form is included in the List? We assume that the disputes will inevitably arise on this issue, since the Tax Code contains two conflicting norms. Thus, the second part of par. 39.2.1.2 Article 39 establishes the moment when this criterion of the controllability of business transactions comes into force - on 1 of January of the reporting year, following the calendar year in which the countries were included in the List. This means that the deals made since 2018 will fall under the control of the TP.

At the same time, cl.41 Subsection 10 of the Transitional Provisions of the TCU states that economic transactions with non-residents, which organizational and legal form is included in the List, are recognized as being controlled from the date of introduction of the List. And this means that this norm makes report for the operations committed this year already.

We still incline to the first option, because the second one contradicts at once two basic principles of the Ukrainian tax legislation, established in art. 4 of the TCU: presumption of legitimacy of the decision of the taxpayer in the event of legal conflict and stability - a ban on the introduction of any elements of the taxes and fees in less than 6 months before the start of the new budget period.

Summarizing, we want to note that Ukraine is moving towards a worldwide policy to fight with tax evasion and approving the concept of paying taxes at the place of business and earning income. It is also obvious that in the future such a struggle will only intensify. The approval of the List has become, even though expected, but still a challenge for the businesses using the tax optimization schemes with the help of the foreign partners and counterparties. We see this as another signal to the need of revision of such structures.

Panama bay

Panama in October became the 105th country to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The OECD, which sets global standards for the exchange of tax information and tax transparency, said that the signing shows that Panama is currently implementing its cooperation with the international community to ensure transparency.

"Panama's decision to sign a multilateral Convention, is a confirmation of its commitment to take the necessary measures to comply with international expectations in the fight against tax evasion," said OECD Secretary-General Angel Gurría, during the signing ceremony with the Ambassador of Panama in France. "It also sends a clear signal that the international community is united we will continue our efforts for as long as there is nowhere to hide in their efforts to eradicate tax evasion on the shelf.."

Global Forum on transparency and exchange of information for tax purposes is expected to publish in early November estimate of peer review, as the legal framework and practices in Panama coincide with existing international standards of transparency and exchange of information on request during the last three years.

"Future reports will reflect the previous record of Panama on transparency. This signing, combined with the latest legislative changes, opens the door to broad international cooperation, illustrates the good location and Panama's commitment to move forward in the area of ​​tax transparency," said Gurria.

For all forms of administrative assistance in tax matters Convention provides: information exchange on request, spontaneous exchanges, facilitating tax examinations abroad, simultaneous tax audits and assistance in collection of taxes. This provides greater safeguards for the protection of taxpayers' rights. It also allows the automatic exchange of information by choice.

OECD says global convention is seen as an essential tool for the rapid implementation of the new standard for automatic exchange of financial information in tax matters developed by OECD and the G20, which is scheduled to come into force in 2017.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

OECD flags

«Governments and authorities need to look for a new ways to use the tax policy to distribute the advantages of economic growth more equally among its citizens», - said in a new report «Tax Design for Inclusive Economic Growth» OECD.

The report contains recommendations to countries looking to expand their tax bases, to make their tax regimes more progressive behavior and encourage opportunities to push for lower income sources, as well as improving tax policy and administration.

The report would be discussed on 23 July at the G20 Ministerial Tax Symposium. The symposium would discuss the best ways to use the tax policy tools, to break through to an inclusive, coherent program that provides enterprises with a greater tax certainty.

«The tax policy has a clear role in facilitating achieving a strong, sustainable and balanced growth», - said OECD’s General secretary Angel Gurria, - «We are convinced that the latest study of the OECD on tax structures for inclusive growth may become part of the new of tax policy, which will contribute G20 to the forward promotion procedure.

Author: Sergey Panov

managing partner Finance Business Service

Consumption tax. USA

In a latest document from the Tax Foundation (TF), it was noted that, the largest Organization for Economic Cooperation and Development (OECD) is more inclined to the proceeds from the consumption tax, the United States prefer more personal income tax, while at the raising relatively is differb a little from the consumption tax.

TF said that "this difference of political issues, given that consumption taxes raise revenue with less economic damage than individual income taxes"

According to the recent data for 2013, consumption taxes were the largest source of tax revenue for the OECD countries, increasing by an average of 32.7 percent of their tax revenues. However, taxes on consumption rose by only 17.4 per cent of revenue for the United States, mainly because the United States is the only OECD country without value-added tax (VAT). Instead, most governments states in the US use the retail sales tax on the final sale of most goods and excise taxes on the production of goods such as cigarettes and alcohol.

The United States instead relies heavily on individual income tax, accounting for 38.7 percent of total government revenue in 2013, compared with the OECD average of 24.8 percent.

TF said that the income taxes are levied directly on the income of an individual and, as a rule, are income. However, many countries, including the United States, also impose a personal income tax on investment income such as capital gains, dividends and interest, as well as income "transit" (where the business income of a legal entity is a tax tax return of the individual owner.

One of the smallest sources of tax revenue has been the corporate income tax in 2013, both the United States and the OECD. US federal, state and local governments collected 8.4 per cent of their total tax revenue from corporate earnings this year, compared with 8.5 percent on average for the OECD countries.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

US tax hikes

In its latest review of the US economy, which was published on June 16, the Organisation for Economic Co-operation and Development (OECD) recommended that increased long-term government spending on infrastructure and education should be funded by higher tax revenues.

In particular, the OECD suggested that work towards putting a price on carbon, such as by implementing President Barack Obama's proposal for a USD10 per barrel tax on oil and his Clean Power Plan, would provide additional funds, while also reducing greenhouse gas emissions.

Worsening income inequality in the United States could, the OECD suggested, be countered if the Administration was to "expand the earned income tax credit … and make tax expenditures less regressive."

For US businesses, the OECD also recommended making the research tax credit refundable for new firms, which are not able to take advantage of the existing non-refundable credit because of low profitability. Such a measure aimed at increasing productivity in the economy would be an alternative to the current congressional patent box proposals that are not favored by the OECD.

Few of the OECD's proposals are likely, in fact, to be acceptable to the present US Congress. For example, on June 10, the House of Representatives adopted a Republican party resolution expressing its belief that "a carbon tax would be detrimental to American families and businesses, and is not in the best interest of the United States."

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Tax in Poland

The new government of Poland will require higher tax revenue for the planned economic reforms, said the Organization for Economic Cooperation and Development (OECD).

OECD Economic Survey of Poland said that the Polish authorities should remove the value added tax (VAT) exemptions and reduced rates that were more than 2.5% of gross domestic product (GDP). This should bring higher revenues than planned increase taxes on banks and retail and will simplify the tax system.

The report recommended an increase in property taxes to make them on the basis of market value.

Green taxes can also increase revenue, in particular, it is recommended to remove the exemption from taxes on fuel use, increase taxes on air and water pollution, as well as to increase the tax on emissions by vehicles. These measures could bring additional revenue equivalent to nearly 1.5% of GDP in 2025.

The report said that the government's plan to focus on improving tax compliance for the creation of additional income is appropriate.

VAT evasion has increased considerably over the past few years.

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