The US Internal Revenue Service has reminded overseas taxpayers living and working abroad that they have an extra month to file their 2019 federal income tax return and pay any tax due. This includes Americans who live and work abroad, non-resident aliens and foreign entities with a US filing and payment requirement.
The deadline for these taxpayers is normally June 15. However, it has been extended to July 15 as part of the various COVID-19-related tax relief measures announced by the Treasury Department and the IRS in April 2020.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
Finland has been looking broadly at measures to increase the country’s tax take post-COVID, and at ways to increase compliance in a number of areas.
Earlier this month, for example, the Finnish Government published a report which explores the economic and fiscal consequences of the COVID-19 pandemic for Finland and considers what taxes could be increased to help restore the public finances.
The report observes that Finland already has one of the highest tax burdens in the world, especially on labor. Therefore, raising taxation poses the risk of damaging Finland’s competitiveness, it warns, but goes on to identify certain tax areas in which there is scope for revenue increases without threatening the economy.
These, according to the report, are: property taxes (which tend not to be economically distortive and affect largely wealthier taxpayers); corporate tax (where there is scope available to reduce the … Read More »
In late November, the US IRS announced that the Foreign Account Tax Compliance Act (FATCA) International Data Exchange Service (IDES) would be opening for testing in December.
FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the IRS obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
US persons are also required to report, depending on the value, their foreign financial accounts and foreign assets.
The FATCA IDES is an electronic delivery point where financial institutions and host country tax authorities can securely transmit and exchange FATCA data with the United States. The data is in a standard XML … Read More »
The House of Representatives has approved bipartisan legislation that would require certain new and existing small corporations and limited liability companies to disclose information about their beneficial owners.
The bill, known as the Corporate Transparency Act of 2019, was sponsored by Carolyn B. Maloney (D-NY) and co-sponsored by Peter King (R-NY) and Tom Malinowski (D-NJ).
Under the proposed legislation, certain entities applying to form a corporation or limited liability company would have to file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN). Additionally, certain existing corporations and limited liability companies would have to file this information with FinCEN two years after the implementation of final regulations required under the bill.
The bill defines a beneficial owner as an individual who:
exercises substantial control over a corporation or limited liability company;
owns 25 percent or more of the interest in a corporation or limited … Read More »
It’s not been a good time for taxpayers in many jurisdictions lately. India, for example, is infamous for its complex tax rules and capricious tax inspectors. It’s just the sort of place where you need a neutral authority standing in between taxpayers and the tax man to arbitrate disputes. Like an ombudsman. Except that the Indian Government has just decided to abolish its income tax ombudsmen service. Oh dear.
Apparently, according to the government, the ombudsman service is being shut down because it hasn’t achieved its objectives, and because taxpayers are increasingly turning to alternative forms of dispute resolution mechanism. That the ombudsman’s office has been effectively squeezed out by the competition probably tells you all you need to know about India’s tax system. Dispute resolution must be a lucrative market indeed!
For more information on this, and other topical international tax … Read More »
There’s unlikely to be any shortage of work for tax advisers in the United States. The way events have conspired, 2019 could go down in history as one of the most challenging tax seasons ever, if not the most challenging. Certainly, the ingredients for this are in place: substantially revised US tax rules, which taxpayers will be filing under for the first time this year; and an Internal Revenue Service only just getting back on its feet after the longest government shutdown in history. An IRS, I might add, that struggles to cope with its bloated remit with 76,000 staff, let alone a skeleton crew. A recipe for disaster, you might say. An administrative perfect storm.
Recently, the IRS has sounded like it resembles one of those tax robots I keep warning you all about. As noted by the American Institute … Read More »
Banks and financial institutions the world over were worried about the legal and reputational costs of falling foul of FATCA (the United States Foreign Account Tax Compliance Act) from the outset. However, what if an entire country ends up missing a FATCA deadline? And this is no mere hypothetical question either. It’s happened. Recently it emerged that the Caribbean territory of Saint Vincent and the Grenadines has requested a 60-day extension from the reporting deadlines under FATCA.
So what will happen? Will SVG now be hauled over the coals by the United States Department of Justice and the Internal Revenue Service? I doubt that, but we’ll have to wait and see. I think it’s probably the territory’s financial institutions that are sweating the most.
Then again, things have gone remarkably quiet on the FATCA front. Successful FATCA-related prosecutions have been very few … Read More »
According to the conclusions of a public consultation by New Zealand’s Tax Working Group, the majority of New Zealanders want major changes to the tax system. Who doesn’t! Will they get them? Probably not – but why so sure? Recent history of tax developments, say over the last 20 years or so, is littered with discarded “root and branch” tax reviews, undertaken by panels of independent experts and other worthies, whose conclusions ultimately get shelved, kicked down the road, or punted into the long grass.
Furthermore, recent experience has taught us that the simplification of tax regimes isn’t as simple as it first sounds. Few would argue convincingly that the US tax code is much simpler because of the Tax Cuts and Jobs Act, especially for individual taxpayers with their own business, which, apart from multinational businesses, tend to have the most complicated … Read More »
If you’re worried what the future holds as we draw nearer to an era of artificial intelligence – more automation, and fewer humans running the show – then you’d better worry about it a bit more. The robots are already here, and they might be processing your tax return right now.
At least, that could be the case if you live in the United Kingdom, where HM Revenue and Customs made the rather startling revelation earlier this month that it has been using artificial intelligence since 2015, and it has processed 10 million transactions already. Creepier still if this is the sort of stuff gives you the willies, HMRC’s Chief Digital & Information Officer said that the tax office uses “robots” to undertake a multitude of albeit mundane administrative tasks! Robots!
Now, I don’t think we’re talking your classic “Metal Mickey”-type automaton here, … Read More »
Government “e-tax” initiatives aren’t always the panacea they are made out to be. They are fine of course when they actually lead to reductions in the time it takes to file forms and pay taxes, and result in fewer or shorter interactions between taxpayers and tax authorities – in other words, make life easier for everyone involved. Such schemes are not very useful if digitization of the taxation process has the opposite effect, though.
But surely a government wouldn’t be so silly as to use information technology to increase the workload on taxpayers? Given the litany of botched public sector IT projects across the world, it would be foolhardy to underestimate governments’ ability to get these things wrong! And the UK Government might be about to commit another botch job if it doesn’t heed the warnings of tax practitioners and members … Read More »