Category Archives: US

Territoriality or worldwide full-inclusion?

With the debate raging around most countries about tax paid or not paid by multinationals, the topic of territoriality in the US has come into focus.  There are lessons for Australia from the debate in the US. The President is reported to be in favour of territoriality. Under territoriality, taxes will be imposed only on income earned within the borders of the country. There will be an exemption for dividends from active income of subsidiaries repatriated to the US. The … Continue reading

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Effective v statutory rates of tax- role of tax adjustments

The US Government Accountability Office (GAO) has published its report “CORPORATE INCOME TAX: Effective Tax Rates Can Differ Significantly from the Statutory Rate” pointing out that profitable U.S. corporations paid U.S. federal income taxes amounting to only about 13 percent of their pretax worldwide income reported in their financial statements. The top statutory tax rate is 35 percent.  Profitable company returns showed an  aggregate pre-tax net book income of $1.4 trillion while unprofitable company returns showed  losses totalling $315 billion, … Continue reading

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FATCA – Expanded affiliated group under IGA

One of the reporting requirements under the final FATCA regulations released recently and the model intergovernmental agreement (IGA) relates to  expanded affiliated group. Foreign financial institutions (FFIs) will be required to report on US accounts in their affiliates if the  affiliates are in countries with no IGAs (only a few IGAs have been entered into up to date). According to the IGA, two entities will be related entities if either entity controls the other or if two entities are under … Continue reading

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Final FATCA Regulations out, IGA needs urgent action

The US Treasury and the Internal Revenue Service cialis buy online released the FATCA final regulations on 17 January 2013. The final regulations include several favourable changes however the deadline for non-US foreign financial institutions (FFIs) to enter into agreements with the IRS is fast approaching.  Registration or execution of FFI agreements with IRS must be in place by 25 October 2013, for inclusion in the IRS list  (December 2013) of participating /deemed compliant FFI’s . Failure to be included … Continue reading

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Shot under the radar, Swiss bank in US folds up

Having no branches in the US did not save the oldest Swiss bank from being fined for assisting US taxpayers avoid taxes in the US on their assets held in Switzerland.  Wegelin (formed in 1741) was fined in the US for assisting US taxpayers avoid taxes in the US and has ended up in the dust heap. This follows a similar decision in the case of UBS where a fine of $780m was imposed by the US tax authorities. The … Continue reading

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FATCA- privacy concerns prompt issue of Model 2 of IGA

On 15 November, the US Treasury issued Model 2 of the Intergovernmental Agreement (IGA). This move is the result of several countries expressing their concern about the impact of local laws on collection and disclosure of personal information regarding US accounts in foreign financial institutions (FFIs). The new Model seeks to get the FFI to report directly to the IRS provided the relevant account holder provides express consent. The FFI is required first to seek consent from account holders for … Continue reading

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FATCA- IGA causes delay

The IRS has made Announcement 2012-42 extending the deadlines for FATCA obligations. It is reported that up to now only the UK has signed up the Inter Governmental Agreement for the implementation of FATCA and that is causing problems. It is increasingly becoming certain that all countries will not buy viagra have IGAs in place before 30 June 2013. According to the IRS announcement, the deadline for withholding agents (including participating FFIs and registered deemed compliant FFIs) to put in place the new … Continue reading

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Hail to the Chief (or more of the same)

With a straggling economy and flagging job creation the November Presidential election in the US promises  to be a distressing experience. Problems confronting a country are always tougher than what they were thought to be.  Has buy cialis online uk any change occurred or even started to occur or are we to wait for some more of the rhetoric? For a start, decoding the code (that is the Internal Revenue Code) can be menacing and now we have the chief aspirants … Continue reading

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Olympic Gold – To tax or not to tax

The ecstasy of gold abroad and the agony of tax at home is currently searing the American conscience, a great soap box opportunity, especially in the election year. The argument in favour of non taxing goes like this; winning at the Olympics is herculean and taxing the dedication and hard work is draconian. Nothing beats being fair at home and fearless abroad. There is now a Bill, “The Olympic Tax Elimination” before the House in the U.S see Romney’s Olympic … Continue reading

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FATCA – will it keep personal information private?

Fighting tax evasion is taken on increased importance in almost all countries, the lingering GFC offering no assistance. Transfer pricing, thin capitalization and offshore tax havens viagra canadian pharmacy are the most popular areas where there is increased scrutiny. In Australia, a Bill to amend the transfer pricing laws in Australia is almost near completion and when finalised will even affect transactions entered into as far back as 2004. In the midst of this is a US Act, Foreign Account Tax … Continue reading

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