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The European Parliament Will Undertake “Paradise Papers”

Published: 15.02.2018 |

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The European Parliament plans to create a new committee on financial crimes, tax evasion and tax planning. This decision was taken by the Chairmen of the factions of the European Parliament on February 8 and it is awaiting approval in the plenary vote. The main goal of the committee, which will last 12 months, will be the completion of work done by the members of the pre-existing TAXE 1, TAXE 2 and PANA committees, as well as focusing on the so-called “Paradise Papers” - recent information leaks. Thus, the co-chairman of the Greens / European Free Alliance (Greens / EFA) fraction, Philippe Lamberts, noted: “Paradise Papers demonstrated the existence of clear objectives and serious volume of work that we must do if we want to ensure fiscal justice throughout the European Union. We want to be sure that the national treasuries are able to collect funds which are necessary to maintain the common prosperity of the EU”. According to the official, the EU Parliament’s Panama Papers Committee has already developed a well-prepared plan of measures to reduce the cases of tax evasion. The new committee will ensure the maintenance of the progress achieved and the implementation of...

Verkhovna Rada Adopted the Law “On Limited Liability Companies and Additional Liability Companies”

Published: 14.02.2018 |

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#Corporate law #Legislation

The Verkhovna Rada supported on second reading and in general the law “On Limited Liability Companies and Additional Liability Companies” (No. 4666) with technical and legal amendments. According to the Interfax-Ukraine Agency, 285 people’s deputies voted for the document. As the Chairman of the Verkhovna Rada Committee on Economic Policy Andrey Ivanchuk (the fraction “People’s Front”) has noted, presenting the law in the parliament, now this issue is regulated by the legislation adopted back in 1991. At the same time, according to the words of the official, limited liability company is the most popular type of Ukrainian companies, and today there are more than half a million of them. Andrey Ivanchuk also added that regarding the law No. 4666, they received 503 amendments on second reading, 360 of which were taken into account. The law provides that the value of the LLC’s share is established as of the day before the meeting of the LLC members, at which the decision to exclude the member from the LLC was made. The transitional provisions of the document also contain the provisions for the compulsory acquisition of a share by a...

UK Toughens Requirements for Trusts

Published: 13.02.2018 |

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#Trusts #United Kingdom

The United Kingdom of Great Britain and Northern Ireland has introduced new requirements for registration and reporting regarding the trust management mechanisms both within the state and outside it. The introductions stipulate that British and non-British trustees are obliged to register all corresponding to these requirements trusts in the new service (register) on disclosing information on Trust Reporting Service by March 5, 2018, in accordance with these requirements. Otherwise, there is a threat of imposing fines. The scope of application of the rules is quite wide. Thus, all the so-called “express trusts” (trusts established according to the intentions of the parties and recorded verbally or in writing, in contrast with the trust by court order) created anywhere in the world that have undertaken the corresponding tax liabilities under the UK law within the tax period (April 6 - April 5) and meet a number of other conditions, are demanded to register and report the information about the trust, its founders, beneficiaries and assets. These data will be kept in the registry of the UK government, which is available to law enforcement and tax authorities. The following taxes...

MFU Has Developed a Draft Resolution for the Operation of VAT Risk System

Published: 13.02.2018 |

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#Taxation #Taxes #VAT

The Ministry of Finance of Ukraine has developed a draft Resolution on the further operation of the VAT risk system. This mechanism is a necessary measure aimed at the prevention of VAT embezzlement schemes and uninterrupted process of automatic VAT refund. We remind that in December last year, the work of the VAT risk system was suspended in order to develop a coordinated effective solution which would not entail new risks. So, the MFU together with the SFS have developed and agreed upon a decision that was made public on the official website of the Ministry on February 9, for public discussion. Now the draft Resolution is under consideration of people’s deputies of the Tax and Customs Policy Committee. It includes the following changes: In order to reduce the cases of suspension of the registration of tax invoices, a “cutoff criterion” of 3% and a threshold of the volume of supply for the month of 500 thousand UAH are established. Earlier, the coordination of evaluation criteria continued for some time, that allowed some payers to use a fictitious loan. It is proposed the SFS to establish criteria for risk assessment for a prompt response. In order to ensure the...

Hong Kong Intends to Join the OECD’s Multilateral Competent Authority Agreement

Published: 09.02.2018 |

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#BEPS #Hong Kong

On February 2, 2018, the Hong Kong Special Administrative Region officially formalized the process of ratifying the OECD’s Multilateral Competent Authority Agreement (MCAA). That means that the jurisdiction will join soon the existing multilateral network of data exchange between the tax authorities of many countries and territories around the world. The Hong Kong Tax and Fees Department introduced the Ordinance on Automatic Exchange of Information on Financial Accounts (AEOI), which will optimize the process of obtaining information by the countries with which the jurisdiction agrees to exchange. This refers to the exchange both under the Common Reporting Standard (CRS) and the intercountry reporting exchange under the BEPS Plan. After joining of Hong Kong the Multilateral Agreement, the authorities of the country will be able to pass a rather formal procedure for finalizing the relations with other participants through the OECD secretariat. If we compare this process with the conclusion of separate bilateral agreements with a number of the countries, it is much faster and easier. It is important to note that until the end of this year, the old (bilateral) rules for automatic...

The Cabinet of Ministers Excluded 5 Countries from Offshore List

Published: 08.02.2018 | news

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#Black list #Offshores

On January 31, at the meeting of the Ukrainian government, it was decided to exclude 5 countries from the list of offshore companies, namely Estonia, Latvia, Georgia, Malta and Hungary. We remind that on January 19, the Ministry of Finance of Latvia announced that the inclusion of this country in the list of offshore zones was unreasonable. Earlier, Ukraine included Estonia in the list without notification of the Estonian government, so the Prime Minister of the state Jüri Ratas reacted by a statement on the need to remove the jurisdiction immediately from the offshore list. It took place on January 26, during his meeting in Davos with the Prime Minister of Ukraine Vladimir Groysman and the Minister of Finance of Ukraine Aleksandr Danilyuk. In total in 2017, Ukraine expanded the list of the countries, the operations with counterparties of which are subject to control in the administration of the law of transfer pricing, to 25 countries. Guadeloupe, Guatemala, French Guiana, the Commonwealth of Dominica, the Dominican Republic, Estonia, Iran, Cuba, Laos, Latvia, Lebanon, Mauritius, Malta, Morocco, Monaco, the United Arab Emirates, Singapore, Georgia and Hungary were added to the...

Hong Kong Legislation on Significant Controllers Register Will Enter into Force in March 2018

Published: 05.02.2018 |

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#Hong Kong #Legislation

On January 24, 2018, the Companies (Amendment) Bill 2017 was passed, which mandates incorporated companies of Hong Kong to keep a Significant Controllers Register (SCR). The new legislation will enter into force on March 1, 2018. The Hong Kong Companies Registry has set up a special section on SCR on its website containing, amongst others, a detailed Guideline on the Keeping of SCR and specific forms for the companies to use. The main requirements for the new SCR regime are listed below. Who are required to keep a SCR? All companies “formed and registered” in accordance with the the Hong Kong Companies Ordinance, including dormant companies, financial institutions, charitable organizations, companies limited by guarantee and any other types of companies incorporated in Hong Kong, except for the listed companies, and foreign companies registered under Part 16 of the Hong Kong Companies Ordinance, must keep a SCR. What should be contained in the SCR? The SCR must contain information on the significant controllers of the applicable company, namely registrable persons (i.e., a natural person or a specified entity such as a government and international organisation) and/or...

Offshore Transactions No Longer Subject to Additional Bank Checks

Published: 01.02.2018 |

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#Offshores #Taxation

The NBU has forbidden financial institutions to apply the requirements of the Regulation on the procedure of analysis by the banks and verification of documents (information) on financial transactions and their participants (Resolution No.369) to the transactions, one of the parties of which are persons registered in the offshore zones. On January 24, the financial institutions received the corresponding Clarification No.25-0008/4731, signed by the director of the financial monitoring of the National Bank of Ukraine, Igor Beryoza. The document was sent out in the form of an electronic message. The letter states that from January 1, 2018 banks should not define such operations as risky ones, which means they are not required to conduct additional checks and request the documents from the clients. This change is justified by the fact that the order of the Cabinet of Ministers, effective from September 16, 2015, with which the list of offshore countries and territories was enshrined, lapsed at the beginning of this year. At the same time, the updated list, determined by a separate order, was not included in the relevant resolution of the National Bank. In other words, the list of...

Another 6 Countries Have Joined the BEPS Multilateral Convention

Published: 31.01.2018 |

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#BEPS #Offshores #Taxation

On January 24, 2018, another six states signed the Multilateral Convention for the Implementation of Activities under the BEPS Plan (MLI Convention). In this regard, the countries were able to amend promptly their agreements on avoidance of double taxation, taking into account the recommendations developed by the OECD in the framework of the plan of action to counteract the base erosion and withdrawal of profits from taxation. Barbados, Côte d'Ivoire, Jamaica, Malaysia, Panama and Tunisia joined the MLI Convention, after which the total number of signers reached 78. It is also worth noting that Algeria, Kazakhstan, Oman and Swaziland have announced their intention to sign the Convention in the near future. In addition, other jurisdictions are actively working on signing the agreement in June this year, as the press service of the OECD reports. To date, four jurisdictions - Austria, the Isle of Man, Jersey and Poland - have ratified the Convention, which will enter into force three months after the fifth part of jurisdictions transfers the instruments of ratification to storage. The Convention, developed as part of large-scale negotiations involving more than 100 countries and...

NBU Has Mitigated Conditions for Business for Selling Foreign Currency

Published: 29.01.2018 |

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#NBU

The National Bank of Ukraine has simplified the conditions for the sale of foreign currency by the clients of the banks in the interbank foreign exchange market. The amendments to the legislation are enshrined in the NBU Resolution No.7 of January 25, 2018 “On Amending certain normative legal acts of the National Bank of Ukraine” and entered into force on January 27, 2018. The innovations provide mainly the following: Clear definition of the client’s right to apply for the sale of foreign currency to any authorized bank by his choice (regardless of the availability of a current account in foreign currency in this bank). Clarification of the terms of sale of foreign currency of the clients by the bank. We remind that an authorized bank is required by proxy of the client to sell its own funds in foreign currency no later than 5 banking days, starting from the day of writing off these funds from the client’s current account. The NBU clarified that in case of transfer of funds for sale by the client from another authorized bank, the sale of this currency is carried out within 5 days from the date of transfer of these funds to the correspondent account of the authorized...

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