Following their election win, the UK’s Conservative Party has said it will use new “freedoms” from Brexit to set its own tax policies, including in the area of VAT.
In its pre-election manifesto, the Conservatives promised to not raise rates of income tax, VAT, or National Insurance. It also cancelled plans to lower the corporate tax rate from 19 percent to 17 percent from April 2020. The Government has however committed to lower the tax burden of business rates (the UK’s commercial property tax), and increase the employment allowance tax relief for small businesses. Further, the research and development tax credit rate will be raised to 13 percent, and the Government intends to review the activities in scope.
It also reportedly intends to also raise the National Insurance threshold to GBP9,500 next year.
On tax enforcement, the Conservative Party committed to:
Double the maximum … Read More »
The United States Internal Revenue Service has issued final regulations and proposed regulations on the base erosion and anti-abuse tax (BEAT) under section 59A of the tax code, which provide guidance for taxpayers affected by the tax provision.
Added to the tax code by the Tax Cuts and Jobs Act of 2017, the BEAT is designed to penalize those companies that make deductible payments to foreign affiliates to substantially reduce their exposure to US taxation. The BEAT is calculated by adding back certain deductible payments made to foreign affiliates and applying a minimum tax to a percentage of the difference between the taxpayer’s modified taxable income and their regular tax liability, at a rate of five percent for 2018, 10 percent from 2019, and 12.5 percent from 2025.
The provision primarily affects corporate taxpayers with gross receipts averaging more than USD500m over … 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 »