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Italy, a country celebrated for its picturesque landscapes, rich history, and vibrant culture, offers more than just a travel destination.
With major cities like Milan, Rome, and Venice, Italy presents a unique opportunity for investors to gain residence in a well-connected EU market.
The Italy Residence by Investment Program provides a gateway to Europe with a variety of investment options tailored to meet different needs, enabling successful applicants to obtain residence rights within three to four months.
The Italian Golden Visa comes with numerous benefits, including:
Applicants can choose from two main investment avenues to qualify for the Italian residence:
– Invest a minimum of EUR 2 million in Italian government bonds.
– Commit at least EUR 500,000 to Italian shares, reduced to EUR 250,000 for innovative start-ups.
– Make a non-refundable donation of EUR 1 million to projects of public interest in Italy, including fields like culture, education, ecology, and more.
Family members such as a spouse, children, and dependent parents can also apply for a visa under the main applicant’s investment without the need for additional funds.
– Ideal for individuals who can demonstrate a stable annual income from foreign sources.
The Italian Golden Visa is initially granted for two years and can be renewed for an additional three years as long as the investment is upheld. The application process generally takes between 90 to 120 days from submission, with the investment required to be made within three months of entering Italy.
For the Investor Visa Program, purchasing or renting residential property in Italy is necessary following approval. Applicants under the Elective Residence Program must also secure residential real estate and prove stable income.
Residency can evolve into permanent residence after five years, provided the investor relocates to Italy. Interestingly, the program does not mandate a minimum physical presence in Italy, offering flexibility for global investors.
Italy’s Residence by Investment Program not only opens the door to a life in one of the world’s most enchanting countries but also offers a strategic foothold in the European Union.
With flexible investment options and a straightforward application process, this program stands out as a premier choice for those looking to invest in Italy and enjoy the myriad benefits it offers.
If you have any queries about this article on Italy’s Golden Visa regime, or Italian tax or other matters in general, then please get in touch.
The Greece Golden Visa Program stands out as one of the most accessible and affordable residence by investment programs in Europe.
Launched in 2013, this program offers non-EU nationals and their families the opportunity to obtain permanent residence permits in Greece, providing a straightforward path to living and traveling throughout Europe.
Key Features of the Greece Golden Visa Program
The Greece Golden Visa offers several compelling benefits:
The Greece Golden Visa Program requires a qualifying investment in one of several categories:
Purchase property worth a minimum of EUR 250,000, with higher values required in prime location’s like Mykonos and Santorini.
Deposit at least EUR 400,000 into a Greek credit institution for a minimum of one year, with a standing order for renewal.
Invest a minimum of EUR 400,000 in a Greek company for share capital increase or bonds.
Contribute to a real estate or closed-end investment company with the intention to invest exclusively in Greece.
Purchase Greek government bonds, corporate bonds, or shares with minimum specified values, ensuring investment in regulated markets within Greece.
The application process for obtaining a Greece Golden Visa is streamlined into several clear steps:
The entire process, from choosing the investment to receiving the permit, is designed to be completed within three to four months, making it one of the fastest and most efficient programs of its kind.
The Greece Golden Visa Program offers a lucrative opportunity for non-EU nationals seeking a permanent residence in Greece with the added benefit of visa-free travel across the Schengen Area.
With its flexible investment options, minimal residency requirements, and quick processing times, the program is an excellent choice for investors looking to expand their global mobility and access the European lifestyle.
The cost of the Visa Program will increase from the current EUR 250k minimum investment to a new minimum of EUR 400k.
Investors may still apply under the current threshold as long as they pay a 10% deposit by 31 August 2024. They will also need to finalise the investment by 31 December 2024.
If you have any queries about Greece’s Golden Visa, or tax matters in Greece, then please get in touch.
The Antigua and Barbuda Citizenship by Investment Program offers a pathway to citizenship for high-net-worth individuals and their families, providing access to the European and Caribbean markets and key Asian financial centers.
Holders of an Antigua and Barbuda passport enjoy visa-free or visa-on-arrival access to over 150 destinations, including major hubs like Hong Kong, Singapore, the UK, and Europe’s Schengen Area.
The program allows the inclusion of a spouse, dependent children under 31, parents and grandparents over 55, and unmarried siblings of any age of the main applicant or their spouse. Dependents can also be added post-citizenship grant. Commonwealth Membership
Citizenship includes privileges in the UK and other Commonwealth countries.
The nation offers excellent air links and is an appealing location for residence or owning a second home.
To qualify, applicants must choose from one of the following:
The minimum investment required will rise to USD 200,000 by June 30, 2024. This provides a limited window under current, more favorable investment conditions.
This program not only facilitates global travel and business opportunities but also requires minimal physical presence, making it an attractive option for investors seeking flexible citizenship solutions.
If you have any queries about the Antigua and Barbuda Citizenship by Investment Program then please get in touch
In a landmark decision on 8 March, the Full Federal Court (FFC) sided with the taxpayer, Minerva Financial Group Pty Ltd, against the Commissioner of Taxation, clarifying the application of general anti-avoidance rules within Part IVA of the Income Tax Assessment Act 1936.
This ruling underscores the nuanced interpretation of Part IVA, particularly concerning discretionary distributions by trustees, and marks a significant victory for taxpayers navigating the complexities of tax law.
The court’s decision offers several crucial insights into Part IVA’s operation:
Taxpayers are reminded of the importance of documenting the reasons behind their arrangements. While Part IVA’s test is objective, understanding the context can help determine the dominant purpose.
It’s essential to consider all eight factors outlined in section 177D(2) collectively, rather than in isolation, to ascertain a scheme’s dominant purpose.
Part IVA does not merely assess if a different course of action would have been taken without the tax benefit, emphasizing that a dominant purpose of obtaining a tax benefit must involve more substantive evidence.
Transactions within a commonly owned group, even if they involve intra-group loan account entries instead of cash transfers, are not inherently indicative of a scheme’s dominant purpose to secure a tax benefit.
The FFC’s ruling further clarified the legality of certain structures and practices:
The case centered around the Liberty group’s restructuring into corporate and trust silos, aimed at optimizing for an IPO.
This restructure led to significant profits being distributed in a way that incurred a lower withholding tax rate, prompting the Commissioner to apply Part IVA, suggesting these distributions were primarily for tax avoidance.
The FFC meticulously dissected the application of Part IVA, focusing on the intent behind the distributions and the structure of the Liberty group.
The court’s analysis, particularly on how the scheme was executed and the financial implications for the involved entities, led to a conclusion that favored the taxpayer.
The decision stresses that the presence of a tax benefit alone is insufficient to prove a dominant purpose of tax avoidance.
This ruling is a pivotal moment for taxpayers and legal practitioners, offering clarity on Part IVA’s interpretation and its application to complex financial structures and distributions.
It serves as a reminder of the critical balance between tax planning and avoidance, reinforcing the need for a comprehensive evaluation of arrangements under the lens of tax law.
The victory of Minerva Financial Group in this case not only provides a roadmap for similar cases but also reassures taxpayers that legitimate business arrangements, even those resulting in tax benefits, can withstand scrutiny under Australia’s general anti-avoidance rules.
If you have any queries about the Minerva case, or any other Australian tax matter, then please get in touch.
Dubai has enhanced its trust and foundations laws through significant amendments to Law Nos. 3 and 4 of 2018, which govern the operations within the Dubai International Financial Centre (DIFC).
These changes, specifically designed to add robust ‘firewall’ or ring-fencing provisions, affirm the supremacy of DIFC laws by preventing the enforcement of foreign judgments that conflict with local statutes.
The newly implemented provisions make it clear that DIFC laws take precedence over foreign judgments, ensuring that trusts and foundations under DIFC jurisdiction are protected from external legal influences that do not recognize or respect DIFC’s legal framework.
A key component of the amendments requires trust officers or foundation managers to discontinue acting under foreign judgments that conflict with DIFC laws.
This safeguard effectively prevents them from exercising asset management powers that could undermine DIFC statutes.
These provisions seem set to position DIFC among the first-tier financial centres with the most potent legal protections for settlors and founders of trusts and foundations.
The provisions also allow these individuals to reserve powers without exposing the trust or foundation to legal challenges as shams.
The amendments expand the role of registered agents, allowing them more flexibility to collaborate with the Registrar of Companies.
This change permits registered agents to fulfill certain compliance-related duties on behalf of foundations, aligning their responsibilities with those of corporate service providers under DIFC’s prescribed company and family office regimes.
Further enhancements include stringent safeguards regarding the transfer of property to a trust or foundation.
Now, a creditor must prove that the transfer was intended to defraud them and that it rendered the settlor or founder insolvent.
Without such proof, the liability of the trust or foundation to settle claims is limited to the interest previously held by the settlor or founder.
Another critical update is the introduction of a three-year statute of limitations on legal proceedings related to property transfers to a foundation, adding an extra layer of security and stability for these transactions.
The new amendments also introduce provisions that allow for the conversion of a DIFC foundation into a company.
Previously, the conversion was only possible from a DIFC company to a foundation, not the other way around.
This change offers greater flexibility in structuring and managing corporate and charitable entities within the DIFC.
These legislative updates significantly bolster the legal framework surrounding trusts and foundations in Dubai’s DIFC, offering enhanced protection against external legal pressures and providing a more stable and secure environment for asset management.
For settlors, founders, and financial professionals engaged with DIFC trusts and foundations, these changes necessitate a thorough understanding and strategic planning to align with the new legal standards.
The DIFC continues to demonstrate its commitment to maintaining a competitive and legally secure financial center with these progressive amendments.
If you have any queries about this article on Dubai’s Firewall Provisions, or tax matters more generally in the UAE, then please get in touch.
On 12 March 2024, the Kazakhstani finance ministry announced significant revisions to the VAT Refund Rules, marking an important change in how businesses interact with tax authorities for VAT refunds.
This article looks at these crucial modifications.
The essence of these updates lies in addressing the controversies surrounding the VAT refund validation process.
Courts have recently highlighted the improper practice by tax authorities of demanding exhaustive supplier chain reports, or “Pyramid” reports, extending through numerous levels.
The revised VAT Refund Rules aim to streamline this process, albeit with nuances that may conflict with existing Tax Code provisions.
These changes became effective on 26 March 2024.
A noteworthy modification is to paragraph 45-1 of the VAT Refund Rules, which now delineates specific scenarios for the creation of Pyramid reports.
Notably, these reports will encompass all direct suppliers involved in horizontal monitoring, moving away from the previous broader scope.
Exceptions to this requirement have been clarified, simplifying compliance for businesses.
The procedure for generating Pyramid reports has been refined, with a clear focus on direct suppliers.
The amendment provides a precise definition of “direct supplier” and introduces the concept of “related parties,” aiming to mitigate tax evasion by tracing transactions to their origin.
The rules now prioritize the generation of Pyramid reports based on potential tax evasion risks identified among suppliers.
This shift focuses on concrete indicators of risk, such as restrictions on e-invoices or legal challenges against the supplier, enhancing the tax authorities’ ability to detect and address evasion schemes.
With the introduction of paragraphs 52-1 and 52-2, the VAT Refund Rules now clearly outline situations where identified risks are disregarded.
This update aims to ensure that discrepancies are not automatically equated with tax evasion, providing a fairer framework for businesses.
Lastly, the amendments expand the circumstances under which tax authorities can conduct counter-audits on suppliers, including intermediaries and freight forwarders.
This broadened scope is intended to tighten scrutiny and ensure compliance throughout the supply chain.
The recent amendments to Kazakhstan’s VAT Refund Rules represent a significant shift in the regulatory landscape.
By refining the conditions under which Pyramid reports are generated and clarifying procedures, the changes aim to balance the need for effective tax collection with the operational realities of businesses.
As these changes unfold, businesses operating in Kazakhstan must stay informed and compliant to navigate the evolving tax environment successfully.
If you have any queries about this article on the Updates to Kazakhstan’s VAT Refund Rules, or Kazakh tax in general, then please get in touch.
In an unexpected turn of events, the Canada Revenue Agency (CRA) has announced the retraction of the newly implemented rule requiring trustees of Canadian bare trusts to submit a trust return for the tax year 2023.
This decision, unveiled just a day before the deadline for filing, comes as a response to the unintended consequences the reporting requirements have imposed on Canadians.
The broad context of the enhanced trust reporting requirements can be seen here.
This latest move follows a March 2024 concession that promised no penalties for trustees who filed late, barring instances of serious misconduct.
Initially introduced in 2023, these regulations mandated extensive annual T3 return filings, starting with tax years ending on or after December 31, 2023.
The mandate aimed to include a broader spectrum of trusts, such as bare trusts and foreign trusts with ties to Canadian property or residents, necessitating many to file a T3 return and the Schedule 15 (Beneficial Ownership Information of a Trust) form for the first time.
However, the latest update specifies that the withdrawal of the filing requirement applies exclusively to bare trust arrangements under the new subsection 150(1.3) of the federal Income Tax Act. Other trusts, particularly express or other trusts based or deemed to be resident in Canada, remain subject to the original filing and tax payment obligations by April 2, 2024.
Over the next few months, the CRA plans to collaborate with the Department of Finance to refine and elaborate on the guidelines concerning the bare trust filing requirements.
Despite the recent announcement, bare trusts must prepare to meet the filing expectations, including Schedule 15 submissions, for the 2024 tax year and beyond.
As the CRA promises further clarity on this matter, stakeholders in bare trusts and the broader tax community await detailed guidance, hoping for smoother compliance paths in the future.
If you have any queries on this article on Canada Withdraws Bare Trusts Reporting Requirement, or Canadian tax matters in general, then please let us know.
In a significant regulatory update, the Canadian federal government has introduced new trust reporting requirements effective for taxation years ending after 30 December 2023.
The first reporting deadline for trusts with a 31 December 2023, year-end is 2 April 2024.
This development introduces an expanded scope of reporting, bringing a wider array of trusts under the purview of mandatory filing, including certain bare trusts.
Here’s what you need to know about these new requirements and their potential impact.
The amendments mandate more extensive filing for trusts, including those that were previously exempt under certain conditions. Key changes include:
More trusts are now required to file T3 trust income tax and information returns, extending to certain bare trusts previously exempt.
Most trusts must provide additional information, including details about trustees, beneficiaries, settlors, and anyone with influence over the trust’s decisions.
The new rules specifically target express trusts resident in Canada or foreign trusts deemed resident, eliminating previous exemptions for certain types of trusts.
However, a list of “listed trusts,” such as registered charities and mutual fund trusts, continues to enjoy exemptions.
Trusts mandated to file under the new rules must complete the new Schedule 15, disclosing comprehensive information about the involved parties.
This includes their names, addresses, taxpayer identification numbers, and their roles within the trust.
Failure to comply with these updated reporting requirements could lead to substantial penalties, especially in cases of gross negligence.
Penalties are pegged at 5% of the trust’s property value or $2,500, whichever is higher.
In a move to facilitate a smoother transition, the Canada Revenue Agency (CRA) has announced a waiver for the normal failure-to-file penalty for the 2023 taxation year, specifically for trusts qualifying under the bare trust exclusion.
Given the significant changes and the potential for hefty penalties, it’s crucial for trustees and beneficiaries to familiarize themselves with the new requirements.
This includes understanding which trusts now need to file, the expanded information requirements, and ensuring compliance to avoid penalties.
For those involved in trust administration or planning, staying informed about these developments and their implications is essential.
This article merely serves as a starting point, but further guidance and clarification from the CRA may be necessary as taxpayers work to comply with the new framework.
If you have any queries on this article around Canada’s Enhanced Trust Reporting Regulations, or Canadian tax matters more generally, then please get in touch.
FedEx Corporation, having previously succeeded in a significant legal battle concerning foreign tax credits, is now urging the US District Court for the Western District of Tennessee to confirm the refund amount due.
This development follows after the government halted discussions on a joint judgment proposal, prompting FedEx to take legal action.
On 8 March 2024, FedEx filed a motion for judgment to finalise the refund amount. This action was taken in response to the government’s withdrawal from negotiations and its indication that it would oppose FedEx’s motion with a novel argument based on the “Haircut Rule”.
The government’s new stance involves Treasury Regulation Section 1.965-5(c)(1)(i), which potentially limits foreign tax credits related to withholding taxes paid to foreign jurisdictions.
FedEx contests this argument on several grounds, including the applicability of the rule when withholding taxes are not claimed, procedural deficiencies under the Administrative Procedure Act, and the belated introduction of this argument in the litigation process.
The government’s late introduction of the “Haircut Rule” argument may face judicial resistance, especially considering the advanced stage of the litigation.
The transparency of the government’s strategy during the litigation and its decision to withhold this argument until a critical juncture could impact the court’s receptivity to the new claim.
The FedEx case underscores the importance of timely presenting arguments in legal disputes.
Waiting until late in the litigation process to introduce new claims can lead to challenges in persuading the court to consider those arguments, with potential consequences including rejection due to delay.
As FedEx moves forward with its motion for judgment, the legal community watches closely.
The outcome may provide further guidance on the strategic considerations and challenges of introducing new arguments in ongoing litigation, particularly in complex tax law disputes.
If you have any queries about this article on FedEx v US Government, or US tax matters in general, then please get in touch.
The Swiss Federal Council has recently outlined new regulatory measures for the taxation of teleworking, specifically addressing the evolving work patterns of cross-border commuters.
Published on 1 March 2024, these regulations aim to integrate the new international treaty agreements with France and Italy into Swiss law, marking a significant step in adapting to the changing landscape of remote work.
The shift towards teleworking, accelerated by the COVID-19 pandemic and ongoing digitalization, has blurred traditional geographic boundaries of employment.
This evolution poses a challenge for taxation, particularly for cross-border commuters who, while working for employers in Switzerland, reside in neighboring countries.
The proposed law by the Swiss Federal Council seeks to address these changes, ensuring that Switzerland remains competitive without forfeiting tax revenue.
Switzerland has proactively negotiated with France and Italy to establish clear rules for teleworking.
A notable agreement with France, effective from 1 January 2023, allows up to 40% of working hours per year to be conducted remotely without affecting the cross-border commuter status or altering taxation rights.
Similarly, an agreement with Italy permits teleworking for up to 25% of working hours from 1 January 2024, maintaining the status and taxation rights of cross-border commuters.
These agreements exemplify Switzerland’s commitment to modernizing its tax legislation in line with international standards.
The Swiss Federal Council’s proposal introduces a framework to tax teleworking activities conducted outside Switzerland by residents of neighboring countries, provided international treaties grant taxation rights to Switzerland.
This approach not only aligns with the agreements with France and Italy but also sets a precedent for future international collaborations on teleworking taxation.
The implementation of these regulations will necessitate detailed certification of teleworking days, which must be submitted to tax authorities.
While the new rules specifically address arrangements with Italy and France, they do not impact agreements with other neighboring countries like Germany, Liechtenstein, and Austria.
However, the broader objective remains clear: to safeguard Swiss tax revenues while enhancing the nation’s appeal as a workplace for international talent.
As Switzerland prepares for parliamentary approval of these proposals, the future of teleworking taxation is poised to offer greater clarity and certainty for cross-border commuters and their employers.
If you have any queries on this article on Switzerland Cross Border Teleworking, or Swiss tax matters generally, then please get in touch.