According to Grant Thornton International Business Report, There are many businesses which would welcome tax authorities to introduce more tax guidance. Resultant outcomes of a report by an advisory firm who interviewed few thousand stakeholders from different parts of the world says that overall 68% of the key players appreciate more tax guidance.

Responding to questions about the local Tax laws only 31 percent found that local taxation policy is adding some value to the overall economic growth. 75 to 85 percent firms in Europe and Latin America are in favor of change and 54 percent in North America and 67% in Asia-Pacific.

While responding to questions about local taxation laws and tax policies, 31 percent as geared to kindle the growth of economy. 11 percent and 23 percent of southern Europe and Latin American companies believed the same. Almost 50% of the participants when asked the same question disagreed with the fact that local taxation laws and policies can add some bounty. BRIC and G7 were not on the same path of opinion where 68 percent were among their BRIC peers and rest said to have some plans to make tax affairs more transparent which itself tells the various sentiments of local pressure among two bodies regarding the subject.

Making further comment incoming Global leader of Tax at Grant Thornton, said: “In a humble way tax is a charge to businesses and it’s predictable to see few subordinate it with the growth of economy”. Established economies around the world and among them many are under intensive cutbacks but the executives see the rise of taxes with overall minimum or no change in economic growth. However, they believe that taxes are too frequent and it’s astonishing that not enough bodies are being taxed. It is clear that business stakeholders want arrangements in global taxation scheme to equal the plot.

On May 15, 2013, the Securities and Futures Commission (SFC) in Hong Kong launched a three month consultation procedure regarding the proposals for the reform of the system of professional investors and the requirements regarding the mandates between investors and intermediaries set out by the Code of Conduct.

The main proposals include :

• The requirement for intermediaries to implement all provisions set out in the Code of Conduct, specifically the observance of the so-called Adequacy Requirement referring to the obligation to ensure the appropriateness of recommendations for clients, applicable to all cases where investors are individuals. This also includes investment vehicles of individuals and their potential trusts and other family trusts.
• The rationalization of Code of Conduct criteria to assess the knowledge and experience of professional investors in the case of legal persons, especially the removal if specific tests, for example the minimum requirement of 40 transactions per year.
• The need for the Adequacy Requirement to be reflected contractually in all mandates, that such mandates should not contain provisions contrasting with the Code of Conduct, and the requirement for the precise statement of all services provided for clients.

According to Mr Ashley Alder, CEO of SFC, this consultation aims to clearly identify investors that require full protection under the Code of Conduct, and those who do not. Indeed, according to the SFC, the adequacy requirement is a pillar of investor protection, which is why regardless of any consideration relating to property, individuals should not be classified in the same category as professional investors, and thus be deprived of this essential protection.

Finally, these proposals aim to harmonize the content of mandates used by intermediaries, and the services they actually provide to customers. Thus, intermediaries will be required to be honest with their customers.

In spite of all the fuss being made, very little information has filtered in the media so far regarding the owners of off-shore companies, other than public information.

The reliability and the density of the released information is unknown, but it has to be noted that the data, consisting of stolen information, are reported to have leaked from two main sources located in the British Virgin Islands and in Singapore.

SFM has no business with the involved providers. Therefore we have no reason to believe that any information related to SFM clients have been stolen and are to be made public.

SFM has consistently taken great care to protect personal data within secured premises and systems, including printing restrictions, in order to comply with the law and with our service agreement, and to prevent any theft of data. Please see our confidentiality policy.

Furthermore, because of the illegal nature of the stolen data, and in spite of the open greediness of some States to have access to it, any release of information to the public, at the exclusion of information linked to prominent political individuals, may be viewed as a breach of the law and punished by the courts.

However, there is a clear drive among some States to point an accusing finger at the off-shore industry and pinpoint it as the new cause of their woes, in an attempt to gain the upper hand in the international tax competition arena and tap into a new source of income.

This should serve as a good opportunity to remind our clients that while their data are safe and an international business company remains a powerful tool, off-shore companies have many legitimate purposes and that they should be used in accordance with them.

Recently, the Dubai International Financial Centre (DIFC) organized a public consultation on legislative changes particularly relating to aligning the regulation of free-trade agreements with the international standards of tax transparency.

Administrative authorities of the DIFC proposed amending a number of laws through an amendment to comply with the requirements in the OECD Global Forum on transparency and exchange of tax information.
 
In addition, they also proposed amendments to the Arbitration Act, DIFC Law No.1 2008 to be aligned to the New York Convention.

For compliance with the standards of fiscal transparency, the DIFC intends to make changes to the companies act, the general partnership law, the general partnership Rules, partnership laws, and limited liability companies rights.

Finally, the administrative authorities of the DIFC also propose to include transitional provisions of the law on non-profit organizations, DIFC Law No. 6 of 2012, to allow the existing Non-Profit Organi

The RQFII (Renminbi Qualified Institutional Investor) program is a key element in the measures taken by China to globalize its currency and make it convertible.
 
In doing so, this change will allow large companies to offer their customers funds denominated in renminbi.

In addition, the regulations of the program, dating back to its inception in 2011, will be amended so that investors have more opportunities to invest their capital in the Chinese financial markets and no longer be obliged to place at least 80 % on the bond markets.

For banks such as HSBC or Standard Chatered, these changes are an excellent opportunity to offer new services to their worldwide customers who will now able to invest via RFQII.
 
According to HSBC, the offshore renminbi market has developed rapidly since 2010 and continues to grow. They are particularly positive about the opening of the RQFII program and hope for full convertibility of the currency in the next 5 years.

The Bahamas wishes to protect its attractiveness and its reputation as a financial centre, while at the same time remaining open to new regulatory initiatives.
 
Ryan Pinder stressed that the territory’s fiscal regime had not been developed in order to create the environment of a tax haven, but to increase the revenue that was necessary for public expenditure in the framework of an open economy orientated towards imports.

However, he recognised that the rules had now changed, as had the attacks against small financial centres like the Bahamas. That is why his ministry follows the developments and the OECD and the European Union so closely, to make sure that the point of view of the business sector is taken into account, and so they can adjust their own legislation.

The Bahamian Ministry of Financial Affairs is therefore working on a certain number of key points, notably on the subject of conformity with the American FACTA (Foreign Account Compliance Tax Act), while at the same time seeking to conserve the territory’s competitive edge.

According to Professor Chan, this convention aims to clearly define the allocation of taxes between the two countries and reduce the rate of income tax considered to be passive.

Such a convention would thus :

• allow a better evaluation, for investors, of their potential tax obligations due from their cross-border economic activity
• strengthen economic and commercial ties between Hong-Kong and Italy
• create new incentives for Italian companies to invest in Hong-Kong or to do business there.

The fiscal advantages of this new measure are particularly positive for both Italians and the residents of Hong-Kong.

Firstly, the Italian residents in Hong-Kong will no longer be subject to taxation in the two countries. The tax that they pay in Hong-Kong will be deducted from what they would have to pay in Italy.

Secondly, companies in Hong-Kong, who do business with companies established in Italy and whose revenues come from Hong–Kong, will no longer have to pay tax in both countries. The tax paid in Italy will be deducted from the tax owed in Hong-Kong.

Thirdly, the tax rates on the interest, dividends and charges income received by a resident of Hong-Kong, coming from Italy, will be reduced :

• Tax on interest changes from 20% to 12.5%.
• Tax on interest changes from 20% to 10%.
• Tax on interest changes from 22.5% to 15%.

In conclusion, the measures taken by the two countries are particularly advantageous. Consequently, this should encourage a good number of investors and Italian companies to start up or further develop their affairs with Honk-Kong.

Between 2nd January and 28th March 2013, the PSDAS is offering a new set of requests for not-for-profit, commercial or industrial organisations, as well as for research institutes.

Therefore, eligible projects include conferences, the organisation of seminars, training courses or promotional events.
Once the project is approved, the subsidy may amount to 2 Million HK$, that is to say 258,000 US$, on a “Dollar for Dollar” basis. The applicant must pay the balance of the cost of the project through self-financing, sponsorship or even income from the project.

The sectors eligible to present their projects and apply for a subsidy are:

• Accounting services such as auditing or even fiscal services
• Legal services including arbitration and legal mediation
• Engineering services such as architecture, design or construction
• Medical, dentistry and veterinary services

However, projects from business, information technology and financial consultancy services are also eligible.

The new treaty aims to improve transparency, information exchange and economic relations between the two countries. Inspired by the Tax Convention on Income and OECD capital, it should enter into force on 1 January 2014.

The main change in this treaty relates to taxation of dividends, capital gains, interest and royalties.
Indeed, the income will not be exempt from withholding tax of 15% in Ukraine, but will be directly imposed at source.
Thus, if the recipient holds at least 20% of the Ukrainian company’s capital which pays dividends, or if it invested at least € 100,000, a fee of 5% will apply on income.
In other cases, the tax rate will be 15%.

Secondly, interest payments will be taxed at 2% if the recipient is tax resident in Cyprus.

Then, for royalty payments, a tax of 10% – or 5% for patents, trademarks or information relating to industrial, trade or scientific research apply if the recipient is tax resident in Cyprus.

It is also important to note the changes in the status of the company as the new Treaty introduces two new concepts :

• A company is resident of the State where its effective management is located.
• A company has a permanent establishment in the other Contracting State in which a person acts and has the authority to sign contracts on behalf of the Company.

Both changes highlight the importance of maintaining a relevant basis in Cyprus.

Finally, the new treaty, in addition to the advantageous tax in the country, allows Cyprus to maintain its position as an ideal jurisdiction for investments in Ukraine.

The Russian Ministry of Finance has recently released a new white list of offshore jurisdictions where Cyprus is no longer included.

Although a double taxation treaty was signed between the two countries last February, Cyprus was still regarded as an offshore destination by Russia until October 31.

This change presents certain advantages as regards taxation and investments for Russian companies.

Indeed, dividends from Cyprus will no longer be taxed at 9% but at 0% instead. Thus, the country will become an advantageous place for Russian holdings regarding ownership of assets abroad.

Furthermore, the tight transaction control typically enacted by the tax authorities whenever one of the parties is domiciled or incorporated in an offshore jurisdiction, shall no longer apply to Cyprus.

Finally, despite rumours of a greater information exchange between the Russian and Cyprus tax authorities, Cyprus confirms that the original agreements remain unchanged.