International Tax News - July 2014

by DLA Piper
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DLA Piper - International Tax NewsBITCOIN FORGES AHEAD: 3 QUICK LOOKS

Bitcoin is a decentralized peer-to-peer payment system that exists virtually and is unlimited by the constraints of countries, government or time. In an age when business leaps across borders and often takes place on line, its impact is growing. This month, DLA Piper looks at bitcoin from three angles.

Our website cover article “Bitcoin: bringing you up to speed on a digital currency,” provides a quick overview of this currency. Find out the basics.

In “Bitcoin and gaming – what legal issues?,” our IPT Italy blog notes that many gaming sites now allow transactions in bitcoin. But this may raise red flags with the regulators – in particular, the tax authorities and those who enforce the anti-money laundering laws. Find out more.

And in “Mixed feelings: China censures bitcoin while Hong Kong embraces it,” we report that China has banned bitcoin-related business, yet Hong Kong’s government is simply ignoring bitcoin – creating a regulatory vacuum in which entrepreneurial activity is flourishing. Hong Kong even is home to the world’s first physical bitcoin shop, where customers convert cash into bitcoins face-to-face at a counter. Learn more about this rapidly evolving scene.


BRAZIL: MAJOR CHANGES IN TAX LEGISLATION

An article from the Tax department of Campos Mello Advogados*

Brazil’s new Law N. 12,973 brings major changes in Brazilian tax legislation, in particular regarding the application of the tax rules in light of the new accounting standards that follow the International Financial Reporting Standards.

The new rules affect the determination of the calculation bases of the Corporate Income Tax (IRPJ), Social Contribution on Net Income (CSLL) and contributions to the Social Integration Program (PIS) and to Social Security Financing (COFINS)

Find out more about these changes here. This article may also be read in Portuguese.


INDIA BUDGET UPDATE: TOP POINTS FOR MULTINATIONALS

By Dharmesh Pandya

In an effort to jump-start a weak economy, the Indian government’s Union Budget adopts several new measures, while taking a balanced approach.

These are the government’s key areas of focus:

Reduce tax litigation and the transfer pricing challenges affecting foreign multinationals by introducing rollback provisions qua advance pricing arrangements

Boost infrastructure investment

Introduce a tax framework for REITS and infrastructure funds

Create a roadmap for the implementation of the goods and services tax.

Here are the key tax changes affecting foreign multinationals with operations in India.


JAPAN TO REDUCE CORPORATE INCOME TAX RATE

The corporate income tax rate in Japan is known to be one of the highest worldwide. To encourage foreign companies to do business in Japan and make Japan a more attractive location for investments, Prime Minister Shinzo Abe is considering reducing the corporate income tax rate to a “competitive rate in the global market” in the near future.

Such a reduction, it is expected, will also encourage repatriation of Japanese multinationals that have moved their operations to low-tax jurisdictions.

Find out more.


THE LATEST ISSUE OF OUR TAX NEWSLETTER FROM CHINA AND HONG KONG

The latest issue of DLA Piper’s Asia Tax Newsletter reviews breaking tax developments in the People’s Republic of China and Hong Kong.

Among the topics in this issue:

New rules from PRC’s SAFE on cross-border security

The new PRC-Germany tax treaty

SAT releases rules on VAT refund to enterprises engaging in foreign trade comprehensive services

Telecommunications sector included in PRC VAT pilot reform

Hong Kong’s exchange-of-tax-information agreement with the US

Hong Kong tax evasion and tax avoidance cases

See this issue here.


AUSTRALIA REPEALS THE CARBON TAX: EASY COME EASY GO

By Anshu Maharaj, Eddie Ahn, Jock McCormack, Matthew Cridland and James Newnham

Fulfilling an election promise, Australia’s federal government has achieved the repeal of the carbon pricing mechanism, otherwise known as the carbon tax, after two weeks of negotiations with the Palmer United Party and other crossbench senators.

The controversial mechanism was an emissions trading scheme that put a price on carbon pollution, setting strict recording and reporting requirements for greenhouse gas emissions and applying to Australia’s biggest carbon emitters (called liable entities).

The repeal legislation awaits Royal Assent and will be effective from 1 July 2014.

Find out more.


NETHERLANDS: NEW DECREES ON ATRS, APAS AND SUBSTANCE REQUIREMENTS

By Jian-Cheng Ku and Sirathorn B.J. Dechsakulthorn

One of the most attractive features of doing business in the Netherlands is the possibility to obtain an Advance Tax Ruling (ATR) and/or Advance Pricing Agreement (“AP”) so that foreign companies investing in or through the Netherlands have full certainty on their future tax position in the Netherlands.

The Dutch Ministry of Finance has published five new decrees on ATRs, APAs and the Dutch substance requirements. These decrees update and replace the previous decrees of August 11, 2004.

The new decrees new decrees continue the existing APA/ATR and Greenfield ruling practice but provide additional guidance on which requirements need to be met. The new decrees apply for fiscal years starting on and after January 1, 2014.

Find out more.


UKRAINE: TAX AUTHORITIES UPDATE INTERPRETATION OF CERTAIN TRANSFER PRICING ISSUES

By Svitlana Musienko, Dmytro Donets and Dmytro Rylovnikov

Ukraine’s Ministry of Revenues and Levies has issued an order that significantly changes certain applications of the transfer pricing regulation.

Find out more.


TRENDING NOW FOR SUPPLIERS OF DIGITAL CONTENT AND INTANGIBLES: DLA PIPER’S GLOBAL VAT GUIDE

Starting January 1, 2015, EU VAT rules for suppliers of digital content, telecommunications and broadcasting services are changing. And the OECD as well as many countries are paying closer attention to supplies of intangible rights and services and digital content.

For companies involved in moving such supplies across borders, we are pleased to publish our new Global VAT Guide.

The Guide provides information on relevant VAT regulations in numerous jurisdictions as well as offering tips to assist companies on minimizing their VAT risk and compliance costs.

Read the guide.


3 RED LIGHTS, 3 GREEN LIGHTS FOR NON-US INVESTORS IN US REAL ESTATE: TAX CHALLENGES AND SOLUTIONS

By John L. Sullivan and Robert Le Duc

Investment in US real estate by non-US investors is increasing. From just January to August 2013, non-US investors acquired almost $23 billion in US real estate, a 9 percent increase over 2013 that accounted for 13 percent of all real estate transactions in the US.

How may these transactions be structured to make them as tax efficient as possible?

Find out more.

*This article was prepared by the Tax department of Campos Mello Advogados, an independent law firm, which has as tax partners Guido Vinci, Leonardo Homsy and Humberto Marini, based in Rio de Janeiro, and Ana Luiza Martins and Alex Jorge, based in São Paulo.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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