Professional Practices Tax Bulletins
Keep abreast of relevant UK and international tax developments
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Belgium – Annual sales listing, March 2015
Summary: Law firms and lawyers who are VAT registered in Belgium, have to file an annual sales listing, to be submitted no later than 31 March 2015.
India – 2015 Budget proposes reduction in withholding rate, March 2015
Summary: The Indian Finance Bill 2015 includes a proposal to reduce the withholding tax rate to 10% on fees for Technical Services.
Singapore – Transfer Pricing Developments, January 2015
Summary: This bulletin summarises the revised Transfer Pricing guidelines and additional documentation requirements issued by the Singapore tax authorities.
UK – Autumn Statement 2014, December 2014
Summary: The Chancellor released the 2014 Autumn Statement. This note provides a high level summary of the points likely to be of most interest to professional practices partnerships and their partners.
Germany – Cash vs Accruals basis, November 2014
Summary: A recent German Federal Fiscal Court decision may make it necessary for firms to account for German tax purposes on an accruals basis. This note summarises the development and the implications for firms with offices in Germany.
The Chancellor yesterday released the 2014 Autumn Statement
The main purpose of the Statement is to provide a summary of the state of the economy, and as anticipated there were fewer announcements on tax than on spending. In addition to this note, which provides a high level summary of the points likely to be of most interest to professional practices partnerships and their partners, Deloitte also prepares bulletins providing more detail on the implications for businesses and individuals more generally, together with a separate summary of the implications most relevant to employers.
Base Erosion & Profit Shifting – September 2014 deliverables, October 2014
On 16 September 2014, the OECD published seven papers as the first tranche of deliverables under the Base Erosion and Profit Shifting (“BEPS”) Project. This note summarises the main implications of the papers for professional practices.
LLP members and pensions auto-enrolment – The latest view from the Pensions Regulator, June 2014
Summary: The UK Pensions Regulator has written to a number of firms this week stating that members of LLPs could be treated as “workers” for the purposes of the pensions auto-enrolment regime. This note summarises the recent developments leading to this move by the Pensions Regulator and how firms’ management might decide to take matters forward.
Belgium update – Changes to personal taxation, April 2014
Summary: Within the 6th State reform framework, the Belgian federal government has prepared draft legislation which was very recently presented before parliament. This draft legislation modifies some of the personal income tax code rules to take into account the partial shift of personal income taxes to the Regions (the Flemish, Walloon or Brussels Regions and also introduces new rules for the taxation of non-residents. It is anticipated that the changes to the law will come into force from 1 July 2014 and will apply to income which should be declared for tax assessment year 2015 (i.e. income from 1 January 2014).
India update – Indian Tribunal finds that secondment to India can create Indian PE for the seconding employer, April 2014
Summary: An alert prepared by Deloitte India which highlights a recent case in the Delhi Tax Tribunal. The case concerned secondments by a UK company to a group entity in India, which the Tribunal held created a service PE in India for the UK employer. While each case will turn on its specific facts and the terms of the "secondment", and while the interpretation of the UK–India treaty could vary for UK partnerships, the case should be borne in mind where you have individuals on secondment with Indian clients or firms, or are considering doing so.
Professional Partnership Update – Some clarification and some new uncertainties, February 2014
Summary: On Friday 21 February HMRC published their revised guidance on the interpretation of the new legislation on Salaried Members which is due to come into effect from 6 April 2014. The Guidance makes reference to changes to the draft legislation but the revised legislation itself has not yet been published. In overview we would observe that, although the Guidance provides improved clarity in a number of areas, its commentary in parts also raises some new, and potentially significant concerns.
Changes to the taxation of partnerships – an update on ‘salaried members’, January 2014
Summary: On 10 December HMRC published draft legislation on the taxation of partnerships, due to come into effect from 6 April 2014, and covering, in particular, the definition of who is to be taxed as a partner and who is to be taxed as a ‘disguised employee’. Deloitte’s Professional Practices team met again recently with the team at HM Treasury responsible for the new legislation and guidance.They plan to issue improved guidance notes around mid-February and, in advance of that, we will continue to actively work to encourage them to improve clarity by providing them with suggestions as to real-life topics and examples for inclusion within that revised guidance.
India update – Protocol to the UK – India tax treaty comes into force, January 2014
Summary: The protocol to the UK - India tax treaty, originally signed in October 2012, has now come into force. The protocol clarifies the treaty position for a ‘partnership’, but some questions remain over whether the Indian Tax Authorities will consider a UK LLP to be a partnership for these purposes.
China VAT reform program – local guidance for Beijing issued: Further clarity on VAT exemption, December 2013
Summary: The Beijing Tax Bureau has issued guidance clarifying the practical requirements to meet the VAT exemption for services provided to clients outside the PRC.
Partnership Service Companies – Change in tax law: Restriction of compensating adjustment claims, October 2013
Summary: HMRC have confirmed that the measures announced on 17 September 2013 to remove any income tax benefit derived from compensating adjustments under the transfer pricing rules in relation to service company fees will take effect from 25 October 2013. The HMRC Technical Note acknowledges that employing staff through separate service companies is an arrangement used for a number of reasons not related to tax.
Poland – Changes regarding the proposed taxation of partnership structures, September 2013
Summary: The Polish tax authorities have proposed changes to certain partnership structures. This note summarises how the proposals could alter the way the Polish offices of many professional partnerships are taxed.
China VAT reform program – Rules on VAT exemption for cross-border services clarified, September 2013
Summary: The Chinese tax authorities have issued guidance clarifying the VAT exemption, under the VAT reform program, for legal services provided to clients outside the PRC. The guidance also confirms the legal right to file for a refund where due.
India – New ‘Form 10 F’ for tax residence information, August 2013
Summary: The Indian Tax Authorities have issued a new form – Form 10F – to capture information provided in support of a Tax Residence Certificate, where a claim for treaty relief is made. This note recaps recent changes to Indian tax law that affect UK firms with Indian clients, and potential practical approaches to satisfying those clients that no withholding tax should be levied on settlement of invoices.
France – Mandatory adoption of a standard audit file for tax, July 2013
Summary: The French Parliament has voted through legislation which will make provision of a Standard Audit File for Tax “SAF-T” mandatory with effect from 1 January 2014. Failure to comply will lead to immediate penalties. This alert explains the new requirements and how to comply and will be relevant for professional partnerships making tax filings in France.
Loans to participators – HMRC continue to toughen their stance, July 2013
Summary: This month HMRC have issued a Consultation Document exploring further amendments to the close company “loans to participators” rules. It would therefore be timely for partnerships to review their approach to group cash management and treasury for any inadvertent tax risk as discussed in this bulletin.
Belgium – Belgian VAT exemption for lawyers to be abolished, July 2013
Summary: The Belgian government has decided to abolish the general VAT exemption which currently applies to lawyers in Belgium. From 1 January 2014, Belgian lawyers’ fees will be subject to a 21% VAT charge. This note summarises the proposals and the implications for law firms with Belgian operations.
India – Special Bench ruling on taxation of fees for work performed outside India, June 2013
Summary: A recent ruling by a Special Bench (Tribunal) in India supports the view that only income from services performed in India by professional partnerships should be taxable in India. This note summarises the implications for professional partnerships doing business with Indian clients.