29Mar

New UK Tax Advisers Legislation

29 March 2017 Acumum Legal & Advisory 42

England; December 2016 saw the inauguration of new rules targeting UK tax advisers.

The FA 2016, Section 162(1) and Schedule 20 (Appointed Day) Regulations 2016 (“the Legislation”) by Her Majesty’s Treasury; the initial plans for the Legislation were announced in the UK Budget 2015 and sets out the civil penalties for tax advisers who have had any part in enabling non-compliance and/or offshore tax evasion.

The Legislation is the first of its kind in the United Kingdom targeting tax advisers and is expected to have a severe impact on the use of artificial tax schemes, by increasing the taboo surrounding tax evasion by targeting those who are considered to encourage or facilitate tax evasion in any way.

“Enabler” is defined by the Legislation itself as “a person [who] has enabled another person to carry out offshore tax evasion or non-compliance where the person has encouraged, assisted or otherwise facilitated conduct by the other person that constitutes offshore tax evasion on non-compliance”.

The penalties shall apply to any individual or corporate that advises on tax planning – ranging from simple advisory services all the way to the physical movement of funds offshore, which enable the evasion of Income Tax, Capital Gains Tax or Inheritance Tax. Individuals and corporates found guilty may be liable for any part or all of the tax evaded; the minimum penalty faced will be £3,000.

The deadline of 30th September 2018, which aims to increase the number of voluntary disclosures, has been set for the correction of any incomplete UK tax filings,. Failing to correct these tax filings by this date will mean the application of harsher and stricter penalties on the offending parties.

Tax evasion has been described by Jane Ellison, Financial Secretary to the Treasury, as “a crime [which] as a government, we have led reform of the international tax system to root it out”.

Tackling tax evasion has seen Her Majesty’s Revenue and Customs secure more than £130 billion since 2010.

More Information:

Financial Services, Insurance, Funds, Malta Trading Companies & Holding Companies, Highly Qualified Persons Programme

Malta Citizenship & Residency

About Acumum – Legal & Advisory

Acumum Legal & Advisory is a well-established set of multidisciplinary legal, tax, fiduciary and accounting firms located and managed in the tax efficient EU jurisdiction of Malta. It operates as a full service law firm with services including aviation, corporate formation, accounting, estate & wealth planning, taxation, intellectual property and more. The firm is overseen by Geraldine Noel, a British barrister – registered in Malta, working alongside an expert team of lawyers and accountants with extensive specialist commercial and private client expertise, particularly to an individual, corporate and family office clientèle.

13Dec

Key Employee Initiative

13 December 2016 Acumum Legal & Advisory 45

The Key Employee Initiative (KEI) has been introduced in Malta, providing a new, efficient programme for third country nationals / non – EU nationals (TCN) seeking employment and residence in Malta.

The Key Employee Initiative aims to facilitate and to provide a fast track application process to highly-specialised third-country nationals who seek employment in Malta; applications will be approved within five working days from the date of submission of the application.

Eligibility

An individual may apply for a work/residence permit under the scheme if the employment position concerns a managerial or a highly-technical post which requires specific qualifications or adequate experience.

This scheme is also open to innovators who are involved in start-up projects which are specifically approved by Malta Enterprise.

Individuals applying under the KEI must:

Have an annual gross salary of at least € 30,000; and
Provide certified copies of the relevant qualifications, warrants or the necessary work experience;
Provide a declaration by the employer stating that they have the necessary credentials to perform the duties which they have been assigned.

Validity

Once the application is validated and approved, the applicant will be issued with a residence permit which is valid for 1 year. The permit may then be renewed for a maximum period of 3 years, subject to the submission of the documentation requested by Identity Malta, namely:

A definite or an indefinite contract of employment, and
The original annual tax declaration form stamped by the Inland Revenue Department.

Government Fee

The Government of Malta’s fee for the submission of the application is €280.50, to be paid at the time of submission.

Time-frame

Permits are issued within five working days from the date of submission of the application. The applicant does not need to be physically present to submit the application, therefore the applicant would not need to travel to Malta to submit the application.

Documents Required

1. Application for a residence permit on the basis of employment – the form must be endorsed by the employer with an official stamp and signature of the responsible official;
2. Identity Registration Form – Non-Maltese Nationals along with the application fee of
€280.50;
3. Full copy of passport;
4. Declaration by the employer stating that the applicant has the necessary credentials to perform the duties being assigned;
5. Draft work contract showing an annual gross salary of €30,000;
6. Curriculum Vitae of the applicant;
7. Certified copies of the relevant qualifications, warrants or reference letters;
8. Full health-insurance policy, showing all aspects being covered, which supports the applicant in the eventuality of requiring any type of medical assistance or hospitalisation during the first year of stay in Malta;
9. Lease agreement or purchase agreement of property.
10. Depending on type of job, a relevant health screening approval from the Health Promotion and Disease Prevention Directorate.

How can we help?

Acumum can advise and assist third country nationals with the application process under the Key Employee Initiative. Applications for the Key Employee Initiative are required to be made to and processed by Identity Malta by an Authorised Registered Mandatory.

Acumum is an Authorised Registered Mandatory for all Malta Citizenship and Malta Residency programmes.

Kindly contact us on [email protected] for more information.

27Jun

BREXIT – the EU Passport Opportunity for Malta

27 June 2016 Acumum Legal & Advisory 43

BREXIT – Britain’s momentous decision to leave the European Union has put into question what rights will British nationals and companies located in Britain have in relation to the European market? In particular, there is doubt whether the passporting rights pursuant to European directives will continue to apply.

Following Brexit, Malta offers a number of advantages to individuals and companies looking for a secure and stable entry point into the European market.

Malta, a full EU member, has transposed all applicable EU directives into its domestic law, particularly in relation to the financial services sector, covering such areas as Funds, Investment Services, Pensions etc.

Added to which, Malta’s long term, special relationship with the UK, provides UK located individuals and businesses comfort in the face of the forthcoming Brexit changes.

Why Malta?

Full EU member
Malta’s long standing special relationship with England – the Maltese and British Governments are currently in talks to discuss bilateral arrangements
English is an official language
Malta’s corporate and commercial laws are based on English law and EU directives
EU and OECD recognised and compliant jurisdiction
EU financial services directives fully implemented
Tax and fiscal advantages – 5% effective corporate tax rate, reduced from 35% after application of tax refunds
Currency – Euro
Single, accessible regulator – Malta Financial Services Authority
Certain financial services sectors, such as funds, can achieve 0% tax on income and distribution
Highly Qualified Persons Programme – 15% income tax cap on certain employees within financial services sector
Multilingual, knowledgeable workforce
Excellent communications infrastructure

What is ‘Passporting’?

Passporting is the exercise of the right (known as a single market passport, or single licence), available to a firm authorised under one of the EU single market directives to carry on activities in another EEA member state, on the basis of its home state authorisation. The activities can be conducted through a branch in the host member state (the right of establishment) or on a cross-border services basis without using an establishment in the host state (a services passport).

Single market directives
The single market directives are currently:

The Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD)
The CRD IV Directive (2013/36/EU), which repealed and recast the Banking Consolidation Directive (2006/48/EC) (BCD)
The Insurance Mediation Directive (2002/92/EC) (IMD)
The Markets in Financial Instruments Directive (2004/39/EC) (MiFID).
Mortgage Credit Directive (2014/17/EU) (MCD)
The Solvency II Directive (2009/138/EC), which repealed and recast the First Non-life Insurance Directive (73/239/EEC), Second Non-life Insurance Directive (88/357/EEC), Third Non-life Insurance Directive (92/49/EEC), Life Assurance Consolidation Directive (2002/83/EC) and the Reinsurance Directive (2005/68/EC)
The UCITS IV Directive (2009/65/EC), which repealed and recast the original UCITS Directive (85/611/EEC)

Which types of firms does Passporting apply to?

Alternative investment fund managers (AIFMs) under the AIFMD
Credit institutions (that is, banks and building societies) under the CRD IV Directive, as well as unauthorised subsidiaries of credit institutions (referred to in the CRD IV Directive as financial institutions) that fulfil certain criteria
Insurance undertakings and reinsurance undertakings under the Solvency II Directive
Insurance intermediaries under the IMD
Investment firms under MiFID
Management companies under the UCITS IV Directive.
Mortgage intermediaries under the MCD

More Information:

Financial Services, Insurance, Funds, Malta Trading Companies & Holding Companies, Highly Qualified Persons Programme

Malta Citizenship & Residency

About Acumum – Legal & Advisory

Acumum Legal & Advisory is a well-established set of multidisciplinary legal, tax and accounting firms located and managed in the tax efficient EU jurisdiction of Malta. It operates as a full service law firm with services including aviation, corporate formation, accounting, estate & wealth planning, taxation, intellectual property and more. The firm is overseen by Geraldine Noel, a British barrister – registered in Malta, working alongside an expert team of lawyers and accountants with extensive specialist commercial and private client expertise, particularly to an individual, corporate and family office clientèle.

02Jun

Acumum Accounting Granted Accountancy License

2 June 2016 Acumum Legal & Advisory 43

Acumum – Malta’s International set of Legal, Tax & Accountancy firms are pleased to announce that Acumum Accounting Ltd has been granted its accountancy license by the Malta Institute of Accountants, pursuant to the Accountancy Profession Act, Chapter 281, Malta.

Acumum Accounting adds to Acumum’s service offering, by allowing the independent, boutique group located in Malta, additional service lines to clients, whilst maintaining its knowledge base and maintenance in respect of and over client matters.

Committed to providing the highest of client service, Acumum’s added service offerings include:

Accounting – GAAP, Maltese GAAP, IFRS
Advisory & Consulting
Royalty Audits
Tax
VAT

We are very pleased to be able to increase our service offering to clients thereby enhancing our clients’ experience. We are positioned as an independent set of firms offering services to individuals, corporates as well as other service providers both in Malta and internationally’. Director, Geraldine Noel, M.A (Oxford), LLM (Fordham)

To find out more about Acumum Legal & Advisory, go to: https://www.acumum.com/
Facebook: https://www.facebook.com/acumum/
Twitter: https://twitter.com/acumum

About

24Feb

Russia Considers Access to Islamic Banking Markets

24 February 2016 Acumum Legal & Advisory 55

A draft law on Islamic banking has been submitted to the State Duma in Russia concerning the establishment of new bank accounts allowing investment into only Shariah-approved assets.

The idea was first raised at the level of the State Duma a year ago after Western sanctions closed Russia’s access to the European and American capital markets. Linar Yakupov, President of the Foundation for the Development of Islamic Business and Finance stated that to associate Islamic finance with political or religious ideas would be to misunderstand the concept of it, as it is only a set of financial instruments largely unrelated to Islam itself.

A draft law was submitted to the State Duma in January. Under this law, banks could set up accounts with funds that could be invested only in line with an investment declaration, thus adapting the Russian banking system to the requirements of religious financial institutions. Individuals and organisations would need to be assured that their funds are invested in accordance with Shariah law, therefore outlawing use of the funds in industries such as alcohol and gambling.

Yakupov has advised that a better alternative for Russia would be to set up dedicated ‘windows’ in existing large banks to provide Islamic banking services, rather than setting up independent Islamic banks. This route has been taken by world-leading banks such as HSBC and Citibank, and would go some way to reducing competition between ‘ordinary’ and Islamic institutions.

07Nov

Acumum Attends Women’s International Shipping & Trading Association (WISTA)

7 November 2015 Acumum Legal & Advisory 26

Acumum Attends

Women’s International Shipping & Trading Association (WISTA) in Cyprus

The Women’s International Shipping & Trading Association (WISTA) is holding its 40th International AGM and Conference in Limassol, Cyprus, between the 8 & 10 October 2014.

WISTA International’s first such AGM and Conference took place in 1981 in Hamburg.

WISTA Malta is the Malta branch (WISTA Malta) of WISTA International, both being non-profit organisations. WISTA Malta was established in September 2014 by a number of female professionals in shipping. The aims of WISTA Malta include the promotion of active participation within WISTA International and to support the involvement of females in the maritime industry.

WISTA Malta members will be attending the WISTA conference to network and exchange ideas and information with other members of the worldwide organisation.

Dr. Geraldine Spiteri, one of the founding members of WISTA Malta, has been appointed as the first treasurer of WISTA Malta. Geraldine Spiteri will also be attending on behalf of Acumum – Legal & Advisory and will be spreading the word about the incentives which the Maltese flag holds for the shipping industry, which include:

favourable tonnage tax
reputable jurisdiction, enjoying favour with international ports
compliance with all major international conventions
an open register
straightforward company registration and vessel registration procedures
the possibility to register bareboat charters and vessels under construction
a mortgage registration system
for those opting to register yachts in Malta a favourable VAT rate

Malta has a very long-standing maritime tradition. Furthermore, the strategic location of Malta, its deep natural harbours and the wide range of services available make Malta an excellent choice to register vessels.

Dr Geraldine Spiteri may be contacted on +356 2778 1700 Ext 102, Cell +356 9985 8000 or at [email protected] should you like to meet her at the conference or discuss Malta yacht or maritime solutions.

07Nov

Switzerland To End Corporate Tax Breaks

7 November 2015 Acumum Legal & Advisory 35

Swiss Cabinet Presents Plans for Swiss Corporate Tax Reform

The Swiss government has made plans to abolish certain Swiss corporate tax privileges for international firms and introduce a royalty box and an interest-adjusted profit tax.

Notional Interest Deduction on Equity
Reduction of Headline Corporate Tax Rate
Royalty Box Schemes Under Attack by OECD
$1.8 Billion Estimated Swiss Revenue Shortfall

Swiss Finance Minister Eveline Widmer-Schlumpf said the aim of the reform is to adapt the fiscal policy to international standards, boost Switzerland’s competitive edge as an attractive business location and encourage companies to continue to make an important contribution to funding the tasks of the government, cantons and local authorities.

Switzerland has been under pressure from the Organisation for Economic Co-operation and Development (OECD) and the European Union for the past ten years to review its preferential corporate tax policy.

Switzerland has three levels of taxation: federal, cantonal and municipal. Under ordinary circumstances, Swiss tax rates historically ranged from 11.5 percent -24 percent, depending upon the canton. Pursuant to certain beneficial federal and cantonal tax regimes, however, the effective tax rate (ETR) for a foreign multinational could be as low as 0 percent – 10 percent.

About 25,000 firms – holding companies, mixed companies and management companies – are granted special tax breaks by Switzerland’s 26 cantons. The firms are either exempt from tax or subject to lower rates for the activities they engage in outside the country.

Royalty Box

A key pillar of the reform is the introduction of so-called royalty boxes – a method of preferential tax treatment for certain types of profits, notably royalties from a patent.

The OECD is due to define the legality of royalty boxes by the end of next year amid calls to abolish their use.

But Widmer-Schlumpf is confident that the practice will not be scrapped as Britain, Luxembourg and Belgium are defending their corporate fiscal regimes.

“The question is not whether royalty boxes will continue to exist or not. The question is how they will be defined. Switzerland might have to adapt its law accordingly,” she said.

Adrian Hug of the Federal Tax Authorities hinted that Switzerland could maintain its corporate tax system for a while if the international community needs more time to find a consensus.

Widmer-Schlumpf maintained that Switzerland has to act now to give investors the necessary legal security.

“Many international companies would leave Switzerland,” she warned.

The planned reform is expected to lead to a shortfall in revenue to the tune of CHF1.7 billion ($1.8 billion) annually for the federal authorities. The finance ministry plans to offset the costs without spending cuts but by introducing a capital gains tax on securities. It also suggests increasing the number of federal tax inspectors from about 300 to about 370.

The overhaul of corporate taxes also has a major impact on the fiscal rates of the country’s largely autonomous 26 cantons and on the system of financial payments between rich and less affluent cantons.

Summary of Present Swiss Tax Regimes and Likely Fate as a Result of Swiss Tax Reform
Model	Authority	General Description	Current Tax Features	EU Commission View	OECD View	Likely Effect of Swiss Tax Reform
Holding Company	Cantonal	Company or Swiss branch of a foreign company engaged in long term holding and administration of certain qualifying participations; no Swiss business activities	Federal participation exemption on certain dividends and capital gains income; cantonal tax exemption; ETR ~0% for income from qualifying investments and 7.8% on other activities	Alleged to constitute unlawful state aid because income from certain activities is taxed solely at the federal level	Pursuant to BEPS Action 5 – “Counter Harmful Tax Practices,” identified as potentially harmful	To be abolished
Domiciliary Company	Cantonal	Company limited to the performance of administrative functions in Switzerland	Beneficial tax rates on qualifying participations and certain foreign source income; ETR ranges from 0%-10% depending upon type of income	Criticized because it may result in unequal treatment of domestic versus foreign sourced income	Pursuant to BEPS Action 5, identified as potentially harmful	To be abolished
Mixed Company	Cantonal	Corporations primary business is abroad (i.e., 80% or more of income foreign source / 80% or more expenses are paid outside Switzerland)	Beneficial tax rates on qualifying participations and certain foreign income and partial tax relief based on cantonal benefits; ETR 0%-11% depending upon type of income	Concern that home country profits are shifted to Switzerland	Pursuant to BEPS Action 5, identified as potentially harmful	To be abolished
Nidwalden IP Box	Nidwalden Canton only	Available to companies resident in the canton and which own IP	Reduced ETR of 8.84% on net royalty income	IP Boxes in general are suspected by EU Commission of unfairly benefiting mobile businesses without creating corresponding research and development activities; the Commission’s general probe of patent box regimes is ongoing.		Assuming that patent boxes are ultimately determined to comply with EU rules this regime may survive
Principal Company	Federal	Available to companies that meet either the Domiciliary or Mixed Company status at cantonal level but that also sell through an affiliated company commissionaire or limited risk distributor	Certain income exempt from tax; ETR can be as low as 0%-9%		Pursuant to BEPS Action 5, identified as potentially harmful	To be abolished
Swiss Finance Branch	Federal	Company acting as internal affiliate group “bank” due to the volume of financing including loans, hedging and cash pooling	Certain beneficial deductions are permitted and the company can also apply for Domiciliary or Mixed Company regimes; ETR 3%-4%	Currently N/A	Certain financial instruments and interest deductions have been identified as problematic in BEPS Action 2 – “Neutralize the effect of hybrid mismatch arrangements” and Action 4 – “Limit Base Erosion via Interest Deductions and Other Financial Payments”	To be abolished

Timing

Timing of implementation and the length of any grandfathering period is not yet certain. The Swiss government anticipates completing the first draft of the legislation, as well as the consultation process, by the end of 2014; entry into force will occur sometime after 2018, following parliamentary debate and the requisite referendums. At present, the grandfathering period is estimated to last from 2018-2020.

07Nov

Chartered Institute Of Taxation

7 November 2015 Acumum Legal & Advisory 30

Acumum provides Headline Editorial for Tax Adviser Magazine

of The Chartered Institute of Taxation (CIOT)

Acumum’s Managing Partner, Geraldine Noel, has been invited to provide the Malta editorial for the Tax Adviser magazine, the Chartered Institute of Taxation’s (CIOT) official publication.

The Malta editorial provides an overview of the main tax and other fiscal benefits that Malta can provide both individuals and companies.

To read the full article, please go to: CIOT Tax Adviser Malta – Sept 2014

About Malta: a full member of the European Union, Malta, an ex British colony is strategically situated in the Mediterranean.

Malta is a highly competitive jurisdiction in respect of tax and other fiscal benefits, some of which are:

5% effective corporate tax rate
No withholding, no entry or exit taxes
Limited capital gains
No transfer pricing or CFC legislation
Remittance system for foreign vehicles
Low set up costs – i.e. hedge funds, captive insurance companies etc

About Acumum: a full service law firm located in Malta, Acumum engages highly experienced lawyers, advocates, tax advisers and accountants. Managed by Geraldine Noel, an English barrister – registered in Malta, Acumum’s areas of expertise includes:

Aviation, Corporate Services, Financial Services, Insurance, Maritime & Yacht, Residence and Relocation, Tax Structuring (individual & corporate), Trusts & Wealth Planning.

If you would like to know more about Malta and our services, kindly contact Geraldine Noel: [email protected] | Skype: acumum

07Nov

Malta – Israel Tax Treaty – In Force

7 November 2015 Acumum Legal & Advisory 30

Malta – Israel Tax Treaty – Ratified: the double tax treaty between Malta and the State of Israel signed in Jerusalem on the 29th of July 2011 has been ratified by the Republic of Malta via Legal Notice 343 of 2013.

Malta – Israel Tax Treaty. For a full list of Malta’s tax treaties go here

The ratification of this treaty is expected to improve and facilitate the bilateral relations between these two States, allowing for:

Israeli investors to have a more tax efficient access to their investments in the European Union
Israeli inbound investors can access and utilize the Malta – Israeli double tax treaty to extract profits out of Israel in a tax efficient manner.

Based upon the OECD Model Convention and is applicable to residents who are residents of one or both of these two Contracting States and applied to:

Malta income and corporate tax, taxes imposed on gains from immovable property (in accordance with the Real Estate Taxation Law)
Israeli profit tax on financial institutions.

Benefits:

Restricts Israel to levy any withholding tax on dividends when such dividends are paid to a Malta resident company holding at least 10% of the share-capital of an Israeli resident company – applicable to withholding taxes applied to an Israeli Real Estate Investment Company, subject to the Maltese company holding at least 10% of the share-capital of the Israeli Real Estate Investment Company
Israel is also bound to withholding tax of no more than 5% on interest paid to a Maltese company
Royalty payments – no withholding by the State of Israel on royalty payments made by an Israeli company to a Maltese company

Malta’s Tax Law do not withhold any tax on outbound interest, dividends or royalties and when combined with Malta’s 100% tax exemption on certain intellectual property, the treaty can realise true tax efficiencies for Israeli companies, the use of a Malta trading or holding company could lead to significant tax advantages.

Malta Tax Treaties | Corporate & Company Formation | Malta Holding Companies Taxation

Aviation | Financial Services | Gaming | Intellectual Property

Acumum – Legal & Advisory – Malta’s International Law Firm

07Nov

Malta – Cayman: Sign Tax Information Exchange Agreement (TIEA)

7 November 2015 Acumum Legal & Advisory 31

London,25 November 2013: Malta – Cayman Sign Tax Information Exchange Agreement (TIEA)

Malta (EU) and the Cayman Islands signed a Tax Information Exchange Agreement (TIEA) – which provides for a full exchange of information between the two jurisdictions on tax matters.

The agreement was signed by Cayman Financial Services Minister Wayne Panton and Finance Minister, Professor Edward Scicluna.

Saying that the TIEA is “much more than signatures and handshakes”, Panton continued as he noted that they ‘reaffirm individual countries’ commitments to uphold international standards set by the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes’.

Minister Scicluna said the TIEA “demonstrated good practice in the global financial sector” whilst Minister Panton remarked that “this level of cooperation signifies the goodwill that exists between Malta and the Cayman Islands.”

Panton explained however that TIEA are tools which governments can use in the fight against financial crime and tax evasion.

“These agreements are implemented by competent authorities who understand the legal nuances and importance of cooperating in the fight against illegal activity such as tax evasion and money laundering. Without them, criminals would continue to drain public coffers, and deprive both developed and developing countries of economic opportunities,” he added.

Both signatories confirmed the agreement included all standard means to ensure due process was followed in tax information requests to both Malta and the Cayman Islands respectively, including, for example, provisions to protect confidentiality of information.

Both Malta and the Cayman Islands are members of the OECD Global Forum on Transparency and Exchange of Information.