Taxation Law Articles
Articles written by attorneys and experts worldwide
discussing legal aspects related to Taxation.
If you've been putting off your estate planning, you are putting yourself and your family at risk. Without a plan, you will have no control over the future and you won't be protected during unexpected events.
More people are looking for new ways to save and this often leaves many people looking for low-cost estate planning options.
Death and taxes may indeed be inevitable, but paying a so-called “death tax” is not. "In this world nothing can be said to be certain, except death and taxes." —Benjamin Franklin
When a person dies, federal estate tax may be due. These are taxes that are due when the assets are passed to another person. Most people refer to this tax as the “death tax.” You may be aware that there are new laws regarding this tax. It is important to stay on top of the new tax law so that you know how you may be affected. Will you have to pay estate taxes?
Independent film financing and tax credits are linked and play a huge role in making a successful film. Understanding where these credits are and how to obtain them is vital. Dunlap, Grubb & Weaver, experienced entertainment lawyers can help with this. This article lists the credits available in the United States by jurisdiction.
Estate planning has everything to do with making sure that your loved ones are properly provided for after you pass away.
One of the things that you are going to have to decide upon when you are planning your estate is the primary vehicle or vehicles of asset transfer that you want to utilize.
When you are a partner in a small business succession planning can be a bit tricky.
There are gifts that you can give to people, other than your spouse, that are not subject to the Federal Gift Tax
Once your child reaches 18 years of age, they are legally considered to be an adult
For parents of young children, the most important element of the estate plan is choosing a guardian for them
One of the things that you must understand about estate planning is the fact that there is no universal, one-size-fits-all approach
As far as entering of a foreign company into the construction market of the Republic of Belarus is concerned, taxation of foreign construction companies’ profits, operating in the Republic of Belarus through the permanent establishment is one of the problematic issues.
An article regarding the legal, tax and business aspects of a prudent accounting in Thailand.
The provisions contained within the tax relief bill that was passed through Congress and signed into law around the middle of December of last year are scheduled to expire at the end of 2012. If no new laws are passed to change the status quo, the estate tax exclusion will return to $1 million in 2013, and the tax will carry a 55% maximum rate.
We heard a lot about the legislation that was passed in the middle of December that is now being called the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 as we were ushering in the new year. As a result of this action the Bush era tax cuts were extended and the Social Security payroll tax was reduced by nearly a third for 2011. As has been widely reported there were also some changes that affect the estate tax.
The recently passed Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that brought the estate tax rate down to 35% has been a hot topic of late. In case you are unaware of the back story, the rate of the tax was scheduled to revert to the 55% that was in effect in 2001 upon the “sunset” of the Bush era tax cuts at the beginning of 2011. The tax was repealed for 2010, but from 2007 to 2009 the rate of the tax was 45%.
Optimizing your assets is one of the goals of estate planning, and depending on the circumstances this can often times be challenging.
Do you know the best age to start withdrawing from your retirement account? Do you plan to work for a few years after you're eligible for Social Security withdrawals? Is there an age by which you must withdraw money from your IRA?) You're nearing retirement age, but maybe you're unsure at what age you can begin using that money you've socked away all these years.
The European Commission, in its Communication published 20 December, aims to make Member States tax systems more compatible in order to facilitate cross-border activities between citizens from neighboring States. Eventually new measures could make it easier for individuals living, working or moving abroad to confront double taxation, tax refunds reclaim, cross-border income, inheritance taxes, dividend taxes, car registration taxes and E-Commerce.
Panama and the USA Sign an Agreement for Tax Cooperation and the Exchange of Information Relating to Taxes
On the 30th day of November of 2010, the governments of the Republic of Panama and of the United States of America (“USA”) signed an “Agreement for Tax Cooperation and the Exchange of Information relating to Taxes” (“the Agreement”).
Administrative Cooperation in the Field of Taxation (Council Directive 2011/16/EU of 15 February 2011) - Cyprus
In April 2009, the European Commission issued a Communication on “Good Governance in Tax Matters” with the intention to launch a debate about concrete actions that could be taken to better promote the principles of good governance in the tax area (transparency, exchange of information and fair tax competition). The aim of the Commission to improve synergies between tax and development policies becomes concrete with the Council Directive 2011/16/EU of 15 February 2011.
Debt reduced by a mortgage loan modification, short sale or foreclosure will often result in the issuance by the lender of an IRS Form 1099–C, Cancellation of Debt. Under the Internal Revenue Code if you borrow money from a lender who later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes.
Nationwide, tax incentives for films typically take on one of three characteristics: (1) tax rebates, (2) tax credits, or (3) a hybrid of rebates and credits. Utah incorporates some form of each popular tax incentive available. Utah offers a hybrid of tax rebates and credits for qualifying productions. The state currently offers productions 20% maximum on dollars spent in Utah, which they term “dollars left in the state.” The new bill will increase this amount to 25%.
Capital Gains Tax accrues on an actual year basis.
A brief introduction to German estate tax, gift tax, and inheritance tax law. Easy to follow explanation and information in plain English on taxation of estates, heirs, and beneficiaries in Germany.
The presentation of a “Pact of Competitiveness” at the EU summit on 4 February by Germany and France was the plan for the Eurozone Member States to agree on a closer economic convergence in order to restore competitiveness to the euro area.
According to the Money Laundering Prohibition Law, and the Prohibition on Money Laundering Ordinances (Methods of Reporting Monies Entering and Leaving Israel) 5761-2001, it is mandatory to report the flow of money in and out of Israel.
Tax planning is a legitimate method of minimizing your tax liability and should not be confused with tax avoidance. For any individual or company that trades or wants to make business in Europe, Russia, Middle East or Asia, Cyprus offers incredible advantages as an international business center.
The Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the Tonnage Tax Law) left certain issues of detail to be determined by the Cyprus Department of Merchant Shipping ("DMS"). The DMS has now issued Notifications setting out requirements for qualifying ship managers and prescribing the arrangements for calculation and payment of tax by owners and charterers of foreign ships and ship managers. A summary of their main provisions is given below.
Following the visit of Russian President Medvedev to Cyprus and the signing of the Protocol to the double taxation agreement on behalf of the governments of both countries, it was expected that the amended treaty would be ratified by the Parliaments of the two countries before the end of 2010 and would become effective from 1 January 2011. This timetable was not realised and, assuming the amended treaty is ratified during 2011, it will take effect on 1 January 2012.
One of the most frequently asked questions by consumers who are contemplating filing bankruptcy is: Can I Discharge a Tax Debt in Bankruptcy? This article answers these questions and more on the subject of what tax debts can be discharged by the filing of a chapter 7 bankruptcy.
Circulars issued by the Russian tax authorities in 2010 clarify their interpretation of certain aspects of the existing Cyprus-Russia double taxation agreement, specifically the presence required to give rise to a permanent establishment, the deeming of excessive interest as dividends and the treatment of the proceeds of liquidation of a Cyprus company in the hands of Russian taxpayers.
Major advantages of setting up a company in Bulgaria.
Unification of the Taxation of Foreign Enterprises, Foreign Invested Enterprises and Domestic Enterprises - China
The State Council issued the Notice on Unifying the City Construction Tax and Educational Surcharge of the Foreign Invested Enterprises, Foreign Enterprises, Foreign Individuals and Domestic Enterprises (the "Notice") on October 18th, 2010.
The Provisional Measures for Tax Administration of Foreign Enterprise Representative Office ("Provisional Measures") was issued by the State Administration of Taxation on February 20th, 2010 and became effective since January 1st, 2010.
China Adopts Tax Measures and Disclosure Rule Relating to Share Transfers by Non-Resident Enterprises
The PRC State Administration of Taxation issued the Notice on “Strengthening the Management of Enterprise Income Tax Collection of Income from Share Transfers by Non-resident Enterprises”, on December 10, 2009 (the "Notice").
Notice on Interpretation and Determination of Concept of "Beneficial Owner" for Application of Tax Treaties
The State Administration of Taxation issued the “Notice on Interpretation and Determination of Beneficial Owner under Tax Treaties” (the "Notice"). The Notice intends to regulate the acts of foreign companies preventing them from taking advantage of the “double taxation arrangements” signed by China.
Although most transfers between spouses or former spouses in the context of a marital dissolution will be non-taxable, there are some important exceptions. These exceptions are discussed below. The importance of obtaining records showing the tax basis in the asset received through divorce is also highlighted.
A good way to avoid tax problems is through detailed record keeping, which provides up-to-date information on your finances and spending patterns.
A tax audit is performed to asses the validity of the information on your tax return.
If you failed to pay your federal taxes, the IRS may seize your property. To find out more about alternatives to an IRS seizure of individual property, you can get the help of a tax attorney.
Protecting your property is an important thing. How do you do it? Why do you do it?
A brief summary of the new tax legislation passed by Congress.
With the measure of the Italian Tax Authority dated December 22nd 2010, a new digital communication has been introduced in the Italian regulatory system for all exchanges relevant for the Value Added Tax (VAT) equal or exceeding the amount of 3,000.00 Euro, as foreseen by the art. 21 of the Law Decree no.78/2010 turned into the Law no. 122/2010.
Details of the new double tax treaty between Cyprus and Kuwait have now been made public. The new treaty, signed on 5 October 2010, will take effect when it has been ratified by both countries. Until then the existing treaty, which dates back to 1984, will continue in effect.
Details of the new double tax treaty between Cyprus and Denmark have now been released. The new treaty, signed on 11 October 2010, will take effect when it has been ratified by both countries. Until then the existing treaty, which dates back to 1981, will continue in effect.
Following its emergence as an independent state, Slovenia adopted the double taxation agreement dated 29 June 1985 between the former Yugoslavia and Cyprus. A new double taxation agreement has now been agreed between Cyprus and Slovenia. It was signed on 12 October 2010 and will take effect when it has been formally ratified by both countries. Until then the existing 1985 treaty will continue in effect.
The Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the Tonnage Tax Law) left certain issues of detail to be determined by the Cyprus Department of Merchant Shipping. The Department has now issued Notifications setting out the arrangements for payment of tonnage tax by owners of ships on the Cyprus Register, the definition of Community ship for the purposes of the Tonnage Tax Law and the towage and dredging activities which qualify for taxation under the tonnage tax regime.
The additional protocol to the Cyprus – Italy agreement on the avoidance of double taxation, which was signed on 28 May 2009, has now been ratified by both countries and has come into effect. The additional protocol provides for the exchange of bank and other information based on the OECD Model Tax Convention.
Mainly, the mining industry comes under the control of is the Mining Code and the ancillary Mining Regulation. This legislature is in general application throughout the entire country and offers some tax advantages and incentives available to private parties that perform mining activities.
Recently, the Magistrate's Court in Ashdod was asked to discuss the admissibility of a statement given in the course of the interrogation of a suspect in tax-related offenses, including theft, conspiracy to commit a crime, accepting property obtained criminally, and evasion of tariff payments owed.
It is hard to believe, but in less than two months the year is over. This year, doing year-end tax planning is full of uncertainty, as the tax rules for 2011 are not set. It is not probable that Congress will act in the lame-duck session now that the elections are over. As a result, it is difficult for a person to decide what to do, in order to lower the overall tax bill for 2010 and 2011.
By Connolly Law
There are different ways of disposing of personal effects in a will, one of which is making specific gifts to named beneficiaries. Sometimes people mistakenly believe that verbally telling their prospective executors how assets are to be distributed or writing the names of various relatives’ on masking tape and labeling items are effective ways of planning for the subsequent distribution of the items.
Persons conducting entrepreneurial activities often pay state duties while dealing with different state bodies. It is necessary that the citizens paying duties are aware of the cases when the paid duty is subject to return. It is also desirable to clarify the procedures of returning the duty.
If the IRS plans to take a collection action against you, there is a Collection Due Process (CDP) that the IRS must follow.
The treatment of California Registered Domestic Partners under federal tax law as compared to spouses is far from equal, but 2010 private letter ruling by the IRS is major step toward the application of federal law in a way that is consistent with the rights granted RDPs under California law.
The Israeli Tax Authority position regarding the classification of transactions involving computer programs has been published in a special Circular (hereinafter: the Circular).
Cyprus is definitely on the map as a prominent forum for the establishment of private investment funds, also known as private International Collective Investment Schemes (private ICIS). An ICIS can also be formed as a public fund, however the purpose of this brief is to provide a general overview of the primary advantages of a private ICIS.
Israel offers several exemptions from tax to foreign residents
As December 31 came and went, so did the federal estate tax - or at least for the time being. The estate tax, or the "death tax" as it is more affectionately known, is a tax imposed on the property and assets (i.e. "the estate") that an individual leaves behind at death. Under 2009 rates, the first $3.5 million of the estate was exempt from the tax while any amount over this was taxed at 45 percent.
Will Section 181 permitting a 100% federal tax write-off on film investment be renewed?
This article focuses on the Israeli tax rules on depreation concerning various assets.
If you fail to pay your taxes in Baltimore, the Internal Revenue Service (IRS) may issue a tax levy against you.
New Israeli tax law provides an exceptional tax planning strategy for foreign investors. Such investors can use an Israeli company as the owner of their global investments and have full exemption from Israeli tax and tax reporting requirements.
The federal government has incentives in place to encourage us all to be more energy efficient. These include tax credits for the purchase of certain energy-efficient products or renewable energy systems for your home.
The emergence of the Federal Inland Revenue Service (FIRS) Establishment Act may bring smile to the faces of corporate tax payers if the provision that introduces tax refund will be given the necessary push and attention.
The Ontario attempt to harmonize its provincial sales tax regime with the federal GST has the charity sector struggling to understand the impact these sweeping changes will have on the various types of charities within the sector.
Most probably you have heard ads on the radio or seen spots on the television for businesses who claim to be able to help taxpayers who are behind on their tax liabilities. The ads claim that they are able to represent the taxpayers and can settle cases for pennies on the dollar. The ads chime—why pay more?
This year may be particularly beneficial for individuals in the latter category because of the unique opportunity afforded donors in the Conservative government's tax changes announced in the May 2006 budget. The most prominent of the changes allowed for the donation of shares in public companies to public charities (i.e. all but private foundations) on a tax free basis.
After the 2006 Budget, many observers expected that the elimination of tax on the donation of publicly listed securities to "public" charities would be extended to private foundations, and, indeed, Budget 2007 lived up to this prediction.
Overseas operation is fundamental to the operation of many charities, especially religious charities, and so it is important for these charities to have a good understanding of the law regarding carrying out charitable activities overseas. Given that the government subsidizes registered charities to the extent that it gives tax credits for the amount donated, it should not be surprising that the CRA attempts to exert as much control over funds spent overseas as funds spent domestically.
Since June 2005, the Canada Revenue Agency has had the power to impose penalties on charities for breaking certain rules which stop short of revoking the charity's registered status. These intermediate penalties range from a $500 penalty for not filing a charitable information return to paying 110% of an undue benefit bestowed upon a third party.
It is important for charities to be flexible in their thinking when raising funds. In this way, charities may be able to amass donations of items they would otherwise never have sought let alone receive. One such area that deserves further focus by charities is that involving life insurance.
The first and most obvious way is that charities dedicated to relieving poverty obviously have greater restraints put upon them in times when more people are suffering from poverty. Unfortunately, just as the individual suffers from these economic troubles, so too does the charity.
The first interesting change is the abolishment of the PST and the adoption of the HST. While the official government announcement indicated that the rebates available to charities under the HST effectively made charities revenue neutral between it and the PST.
In 1999, Parliament amended the Income Tax Act (the "Act") to create what are commonly called Third Party Civil Penalties. The provisions, which are broadly worded, ostensibly target those individuals who assist others in making what the CRA would believe is a false statement or omission on their tax returns.
For the second time in six years the Federal government is changing the disbursement quota calculation for charities. Originally instituted in 1976 as a way to force charities to spend their funds on their charitable activities, the quota has turned into a cross between a math nightmare and an obstacle for the growth of small charities.
Homeowners in most provinces know that the land transfer tax due on purchase of the home can be the straw that breaks the camel's back as far as affordability goes. Most provinces have a version of the land transfer tax (as called in Ontario, or the Property Transfer Tax or Land Purchase Tax in other provinces). The tax is generally calculated as a percentage of the property being transferred, so the higher the value of the property the greater the tax.
The advent of the HST system in Ontario has been treated with a distinct lack of enthusiasm by charities. On the one hand, as the HST system is based on the GST regime some may feel comfortable with HST as simply being an extension of the GST (the only problem is that the GST is an enigma to most). On the other hand, the silence about the HST in the charities community is in some ways surprising given the now enhanced consequences to directors and charities for misunderstanding the law.
We are periodically faced with the unfortunate situation when a charity or not for profit is forced into bankruptcy or receivership. Unfortunately, giving clear advice in the area is complicated by the relative lack of applicable law. In one circumstance we were confronted with a situation as to whether a going concern operating as a charitable trust could make a proposal in bankruptcy.
This case serves as a warning to any advisors that receive commissions paid by promoters to avoid potentially conflicting situations regardless of their confidence in the shelter. And perhaps more importantly, advisors should hold themselves to the highest fiduciary standards in all cases, even if their relationship with the donor is more fleeting thatn was the one between the Lembergs and Mr. Perris.
The first and likely most recurring situation is a return of member's dues. In theory, there is nothing wrong with the organization returning amounts paid by the members to the organization. However, in circumstances where the organization has provided some (non monetary) benefits to its members the organization would have to deduct the value of these benefits from the amounts being returned to the member.
Recently, there was a report that President Barack Obama and Democratic lawmakers planned to freeze the estate tax at the current level of $3.5 million exemption per estate, which would prevent the temporary one year repeal of federal estate taxes in 2010, with the tax returning in the following year with only a $1.0 million exemption, along with a tax rate of as much as 55%.
Ask a tax professional before losing or walking away from your home. These days in this shaky economy and what the experts are calling the “jobless recovery,” there are many people still out of work. Perhaps the reader of this article has friends or family that are currently out of work, but have been actively seeking work.
As many Napervillians become more successful in their businesses, they may purchase another residence in another state. As time goes on, they may choose to spend more time in that state (especially in the wintertime). The other state may be more attractive, because that state might not have an income tax or an estate tax upon death. Thus, even if people choose to spend a substantial amount of time at their Illinois residence, they may declare they are a resident of another state.
It often happens that for one reason or another you owe back taxes. The IRS can be relentless in their pursuit for payment. It may seem like filing for Bankruptcy would get the tax man off your back, but this is not necessarily the case. The Franchise Tax Board and the Internal Revenue Service really don't like to lose money.
The mechanism of Cyprus International Trusts in Tax Planning.
Many people incorrectly believe that they cannot discharge unpaid tax debt in bankruptcy. While this is a very complicated area of bankruptcy law, it is possible to obtain a bankruptcy discharge of many tax debts, including the penalties and interest owed thereon. In fact, bankruptcy can be the best available option for individuals with unpaid tax debt to relieve some or all of the financial and personal hardship caused by owing money to the IRS.
Hong Kong signed comprehensive agreements with the UK and Ireland on the avoidance of double taxation in June 2010.
They say there are two things that are almost sure in your life: death and taxes. It is likely that none of these problems will ever be completely “solved”, however as medical professionals are continuously working on expanding life expectancy, we, tax professionals are always trying to offer cosmetic solutions for lowering the overall tax burden of businesses.
Although representative offices (“RO”) are legally only allowed to conduct limited activities in China e.g. liaison, research and marketing for their foreign holding companies, it has been a popular form of business entity for foreign companies to set up due to its simple registration requirements and no registered capital payment is needed. Recent changes to the tax rules for ROs may however affect this trend.
How to establish a Limited Liability Corporation, Joint Stock Corporation from a practical point of view.
The Hungarian Parliament passed a bill on 22/07/2010 which brings company tax exposure of Hungarian companies down to 10% on profits up to EUR 1,8 million.
The term to exercise the right to be reimbursed any overpaid or improperly paid amounts to the Treasury is reduced from 7 to 3 years, counted from the last day of the year on which payment was made.
The rates for natural person shall be as follows:
Does your company make payments to foreign entities or non-U.S. individuals? If yes, you may have tax withholding requirements under US Tax Code Section 1441: Withholding and Reporting Requirements.
By MMLC Group
The China State Administration of Taxation ("SAT") issued Circular Guoshuihan  No.507 “Notice of the State Administration of Taxation about the Issues Relevant to the Execution of the Royalty Clauses of Tax Treaties” (“Circular 507”) on 14 September 2009 clarifying some issues on implementation of the Royalty Clauses under the tax treaties between the PRC and various countries. This article reviews the major issues of that Circular.
The Mainland and Hong Kong signed an Arrangement between them for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Arrangement”) on 21 August 2006 to eliminate any situation of double taxation that might otherwise be faced by a Mainland or Hong Kong investor or resident in the conduct of cross border activities.
With the enactment of Law No.8 of 2010, new rates will take effect on income tax for both legal entities and for individuals. Note that the application of these rates is retroactive, so their entry into force is from January 1, 2010. In addition, it includes tariff changes regarding ITBMS (similar to the VAT), ISC and Stamps, which take effect from July 1, 2010.