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Archives: October 2019Subscribe
By Joseph Boris
A three-year-old U.K. program to impose special measures on companies engaged in persistent and aggressive tax planning has so far brought no action against any offender, a tax watchdog group said in a paper being issued Tuesday. According to Tax Watch UK, which calls itself an investigative think tank focused on tax policy, the HM Revenue & Customs’ High Risk Corporates Program, launched in September 2016, has proved a failure.
By Todd Buell
The European Union needs a comprehensive approach to digitalization that covers taxation and other aspects of the digital economy, European Commission Competition Commissioner Margrethe Vestager said Tuesday. Vestager told an audience at the Digital Summit in Dortmund, Germany, that Europe needs a system in place to ensure fair taxation of digital companies, as well as regulation of the treatment of artificial intelligence.
By Josh White
The UK financial sector could face a financial transaction tax (FTT) among a raft of tax reforms if the Labour Party wins the upcoming snap general election. The UK has an SDRT rate of 0.5% on share trading, which raised £3.5 billion ($4.5 billion) in 2017/18. Labour’s proposal would expand this to include transactions involving corporate bonds, equity and credit derivatives, raising an extra £2.1 billion in annual tax revenues.
by Matt Thompson
Both national and international action are necessary to end tax practices that, while legal, are still unfair, the German finance minister said recently, praising a European Union disclosure requirement his country is due to adopt by year-end. Under the requirement, companies would have to notify authorities of legal tax avoidance strategies, Olaf Scholz, the finance minister, said during a conference for German tax consultants in Berlin on Monday.
by Naomi Jagoda
The House on Tuesday passed legislation aimed at cracking down on the use of anonymous shell companies for illicit activities. The bill passed by a vote of 249-173. Twenty-five Republicans joined most Democrats in voting for the bill, while five Democrats voted against it.
by David Morse
France made some big news recently in the world of global taxation. It enacted a tax targeting large U.S. tech companies – including Facebook, Amazon, Google and Apple – that are earning massive global profits. For years these multinational enterprises have avoided paying corporate taxes in the U.S., thanks to shell operations in tax havens like the Bahamas and the Cayman Islands. But France is tired of seeing these companies get away with large-scale tax avoidance. It’s not just France, however. More than 20 European countries are poised to impose digital taxes on large U.S. tech companies.
By Alex M. Parker
President Donald Trump on Wednesday again criticized France’s digital services tax, saying that only the U.S. should be allowed to tax its tech companies.
By Chris Giles
Meeting in Washington, the G20 welcomed the recent progress and the announcement last week of an OECD initiative to find a compromise way of taxing profits, particularly of tech giants. Its suggestion was to rip up almost a century of taxing profits according to the physical presence of a company in a jurisdiction and move to one that gave countries greater taxing rights dependent on where sales were located.
By Bloomberg Analyst
The European Union Official Gazette Oct. 17 published an order updating the EU list of non-cooperative tax jurisdictions. The order includes measures: 1) removing the United Arab Emirates from the black list; 2) removing Albania, Costa Rica, Mauritius, Serbia, and Switzerland from the gray list; and 3) moving Marshall Islands to the gray list from the black list.
United Kingdom Parliament Considers Statutory Instrument to Clarify Financial Instruments for Hybrid Mismatches
By Bloomberg Analyst
The United Kingdom Parliament Oct. 15 accepted for consideration a statutory instrument to implement an EU directive clarifying the definition of financial instruments for hybrid mismatch arrangement purposes. The draft instrument includes: 1) reporting procedures for tax periods that fall outside the effective date range, and 2) the exclusion of certain financial instruments.
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