Tax Professional usually responds in minutes
Our tax advisers are all verified
Unlimited follow-up questions
France has taken a significant step in its battle against corporate tax evasion by introducing artificial intelligence (AI) tools to help uncover hidden assets and questionable tax practices.
These AI systems are designed to analyse financial data and detect complex tax avoidance strategies, particularly focusing on large multinational companies that shift profits across borders to evade taxes.
The French government has deployed cutting-edge AI technologies to analyse a wide range of financial data. These tools will:
The AI systems will work in tandem with France’s tax authority, which will use the insights generated to open investigations or issue penalties to companies that are found to be evading taxes.
Corporate tax evasion costs France billions of euros in lost revenue every year.
By using AI, the government hopes to speed up investigations, reduce the burden on human auditors, and make the tax system fairer for everyone.
The focus is primarily on sectors like technology and finance, where complex financial structures are often used to shift profits to tax havens or low-tax jurisdictions.
This initiative is part of France’s broader efforts to comply with the OECD’s Base Erosion and Profit Shifting (BEPS) project, which aims to tackle profit shifting and tax avoidance on a global scale.
Large corporations operating in France will need to review their tax strategies carefully.
The introduction of AI tools means that the French government can more easily detect any attempts to avoid paying taxes.
Companies that engage in complex tax planning schemes may face higher scrutiny, fines, or legal action.
France’s use of AI to combat corporate tax evasion marks a significant step forward in the fight against tax avoidance.
These new tools are expected to increase tax compliance, generate additional revenue, and ensure that large corporations pay their fair share.
If you have any queries about this article on France’s corporate tax evasion tools, or tax matters in France, then please get in touch.
Alternatively, if you are a tax adviser in France and would be interested in sharing your knowledge and becoming a tax native, then please get in touch.
There is more information on membership here.
Brazil is on the verge of passing a major tax reform bill that could dramatically change how taxes are collected in the country.
This reform is aimed at simplifying the tax system, which is currently one of the most complicated in the world.
For businesses, both local and international, this could mean a reduction in compliance costs and a clearer understanding of how taxes will be applied.
Let’s explore what this tax reform involves and how it could impact businesses.
The Brazilian tax system is notorious for its complexity.
It involves multiple layers of taxes, including federal, state, and municipal taxes, which often overlap and create confusion for businesses.
The new tax reform bill aims to simplify this system by consolidating various taxes into one or two main taxes.
This would make it easier for businesses to comply with tax laws and reduce the administrative burden.
The main feature of the reform is the creation of a new Value Added Tax (VAT), which would replace several existing taxes.
The idea is to move towards a system that taxes consumption more fairly and reduces the burden on businesses that have been struggling to keep up with Brazil’s current tax requirements.
Brazil’s current tax system has long been a problem for businesses.
It’s not just the high tax rates that are an issue; it’s the complexity of the system. Companies spend a lot of time and money trying to figure out how much tax they owe and where they need to pay it.
In fact, a recent study showed that Brazilian companies spend more time on tax compliance than businesses in almost any other country.
By simplifying the tax system, the Brazilian government hopes to make the country a more attractive place for foreign investment.
Reducing the complexity of the system will lower compliance costs for businesses and help them focus more on growth and innovation.
The most significant change in the reform is the introduction of a single VAT that would replace several different taxes, including the PIS/COFINS (federal taxes) and the ICMS (a state-level tax on goods and services).
This would make it easier for businesses to comply with tax laws because they would only need to deal with one set of rules for consumption taxes, instead of the many overlapping rules they currently face.
Another key change is the introduction of a simplified income tax system for small and medium-sized enterprises (SMEs).
The goal here is to encourage growth among smaller businesses by reducing their tax burden and making it easier for them to comply with the law.
For businesses, especially large multinationals, this reform could lead to lower compliance costs and more clarity when it comes to tax obligations.
Instead of dealing with multiple tax authorities, businesses will be able to focus on a simplified system with fewer opportunities for confusion and errors.
However, some industries may face higher taxes, particularly in sectors that currently benefit from lower state-level taxes under the current system.
The reform is designed to create a more level playing field, so some businesses may end up paying more in taxes, while others may see their tax burden reduced.
Brazil’s tax reform bill is a long-awaited step towards simplifying one of the world’s most complicated tax systems.
For businesses, this reform promises to lower compliance costs and make it easier to understand and comply with tax laws.
While the changes will take some time to implement, they represent a significant move towards a more efficient and business-friendly tax system in Brazil.
If you have any queries about this article on Brazil’s tax reform, or tax matters in Brazil, then please get in touch.
Alternatively, if you are a tax adviser in Brazil and would be interested in sharing your knowledge and becoming a tax native, then please get in touch. There is more information on membership here.
Australia is updating its Goods and Services Tax (GST) rules, with a focus on cross-border digital services.
These changes require foreign companies that provide digital services to Australian consumers—such as streaming platforms, software providers, and online content services—to register for GST and collect the tax from their customers.
Under the new rules, any company that provides digital services to Australian consumers must:
This new regulation expands the scope of GST to cover not only goods but also digital services, meaning companies like Netflix, Spotify, and Amazon Web Services will all be subject to the tax.
Australia’s digital economy has grown rapidly in recent years, with many Australians using streaming services, software subscriptions, and other online platforms.
However, foreign companies that provide these services have been able to avoid paying Australian taxes because they do not have a physical presence in the country.
These new rules are designed to close this loophole and ensure that all businesses operating in Australia’s digital market contribute to the country’s tax base.
For foreign companies, these new rules will increase administrative costs as they will need to set up systems to collect and remit GST.
Companies that do not comply with the new regulations may face penalties or fines from the ATO.
On the other hand, this move will help level the playing field for domestic digital service providers, who already have to pay GST on their services.
Australia’s decision to extend GST to cross-border digital services is part of a broader trend towards taxing the digital economy.
These changes will ensure that foreign companies contribute fairly to the Australian tax system, while also boosting the government’s revenue from the rapidly growing digital sector.
If you have any queries about this article on Australia’s GST rules for digital services, or tax matters in Australia, then please get in touch.
Alternatively, if you are a tax adviser in Australia and would be interested in sharing your knowledge and becoming a tax native, then please get in touch.
There is more information on membership here.
Pillar Two is the second part of the OECD’s global tax reform, and its main goal is to introduce a global minimum tax rate for large multinational companies.
This helps prevent companies from shifting their profits to low-tax jurisdictions, commonly known as tax havens, to avoid paying taxes.
Pillar Two introduces a global minimum tax rate of 15%.
This means that even if a company is based in a country with a tax rate lower than 15%, other countries where the company operates can “top up” the tax to ensure that the company pays at least 15% on its profits.
The global minimum tax is designed to stop companies from using tax havens to avoid paying taxes.
By ensuring that all large companies pay a minimum level of tax, the OECD hopes to create a fairer global tax system.
Under Pillar Two, countries can introduce a Top-Up Tax, which ensures that companies with subsidiaries in low-tax countries pay additional taxes to bring their total tax rate up to 15%.
The Income Inclusion Rule (IIR) allows parent companies to pay extra tax on the income of their foreign subsidiaries if those subsidiaries are taxed below the global minimum rate.
Pillar Two is a major development in the fight against tax avoidance.
By introducing a global minimum tax rate, it ensures that companies can’t take advantage of tax havens to avoid paying taxes.
This creates a more level playing field for countries and helps them collect the tax revenues they need to fund public services.
If you have any queries about this article – What is the OECD’s Pillar Two – then please don’t hesitate to get in touch.
A dispute is brewing between the United States and Canada over the latter’s plans to introduce a Digital Services Tax (DST).
The DST is aimed at taxing large technology companies that generate significant revenue from Canadian users but currently pay little tax in the country.
The U.S. has expressed concerns that the tax unfairly targets American companies like Google, Facebook, and Amazon, and has threatened to retaliate with tariffs on Canadian goods if the DST is implemented.
In this article, we’ll explore the details of the DST, why the US is opposed to it, and what this could mean for international trade relations.
The Digital Services Tax is a tax on the revenue that large tech companies earn from providing digital services, such as social media, online advertising, and e-commerce platforms.
Canada’s proposed DST would impose a 3% tax on the revenue these companies generate from Canadian users.
The tax would apply to companies with global revenues of more than CAD 1 billion and at least CAD 40 million in Canadian revenue.
The tax is designed to ensure that digital companies, many of which are based in the U.S., pay a fair share of tax on the profits they earn from Canadian users.
Currently, many of these companies can shift their profits to low-tax jurisdictions, allowing them to avoid paying significant taxes in Canada.
The United States has raised concerns that the DST unfairly targets American tech companies, which dominate the global digital economy.
The U.S. government argues that the tax is discriminatory because it primarily affects American companies like Google, Amazon, and Facebook, while Canadian companies and companies from other countries are largely unaffected.
In response to Canada’s plans, the U.S. has threatened to impose tariffs on Canadian exports, which could affect key industries such as aluminum, steel, and agriculture.
The U.S. has argued that international tax issues should be addressed through multilateral agreements, such as the OECD’s global tax framework, rather than unilateral measures like the DST.
The dispute between the U.S. and Canada is ongoing, and both sides are still in talks to resolve the issue.
However, if Canada moves forward with the DST, the U.S. could retaliate with tariffs, leading to a potential trade war between the two countries.
This would have significant economic consequences for both countries, particularly for Canadian exporters who rely on the U.S. market.
In the meantime, many other countries, including France and Italy, have also introduced digital services taxes, and the US has taken a similar stance against those measures.
The outcome of the US-Canada dispute could have broader implications for how digital companies are taxed around the world.
Canada’s proposed Digital Services Tax has sparked a heated dispute with the United States, which views the tax as unfairly targeting American tech companies.
While the two countries continue to negotiate, the potential for tariffs and trade retaliation looms large.
If you have any queries about this article on Canada’s Digital Services Tax, or tax matters in Canada or the United States, then please get in touch.
Alternatively, if you are a tax adviser in Canada or the United States and would be interested in sharing your knowledge and becoming a tax native, then please get in touch. There is more information on membership here.
When you contribute to a retirement plan, such as a 401(k) or an Individual Retirement Account (IRA), you’re saving money for your future.
These contributions are often tax-deferred, which means you don’t pay taxes on the money you contribute until you withdraw it in retirement.
Every year, the IRS sets limits on how much you can contribute to these accounts, and in 2024, those limits have increased.
For 2024, the 401(k) contribution limit has been raised by £500, meaning you can now contribute up to £23,000 per year.
If you’re 50 or older, you can also make catch-up contributions, allowing you to contribute an additional £7,500 per year.
For IRAs, the contribution limit has increased to £7,000. However, unlike 401(k) plans, the catch-up contribution for IRAs remains the same at £1,000 for those aged 50 or older.
These increased limits are great news for anyone saving for retirement. The more money you can contribute to a retirement account, the more tax-deferred growth you can enjoy.
For people nearing retirement age, catch-up contributions are especially helpful because they allow you to save more during the final years of your working life.
The IRS adjusts contribution limits every year to keep up with inflation.
As the cost of living goes up, it’s important that people are able to save more for retirement to ensure they have enough money to live on in the future.
These adjustments help make sure that your savings don’t lose value over time.
The increase in retirement contribution limits for 2024 gives people more opportunities to save for their future.
By taking full advantage of these higher limits, you can grow your retirement savings and ensure a more comfortable retirement.
Whether you’re just starting your retirement journey or catching up on savings, these increases are a positive change for everyone.
If you have any queries about this article on the 2024 Retirement Contribution Limits, or US tax matters in general, then please get in touch.
The Global Minimum Tax is an international tax reform initiative designed to ensure that large multinational companies pay a minimum level of tax, no matter where they are headquartered or where their profits are generated.
This tax rule is part of the OECD’s Pillar Two initiative, which aims to prevent companies from shifting their profits to low-tax countries, also known as tax havens, to reduce their tax bills.
The minimum tax rate, set at 15%, applies to large multinational companies that meet certain revenue thresholds.
Under the Global Minimum Tax rules, if a multinational company has profits in a country where the corporate tax rate is lower than 15%, the home country of the company can apply a Top-Up Tax to bring the total tax on those profits up to 15%.
This ensures that companies can no longer benefit from moving their profits to countries with very low or no taxes.
For example, if a company has a subsidiary in a country with a 10% tax rate, the parent company’s home country can charge an additional 5% tax on those profits to meet the 15% collar.
It applies to large multinational companies with global revenues of more than €750 million. Smaller businesses and companies that operate mainly within one country are not affected by this rule.
The tax mainly targets companies that have used tax planning strategies to reduce their tax liabilities by moving profits to tax havens. Big tech companies like **Google**, **Amazon**, and Facebook are among the companies that could be impacted the most by this rule.
The Global Minimum Tax is important because it helps to create a more level playing field for countries and companies.
By ensuring that all large companies pay a minimum tax rate, it makes it harder for them to avoid paying taxes in the countries where they operate.
This reform is also expected to generate significant tax revenue for governments, which can be used to fund important public services like healthcare, education, and infrastructure.
The Global Minimum Tax is a key part of the OECD’s efforts to tackle tax avoidance by multinational companies.
By setting a minimum tax rate of 15%, this initiative aims to stop companies from shifting profits to tax havens and ensure that they contribute fairly to the countries where they do business.
If you have any queries about this article then please get in touch.
In a massive ruling, the European Court of Justice (ECJ) has ordered Apple to pay €13 billion in back taxes to Ireland.
This case has been closely watched by governments, multinational companies, and tax professionals around the world, as it has major implications for how large corporations are taxed in Europe.
As such, and as per our article earlier in the week, the judgement was eagerly awaited.
The ruling has been hailed as a victory for tax fairness in some quarters, but it also raises questions about the role of tax incentives in attracting foreign investment.
In this article, we’ll explore the background of the case, the court’s ruling, and what it means for the future of corporate taxation.
The case began in 2016 when the European Commission accused Apple of receiving illegal state aid from Ireland in the form of special tax arrangements that allowed the company to pay significantly lower taxes on its European profits.
Under these arrangements, Apple was able to route its profits through Ireland, where it paid a tax rate as low as 0.005% on some of its profits, far below the standard corporate tax rate of 12.5% in Ireland.
The European Commission argued that these tax arrangements violated EU rules on state aid, which prohibit countries from giving preferential treatment to specific companies.
As a result, the Commission ordered Apple to pay back €13 billion in taxes, a decision that both Apple and Ireland appealed.
In 2024, after years of legal battles, the European Court of Justice upheld the European Commission’s decision, ruling that Apple must pay the €13 billion in back taxes to Ireland.
The court found that the tax arrangements Apple had with Ireland constituted illegal state aid because they gave the company an unfair advantage over other businesses.
The court’s decision is a major blow to both Apple and Ireland, which had argued that the tax arrangements were legal and necessary to attract foreign investment.
The ruling sets an important precedent for how multinational companies are taxed in the EU and could lead to further scrutiny of tax deals between governments and corporations.
The Apple case is significant for several reasons. First, it demonstrates that the European Commission is serious about cracking down on tax avoidance by multinational companies.
By ordering Apple to pay back €13 billion, the Commission has sent a clear message that companies must pay their fair share of taxes, regardless of any special deals they may have negotiated with individual countries.
Second, the ruling raises important questions about the role of tax incentives in attracting foreign investment.
Ireland, like many other countries, has used low corporate tax rates and special tax deals to attract multinational companies to set up operations in the country.
While these incentives have helped boost investment and create jobs, they have also led to accusations of tax competition, where countries compete to offer the lowest tax rates to attract businesses.
The European Court’s decision in Apple’s tax case is a landmark ruling that will have far-reaching implications for how multinational companies are taxed in Europe.
By upholding the European Commission’s decision, the court has reinforced the principle that all companies must pay their fair share of taxes, even if they have negotiated special deals with individual countries.
For businesses and governments alike, this ruling serves as a reminder of the importance of complying with international tax rules.
If you have any queries about this article on the Apple tax case, or tax matters in the European Union or Ireland, then please get in touch.
Alternatively, if you are a tax adviser in the European Union and would be interested in sharing your knowledge and becoming a tax native, then please get in touch. There is more information on membership here.
Value Added Tax (VAT) is a type of tax that’s added to most goods and services that are sold.
In many countries, businesses collect VAT from their customers and then pay it to the government.
Recently, Switzerland decided to require online platforms to collect VAT on behalf of sellers, similar to rules in the European Union.
Switzerland is following the lead of the EU in making sure that online platforms like Amazon and eBay collect VAT on the goods sold by independent sellers.
Before this rule, it was up to the sellers themselves to collect and pay the VAT. However, not all sellers complied, and this led to lost tax revenue.
By shifting the responsibility to platforms, Switzerland aims to make sure that VAT is properly collected and paid. This helps ensure a fairer tax system and increases government revenue.
Under the new rule, if an online platform facilitates a sale between a Swiss buyer and an independent seller, the platform must collect VAT on behalf of the seller and pay it to the Swiss government.
This applies to both Swiss-based sellers and sellers from other countries selling to Swiss customers.
This change is important because it makes it harder for sellers to avoid paying VAT. It also levels the playing field for Swiss businesses, which have always had to collect and pay VAT on their sales.
For sellers, this rule means they no longer have to worry about collecting VAT themselves. However, it also means they may have to adjust their prices to include the VAT collected by the platform.
For online platforms, this rule adds extra work, as they need to update their systems to comply with the new VAT requirements.
However, platforms are used to these types of rules, especially in the EU, so most should be able to adjust without too much difficulty.
Switzerland’s new VAT rule for online platforms is a step towards stronger tax compliance.
By requiring platforms to collect VAT, Switzerland ensures that sellers pay their fair share of taxes while making the system simpler for both businesses and the government.
Final thoughts
If you have any queries about this article, Swiss Platforms Required to Collect VAT from Online Sellers, or tax matters in Switzerland more generally, then please get in touch.
In today’s digital age, many people are earning money through social media platforms like Instagram, YouTube, and TikTok.
These individuals are known as social media influencers and content creators. They earn income through brand deals, sponsorships, and even selling their own products.
However, with the rise of this new type of income, tax authorities have had to adapt and create rules on how influencers should report their earnings.
In the UK, HM Revenue and Customs (HMRC) is cracking down on influencers who may not be aware that they need to pay tax on their online income.
If you’re an influencer, it’s important to understand that the money you make from social media is subject to tax just like any other income.
Social media influencers can earn money in a variety of ways, including:
Even though these earnings come from social media, they are still considered taxable income. Just because your income comes from an online source doesn’t mean you’re exempt from paying taxes.
In the UK, influencers must pay both Income Tax and National Insurance Contributions (NICs) on their earnings. The specific amount they owe depends on how much they earn in total. Here are some of the key tax responsibilities influencers have:
Most influencers are self-employed, which means they must file a Self-Assessment tax return every year.
This is where they report all their earnings, expenses, and calculate how much tax they owe.
It’s important to keep records of all income, including payments received from brands, affiliate links, and ad revenue.
Failing to report income correctly can lead to penalties from HMRC.
Additionally, if influencers receive products or services in exchange for promoting a brand, the value of these goods must also be reported as income.
For example, if a clothing company sends an influencer free clothes in exchange for a post, the value of the clothes counts as income and needs to be taxed.
As social media continues to evolve, more and more people are making a living through online platforms.
While this is exciting, it’s important for influencers to understand that their income is taxable and that HMRC is paying close attention to how it is reported.
Keeping accurate records, filing a Self-Assessment tax return, and being honest about earnings are the best ways to stay compliant and avoid penalties.
If you’re an influencer, don’t forget that taxes are part of your business responsibilities!
If you have any queries on Tax for Social Media Influencers, or other UK tax matters, then please get in touch.