August 3, 2009 Taxation in India
The Central Board of Excise and Customs (CBEC) of India has released their stance on service tax for Directors’ and Managing Directors‘ remuneration, clarifying that commission paid is in most cases not liable for service tax.
The CBEC has clarified their position on the situation of “commission” based on company performance being paid to Directors and Managing Directors, in regards to service tax purposes. Doubts were raised as to the position due to many of India’s listed companies treating the payments made towards Directors as “salary”, while in the strict reading of the law they were “commission”.
It was stated by the CBEC in a publication that “Some companies make payments to Managing Director/Directors (whole-time or independent), terming the same as commissions...Read More
The ongoing legal action between UBS and US Government has lead to some US offshore account holders volunteering their financial information to eschew possible harsher penalties.
According to Internal Revenue Service (IRS) spokesman, Terry Lemons, almost 400 applications were received by the IRS for the Leniency Program for offshore bank account disclosure in the week starting Monday 20th of July. This amount eclipses the voluntary disclosures for 2008, which numbered only 100 individuals.
The IRS is currently pursuing the identities of approximately 52,000 individuals who they believe to hold offshore bank accounts with UBS specifically for tax evasion purposes. The legal action is proceeding in the US court system, thereby circumventing the strict Swiss banking privacy laws.
Those indiv...Read More
The Australian Taxation Office (ATO) has made its submission to US Senate Committee on Homeland Security and Governmental Affairs regarding the use of entities incorporated in the United States for possible secrecy haven purposes.
In an effort to stem tax evasion, avoidance, money laundering and other non-compliance activities, the US Senate Committee on Homeland Security and Governmental Affairs requested that the ATO provide some case studies involving US entities and their possible use in non-compliance activities in Australia. The ATO has now sent their response, consisting of an introduction and eight cases and their analysis.
The ATO made comments in their response saying that secrecy havens still being a high compliance risk to Australia...Read More
The Institute of Directors of UK, in a paper released on the 27th of July is urging the UK Government to embrace the concept of tax havens as opposed to the current policy of attempting to combat them.
The primary crux of the paper urges the UK government to relax some taxation rules surrounding UK based business, hedge-funds were a primary example. Specifically in regards to this, the paper says “If the UK’s tax rules were amended, hedge fund assets could be held in the UK, with no overall loss and some gain to the exchequer.”
This view is not met with overall support and faces staunch opposition, both from commentators and governmental actions. In early July at the Franco-British Summit, both countries set out to impose economic sanctions on tax havens by March 2010...Read More
July 28, 2009 Taxation in USA
In an open letter, addressed to leaders of the US Congress, the IT industry is voicing their concern regarding the Obama administration’s international tax reforms, specifically in regards to “deferral”.
Under current US International taxation rules there are provisions for the “deferral” of international earnings on worldwide American companies. As it stands with the current rules, the active foreign income earned by a US based company is not taxed until it has been paid to the parent company. Typically this happens in the form of dividends from the foreign operation. This system allows for the US parent company to defer their taxation on earning.
Opponents of this system maintain that this has no effect beyond “shipping” US jobs overseas and allowing US companies to effectively ...Read More