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Like any tax system, Albania’s tax rules come with critical dates for taxpayers with April 30 being one of the most significant.
This marks the deadline for the declaration and payment of Personal Income Tax through the Annual Individual Tax Declaration (DIVA) for the previous fiscal year.
Understanding the DIVA process is essential for both residents and non-residents alike, as it carries legal obligations and implications.
The DIVA declaration process for the fiscal year 2023 remains consistent with previous years, maintaining similar categories and obligations.
Despite upcoming changes with the implementation of the new “Income Tax” law in 2025, which will affect declarations for the fiscal year 2024, the current process remains unchanged.
The Albanian Tax Authorities issue reminders to both resident and non-resident individuals who meet specific criteria.
Those with an annual gross income exceeding ALL 2,000,000 in 2023 or individuals engaging in moonlighting activities for at least one tax period within the year are legally obligated to complete the “Annual Individual Income Statement” as part of the DIVA process.
It’s crucial to note exemptions for individuals classified as ‘self-employed’ and those employed by an entity, whether an individual or a legal entity, from whom they receive income in the form of wages and employment-related benefits.
These individuals are exempt from declaring the DIVA, justified by the ‘self-employed’ category’s responsibility for paying social and health insurance, with their ‘Gross Salary’ section specified as zero.
The DIVA 2023 declaration includes pre-filled data regarding annual gross income from wages or benefits derived from employment relationships for individuals.
Additionally, the calculation of Income Tax from Employment is provided.
While prefilled, these sections are editable fields, enabling declarants to review and make necessary changes.
Moreover, the amount paid during the year related to Income Tax from Employment is prefilled, streamlining the declaration process.
Beyond its legal obligation, income declaration offers individuals an additional guarantee regarding the justification of their wealth.
It fosters transparency and accountability while ensuring compliance with tax regulations.
As April 30 approaches, it is important that you ensure that you fulfill your DIVA obligations to avoid penalties and remain compliant with Albanian tax laws.
If you have any queries about Albania’s DIVA Tax Declaration, or Albanian tax matters in general, then then please get in touch
Corporate taxation is a fundamental aspect of operating a business in Nigeria, with tax revenues contributing significantly to public infrastructure, social services, and developmental projects.
This guide aims to elucidate the intricacies of corporate taxation and regulatory compliance in Nigeria, fostering a transparent and conducive business environment.
The Nigerian tax landscape comprises various taxes mandated by law for companies conducting business activities in the country:
Governed by the Finance Act 2019 and the Company Income Tax Act, CIT is an annual federal income tax levied at a rate of 30% for most companies.
However, companies with gross revenue below NGN 25 million enjoy a reduced rate of 0%, while those with revenue between NGN 25 million and NGN 100 million are taxed at 20%.
Additional state-level income taxes may also apply.
Varies based on company status and accounting period.
Imposed on profits from the sale of chargeable assets, governed by the Capital Gain Tax Act, and levied at a rate of 10% on gains.
Applicable to upstream petroleum operations, with rates ranging from 50% to 85% based on contract type and operational phase.
Required by law to be withheld from payments made to contractors and remitted periodically to tax authorities. Rates vary based on the nature of transactions.
A consumption tax levied at a rate of 5% on goods and services consumed, with returns filed monthly.
Mandated for companies employing five or more workers or with turnovers above a certain threshold, contributing 1% of annual payroll to ITF.
Imposed at a rate of 2% of assessable profit, payable within two months of assessment notice.
Mandatory for businesses and individuals with tax authorities to obtain Tax Identification Numbers (TINs) for identification purposes.
Timely submission of accurate tax returns, detailing income, deductions, and liabilities, is imperative to avoid penalties.
Ensuring prompt and accurate tax payments within specified deadlines to avert interest charges or penalties.
Tax evasion attracts severe penalties, including fines, imprisonment, or both, depending on the severity of the offense.
Failure to remit taxes may result in penalties and interest charges.
Companies complying with tax obligations may enjoy incentives such as investment tax credits, tax allowances, and exemptions provided by the Federal Government to encourage investment and economic growth.
Navigating corporate taxation and regulatory compliance in Nigeria is essential for businesses to thrive and contribute to sustainable economic development.
If you have any queries about Corporate Tax in Nigeria, or any tax matters in Nigeria, then please get in touch.
The United Arab Emirates (UAE) has established specific deadlines for the application process of Corporate Tax (CT) Registration.
This move follows the implementation of the UAE CT law, which came into effect for the financial year starting on or after 1 June 2023.
The Federal Tax Authority’s Decision No. 3 of 2024, effective from 1 March 2024, outlines the crucial timelines for entities to comply with this registration requirement, emphasizing the nation’s commitment to a structured tax framework.
Entities established or recognized before March 2024 must adhere to specified deadlines based on the issuance date of their earliest license. These are set out in a table in the Decision (link provided above)
Those incorporated or recognised post the decision’s effective date must secure their Tax Registration within three months from their date of incorporation, establishment, or recognition.
Entities with a Place of Effective Management (POEM) in the UAE need to obtain registration within three months from the end of their financial year.
Similar timelines apply, with specific deadlines set for non-resident entities established or recognized prior to and following March 2024.
Individuals engaged in business or professional activities must apply for Tax Registration by stipulated deadlines to ensure compliance.
Failure to submit the CT Registration application within the designated timelines incurs a substantial penalty of AED 10,000, underscoring the importance of timely action to avoid financial repercussions.
This structured approach to CT Registration necessitates careful planning and evaluation, particularly for foreign companies operating in the UAE through various business models.
The decision signifies the UAE’s proactive stance in tax regulation, aiming to streamline the process while ensuring entities contribute their fair share to the national economy.
Entities, both resident and non-resident, must diligently assess their operations within the UAE to adhere to the new registration mandates.
This includes evaluating any exposure related to Permanent Establishments, Nexus, and POEM, and initiating the registration process promptly to sidestep penalties.
The Federal Tax Authority’s recent decision marks a significant step in reinforcing the UAE’s corporate tax framework, aligning with global tax practices and enhancing the nation’s competitiveness.
Businesses operating within the UAE’s jurisdiction must now navigate these new requirements with strategic foresight, ensuring compliance to maintain their standing and avoid penal implications.
If you have any queries about this article on UAE Corporate Tax Registration, then please get in touch
In a significant move to clamp down on tax evasion, the Internal Revenue Service (IRS) unveiled a new initiative on February 29, aimed at individuals who have neglected to file their income tax returns for 2017 and subsequent years.
This program, powered by the financial backing of the Inflation Reduction Act, represents a continuation of the IRS’s intensified efforts to scrutinize the tax compliance of large corporations, partnerships, and high-net-worth individuals, a strategy highlighted in a GT Alert from September 2023.
This initiative also aligns with the IRS’s ongoing operations to recover taxes from millionaires who owe substantial amounts in back taxes.
Thanks to these concerted efforts, the agency has successfully recuperated nearly $500 million to date.
The current non-filer campaign specifically targets taxpayers who earned between $400,000 and $1 million from 2017 to 2021.
The IRS plans to dispatch over 100,000 compliance letters to this demographic, sending out between 20,000 and 40,000 letters (CP-59) each week.
Additionally, for those with incomes exceeding $1 million, over 25,000 individuals will receive compliance notifications.
The IRS identifies potential non-filers in these income brackets using third-party data, including information from W-2s and 1099 forms, among other sources.
The IRS has issued a stern warning to these high earners, urging them to promptly rectify their filing status to avoid further notices, escalating penalties, and the possibility of criminal prosecution.
Taxpayers who disregard the initial compliance letters will face additional notifications and could be subjected to audit and collection enforcement measures.
In extreme cases, the IRS has the authority to prepare a Substitute for Return (SFR) for non-filers, using only reported income information.
This action could lead to a higher tax liability for the taxpayer, as it doesn’t account for any deductions or exemptions they may be entitled to.
Such individuals might then find themselves compelled to either settle the increased tax debt or challenge the IRS’s assessments in court.
The message from the IRS is clear: with enhanced resources and a firm commitment, the agency is actively pursuing high-income individuals who have failed to file their tax returns.
This initiative underscores the importance of staying compliant with tax filing obligations and consulting a trusted tax professional if you’ve missed filing returns for 2017 or later years.
If you have any queries around this article, or US tax matters more generally, then please get in touch with us.
Malta has been tasked with implementing three essential reforms to its anti-money laundering (AML) strategies to be removed from the Financial Action Task Force’s (FATF) enhanced monitoring list, commonly referred to as the grey list.
Following an agreement on an action plan with the FATF, Malta’s government is under pressure to address significant issues identified by the global financial crime watchdog.
The action plan outlines a comprehensive strategy for Malta, focusing on:
Malta must ensure that company ownership information is precise, with strict enforcement actions against inaccuracies.
This includes imposing sanctions on legal persons and gatekeepers failing to maintain accurate beneficial ownership information.
The government’s Financial Intelligence Analysis Unit (FIAU) is expected to better utilize financial intelligence to support the pursuit of criminal tax evasion and associated money laundering cases.
This entails clarifying the roles of the Revenue Commissioner and the FIAU.
The FIAU’s analytical efforts must focus on criminal tax offences to produce intelligence that aids Maltese law enforcement in detecting and investigating tax evasion-related money laundering activities in alignment with Malta’s risk profile.
Malta, alongside Haiti, the Philippines, and South Sudan, was grey-listed by the FATF, signaling the need for enhanced AML measures.
Despite having a robust legal framework on paper, Malta’s practical implementation of these laws has been under scrutiny.
The nation’s commitment to fighting tax crimes and policing beneficial ownership rules is central to the FATF’s concerns.
Although Malta has made significant strides in addressing some issues flagged in 2019, including improving financial intelligence analytics and resourcing law enforcement, the FATF’s latest review indicates that critical areas still require attention.
The Maltese government has acknowledged progress on most recommended actions but admits that three critical points have only been partially addressed.
The Maltese government has expressed disagreement with the grey-listing, emphasizing its dedication to rectifying the remaining deficiencies promptly.
The economic impact of the FATF’s decision on Malta, a notable financial hub, hinges on the government’s effectiveness in implementing the necessary reforms.
Rating agencies and investors are closely watching the situation, as Malta’s attractiveness for foreign investment is at stake.
Malta’s path to exiting the FATF grey list is paved with stringent AML reforms and enhanced financial transparency measures.
The nation’s ability to fulfill the FATF’s action plan will not only determine its removal from the grey list but also reinforce its standing as a reliable and compliant financial centre.
The Maltese government’s commitment to these reforms is crucial for restoring international confidence and securing Malta’s economic future.
If you have any queries regarding this article relating to Malta AML Reforms to Exit FATF Grey List, or Maltese tax matters, then please get in touch.
The Internal Revenue Service (IRS) is setting its sights on the skies, announcing an upcoming audit initiative focused on the use of private jets by large corporations, partnerships, and high-income individuals.
Perhaps they’ve been watching Succession?
This move aims to look at the allocation of aircraft usage between business and personal purposes, a practice that has seen significant growth in recent years.
According to a report by the Wall Street Journal, executive personal use of corporate jets has surged by 35% since 2015, with spending on such flights increasing by a staggering 92%.
Despite previous audits in this area, the IRS believes that private aircraft usage has not been sufficiently monitored over the past decade.
With plans to expand the team of examiners, the IRS indicates that the number of audits concerning aircraft usage could rise based on the findings of this initial initiative.
The audits will investigate whether:
IRS Commissioner Werfel emphasised the agency’s commitment to increasing scrutiny on high-income taxpayers, signaling a broader effort to ensure compliance among the wealthiest individuals and organisations.
This initiative aligns with the objectives set forth by the Inflation Reduction Act, aiming to reverse historically low audit rates and enhance the focus on substantial income and corporate entities.
Tax law surrounding the business use of aircraft is complex, and maintaining accurate records can be challenging for taxpayers.
Issues often arise due to inadequate contemporaneous documentation, leading the IRS to classify the aircraft as an “entertainment facility” under IRC Section 274 in some examinations.
This classification can result in the denial of all deductions, including those associated with business use.
As such, affected taxpayers that are utilising private jets are advised to review and assess whether their record-keeping practices are fit for purposes. In other words, they can ensure a clear distinction between business and personal use to comply with IRS requirements.
The IRS’s new audit initiative on private jet usage underscores the agency’s dedication to ensuring tax compliance among high-income individuals and large entities.
As the IRS bolsters its examination efforts, taxpayers should take proactive steps to ensure their usage of business aircraft aligns with tax laws and regulations, particularly in maintaining and documenting usage accurately.
If you have any queries about this article, IRS Targets Private Jet Usage, then please get in touch.
In a groundbreaking case that signals the Internal Revenue Service’s (IRS) increasing scrutiny of digital assets, a Texas man has been indicted for filing false tax returns related to unreported cryptocurrency transactions.
This marks a significant moment in the enforcement of tax laws on digital currency gains, underscoring the federal government’s commitment to upholding tax compliance in the cryptocurrency space.
The Department of Justice (DoJ) announced that an Austin resident was charged with filing false tax returns from 2017 to 2019, during which he allegedly failed to report the sale of approximately $3.7 million worth of Bitcoin.
These unreported sales resulted in substantial capital gains, part of which was used to purchase a residence.
The indictment also accuses the individual of structuring cash deposits to evade currency transaction reporting requirements, further complicating the case.
This prosecution is notable not just for its focus on cryptocurrency but because it represents what is believed to be the first-ever criminal case concerning the tax implications of legal source crypto transactions in the United States.
The charges underscore the IRS’s stance: the vast majority of digital asset transactions are taxable and must be reported.
With the IRS placing the crypto question prominently on tax forms, the message is clear—ignorance or avoidance of reporting digital assets is fraught with legal peril.
This case serves as a stark reminder of the consequences of failing to comply with tax obligations related to cryptocurrency gains.
As digital currencies continue to integrate into the mainstream financial ecosystem, the IRS and the DoJ are signaling their intent to rigorously enforce tax laws in this domain.
For cryptocurrency investors and users, this case underscores the importance of maintaining meticulous records and ensuring all taxable transactions are accurately reported.
It’s crucial to remember that an indictment is merely an allegation, and the defendant in this case is presumed innocent until proven guilty in a court of law.
However, if convicted, the charges carry substantial penalties, including potential prison time for each count of structuring and filing false tax returns.
This landmark case is a wake-up call to all who engage in cryptocurrency transactions to take their tax reporting obligations seriously.
With the IRS and federal prosecutors now actively pursuing legal actions against tax evasion in the crypto space, ensuring compliance has never been more critical.
Further, one suggests the rest of the world is likely to follow suit.
If you have any thoughts on this article regarding US Historic Crypto Tax charges, or any US tax matters, then please get in touch.
In a key development for corporate transparency, the Financial Crimes Enforcement Network (FinCEN) of the US government has initiated the process of receiving beneficial ownership information reports as mandated by the Corporate Transparency Act 2021.
This strategic move aims to fortify the battle against financial crimes by ensuring clarity in company ownership structures.
Under the new framework, existing companies are provided with a one-year window to submit their reports, while newly established entities must adhere to a 90-day filing deadline post-creation or registration with FinCEN.
The agency is entrusted with the administration and secure management of the beneficial ownership database.
Reporting entities are required to furnish comprehensive details for each beneficial owner, including their name, date of birth, address, and a valid identification number from an approved list of documents such as a US driving license, passport, or other state or local government-issued documents, including foreign passports.
As 2023 drew to a close, FinCEN unveiled a final rule elucidating the conditions and authorized entities eligible to access the national beneficial ownership database.
This rule, largely based on the previous year’s draft but incorporating notable amendments, is set to progressively allow access from 20 February onwards.
The list of entities with granted access includes federal, state, and foreign law enforcement agencies, financial institutions, regulators involved in customer due diligence processes, and the US Treasury.
A significant enhancement in the final rule is the broadening of the ‘customer due diligence requirements’ clause.
This expansion now covers legal obligations designed to counteract money laundering, terrorism financing, or protect the US’s national security.
Consequently, financial institutions are empowered to integrate FinCEN’s beneficial information into their due diligence and suspicious activity monitoring and reporting mechanisms, thereby reinforcing their compliance with the Banking Secrecy Act or sanctions enforced by the US Treasury’s Office of Foreign Assets Control.
The implementation of access to the beneficial ownership information will commence on 20 February with a pilot program aimed at key federal agency users.
This initial phase will be followed by extending access to other federal agencies, and subsequently to state and local law enforcement agencies.
The final rule also paves the way for financial institutions to share beneficial ownership information with employees or contract personnel outside the USA, with specific exceptions, thus addressing operational challenges for institutions with extensive international operations and compliance functions.
While the precise operational framework of the database remains under wraps, FinCEN has clarified its stance against providing bulk data exports to authorized users.
Instead, an application programming interface is expected to be made available, allowing these users to conduct specific queries in the database.
This landmark regulation marks a significant stride in the US government’s ongoing efforts to enhance corporate transparency and combat financial crimes effectively.
If you have any queries about this article on US Beneficial Ownership Access, or any other US matters, then please get in touch.
The BVI has made a significant stride towards enhancing transparency and tax information exchange.
It has mandated that, from 24 January 2024, all entities under its jurisdiction with certain financial reporting responsibilities, are to submit their reports exclusively through the BVI Financial Accounting Reporting System (BVIFARS).
The relevant reporting responsibilities include:
The shift to the digital platform is in response to the recommendations from the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum).
Despite BVI’s AEOI legislation aligning with the Global Forum’s technical standards for years, the OECD’s 2022 review identified significant gaps in the actual AEOI implementation.
The spotlight was on the “significant issues” concerning the assurance that Reporting Financial Institutions were accurately carrying out due diligence and reporting procedures.
The Global Forum hence called for the BVI to fortify its domestic compliance framework to solidify CRS implementation effectiveness.
The BVI government candidly attributed the shortcomings to the devastating impact of Hurricanes Irma and Maria and the subsequent global COVID-19 pandemic, which significantly hindered their information exchange capabilities.
In light of these challenges, the government requested a supplementary review to validate the improvements in their AEOI processes.
This request was approved, with an on-site visit by the OECD slated for the first quarter of 2024 to confirm the BVI’s adherence to the stipulated conditions.
With the activation of BVIFARS in January 2024, entities are now transitioning to this centralized online system for their FATCA, CRS, and CbC report submissions.
A notable feature of this new system is the imposition of an annual usage fee of USD185 for each reporting entity, payable by 1 June each year.
Entities are required to be vigilant about the following critical deadlines:
Additionally, each legal entity is obligated to furnish its registered agent with the mandated economic substance information annually.
The registered agent, in turn, must relay this data to the BVI International Tax Authority within six months from the end of the pertinent reporting period.
This transformation in the reporting process for BVI entities signifies a proactive approach to addressing the challenges previously flagged by the OECD.
By embracing a digital and centralized reporting system, the BVI is taking definitive steps towards bolstering its compliance framework, thereby reinforcing its commitment to international tax transparency and cooperation.
If you have any queries on this article about BVI and Online Submission for FATCA, CRS and CbC Reports, or BVI matters in general, then please get in touch.
In the landscape of global investment, Citizenship by Investment (CBI) and Residency by Investment (RBI) programs offer a compelling gateway for foreign investors seeking expedited citizenship or residency in other countries.
These initiatives, while promising economic growth through substantial foreign investment, have a flip side.
It is alleged that they’ve become a magnet for unscrupulous individuals—criminals and corrupt officials—who exploit these programs to evade justice and launder billions of dollars obtained through illicit activities.
The FATF team, of course.
Recently, the Financial Action Task Force (FATF) teamed up with the Organisation for Economic Co-operation and Development (OECD) to delve into the risks and vulnerabilities of these programs in their joint project.
Their findings underscored the inherent dangers associated with CBI/RBI programs, particularly in terms of money laundering, fraud, and their adverse effects on public integrity, taxation, and migration.
FATF President T. Raja Kumar highlighted the dual nature of these investment schemes, acknowledging their potential for stimulating economic growth while underscoring the grave threats they pose when abused by criminals and corrupt entities.
“Golden” passports and visas extended through these programs often fall prey to exploitation by individuals looking to obfuscate their identities, launder illicit gains, or perpetrate further criminal activities.
The report illuminates how these programs offer criminals enhanced global mobility, enabling them to cloak their identities and illegal undertakings behind opaque corporate structures in foreign jurisdictions.
Complex and multifaceted, these international investment migration programs frequently involve multiple government agencies, intermediaries, and lack proper governance, making them vulnerable to abuse by professional facilitators.
OECD Secretary-General Cormann emphasized the alarming scale of exploitation within these citizenship and residency programs, characterizing it as a multi-billion-dollar enterprise utilized by criminals to launder the proceeds of fraud and corruption, evade accountability, or access third-party countries.
To counter these threats, the report proposes a series of measures and best practices aimed at mitigating risks.
It advocates for robust due diligence mechanisms, transparency, and integrity frameworks to be integrated into the fabric of these investment migration programs.
Additionally, it stresses the importance of dissecting how criminals exploit these programs and delineates the need for clear demarcation of roles and responsibilities among involved parties to spot and prevent fraudulent activities.
In essence, while CBI/RBI programs offer a potential gateway to economic growth, their unchecked exploitation poses a severe threat to global financial systems and integrity.
The onus lies on policymakers and administrators of these programs to adopt stringent measures, ensuring these schemes aren’t hijacked for nefarious purposes.
The report serves as a clarion call to establish a delicate equilibrium between economic prosperity and robust security measures within the realm of investment migration programs.
If you have any queries about Citizenship and Residency by Investment programs, then please get in touch.