...relief: Relief from double taxation can be provided mainly in two ways (i) Bilateral relief (ii) Unilateral relief. (i) Bilateral relief: Under this method, the Governments of two countries can enter into an agreement to provide relief against double taxation by mutually working out the basis on which relief is to be granted. India has entered into agreement for relief against or avoidance of double taxation with 77 countries up to May,2010. Bilateral relief may be granted in either one of the following methods: (a) Exemption method, by which a particular income is taxed in only one of the two countries; and (b) Tax relief methods under which, an income is taxable in both countries in accordance with the respective tax laws read with the Double Taxation Avoidance Agreements. However, the country of residence of the taxpayer allows him credit for the tax charged thereon in the country of source. In India, double taxation relief is provided by a combination of the two methods. (ii) Unilateral relief : This method provides for relief of some kind by the home country where no mutual agreement has been entered into between the countries. 4.2. Double Taxation Relief Provisions under the Act: Section 90 and 91 of the Income Tax Act, 1961 provides for double taxation relief in India. 4.2.1.Agreement with foreign countries or specified territories –Bilateral Relief [Section 90]: (i) Section 90(1) provides that the Central Government may enter into an agreement with the Government ...
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...As of now, there are 103 offshore financial centres throughout the world. (Source: Wikipedia). Economy of Mauritius The economy of Mauritius has evolved during the last decades from sugar to textile and now towards tourism, technology, finances and residential investments. According to the World Bank (Oct 2013), Mauritius has strong economic fundamentals comprising of US$415 million for the year 2012 towards foreign direct investments. According to the Hon. Xavier-Luc Duval, Vice Prime Minister, Minister of Finance and Economic Developmnet (2012), financial services represents 10% of the Gross Domestic Product of Mauritius, 5% of which is contributed by the global business sector. Double Taxation Avoidance...
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...Minister by statutory order declares that arrangements set out in such order been made by the with the government of any territory outside Malaysia in order to give to the relief of double taxation in relation to tax beneath this Act and any other foreign tax territory and it was is expedient that those arrangements should have effect (Choong, 2013). Next, as long as the order remains in force, those arrangements shall be effective in relation to tax beneath this Act notwithstanding anything in any written law. Whilst the above law is quite clear, there have been litigations on this aspect. And, as expected, it has been established that due respect should always be given to the DTAs that the Malaysian Government has entered into (Choong, 2013). 2.0 Scope of DTAs Double Taxation Agreement (DTA) is a deal between two nations who want to avoid double taxation by determining the taxing rights of each nation taking into consideration cross-border flows of revenues and provide tax credits or exemptions to eliminating double taxation (Yong, 2012). The objective of the DTA Malaysia to establish favorable climate for both inbound and outbound investments and also to make Malaysia typical tax incentives for the taxpayer entirely effective exporting nations capital, to get assistance more effective than double the tax relief obtained beneath unilateral measures and to avoid evasion and prevention of tax (Choong, 2013). As with the rest in the advanced economies and...
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...Types of DTAA How do treaties remove Double taxation Structure of a typical DTAA and major Models Conventions used in world Applicability of DTAA Interpretation techniques of DTAA How to determine which DTAA is applicable and how to apply that DTAA Some important concepts used in DTAA Some important points to remember 3 Problems faced while uploading • Form 15CA • • • CA Dayavanti Khilolani 28th January 2012 CA Dayavanti Khilolani 28th January 2012 4 Tax Payer resident of State A Operating in State A State B State C Each state having its own tax system and rights over taxpayer Double taxation of Income in the hands of taxpayer Economic Double taxation Juridical Double Taxation Same Income taxed in two states in the same period in the hands of different taxpayer Same Income taxed in two states in the same period in the hands of same taxpayer Elimination of Double Taxation Via Double Taxation Avoidance Agreements CA Dayavanti Khilolani 28th January 2012 5 CA Dayavanti Khilolani 28th January 2012 6 CA Dayavanti Khilolani 28th January 2012 7 CA Dayavanti Khilolani 28th January 2012 8 CA Dayavanti Khilolani 28th January 2012 9 Scope of the Convention Definitions Taxation of Income (Active and Passive)...
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...The Role of Income Tax Treaties in International Taxation Tax treaties are bilateral agreements between countries. The purpose of bilateral tax treaties is typically expressed to be “the avoidance of double taxation and the prevention of fiscal evasion.” As most countries contain within their domestic law provisions to prevent double taxation of their residents where another country taxes the same income on a source basis, the main operation of tax treaties in this respect is for other types of double taxation that can arise as elaborated below. The prevention of fiscal evasion primarily refers to cases where taxpayers fraudulently conceal income in an international setting and rely on the inability of tax administrations to obtain information from abroad. The exchange of information article in tax treaties are the major provision dealing with this problem. Because of the capital flight experienced by many developing and transition countries, exchange of information is important, but in practice there are some considerable hurdles to successful exchange. From the perspective of developing and transition countries, there are a number of other purposes of tax treaties that are usually unstated but in many cases are more important. First, there is the division of tax revenues to be derived from income involving the two countries that are parties to the treaty. Where flows of income from business and investment are balanced between two countries, or even among a...
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...to corporate with the tax authorities, if there is any suspicion of tax evasion. Punishment for tax evasion is very strict and hard in Germany. For serious tax evasion the consequence can be high fines and a prison term up to 10 years. The period of limitation for tax fraud amounts also to 10 years. Compared to international regulation Germany is strict regarding tax evasion. Australia and Germany have a double tax agreement which was stated in 1974. Purpose of the agreement is the avoidance of double taxation and tax evasion of individuals and businesses and a general ease in favor for the cross border economic exchange. The agreement says in which country individuals and companies have to pay taxes. Crucial for the tax claim is the habitual residence of the individual or the permanent business establishment of the company. Article 15 of the agreement for example states that a Non-executive director who´s getting paid for his work in Australia, while he is living in Germany, also must pay taxes in Germany. Conclusion: Even if there are many opportunities to avoidance or evasion of taxes international transaction costs, currency risks ( fluctuations of the foreign exchange market) and the hard punishment of the government make it hard to get an overall advantage. -------------------------------------------- [ 1 ]. Compare: http://www.steuerliches-info-center.de/EN/AufgabenDesBZSt/Abzugsteuerentlastung/abzugsteuerentlastung_node.html [ 2 ]. Compare:...
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...MT570 Taxation (Current Topics) Assignment 2 Question 1 The draft tax determination TD 2009/18 – Income Tax: Can a private equity entity make an income gain from the disposal of target assets it has acquired? – deals with private equity entities disposing of Australian target assets, and per this draft determination, the ATO’s view on this is that yes a private equity entity can make an income gain on the disposal of such assets, although they do acknowledge that each case will depend on fact and circumstance. The draft determination basically states that where a foreign private equity entity that is not in a treaty country carries on a business of deriving a profit from the sale of an Australian asset then the profit is ordinary income under section 6-5 of the ITAA 1997 which is taxable in Australia and is not exempt as a capital gain. Whether a private equity entity can make an income gain on the disposal of its target assets will be a question of fact and circumstance. It will need to be determined on what account the asset was being held on and in order to determine this. The investment strategy and the form and substance of the private equity entity must be looked at in detail and at length to determine this. Basically, if the intent of the private equity entity is to acquire the target asset, become a long term investor and derive dividend income from its shares then the gain made from disposal would be held on capital account as the disposal would be...
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...The United Nations’ Role in International Tax Policy A Research and Policy Brief for the Use of the NGO Committee on Financing for Development Hamrawit Abebe, Ryan Dugan, Michael McShane, Julie Mellin, Tara Patel, and Linda Patentas Graduate Program in International Affairs, Milano School of International Affairs, Management, and Urban Policy, The New School March 7, 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY BACKGROUND AND PERSPECTIVES BACKGROUND AND ANALYSIS THE OECD, G77, G20, AND EU ON UPGRADING THE UN TAX COMMITTEE KEY INSTITUTIONAL PLAYERS ARGUMENTS FOR AND AGAINST A UN TAX BODY 3 4 8 12 17 REFLECTIONS AND RECOMMENDATIONS RELATIONSHIP BETWEEN OECD AND UN TAX COMMITTEE GLOBAL TAX POLICIES POLICY RECOMMENDATIONS 20 28 38 APPENDIX GLOSSARY AND ACRONYMS REFERENCES 44 48 52 2 Executive Summary The report provides an analytical view on the role of the United Nations in tax policy, highlighting the interventions made by and challenges to key players in attempts to streamline global tax cooperation. The first section of the paper provides a background on the importance of tax related issues, emphasizing its importance within the Monterrey Consensus. Debates are introduced between two key institutional players regarding global tax cooperation, the OECD’s Committee on Fiscal Affairs and the UN Tax Committee. Views from key players the OECD, Group of 77, Group of 20, and European Union are addressed in the areas of international tax cooperation...
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...Major areas for final settlement of tax liability : Tax deducted at source for the following cases is treated as final discharge of tax liabilities. No additional tax is charged or refund is allowed in the following cases:- * Supply or contract work * Band rolls of hand made cigarettes * Import of goods * Transfer of properties * Export of manpower * Real Estate Business * Export value of certain items including knit and woven garments. * Local shipping business * Royalty, technical know-how fee * Insurance agent commission * Auction purchase * Payment on account of survey by surveyor of a general insurance company * Clearing & forwarding agency commission * Transaction by a member of a Stock Exchange * Courier business * Compensation against acquisition of property * Premium value over face value of a share * Income from transfer of securities of a sponsor shareholder. * Winning lotteries. Tax Recovery System : In case of non-payment of income tax demand the following measures can be taken against a taxpayer for realization of tax:- * Imposition of penalty, * Attachment of bank accounts, salary or any other payment, * Filing of Certificate case to the Special Magistrate. Advance Payment of Tax : Every taxpayer is required to pay advance tax in four equal installments falling on 15th September; 15th December; 15th March and 15th June of each year if the latest assessed income exceeds Taka four lakh. Penalty...
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...has always been ranked of one the frontrunners in the world in terms ease of doing business (1), world leader in foreign trade and investment (1), best investment potential for 16 consecutive years (2), most open economy for international trade and investment (1). Source: http://www.weforum.org/reports/global-enabling-trade-report-2010?fo=1 http://app.www.sg/who/196/Business-and-working-conditions.aspx http://www.doingbusiness.org/data/exploreeconomies/singapore/ Another significant reason Singapore continues to attract both local and overseas investment is due to its tax regime – well-known for its attractive corporate and personal tax rates, tax relief measures, absences of capital gains tax, one tier tax system and extensive double tax treaties. Since her independence, Singapore has always strived to develop a vibrant and robust global hub of knowledge-driven industries in a knowledge-based economy. To help active this aim, the Economic Development Board (EDB), actively promotes foreign capital inflows and local investment into Singapore as well as to ensure Singapore can compete with other major economies such...
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...3. Investment Climate POLITICAL AND ECONOMIC STABILITY The Czech Republic is a fully-fledged parliamentary democracy, and is one of the faster growing economies as well as one of the ten countries that entered the European Union on 1 May 2004. The country’s economic policy is consistent and predictable. A strong and independent central bank (the Czech National Bank) has maintained an extraordinary degree of currency stability since 1991. The Czech Republic was the first CEE country to be admitted into the OECD. The country is a member of NATO and is fully integrated into other international organisations such as the WTO, IMF and EBRD. EU legislation was adopted in preparation for EU accession. Czech commercial, accounting and bankruptcy laws are compatible with Western standards. The Czech koruna is fully convertible. All international transfers (e.g. profits and royalties) related to an investment can be carried out freely and without delay. NON-DISCRIMINATION Under Czech law foreign and domestic entities are treated identically in all areas, from protection of property rights to investment incentives. The government does not screen any foreign investment projects with the exception of those in the defence and banking sectors. As an OECD member the Czech Republic is committed not to discriminate against foreign investors in privatisation sales, with the same exception as that mentioned above. INVESTMENT PROTECTION The Czech Republic is a member of the Multilateral Investment...
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...potential by expanding and add greater stability to earnings through diversification. Complex organizational structures help achieve business objectives such as increased profitability and reduced risks. Also, these complex structures allow the company to reduce its overall tax burden. One such strategy is discussed in this paper. Transfer pricing allows the company to price the inter-company transactions. Transfer pricing simplifies the accounting of transactions that take place between affiliated or related entities. Companies have freedom in valuing inter-company transactions. But, if strategically implemented, this strategy allows the company to save taxes and retain large amount of profits. Keywords: Transfer mispricing, tax-havens, Double Irish Dutch Arrangement Transfer Pricing Transfer pricing is the methodology used to set the prices for goods sold or services provided between related entities within an enterprise. Related entities are those which are under control of a single corporation and include branches and companies that are wholly or majority owned ultimately by the parent company. Generally, such a transfer price should be equal to the price which the entity would charge to an independent customer, an arm’s length customer. Such a price is termed as an “arm’s length price” (Transfer Pricing, Wikipedia, 2015). Financial accounting does not differentiate between affiliates and treats the corporate group as a single entity. But the federal income tax law treats...
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...define IHRM as ‘a strategic process of managing a global and diverse pool of talented people in such a way as to achieve aims and objectives of the organisation both at parent and subsidiary level successfully, follow ethical practices on human and business issues and be adaptable to local cultural norms and other human needs and aspirations’. And Dowling, Festing and Engle (2013, p.242) define IR as ‘The board field of study that looks at wider issues of work and employment’. The purposes of this essay are to identify and discuss the IR and HRM issues an expatriate from Melbourne could face while living and working in London. In relation to Industrial relations issues, the role of unions, employment contracts, regulations, visas, taxation, labour laws and employ compensations will be discussed. When it comes to human resource management, the essay will discuss culture, language, family, soft skills, allocation, medical secures and weather. Over the last decade, the participation in trade unions has been decreasing worldwide. The trade unions do not have the same level of power or the same affiliation in all the...
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...After a thorough amount of research, I find it best to simply to look at the root of the concerns. Here we have two gentlemen, from widely different backgrounds seeking to make a profit, albeit, in varying degrees in the market of laundry and dry cleaning. It is to my understanding that Mr. John Smith will be the source of capital in this joint business venture. Mr. Smith, a retired man, is concerned with protection from liability for the sake of his personal assets and belongings. Taxes are not a concern as long as they are paid and protection keeps him behind some form of veil. On the other end of the spectrum, we have the younger Mr. Juan Gonzalez. Mr. Gonzalez does not have much in the way of investments nor does he have any personal assets that would be much at risk. Mr. Gonzalez is more concerned about taxes and with obtaining as much profit as possible with no minimal attention to risk, understandably so. It’s best to take these drastic views and ideologies and reach some semblance of a compromise between both parties in terms of which business entity should be agreed upon. To commence, it would be best to eliminate superfluous options from the get go. Sole proprietorship is out of the question simply because of its inherent definition. A “partnership” will also not be considered, because although it offers several tax breaks and the potential to be more easily managed, it has an unlimited amount of liability risk. If for any reason there were ever a dispute and...
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...International Taxation Allison Auld Keller Graduate Intnl Acct & Multinatl Ent ACCT-564-61900 Professor Nauri Ahmed December 08, 2012 International Taxation Do you know that corporations pay taxes? Well they do. No matter if they are a mom and pop shop or a multinational corporation. The big question is how do companies that go international know what taxes they pay? Well your multinational companies do what we call treaty shopping to find out what taxes each country has that will affect the bottom line of the company. In this paper it will define international taxation, define treaty shopping, and define tax haven and what factors that a multinational company looks at that effect the placement of the company’s headquarters. In today’s society more and more corporations want to go international or become a multinational corporation, at the same time there is a growing concern on different tax laws of the different countries. To have a complete understanding of multinational taxation we must first define what international taxation. According to Wikipedia “International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country's tax laws. (Unknown, 2012)” The governments of the different countries make up the different tax laws base on if it is residential or commercial income. Some countries have a taxation system in place while other does not. The...
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