Operational tax news
News on tax topics impacting the financial industry
Operational tax news is the tax issues guide for financial sector companies.
In the current environment, the financial sector faces a multitude of different challenges: ongoing volatility in the markets, cost cutting programmes, increasingly complex regulations, and constantly changing tax and operational rules. The complexity of managing these challenges is further increased by the tendency for globalisation and increasing cross-border competition. One of the areas which needs to be managed carefully is the operational tax environment.
On October 17 2018, the Internal Revenue Services (“IRS”) released a reminder regarding the Qualified Intermediary (“QI”), Qualified Derivatives Dealer (“QDD”), Withholding Foreign Partnership (“WP”) and Withholding Foreign Trust (“WT”) applications deadline for 2018.
Update to our newsletter dated 25 October 2018: On 17 October 2018, the OECD has published an update regarding high-risk RBI/CBI schemes.
The Organization for Economic Cooperation and Development (“OECD”) issued an analysis of over 100 Residence and Citizenship by Investment (“RBI/CBI”) schemes offered by jurisdictions that participate or intend to participate to the Common Reporting Standard (“CRS”).
According to the alert issued by the IRS on 19 July 2018, the FATCA Registration System will be updated to include new features and modify some of existing ones.
As previously announced in the newsletter issued on 19 June 2018 by the Luxembourg Tax Authorities, the list of reportable jurisdictions has been updated through the Grand Ducal Regulation amending the list of Reportable Jurisdictions for the purpose of the Common Reporting Standard (CRS), dated 10 July 2018.
On 21 June 2018, the Court of Justice of the European Union (ECJ) issued a decision in the case Fidelity Funds v. Denmark, C-480/16 (intervener : NN (L) SICAV).
According to article 19bis CIR 92, the interest component embedded in the proceeds received upon sale, transfer or redemption of shares or units of “in scope” investment funds must be considered as movable income for Belgian income tax purposes and be subject to the Belgian withholding tax on movable income (“précompte mobilier”) at a rate of 30%.
According to an announcement from the IRS dated May 4, 2018, all Qualified Intermediary entities (hereafter “QIs”) have to select the periodic review year of their certification period before September 1, 2018.
On 4 April 2018, the Internal Revenue Service (IRS) announced that the QI Portal allowing applicants to submit their QI periodic certifications and applications for renewal of their status as a Qualified Intermediary (QI), Withholding Foreign Partnership (WP), or Withholding Foreign Trust (WT) is now open.
- Grand Ducal Decree on Reportable Jurisdictions published
- New QI/WP/WT FAQs
On 22 February 2018, the IRS issued a publication announcing that the Qualified Intermediary (QI), the Withholding Foreign Partnership (WP), and the Withholding Foreign Trust (WT) application and account management system will be open to accept QI/WP/WT certifications at the beginning of April.
The Indian Budget for FY 2018-19 was presented in parliament on 1 February 2018. The key highlights of the tax proposals that are relevant to non-residents are outlined on our webpage.
On 22 December 2017, the U.S. President Donald Trump has signed the public law no. 115-97, commonly referred to as the 2017 Tax Reform Act.
The Belgian draft law implementing the tax on securities accounts (TSA) has been adopted on 1 February 2018.
On 21 December the German Ministry of Finance (BMF) has issued a short circular that again deals with some questions regarding the partial exemptions and the new asset ratio, and gives further information in respect to the last interim profit as per 31 December 2017.
On 29 November 2017 and 8 December 2017, the IRS published new QI / QDD FAQs. The FAQs can be found in the New Applications/Renewals (Q17, Q18, and Q19) and Certifications and Periodic Reviews (Q1 and Q2) subsections on the FATCA – FAQs General page.
Application deadline for QI (including QDD), WP, and WT approaching
On 25 September 2017, the IRS issued Notice 2017-46 that provides transitory relief for financial institutions (“FIs”) in respect of their obligation to obtain and report taxpayer identification numbers (“TINs”) and dates of birth (“DOB”) under chapters 3 and 4 of the Internal Revenue Code. With this notice, the IRS extends several deadlines imposed on FIs under Model 1 Intergovernmental Agreements (“IGAs”) and the recent chapter 3 and 4 final and temporary regulations released on January 6, 2017.
On 26 July 2017, the Belgian federal government issued an agreement on different tax measures, the so-called “Summer Agreement”.
Taiwan’s Ministry of Finance (MOF) announced a proposed tax reform package on 1 September 2017 that would overhaul the income tax system.
The Indonesian Directorate General of Taxation (DGT) has issued two sets of regulations related to tax treaty benefits: No. PER-10/PJ/2017 (“PER-10”) for a non-resident to obtain benefits under Indonesia’s tax treaties and PER-08/PJ/2017 (“PER-08”)
The Internal Revenue Service (“IRS”) issued Notice 2017-42 (“Notice”) which provides additional guidelines on certain aspects of the final and temporary regulations under Section 871(m), 1441, 1461, and 1473 of the IRS Code.
On 12 June 2017, the Danish Government announced its intention to introduce a new model for withholding tax on dividend distributions.
On 19 June 2017, the Luxembourg Tax Authorities (LTA) have published an updated version of the Circular ECHA 4, initially issued on 6 February 2017.
The first tax return, covering transactions executed between 1 January 2017 and 30 April 2017, must be filed by 30 June 2017.
On 24 May 2017, the IRS has issued an update of the form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Rev. April 2016), that supplements the form and provides additional information for foreign persons submitting the form.
The CRS reporting is fast approaching, being due by June 30, 2017 (on financial year 2016). Financial Institutions should be ready to comply with the related requirements in this respect, more specifically, their data protection obligations.
On 1 March 2017, revised guidelines with immediate effect have been published by the French tax authorities in order to simplify the procedure of applying for the French withholding tax exemption on dividends, applicable to qualifying EU / EEA investment funds.
In this newsletter: New FAQ on CRS and second edition of the Standard for Automatic Exchange of Financial Account Information in Tax Matters - New FAQ on FATCA
In this newsletter: Extension for QI/WP/WT Agreement renewals - New ABBL guidelines on the OECD’s Common Reporting Standard - Grand Ducal Decree on Reportable Jurisdictions published - New FAQ on QI and QDD published
The first exchange of information between the tax authorities will take place in 2018.
Over the last decade, thousands of claims for refunding of Dutch withholding tax have been filed by foreign investment funds on the grounds that the tax was levied contrary to EU law.
On 15 February 2017, the IRS has added a new FAQ to provide guidance for QIs that would like to apply for QDD status.
The Finnish Tax Authorities have acknowledge that their legislation was contrary to EU Law and agree to reimburse unduly levied withholding tax to foreign investment funds.
On 8 January 2017, the IRS has released the instructions for the Form 1042-S, published on 21 December 2016.
Technical Circular ECHA n°4 released.
Updated FATCA Circular ECHA n°3 released.
On 13 December 2016, the IRS released a new version of the form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals).
On 30 December 2016, the IRS released the final Qualified Intermediary Agreement (Final QIA) as part of the Revenue Procedure 2017-15.
The 2017 state budget was adopted by the Belgian parliament on 22 December 2016.
On 23 December 2016, the Luxembourg government has issued an updated version of the Grand Ducal Decree, published on 27 December 2016.
Last month, the Swedish government issued a proposal on a new financial activity tax for consultation purposes. This new financial tax will apply to companies supplying VAT-exempt banking, financial, and insurance services.
The IRS issued Notice 2016-76 on 2 December 2016, aiming to provide taxpayers with guidance and additional clarifications with regards to the administration of, and compliance with, section 871(m) regulations.
Over the last few years, many foreign investment vehicles have filed refund requests in the Netherlands on the grounds that the dividend withholding tax levied was contrary to EU law.
The Dutch Tax Plan 2017 – Presentation to the House of Representatives
As reminded by the IRS Notice 2015-66, sponsoring entities may be required to register their sponsored entities on or before 31 December 2016 in order to obtain a separate GIIN for each such sponsored entity.
The current applicable statute of limitations in Finland is five years following the end of the calendar year in which the tax was withheld.
A Dutch first instance court has referred two cases involving requests for refunds of Dutch dividend withholding tax to the Dutch Supreme Court for a preliminary ruling.
The Luxembourg Law of 23 July 2016 repeals, as from 1 January 2016, the Luxembourg Law of 21 June 2005 transposing the EU Savings Directive and modifies the Law of 23 December 2005 (as amended) relating to the final withholding tax regime on certain interest income (the “RELIBI Law”).
In late July 2016, the IRS released Announcement 2016-27 stating that on 1 January 2017, the US Treasury will update its IGA list, and will remove certain jurisdictions from the list of foreign jurisdictions that are treated as having intergovernmental agreements (IGAs) in effect.
The Luxembourg government recently decided to update the list of Participating Jurisdictions attached to the Grand Ducal Decree of 15 March 2016, executing article 2 (4) of the law of 18 December 2016 transposing EU Directive 2014/107/EU.
On July 20, 2016, the IRS released a FATCA news mentioning that the FATCA Online Registration System needs to contain any updates as to contact information of the Responsible Officer and Point(s) of Contact.
On the 13th June 2016, the Danish Tax Authorities (hereinafter “SKAT”) have issued Guidance Note SKM2016.263.SKAT stating that the statute of limitation for withholding tax claims will be reduced to three years, as from the dividend distribution date.
On July 1, 2016, the IRS released Notice 2016-42 (“Notice”), providing the proposed Qualified Intermediary (“QI”) Agreement that certain foreign persons may enter into with the IRS to simplify their withholding agent and payor obligations under chapters 3, 4, 61, and section 3406
On 8 April 2016, the Belgian Tax Administration issued an addendum to the 25 October 2013 Circular Letter Ci.RH.231/629.328 regarding the application of the Belgian Tax on Savings Income.
Luxembourg Grand Ducal Decree containing the list of participating jurisdictions and exempt accounts published
Notice 2016-08 issued by the IRS | New draft Form W-8BEN-E and instructions released by the IRS
The Tax Reporting Ruling for Funds 2015 will be postponed by 2 additional months from April 4th, 2016 to June 6th, 2016.
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