Offshore Survey – September 2012 by Christopher Owen

  • Austria and Luxembourg block EU Savings Tax proposals
    • 15 May 2012, Austria and Luxembourg blocked the European Commission (EC) from holding talks with third countries to strengthen the EU Savings Tax Directive. The EC was seeking a negotiating mandate from European finance ministers at the EU’s Economic and Financial Affairs Council (Ecofin) meeting in Brussels to strengthen common instruments against tax evasion by concluding a treaty with third countries – Switzerland, Monaco, Liechtenstein, Andorra and San Marino.

      In force since 2005, the EU Savings Tax Directive regulates the exchange of information on the savings income of EU citizens. The EC presented a revised version last year that would expand the definition of “interest” payments to include complex financial products, introduce a “paying agent upon receipt” rule obliging trusts and other structures to reveal beneficial ownership, and move to automatic exchange of information rather than withholding tax payments.

      However Luxembourg and Austria rejected the Commission’s plans. Austria’s Finance Minister Maria Fekter challenged the EC’s motives, insisting that its principal aim was to abolish banking secrecy and ensure automatic exchange of data, rather than to include third states.

      EU Tax Commissioner Algirdas Semeta said: “The position that Austria and Luxembourg have taken on this issue is grossly unfair. They are hindering 25 willing member states from improving tax compliance and finding additional sources of income. We are only seeking mandates to negotiate at this stage – to explore how much we can achieve with Switzerland and the other countries. Any eventual agreement would have to be adopted unanimously.

      “Austria and Luxembourg have every assurance that nothing will be signed without their full consent. So their resistance against merely opening negotiations is completely unjustifiable… I leave it to them to explain to citizens across Europe why they can support tax hikes and spending cuts for ordinary people, but won’t allow us to step up our fight against tax evaders.”

  • Cayman proposes new form of Incorporated Cell Company legislation
    • 17 July 2012, the Cayman Islands Financial Services Authority announced the launch of consultation on a Bill to amend the Insurance Law to allow insurers formed as segregated portfolio companies (SPCs) to enjoy the same benefits as incorporated cell companies in other jurisdictions.
      Under the change, a new or existing insurance SPC would be able to incorporate one or more of its segregated portfolios by establishing a “portfolio insurance company” (PIC) under the cell. The PIC would then conduct the relevant insurance business, instead of the cell. The PIC would be regulated by the Cayman Islands Monetary Authority but would not need to be separately licensed as an insurance company. Unlike a traditional segregated portfolio cell, the PIC would be a separate legal entity – an exempted company limited by shares.
      On 9 July, the Cayman Islands government also launched a consultation on a proposed Third Party Rights Bill, which would give third parties the ability to enforce rights that have been conferred to them in a contractual agreement.
      Currently in the Cayman Islands, a key principle of contract law is “privity of contract”, which allows only those persons who are direct contractual parties to enforce rights. However, issues arise when natural persons, acting for companies or other forms of legal persons, cannot enforce rights given to the legal persons. The bill seeks to give effect to third-party rights, where parties expressly agree that it should apply.

  • Court approves trustee decision opposed by beneficiaries
    • 26 March 2012, the Jersey Royal Court approved a trustee’s decision to widen the class of beneficiaries of a trust – seeking to uphold the unwritten intentions of the settlors – in the face of opposition from the existing hostile beneficiaries.

      In the matter of The A Trust [2012] JRC066, the settlors of The A Trust were Mr and Mrs H, a husband and wife who had four children. They had appointed a close business associate and friend as protector. Under the terms of the trust, the settlors were designated the life tenants. Other than charities, no other beneficiaries were named at the point of settlement. The settlors further settled The B Trust, which named the siblings and the settlors’ remoter issue and spouses as beneficiaries. The assets settled into both trusts were substantial. There were no letters of wishes for either trust.

      Disputes had arisen between certain members of the family before the settling of the two trusts. The trustee understood that it was the settlors’ intention that the wider family should enjoy the trusts with the assets cascading down to future generations.

      Mr and Mrs H died in 2003 and 2005 respectively. The wife had left the freely disposable portion of her personal estate to The A Trust, rather than to the siblings. The trustee, seeking to ensure that they could inherit her estate in as tax efficient a manner as possible, added the siblings as beneficiaries to The A Trust, so that the trustee could then renounce its inheritance and allow them to inherit in its place. It was also the trustee’s intention, based on its understanding of the settlors’ wishes, to add the remoter issue of the settlors as beneficiaries of The A Trust.

      At a meeting with the trustee and protector in 2010, the siblings requested the trustee to distribute all the assets of The A Trust to them, less its charitable obligations. When the trustee rejected this request, the siblings demanded that the trustee should either wind up The A Trust as requested, or retire. Should the trustee expand the beneficial class of The A Trust, they would issue immediate proceedings seeking to set aside the decision and remove the trustee. The trustee therefore issued proceedings seeking court approval for its decision to add to the beneficial class. The protector supported the trustee’s view. The siblings issued proceedings seeking the trustee’s removal.

      Based on the evidence from the trustee and the protector, the court held that it had been the intention of the settlors that The A Trust would be inter-generational with assets cascading down to future generations. Further, it would have been their expectation that the remoter issue would have been added as beneficiaries of The A Trust in due course.

      It also held that it was right for the trustee in this instance to make such a decision and seek the court’s approval prior to the outcome of removal proceedings because there was no letter of wishes, a new trustee and protector would have no personal knowledge, the trustee was part way through a process of adding the remoter issue as beneficiaries, and there was no impropriety on the part of the trustee.

      Commissioner Clyde-Smith stated that “the efficient and satisfactory execution of this trust going forward requires this issue to be clarified now” and “will avoid difficulties for any future trustee.”

  • Cyprus brings new tax package into force
    • 6 July 2012, the tax package passed by the House of Representatives on 24 May, which includes a number of amending laws in relation to the intellectual property regime, interest deductibility, group relief and the deemed distribution of dividends, was enacted with its publication in the official gazette. The changes, which are designed to attract foreign investment, are effective retroactively as from 1 January 2012.

      The meaning of patent rights and intellectual property (IP) rights in the Income Tax Law has been amended to coincide with the definition in the Patent Rights Law of 1998, the Intellectual Property Law of 1976 and the Law regarding Trademarks. This ensures that all types of intellectual properties will be covered by this new regime avoiding any uncertainty.

      The new law provides for an 80% exemption on the net profit from the exploitation of such intangibles before being taxed at the flat corporate income tax rate of 10% which is the lowest in Europe. This brings the effective tax rate on IP income to less than 2%. The net profit is calculated after deducting from the licensing of the intangibles all direct expenses associated with the production of this income. The rate of capital allowances on such intangibles has been set at 20% of the cost of acquisition. Any profit arising from the disposal of such intangibles will also benefit from the 80% exemption.

      The change to interest deductibility will make the Cyprus Holding Company more attractive because interest will now be an allowable expense for tax purposes. No interest expense restriction will apply in cases where shares are acquired directly or indirectly in a wholly owned subsidiary provided that the subsidiary does not own any assets that are not used in the business. If the subsidiary does own assets that are not used in the business, the restriction of interest will only correspond to the percentage of assets not used in the business.

      Under the current provisions of group relief a company is considered to belong to the same group for group relief purposes if it is part of that group for a whole tax year. With the amended legislation, in cases where a company has been incorporated by its parent company during the tax year, this company will be deemed to be a member of this group for group relief purposes for that tax year.

      A new Limitation of Actions Law (Law 66(I) of 2012), to replace the previous Limitation of Actions Law (Cap. 15) – which has been suspended since 1964 – as well as of other legislation with a modern and comprehensive limitation action system, was also brought into force on 1 July.

      The new Law sets out different limitation periods depending of the nature of the actionable right. It provides for a general limitation period of 10 years and introduces various limitation periods for specific actionable rights. It also introduces, among others, mechanisms of suspension of the limitation periods and criteria for their computation. In addition the new Law confers the general power on the Cyprus courts to extend the limitation period for up to two years in cases where they deem it appropriate.

      The new Law provides a transition period of one year in the case of actionable rights for which the cause of action is completed before it comes into effect.

  • Dubai introduces new Markets Law and amends Regulatory Law
    • 5 July 2012, the Markets Law 2012 and the Regulatory Law Amendment Law 2012, designed to promote investor protection to align the Dubai International Financial Centre (DIFC) to international standards, were both brought into force. His Highness Sheikh Mohammed Bin Rashid Al Maktoum enacted them in his capacity as the Ruler of Dubai on 7 June.

      The new Markets Law, which replaces the Markets Law 2004, brings about a number of changes covering prospectus disclosure, what activities constitute an offer, market misconduct provisions and corporate governance. The prospectus disclosure changes include the requirement for a prospectus to be formally approved by the Dubai Financial Services Authority (DFSA) before it can be used to make an offer of securities to the public or admit them to the Official List of Securities.

      The amendments to the Regulatory Law 2004 support the changes brought about by the new Markets Law regime. It provides for the DFSA to undertake regulatory oversight of auditors of DIFC incorporated companies listed on an Authorised Market Institution (AMI) or any other exchange.

      DFSA chief executive Ian Johnston said: “These changes bring our markets regime into closer alignment with the EU requirements while retaining features necessary to accommodate regional needs and circumstances. The DFSA’s supervisory oversight has also been expanded to include auditors for companies incorporated in the DIFC that seek listing on an exchange in the DIFC or in another jurisdiction. Such regulatory oversight of auditors would allow for the passporting of auditors registered by the DFSA into the EU, thus enabling those auditors to conduct audits of DIFC-based companies where they seek listings in the EU.”

  • EU introduces cross-border succession rules
    • 7 June 2012, the EU Council of Justice Ministers approved the European Commission’s proposal to simplify the settlement of international successions in order to ease the legal burden when a family member with property in another EU country dies. When published in the EU’s Official Journal, EU member states will have three years to align their national laws.

      There are around 4.5 million successions a year in the EU, of which about 10% – valued at about €123 billion – have an international dimension. Legislation governing jurisdiction and the law applicable vary considerably from one member state to another, which leads to great legal uncertainty in succession planning.

      Under the new EU rules, the deceased’s habitual place of residence would be the single criterion for determining both the jurisdiction of the authorities and the law applicable to a cross-border succession. People living abroad will, however, be able to opt to have the law of their country of nationality apply to the entirety of their succession. The regulation will also introduce a European Certificate of Succession, which will allow people to prove that they are heirs or administrators of a succession without further formalities.

  • European Parliament approves resolution for mandatory CCCTB
    • 19 April 2012, the European Parliament voted to make mandatory the introduction of a Common Consolidated Corporate Tax Base (CCCTB) among European Union member states after a transitional period. The resolution was adopted at a parliament plenary by 452 votes to 172, with 36 abstentions.

      The CCCTB would provide a single set of rules for companies to calculate their taxable profits, rather than having to comply with different accounting rules in each member state in which they operate. It is claimed that a CCCTB would significantly reduce transfer-pricing requirements on multinationals when assessing a transaction between European member states for tax purposes. The Parliament’s resolution differs from the Commission’s proposals, which favour the CCCTB being rolled out on a voluntary basis.

      It was agreed that, initially, the CCCTB would only apply to European cooperative societies, which are by nature cross-border. After five years, it would apply to all companies except small- and medium-sized enterprises (defined as those companies which employ less than 250 people and either have a turnover of less than €50m or a balance sheet of less than €43m), which could opt in if they so wish.

      The Parliament also adopted, by 538 votes in favour to 73 against and 32 abstentions, a motion calling on EU member states and the European Commission to take concrete measures to combat tax fraud and tax evasion. It urged member states to overhaul their tax systems to make them more efficient, remove unjustified exemptions and broaden the tax base so as to shift taxes away from labour. Member states should focus on tax collection and tackling tax evasion.

      To prevent unintended non-taxation, tax evasion and fraud, member states should ensure that their tax authorities cooperated with each other and gave them adequate resources to combat fraud. It also called for tight controls to prevent the use of tax havens and measures to defend member states against uncooperative jurisdictions.

      EU legal measures that will have to be reviewed in order to eliminate tax evasion include the Savings Directive, Parent-Subsidiary Directive and the Royalties Directive, said the resolution

  • French parliament adopts Exceptional Wealth Tax
    • 19 July 2012, the French National Assembly voted an emergency increase in wealth tax (ISF), provided for within the framework of the government’s supplementary finance bill, designed to generate an extra €2.3 billion for the cash-strapped government pending fuller legislation next year to repeal tax reductions that former President Sarkozy introduced in 2011.

      The increase – known as the contribution exceptionnelle sur la fortune – is a stop-gap measure introduced by Francois Hollande, the new Socialist president, which affects people with assets exceeding €1.3 million.

      Budget rapporteur Christian Eckert confirmed that there would be no cap on the amount of wealth tax paid in 2012 under the ISF, the exceptional contribution, or a combination of the two. It is estimated that the wealth tax charge will raise €5.7bn overall this year, including the €2.3bn emergency increase.

      According to the information provided by Eckert in his report, for those with assets of between €1.3 million and €1.6 million, the ISF surtax is expected to increase their tax burden by 14%. For households with between €2.9m and €4m in assets, the tax will increase their contribution by on average 42%. For the top 10% of France’s most wealthy individuals, the tax burden will soar by 143% compared with the amount that they would have had to pay at the beginning of the year.

      The measure is part of a series of taxes being imposed on wealthy citizens and companies, which include a 3% tax at source on cash dividend payouts by companies, in line with a goal of encouraging re-investment of profits, and a reduction in the value of inheritances that benefit from automatic tax exemption, from €159,000 to €100,000.

      The new administration is also planning a 75% tax on salaries above €1m, although Jerome Cahuzac, budget minister, said this would be revised once the country cleared its debt.

      On 18 July 2012, the French tax authorities issued an Instruction confirming that the filing deadline, for this year only, under the new disclosure regime for trusts with French connections will be 15 September.

      The new law, which came into effect on 1 January 2012, requires trusts and their trustees to report any French assets held on 31 July 2011, as well as any French beneficiaries and settlors. Even if all parties to a trust reside outside of France, reporting is required if the trust held a French “situs” asset or French financial assets. Any modifications to or terminations of trusts made between 31 July 2011 and 31 December 2011 must also be reported.

      In addition, the government has announced a one-off penalty tax of 0.5% for any settlors that have not made disclosures either by 15 June or 31 August and who would normally fall under the wealth tax regime. Trustees must pay this before 15 September.

  • Guernsey States approves Foundations Law
    • 25 July 2012, the States of Guernsey approved a new Foundations Law to provide for the introduction of foundations in Guernsey. The legislation has gone to the UK’s Privy Council, which next sits in October, for final ratification.

      Foundations are seen as appealing to investors from countries with a civil law tradition who are often unfamiliar with trusts and in particular, the concept of the separation of legal and beneficial ownership.

      Guernsey follows the other Crown Dependencies Jersey and the Isle of Man, which enacted foundations legislation in 2009 and 2011 respectively. Jersey now lists some 173 foundations, up from 94 in May 2011. In February, Gibraltar announced that it was also planning to introduce a foundations law as part of a package of measures aimed at boosting its financial services industry.

      Guernsey Finance said the creation of a foundations structuring option would provide Guernsey’s fiduciary sector “with additional choice and flexibility when setting up wealth management structures in the island”.

  • Guernsey States approves zero-10 tax change
    • 27 June 2012, the States parliament agreed to follow the governments of Jersey and the Isle of Man by removing an area of the “Zero-10” corporate tax regime known as deemed distribution, which was needed to make it compliant with EU rules. The change will come into effect from 1 January 2013.

      On 17 April, the EU’s Code of Conduct Group on Business Taxation deemed Guernsey’s zero-10 corporate tax regime, introduced in January 2008, to be “harmful”. Under the regime, companies are subject to tax at the standard rate of 0%. A 10% tax rate applies to income derived from specified banking activities and a 20% tax rate to income from the ownership of land and buildings and regulated utilities. However, companies are required to deduct tax at the 20% individual standard rate on the distribution or deemed distribution of profits to resident individuals.

      Last December the European Council of Finance Ministers (ECOFIN) approved the amended “zero-10” tax regimes of Jersey and the Isle of Man after the Code of Conduct Group had declared in September that it no longer considered these regimes to be harmful because the deemed distribution provisions in Jersey and attribution regime for individuals in the Isle of Man had both been removed.

  • Guernsey to establish a new aircraft registry
    • 10 May 2012, the States of Guernsey agreed a public-private partnership for the development and running of a new aircraft registry after the Commerce and Employment Department signed an operating agreement with Amsterdam-based SGI Aviation.

      SGI Guernsey, a subsidiary of SGI Aviation, which provides services for national aviation authorities, would manage the day-to-day operation of the registry. The registration prefix for Guernsey aircraft is expected to be the number two followed by four letters – for example 2-ABCD.

      The registry is due to be set up in 2013 and the aim is to have 150 aircraft registered within two years. Previously proposals, that included setting up a joint registry with Jersey, have been abandoned at present.

  • HMRC delists over 400 QROPS from new register
    • 12 April 2012, the UK Revenue (HMRC) published a new list of qualified recognised overseas pension schemes (QROPS) which removed 436 schemes from Guernsey, Jersey, the Isle of Man and New Zealand that had appeared on the previous register.

      The number of schemes available in Guernsey fell from 312 to 3, Jersey from 138 to 64, the Isle of Man from 185 to 173 and New Zealand from 64 to 23. The total number of pensions schemes recognised by HMRC as QROPS fell from 2,980 to 2,651, a fall of 329 – the difference due to new schemes being added to the list.

      HMRC’s final QROPS rules, published in March, require providers to treat non-residents and residents of a jurisdiction in the same way for tax purposes from 6 April. New information and reporting requirements were also introduced. It further placed strict new rules on schemes in New Zealand, which were considered to be breaking QROPS rules by allowing people to cash out their entire pensions while QROPS rules insist schemes should retain 70% to transferred funds for retirement income.

      QROPS were introduced in April 2006 to allow an individual to transfer their savings in a UK-registered pension scheme to a pension plan that meets the conditions to be a QROPS, free of UK tax. Guernsey has accounted for at least 10% of all QROPS transfers since the scheme was introduced. In the first part of 2011, it was the leading destination for UK pensions transferred into QROP schemes, with around 32% of the total in terms of numbers transferred.

      A statement from HMRC said: “The government made clear at Budget 2012 that, where the country or territory in which a QROPS is established makes legislation or otherwise creates or uses a pension scheme to provide tax advantages that are not intended or available under the QROPS rules, the government will act so that the relevant types of pension schemes in those countries or territories will be excluded from being QROPS.”

      On 27 June, Guernsey Treasury Minister Gavin St. Pier said the new Section 157E exempt pension regime, which was introduced in March specifically to comply with HMRC’s new rules, would be curtailed. Instead, to ensure that existing QROPS schemes can be re-listed, new taxing provisions would be added on pensions transferred by non-residents to ensure equitable taxation between resident and non-resident persons.

      The proposed changes involve the removal of the exemption from tax on annuities and lump sums paid to non-resident members of approved retirement annuity schemes and retirement annuity trust schemes, and making the income from occupational pension schemes taxable on non-residents as well as residents. The exemption for pensions and annuities paid in respect of services performed outside Guernsey will also be removed.

      The changes are to be brought before the States of Guernsey in September and, if adopted, will have retrospective application from 27 June 2012. Provision would be made to ensure no retrospective impact on schemes being managed on behalf of non-residents who transferred their UK pensions to Guernsey prior to the rule change.

  • Isle of Man registers 500th aircraft
    • 1 July 2012, the Isle of Man Aircraft Registry announced the registration of its 500th aircraft since its inception on 1 May 2007. The 500th aircraft registered was a Bombardier Global 5000, registration M-SEAS, which was delivered new from the factory in Montreal Canada.

      The Isle of Man, which specialises in the registration of private and corporate-owned business jets, is currently the fastest growing offshore aircraft register in the world and the seventh largest business jet register worldwide.

      Alex Downie, Political Member with responsibility for the Aircraft Registry, said: “I never thought the Aircraft Registry would develop as fast as it has so I would like to pass on my warmest congratulations to all the Aircraft Registry staff on reaching this magnificent milestone.”

  • Mauritius and India to resume talks on treaty revision
    • 5 July 2012, the Indian and Mauritian governments confirmed they would resume renegotiating their bilateral double tax treaty in August. The move followed India’s issuing draft guidelines for a general anti-avoidance rule (GAAR), which was announced as part of the Budget in March along with proposals to tighten requirements for benefits under India’s tax treaties and to apply withholding tax to non-residents regardless of their presence in India.

      Mauritius said it was not against a renegotiation of the treaty that benefits both sides. Mauritius foreign affairs and international trade minister Arvin Boolell said: “Mauritius favours substance over form. We will never shortchange each other. We are a team. If ever there is room for improvement, we will constantly make room … in compliance with best international practices.”

      India has been seeking to negotiate the tax treaty with Mauritius for several years in order to prevent so-called round tripping and other potential abuses. Mauritius has been reluctant to make any changes that might damage its status as a preferred route for foreign investors. Under the existing treaty, capital gains from sale of securities can be taxed only in Mauritius. Capital gains tax is close to zero in Mauritius and almost 40% of investments into India come through the island.

      The India-Mauritius joint working group will also discuss the inclusion of a so-called limitation of benefit clause, similar to the Singapore tax treaty with India, to ensure that only genuine Mauritius-based companies can benefit. India’s tax agreement with Singapore states that only companies spending a minimum of $200,000 in Singapore can avail the benefits of the treaty. A further issue is the sanctity of tax residency certificates. The Indian Budget set out that the certificates are a necessary but not sufficient condition. Mauritius is seeking assurance that certificates that it issues will be honoured.

  • New US disclosure rules for “non-resident aliens”
    • 19 April 2012, the US Internal Revenue Service (IRS) issued the final version of regulations setting out the reporting obligations of US banks when they pay interest to non-resident foreigners. The regulations (TD 9584) form part of the Foreign Account Tax Compliance Act (FATCA), which comes into force in January 2013 and requires foreign financial institutions to report on the holdings of US taxpayers.

      The new “Guidance on Reporting Interest Paid to Non-resident Aliens” obliges US banks to report all interest payments to “non-resident aliens” to the IRS, even though these payments are not taxable in the US. The IRS will then pass this information to the appropriate foreign tax authorities. The regulations will affect commercial banks, savings institutions, credit unions, securities brokerages and insurance companies that pay interest on deposits.

      The IRS noted that the regulations would facilitate intergovernmental cooperation on FATCA implementation by enabling it, in appropriate circumstances, to reciprocate better by exchanging information with foreign governments for tax administration purposes. The bank disclosures required by these regulations would also enhance US tax compliance because US taxpayers with US deposits would find it harder to claim falsely to be non-residents.

      “In order to ensure that US taxpayers cannot evade US tax by hiding income and assets offshore, the United States must be able to obtain information from other countries regarding income earned and assets held in those countries by US taxpayers. Under present law, the measures available to assist the United States in obtaining this information include both treaty relationships and statutory provisions. The effectiveness of these measures depends significantly, however, on the United States’ ability to reciprocate,” said the document.

      As a safeguard, the IRS has said it will not pass on information to jurisdictions with which it does not have a tax information exchange agreement.

  • Singapore Court rejects Indian request for bank information
    • 23 May 2012, the High Court of Singapore rejected an application made by the Singapore Comptroller of Income Tax, pursuant to a request for information by the Indian tax authority, for the production of information held by a bank in Singapore on the basis that the information requested was not foreseeably relevant for carrying out the provisions of the tax treaty between Singapore and India.

      In Comptroller of Income Tax v AZP [2012] SGHC 112, the Comptroller made an application under section 105J of the Income Tax Act for an order requiring AZP, a bank in Singapore, to produce records and information relating to two bank accounts, from 1 January 2008 to date, held with AZP. Account 1 was held in the name of Company X and Account 2 was held in the name of Company Y. The Indian tax authorities had seized documents from an Indian national that it believed indicated the existence of undeclared income and bank accounts overseas. It therefore requested the Comptroller to facilitate the release of certain information under the Singapore-India tax treaty.

      The application was dismissed. The High Court was not satisfied that the information requested was “foreseeably relevant” under the provisions of the Singapore-India tax treaty because supporting documentation provided by the Indian tax authorities was inadequate. Companies X and Y were not Indian-incorporated entities and were not under any investigation by the Indian tax authorities. The Indian tax authorities were not able to provide evidence of any transaction between the Indian national and either of the companies on or after 1 January 2008 – the effective date of the exchange of information clause. All that was provided was certain unsigned transfer instructions issued before 2008.

      The High Court stressed that given that the exchange of information could impinge on interests such as taxpayer privacy and confidentiality of banking information, it was important that the right balance was struck and that procedural safeguards were put in place to ensure that only specific and relevant requests were entertained.

  • Swiss bank Wegelin served with US charges
    • 23 May 2012, Wegelin & Co, the oldest Swiss private bank, failed to appear for a hearing in a US District Court in Manhattan to answer charges that it helped US taxpayers hide more than $1.2 billion from the Internal Revenue Service.

      The bank was first indicted on 2 February but claimed it had not been properly served with a criminal summons to appear. On 2 May, US authorities served a new summons on Konrad Hummler, a bank partner in Switzerland, but Wegelin said the attempted service was invalid for a variety of reasons and challenged it in a Swiss court.

      Wegelin has also forfeited more than $16 million held in a UBS account. In an order made public on 22 May, US District Judge Laura Taylor Swain in Manhattan entered the forfeiture order, covering money seized from a US correspondent account held at UBS in Stamford, Connecticut. Wegelin has no branches outside Switzerland, and had followed the common industry practice of using correspondent banking services to handle money for US clients. The forfeited funds will be deposited with the US Treasury.

  • US strikes FATCA deals with Switzerland and Japan
    • 21 June 2012, the US Treasury Department announced it had reached agreements with both Switzerland and Japan to cooperate on a framework for sharing financial information on bank accounts under the Foreign Account Tax Compliance Act (FATCA) when it comes into effect in January 2013. It followed similar agreements with the five largest EU member states – Germany, France, Spain, Italy and the UK – in February.

      FATCA requires foreign financial institutions (FFIs) to report all their US clients’ dealings to the US Internal Revenue Service (IRS). They must also block payments to US clients and to other FFIs if ordered to do so by the IRS, and must close accounts belonging to individuals regarded by the US as delinquent. For FFIs that fail to comply, the US will levy a 30% withholding tax on their earnings from US investments.

      Unlike the agreements with the EU member states, so-called “reciprocity” arrangements for automatic exchange of tax information under the countries’ existing bilateral tax treaties, the agreement with Switzerland represents a second model for implementing FATCA by establishing a framework of direct reporting by FFIs to the IRS, supplemented by information exchanged between the Swiss and US governments upon request. The agreement with Japan, meanwhile, expands FATCA beyond Europe to Asia.

      FATCA was enacted in 2010 by Congress as part of the Hiring Incentives to Restore Employment Act. The US Treasury and the IRS said they would continue to work closely with businesses and foreign governments to implement FATCA effectively.

      On 26 July, the OECD endorsed the new model international tax agreement developed by the US with France, Germany, Italy, Spain and the UK to allow implementation of FACTA through automatic exchange between governments.

      OECD Secretary-General Angel Gurría said: “We at the OECD have always stressed the need to combat offshore tax evasion while keeping compliance costs as low as possible. A proliferation of different systems is in nobody’s interest. We are happy to redouble our efforts in this area, working closely with interested countries and stakeholders to design global solutions to global problems to the benefit of governments and business around the world.”

yeezy boost 350 oxford tan adidas yeezy 350 boost oxford tan release date moonrock yeezy 350 boost legit real fake adidas yezzy boost 350 pirate black moonrock restocking yeezy boost 350 moonrock raffle yeezy boost 350 moonrock 331592665172 is the adidas yeezy boost 350 turtle dove releasing again yeezy boost 350 turtle dove AQ4832 fse 082415 p se yeezy boost 350 adidas yeezy 350 boost where to buy yeezy boost 350 v2 black white adidas yeezy boost 350 pirate black adidas yeezy boost 350 v2 black white adidas yeezy boost 350 v2 blackwhite reservations open december 15 confirmed app buy black friday yeezy boost 350 v2 yeezy boost 350 v2 black white adidas yeezy boost 350 v2 official images adidas yeezy boost 350 v2 restock info adidas yeezy boost 350 v2 beluga solar red adidas yeezy boost 350 v2 beluga launches tomorrow news.23913.html yeezy boost 350 v2 black white release date adidas yeezy yeezy boost 350 v2 bw raffle store list for the black white adidas yeezy boost 350 v2 release news.26285.html adidas yeezy boost 350 v2 black white release procedure announced news.26233.html yeezy boost 350 v2 black white raffle