HNWIs seeking to leave the UK

An interesting read from Family Capital. Although I agree with the net-outflow thesis, the issue is where will these millionaires / billionaires go?  America, for example, is starting to see a slow outflow of its ultra-wealthy as they increasingly feel the pressure emanating from the progressive left. Although the ultra wealthy dodged the tax man ‘bullet’ so to speak last week, the question is when will the next one come along and how will the midterms this November 2022 affect…

Hungary blocks global minimum tax

Hungary blocked an EU directive that would impose a 15% minimum tax on multinational corporations, arguing the levy would deal a “low blow” to European competitiveness and endanger jobs. The tax reform is part of a global deal achieved last year at the Organisation for Economic Co-operation and Development (OECD). It has been endorsed by 136 countries representing more than 90% of global GDP. The coronavirus pandemic injected momentum into the talks as governments around the world have scrambled for…

For the 99.5% Act

On March 25, 2021, Senator Bernie Sanders introduced legislation entitled “For the 99.5% Act.”  The aim of the bill is to tax the fortunes of the top 0.5% of wealthy Americans. This is the first piece of legislation introduced since Joe Biden came into office and is designed to lower the U.S. federal estate tax exemption.  Highlights include: regarding personal wealth: Reduce the U.S. federal estate tax exemption to USD $3.5m for U.S. citizens / domiciliaries (Note: There is no…

US attempts to create a global tax baseline

U.S. Treasury Secretary Janet Yellen argued this week for the imposition of a global minimum corporate tax rate. Her comments were set in the context of increasing U.S. corporate taxes to fund Joe Biden’s USD $2 trillion+ infrastructure plan. Why do we care? The argument goes that by convincing other countries to impose a global minimum tax would greatly reduce the likelihood of U.S. companies relocating offshore, as America is set to potentially increase the corporate rate from 21% to 28%. …

Democrats push for a ‘Wealth Tax’

The United States has never had a wealth tax. European nations have had such things, but many of repealed them over the last few decades. Simply put, wealth taxes don’t work for they spur capital flight. That has not deterred Senator Warren (D-MA) with Reps. Pramila Jayapal (D-WA) and Brendan Boyle (D-PA) from introducing legislation to create a flat 2% annual tax on all household worth above $50 million, which would rise to 3% for anyone above $1 billion. Senator…

US taxes set to rise

With the Democrats now controlling Congress and the Presidency, the new Biden Administration is set to fundamentally change the nature of tax. How this will impact Americans and business remains an open question. What is certain is the fact that wealth preservation and tax structuring will become primary motivators for the migration industry over the next four years. It is only a matter of time before other countries start to look to America for inspiration and guidance, as governments everywhere…

UK wealth tax

With all due respect to the BBC, the imposition of such a “one-time” wealth tax would have a disastrous impact on the British economy. Capital flight would occur, much like what is happening already in Argentina (which brought in such a measure last week). Given the now noticeable shift in public discourse in favour of greater burdens being placed on successful business people, those with means should start thinking about reorganising their affairs. Second citizenship and permanent residency verticals are…

Argentina and taxes

Argentinians normally look to Uruguay and then the United States when thinking about tax planning. Those routes seem now insufficient, given the political shift. Arguably, Latin Americans, and even North Americans, with means should now consider wealth planning options that utilise residency options, as tax matters are only set to get worse. Read More.

UK starts to tax wealth

Like other major economies in 2020, the UK is facing a tax deficiency in light of covid-19 and the severe contraction of its economy. Governments are now looking to new tax revenue schemes and everything is on the table. The Portuguese Golden Visa Program tied to a fund investment is one such possibility, as it provides a functional result coupled with a financial product designed to create liquidity and ease of exit. Read More.

India introduces citizenship based taxation

Like others governments facing revenue shortfalls, India has just recently introduced citizenship-based taxation. Henceforth, Indian nationals, irrespective of physical presence in India, will be deemed to be tax residents in certain circumstances. Although India is still quite flexible in terms of application, the fact remains that the tax system is slowly moving towards obtaining additional revenues from those living and working abroad. Indian citizens should expect that matters will only get worse. Governments rarely lessen the tax burden. As such,…

Tax their obscene wealth.

With the Democrats now solidifying around a Biden-Harris ticket, the U.S. faces a real choice. Continue with the Trump-Pence paradigm or reject it in favour of something just as earth shattering. Never has politics been so polarising and the World must wait for America to decide. Those with means now need to consider backup strategies that preserve wealth and opportunity. Read More.

Some thoughts on Austria

Austria’s Ministry of Finance has recently provided some guidance on the question of an Austrian home office as it applies to an Austrian tax resident employee and whether such a setup can qualify as an Austrian permanent establishment for a non-Austrian enterprise. A permanent establishment for Austrian domestic tax purposes is a fixed place through which an enterprise’s business is carried out. Such an establishment can be an employee’s private flat, provided that employee renders his/her work at least partly…

Dividends in Austria

The Austrian tax court has recently opined on the question of dividend payments from Austria to an intermediate EU holding company which has no substance (while its EU parent does). Generally in Austria dividends paid out by Austrian corporations trigger a 27.5% withholding tax. Nevertheless, pursuant to the EU Parent/Subsidiary Directive applied in Austria, outbound dividends are totally exempt from withholding tax if the parent company fulfils the criteria as set out in the Directive and holds at least 10%…

Hungary vs. Google

On 12 September 2019, the advocate general of the European Court of Justice held that Hungary’s advertisement tax legislation based on which Google was fined HUF 1 billion (approx. EUR 3 million) constitutes an unjustifiable restriction on the freedom to provide services. Hungary’s advertisement tax was introduced in 2014 as a special tax on the turnover from the broadcasting or publication of advertisements. Individuals or entities that broadcast or publish advertisements may – irrespective of their residence – be subject…

Czech Cross-Border Disclosure

Recently, the Czech government submitted to parliament a bill implementing DAC 6 on the mandatory disclosure of cross-border tax arrangements. The bill underwent several changes in comparison with the initial draft published in March 2019. DAC 6 – the EU Council Directive 2011/16 on cross border tax arrangements – is being implement by the Czech Republic via domestic legislation no later than 31 December 2019, and will start to apply as of1 July 2020. The government has drafted a bill…

Albania tax update

On 1 January 2019, Albania’s Income Tax Act was amended with respect to imposition of new rules on the indirect transfer of ownership of assets situated in Albania. The new rules deal with the taxation of gains arising from such indirect asset transfers. An indirect transfer occurs when an Albanian company owning assets in Albania decides to sell said assets to a third party, but such third party merely purchases the shares/quota in the Albanian company holding the assets or…

Republic Srpska Tax Update

The National Assembly of the Republic of Srpska (RS) adopted amendments to the Profit Tax Law on 28 December 2016. The main changes have become effective as of 1 January 2017 and will be briefly presented in this article. With the amendments, the Law clarifies the definition of “taxable person” and harmonizes the concept of residence with the Profit Tax Law of the Federation of Bosnia and Herzegovina (FBiH) and Brcko District in order to avoid double taxation. Namely, a…

Belarus Tax Note

A draft law that would amend the Tax Code of the Republic of Belarus has been posted on the website of the Belarusian Ministry of Finance (the “Draft Law”). This time the draft has been published long before the start of the calendar year in which the amendments are to take effect, giving taxpayers a chance to understand the changes and prepare for them. In addition to the traditional indexation of tax rates in Belarusian rubles, the draft law contains…