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Monthly Archives: February 2013

OECD Could Lead to Redefining Global Taxation Rules

February 12, 2013

The OECD produced this report from the concern of many of it members regarding whether there is fair taxation of the profits of multinational corporations operating in the global market as compared to smaller businesses which operate mainly in domestic market.
 
On February 12, 2013, the OECD released its report Addressing Base Erosion and Profit Shifting. The report will be reviewed by the G20 at its February summit in Moscow. The 93 page document surveys publicly available data regarding Base Erosion and Profit Shifting and it identifies “pressure points” where it said countries should consider a comprehensive approach to closing loopholes that allow companies to shift profits.  
 
"These include, for example, the balance between source and residence taxation, the tax treatment of intragroup financial transactions, the implication of anti-abuse provisions, including CFC legislation, as well as transfer pricing rules.  A comprehensive approach , globally supported, should draw on the in depth analysis of the interaction of all these pressure points."

This report could lead to an overhaul of certain parts of the OECD's Model Tax Convention on Income and on Capital, which has served as the model for several thousand bilateral tax treaties.

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Read more at: Tax Times blog

Asia is a Huge Hurdle for Fatca Agreements!

February 8, 2013

While the US is pushing to sign up as many countries as possible to an IGA, for Hong Kong & China signing an IGA appears less appealing. Speaking at a PwC Fatca roundtable in Hong Kong on February 6, Anthony Tong, US tax consulting leader for Greater China, said it is the US that would gain the most benefits from such an agreement – as it would be onerous for China to comply with no obvious benefit.

For Fatca to be effective against tax evasion, it needs to be implemented worldwide, said Tim Clough, risk and assurance partner at PwC. "Fatca needs to be established globally and with all financial institutions, otherwise there will be arbitrage," Clough said.

Although China was not on a list of 50 countries the US Treasury said it was in negotiations with for signing an IGA in November last year, market sources believe that the US is actively engaging with the Asian state to come to an agreement behind the scenes.

No country in Asia has yet signed up to an IGA. Japan is in the process of finalising its agreement while Australia, New Zealand, Malaysia, Singapore, India and Korea are believed to be actively engaged with the US Treasury over this issue.
There is little incentive for Chinese authorities to sign an intergovernmental agreement (IGA) to enable China’s financial institutions to comply with Fatca, as any benefits to it from an exchange of information with US tax authorities are likely to be minimal, say consultants.

"Under Chinese law there are a lot of bankruptcy protection rules, so that under the current Fatca rules it would be very difficult for Chinese financial institutions to try to comply. Even if the account holders were to waive those privacy protections, there are still laws that would make it illegal to report that information to the US government.

Speaking at the same briefing, PwC US tax partner Angelica Kwan said "In Hong Kong there is a lot of misinformation about IGAs and some institutions believe that if Hong Kong signed an IGA, it would save them from having to comply with Fatca. While it may make Fatca easier to comply with under an IGA, it is still essentially the same framework," she said.

Have Un-Reported Income from an Asian Bank?

Don't want to Go To Jail for a Foreign Bank Account?

Are you a Foreign Bank or Trust with FATCA Problems???
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Source:

Risk.net

Read more at: Tax Times blog

Foreign Trusts With Individual Trustees Are NFFE's & Are Not Subject to FATCA Reporting.

February 7, 2013

As we reported on Monday, January 28, 2013 in our post Significant Changes in Final FATCA Regulations, the US Treasury Department published final rules governing enforcement of the Foreign Account Tax Compliance Act (FATCA).

The regulations indicate that trusts with individual trustees will be NFFEs (non financial foreign entities), whether those individuals are professional trustees are not. This is good as such trusts would be excluded from the FATCA registration requirements.

However trusts where there is a corporate trustee, will be considered to be financial institutions (FIs) and may have to register as an Investment Company.

This means that foreign trusts with corporate trustees are potentially subject to the FATCA withholding rules and they need to register as an Investment Company and provide the required information in order to avoid FATCA withholding tax obligations.

Stay tuned and FACTA and its associated Regulations continue to develop and unfold! 

Are you a US Person with UNREPORTED INCOME from a Foreign Bank Account???
Are you a Foreign Trust with FATCA Problems???

 
 
 
Contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at:www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243). 
 

Read more at: Tax Times blog

Advantages of Using an Offer in Compromise to Settle Payroll Taxes

February 5, 2013


 Very few tax professionals and business owners realize, that just like a personal IRS tax debt, back payroll taxes can be negotiated down using the IRS Offer in Compromise program. 

Anthony E. Parent, Esq. posted a good article which discuss the six advantages of using an Offer in Compromise to settle back payroll tax debt, which include:

1. A More favorable repayment schedule.

2. You can direct payments to the Trust Fund Penalty Taxes.

3. You can avoid paying the Trust Fund Penalty personally.

4. The Offer in Compromise is NOT Considered by your Revenue Officer.

5. No interest on repayment.

6. Collection hold in place.
 
Have Payroll Tax Problems?  Need and Offer in Compromise? 

Contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at: www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).

 

Read more at: Tax Times blog

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