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    Lawyer's Blogs

    SERBIA HAS AMENDED THE LEGISLATION THAT SIMPLIFIES COMPANY REGISTRATION

    Published:   08.02.2023 |

    Serbia amends the Law on the procedure for registering companies with the Commercial Registers Agency (AKR). The changes require the filing of applications for company registration with the AKP in electronic form. These changes in the Serbian legislation are adopted to implement the direction of the government of the digitalization of the economy and electronic services. The provision of paragraph 2 of Article 9 of the Law will enter into force in full on May 16, 2023, therefore, filing an application for registration in paper form with a certified constituent act will be prohibited. In addition to the possibility to submit documents for company registration in electronic form, there are other changes in the corporate legislation of Serbia. The right to certify a digitized document by a lawyer. New changes give the right to digitize documents and confirm the identity of the applicant when registering a company by lawyers registered in the list of lawyers of the Serbian Bar Association. The lawyer signs the application with his electronic signature (qualified electronic signature). The lawyer is obliged to keep the original document, which he digitized and submitted to the...

    BUSINESS IMMIGRATION TO LITHUANIA

    Published:   08.02.2023 |

    One of the most common grounds for issuing a residence permit in Lithuania is doing business in Lithuania. If a foreigner plans to develop his business in Lithuania and reside here, he can establish or buy an enterprise in Lithuania and develop the planned business. In case of foundation or purchase of an enterprise, a foreigner who is a participant, shareholder or member of the management body of the enterprise being created or acquired, may apply for a temporary residence permit in Lithuania, under the following conditions: A Lithuanian company has been operating for at least 6 months before applying for a residence permit in Lithuania; The authorized capital of the enterprise is not less than 28,000 euros, including 14,000 euros invested by the foreigner; The value of shares owned by a foreigner is at least 1/3 of the value of the company's shares; Citizens of Lithuania, other member states of the European Union or member states of the European Free Trade Association or foreigners permanently residing in Lithuania work in a Lithuanian company on a permanent basis, the monthly salary (of all employees) is at least 2 average monthly salaries in...

    GDPR: working with Personal data

    Published:   29.05.2019 |
    Tags:
    #EU#Ukraine

    With the rapid development of business on the Internet, including in Ukraine, a real legal settlement of the issues of personal data protection by preventive means and compensation damage for their violation is necessary. This issue is particularly relevant for those companies that have access to personal data of EU citizens and where the number of employees is more than 250 people (small and medium-sized enterprises are not required to keep records of data in most cases stipulated by Art. 30.5 GDPR). The main conditions for the collection, storage and distribution of personal data and the liability for violation of personal data are provided for by the Law of Ukraine “On the protection of personal data” of 01.06.2010, No. 2297-VI (Law No. 2297-VI). Also, the responsibility for violation of personal data is provided in Art. 182 of the Criminal Code of Ukraine, in Art. 188-39 of the Code of Administrative Offenses of Ukraine. On April 26, 2017, the European Court of Human Rights ruled in plaintiff’s favor for the protection of his personal data, with a reimbursement of EUR 6,000 for non-pecuniary damage, referring, inter alia, to the Convention for the Protection of...

    Nature, purpose and effect of controlled foreign corporation rules. Their compatibility with the principles of international tax law

    Published:   02.10.2018 |
    Tags:
    #Taxation#Taxes

    Increase in globalization and foreign trade in the last century led to aggressive tax planning. Though these planning measures are legitimate, they are designed for shifting profits to low tax jurisdictions. There is a number of measured to deal with this tax abuse. In particular, some jurisdictions apply controlled foreign corporation (CFC) rules. Historically, the CFC concepts were created to help prevent tax evasion achieved by setting up offshore companies in tax havens, such as Bermuda and the Cayman Islands. Increasingly countries have developed CFC legislation to counter perceived overseas abuses enveloped in a low tax overseas entity. The aim of CFC rules is to prevent or obstruct the creation of structures used by companies, especially domestic multinationals, for pure avoidance of domestic tax liability. CFC rules are designed to prevent profit shifting without penalizing foreign subsidiaries engaged in legitimate business practices. A controlled foreign corporation is a corporate entity that is registered and conducts business in a different jurisdiction or country than the residency of the controlling owners. A company that qualifies as a CFC generally has its...

    OECD’s and other cross-border initiatives in information exchange between states

    Published:   02.10.2018 |
    Tags:
    #OECD

    For many years, countries have recognized in international forums that co-operation is the key to obtain tax information from abroad. The OECD’s work is at the forefront of international efforts to promote exchange of information for tax purposes. The organization developed different mechanisms for the exchange of tax information, many of which have been implemented worldwide. The OECD started its work on harmful tax practices with regard to tax havens, initially in May 1998 with its Report Harmful Tax Competition – An Emerging Global Issue. This Report called for a concerted international effort to eliminate harmful tax practices and to adopt a series of recommendations. Following the Report, OECD Global Forum Working Group on Effective Exchange of Information developed Model Agreement on Exchange of Information in Tax Matters (known as the Model TIEA) to push for greater transparency. It was issued in April 2002. The aim is to establish a standard for what constitutes the effective exchange of information. The Model TIEA is not a binding instrument but contains two models for bilateral agreements. A large number of bilateral agreements have been based on this...

    The concept of Non-Discrimination as expounded in Article 24 of the OECD Model Tax Convention on Income and on Capital

    Published:   02.10.2018 |
    Tags:
    #OECD#Taxation

    Non-discrimination articles have been used in tax treaties over a number of years, they are designed to place non-discrimination requirements on the source country rather than on the residence state. There may arise cases where a country provides favourable treatment to its nationals and discriminates against foreigners. To circumvent such cases tax treaties provide a clause which restricts contracting states from offering discriminatory treatment to foreign nationals as compared to its nationals. The article on non-discrimination is the tool employed by tax treaties to express and achieve this very fundamental principle of taxation and to prevent unfair taxation as distinct from preventing double taxation. As mentioned in General remarks to the Commentary to Article 24 of the OECD Model Tax Convention on Income and on Capital (2017) (the OECD MTC): This Article deals with the elimination of tax discrimination in certain precise circumstances. Discrimination means unequal treatment in situations which are identical or similar. Article 24 of the OECD MTC deals with non-discrimination provisions; nationality non-discrimination, permanent establishment non-discrimination,...

    Transfer Pricing Methods that can be used to arrive at an arm’s length price as set down in the current OECD Transfer Pricing Guidelines in terms of achieving comparability and objectivity

    Published:   02.10.2018 |
    Tags:
    Transfer pricing

    OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017 (OECD Transfer Pricing Guidelines), there are 3 traditional methods and 2 transactional methods to determine an arm length price. Traditional transaction methods are: Compared Uncontrolled Price method (CUP) Resale Price method (RSP) Cost Plus method (CP) Transactional profit methods are: Transactional Net Margin method (TNM) Profit Split method (PS) Compared Uncontrolled Price (CUP) method compares price changed for products and services in controlled transaction between related parties, and price that would have been charged if it were a transaction undertaken between independent non-related parties. CUP method can be internal and external. The first one compares prices between distributor an its related customer, and price between the same distributor and its non-related customer. External method determines price between distributor and its related customer, and between another distributor and its independent customer. Resale Price (RSP) method is based on difference between price at which products were bought and then sold to third party. The resale...

    Judicial double taxation as a result of conflict of connecting factors which are commonly used by States to establish jurisdiction to tax the profits of multinational enterprises

    Published:   02.10.2018 |
    Tags:
    #Double taxation

    The main connecting factors which are commonly used by States to establish jurisdiction to tax the profits of multinational enterprises are “residence” and “source”, which are linked to concepts of “nationality” and “territoriality” used in public international law. Notions of residence and source are recognized by both OECD and UN and are reflected in their tax treaty models. Under residence approach, a state imposes its taxing rights of legal entity or individual based on its relation to the person who derives income. Under source principle, a state assess legal entity or individual to tax based on its relation to assets that generate income. All the states use source principle to levy taxes on income generated within state’s territory. Some states invoke residence/nationality principle and thus tax their citizens and residential companies on their worldwide income (the USA, Russia, Finland, etc.). Some states adopted only territorial principle (Hong Kong SAR, Singapore, Malaysia, Panama, Costa Rica, etc.). However, and most of states utilize both principles. State practice in determining place of residence comprises two main tests: place of...

    Nature and purposes of double taxation agreements and the issues of interpretation to which they may give rise

    Published:   02.10.2018 | blog
    Tags:
    #Double taxation

    Double Taxation Agreements (DTAs) are predominantly bilateral in nature. They are concluded on international level under international public law and thus on international level guarantee that they will become a part of domestic law of contracting states after their ratification. There are two ways how contracting states incorporate DTAs into their domestic legislation: Direct effect incorporation does not require any additional legal procedures, and DTA automatically becomes a part of domestic legislation right after its ratification (the USA, France, Switzerland, Luxemburg). In some jurisdictions a legislative act is required (Austria). Indirect effect incorporation needs special legislation for incorporation of DTA into its domestic law system (the UK, India). DTAs override domestic legislation, they prevail over internal laws and regulations. There are three main models of DTAs: The US Model Treaty (updated in 2016) is used by the USA in negotiations with other states, with inclusion of citizenship and focus on limitation of benefits. The UN Model Treaty (updated in 2017) is used by developing countries, allocates more taxing rights for source countries. ...

    Foreign companies owning real estate in the UK are demanded to register in the proper register in 2021

    Published:   05.09.2018 |
    Tags:
    #England#Scotland

    At the end of July 2018, a draft law on the registration of foreign companies was published in the UK (hereinafter - the Law). The purpose of this Law is to maintain a register of foreign companies since 2021 that own real estate in the UK. This Law is a “continuation” of the legislation on “persons with significant control”, which was introduced for UK companies in 2016. New requirements for foreign companies are aimed at combating the use of property located in the UK, for the purpose of laundering money obtained by criminal means. It is planned that the requirement for foreign companies to enter data on their final beneficiaries into a special register will allow to control the use of property for illegal purposes. It should be noted that the obligation to register will be entrusted not only to companies, but also to partnerships, governments and any other types of legal entities that are legally competent under their domestic law. So, companies can have privileges under certain circumstances, in particular, regarding how  “transparent” they are already (here it concerns the companies which shares are quoted on stock exchanges). In the event that it is...