HMRC has added to its draft CFC guidance a supplementary note on the profit-shifting legislation in FA 2014 which introduced additional exclusions from the definition of 'qualifying loan relationship’ (in TIOPA 2010 s 371IH(9A)–(9E)). The guidance explains, inter alia, that where a group looks to unwind a tower structure and put in place a CFC finance company, s 371IH(9A)–(9E) will need to be considered since the arrangement will involve transferring existing intra-group lending out of the UK.
At the meeting of the Economic and Financial Affairs Council (ECOFIN), held in Brussels on 7 November, all member states agreed in principle on the introduction of an anti-abuse clause in the parent-subsidiary directive 2003/123/EC (as proposed in November 2013), agreeing to work together to reach an agreement by the ECOFIN meeting scheduled for 9 December 2014. The introduction of a financial transaction tax (FTT) in 11 participant member states (although not the UK) was also discussed, and it was agreed to aim for implementation of a first phase of the FTT from 1 January 2016. Although participating member states agreed that transactions in shares of companies listed on stock exchanges should be subject to the FTT, further work was required in particular on derivatives to be subject to the FTT. The proposal involves a minimum 0.1% tax rate for transactions in all types of financial instruments, except for derivatives that would be subject to a minimum 0.01% tax rate. The EC also reported on ongoing work to introduce a standard VAT return and agreed to reflect on the best way forward to enable an agreement.
Chancellor George Osborne has agreed to waive VAT on sales of the Band Aid anniversary single. Musician Bob Geldof is re-recording the single to mark the 30th anniversary of the original release in 1984, and proceeds from the single will go towards the fight against the ebola virus, which has caused thousands of deaths in West Africa.
HMRC has published Revenue & Customs Brief 41/2014 concerning the introduction of a scheme to reimburse 80% of the levy paid on aggregate imported into Northern Ireland from other member states between 1 April 2004 and 30 November 2010. The European Commission required the UK to implement such a scheme as part of its recent state aid approval for the aggregates levy credit scheme in Northern Ireland (reported last week), which was suspended from 1 December 2010. Legislation for the scheme will be included in Finance Bill 2015 and is expected to take effect from 1 April 2015.
Financial institutions under FATCA need to register with the IRS by 22 December 2014 in order to be included on the 1 January 2015 foreign financial institution (FFI) list, the Law Society has advised. This is later than previously advised owing to the IRS processing registrations quicker than expected.
HMRC has announced that the Protocol and Exchange of Notes between the UK and Japan which was signed in London on 17 December 2013 will enter into force on 12 December 2014. In the UK, this will take effect: in respect of withholding taxes, on income derived on or after 1 January 2015; in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April 2015; and in respect of corporation tax, for any financial year beginning on or after 1 April 2015. In Japan, this will take effect in respect of withholding taxes on amounts taxable on or after 1 January 2015, and in respect of income taxes other than withholding taxes, for any tax year beginning on or after 1 January 2015.
HMRC, the Prudential Regulation Authority and the Financial Conduct Authority have agreed an approach to sharing of information and expertise, following the recommendations of the Parliamentary Commission for Banking Standards. On HMRC’s part, this will include: discussing tax implications of ad-hoc transactions or capital structures of firms and tax treatments of new or complex products; and providing early warning of significant tax liabilities, disputes, or tax investigations underway.
HMRC has published a report, Issue briefing: Taxing multinationals: tackling aggressive tax planning, which explains the steps the department is taking with other countries to stop some multinationals exploiting international standards to avoid paying tax by. This includes: working globally to tackle aggressive tax planning; exchanging information with other tax administrations; and using advance pricing agreements to agree in advance how transactions between different parts of the business will be priced for the purpose of calculating taxable profits.
The Office of Tax Simplification (OTS) has published a final report on its review of tax civil penalties, making 14 recommendations. The recommendations are not intended to be legislative measures, but suggestions for improving the workings of the system. Among some of the recommendations are: a look at the VAT registration system to de-register businesses no longer trading; consideration of alternative methods of publicising the behaviours and suspension criteria so that staff gain a better understanding of how to apply penalties; providing further training for managers to emphasise their role in how penalties are applied and to get more consistency amongst their staff.
HMRC has issued the following on its website:
HMRC has added to its draft CFC guidance a supplementary note on the profit-shifting legislation in FA 2014 which introduced additional exclusions from the definition of 'qualifying loan relationship’ (in TIOPA 2010 s 371IH(9A)–(9E)). The guidance explains, inter alia, that where a group looks to unwind a tower structure and put in place a CFC finance company, s 371IH(9A)–(9E) will need to be considered since the arrangement will involve transferring existing intra-group lending out of the UK.
At the meeting of the Economic and Financial Affairs Council (ECOFIN), held in Brussels on 7 November, all member states agreed in principle on the introduction of an anti-abuse clause in the parent-subsidiary directive 2003/123/EC (as proposed in November 2013), agreeing to work together to reach an agreement by the ECOFIN meeting scheduled for 9 December 2014. The introduction of a financial transaction tax (FTT) in 11 participant member states (although not the UK) was also discussed, and it was agreed to aim for implementation of a first phase of the FTT from 1 January 2016. Although participating member states agreed that transactions in shares of companies listed on stock exchanges should be subject to the FTT, further work was required in particular on derivatives to be subject to the FTT. The proposal involves a minimum 0.1% tax rate for transactions in all types of financial instruments, except for derivatives that would be subject to a minimum 0.01% tax rate. The EC also reported on ongoing work to introduce a standard VAT return and agreed to reflect on the best way forward to enable an agreement.
Chancellor George Osborne has agreed to waive VAT on sales of the Band Aid anniversary single. Musician Bob Geldof is re-recording the single to mark the 30th anniversary of the original release in 1984, and proceeds from the single will go towards the fight against the ebola virus, which has caused thousands of deaths in West Africa.
HMRC has published Revenue & Customs Brief 41/2014 concerning the introduction of a scheme to reimburse 80% of the levy paid on aggregate imported into Northern Ireland from other member states between 1 April 2004 and 30 November 2010. The European Commission required the UK to implement such a scheme as part of its recent state aid approval for the aggregates levy credit scheme in Northern Ireland (reported last week), which was suspended from 1 December 2010. Legislation for the scheme will be included in Finance Bill 2015 and is expected to take effect from 1 April 2015.
Financial institutions under FATCA need to register with the IRS by 22 December 2014 in order to be included on the 1 January 2015 foreign financial institution (FFI) list, the Law Society has advised. This is later than previously advised owing to the IRS processing registrations quicker than expected.
HMRC has announced that the Protocol and Exchange of Notes between the UK and Japan which was signed in London on 17 December 2013 will enter into force on 12 December 2014. In the UK, this will take effect: in respect of withholding taxes, on income derived on or after 1 January 2015; in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April 2015; and in respect of corporation tax, for any financial year beginning on or after 1 April 2015. In Japan, this will take effect in respect of withholding taxes on amounts taxable on or after 1 January 2015, and in respect of income taxes other than withholding taxes, for any tax year beginning on or after 1 January 2015.
HMRC, the Prudential Regulation Authority and the Financial Conduct Authority have agreed an approach to sharing of information and expertise, following the recommendations of the Parliamentary Commission for Banking Standards. On HMRC’s part, this will include: discussing tax implications of ad-hoc transactions or capital structures of firms and tax treatments of new or complex products; and providing early warning of significant tax liabilities, disputes, or tax investigations underway.
HMRC has published a report, Issue briefing: Taxing multinationals: tackling aggressive tax planning, which explains the steps the department is taking with other countries to stop some multinationals exploiting international standards to avoid paying tax by. This includes: working globally to tackle aggressive tax planning; exchanging information with other tax administrations; and using advance pricing agreements to agree in advance how transactions between different parts of the business will be priced for the purpose of calculating taxable profits.
The Office of Tax Simplification (OTS) has published a final report on its review of tax civil penalties, making 14 recommendations. The recommendations are not intended to be legislative measures, but suggestions for improving the workings of the system. Among some of the recommendations are: a look at the VAT registration system to de-register businesses no longer trading; consideration of alternative methods of publicising the behaviours and suspension criteria so that staff gain a better understanding of how to apply penalties; providing further training for managers to emphasise their role in how penalties are applied and to get more consistency amongst their staff.
HMRC has issued the following on its website:
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