1 / 17

IFA UK Branch Report 2013

IFA UK Branch Report 2013 Subject 1: the taxation of foreign passive income for groups of companies. James Anderson and Alex Jupp Presentation to the UK Branch, September 2012. Focus of Subject 1. Beijing Boston Brussels Chicago Frankfurt Hong Kong Houston London Los Angeles Moscow

rigel-burris
Download Presentation

IFA UK Branch Report 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. IFA UK Branch Report 2013 Subject 1: the taxation of foreign passive income for groups of companies James Anderson and Alex JuppPresentation to the UK Branch, September 2012

  2. Focus of Subject 1 Beijing Boston Brussels Chicago Frankfurt Hong Kong Houston London Los Angeles Moscow Munich New York Palo Alto Paris San Francisco São Paulo Shanghai Singapore Sydney Tokyo Toronto Vienna Washington, D.C. Wilmington • Groups of companies • Profits of non-domestic / foreign entities • Passive investments • Low-taxed “Intellectual systematisation of a quotidian problem”

  3. Structure of UK Branch Report • Overview • General anti-avoidance rules • Specific / targeted anti-avoidance rules (excluding CFC provisions) • CFC provisions • Tax treaty / EU considerations

  4. Overview • UK taxation of cross-border groups • Direct tax on foreign profits (e.g. CFC) • At-source tax on foreign-earned income (e.g. withholding) • Indirect tax impact from foreign-earned income (e.g. transfer pricing adjustments in the UK) • Policy indicators • Global v territorial: the shift • CFC better but safeguards remain • Tightening of other passive income safeguards: QEB • What is “passive” income? • Not a term of art in UK tax • Some artificial distinctions are needed

  5. Structure of UK Branch Report • Overview • General anti-avoidance rules • Specific / targeted anti-avoidance rules (excluding CFC provisions) • CFC provisions • Tax treaty / EU considerations

  6. General anti-avoidance rules • Statutory • General anti-abuse rule • Effect on the centre ground of tax planning? • Supplementary to TAARs • Application to treaties? • The Panel • “Judicial” • Not limited to foreign, passive, low-taxed income of groups of companies • Use in the CFC context? • Artificial gateways to the GAAR?

  7. Structure of UK Branch Report • Overview • General anti-avoidance rules • Specific / targeted anti-avoidance rules (excluding CFC provisions) • CFC provisions • Tax treaty / EU considerations

  8. Specific / targeted anti-avoidance rules • Subject 1-specific: • Withholding obligations • Transfer pricing / thin cap • Anti-arbitrage • Worldwide debt cap • Incentives as reverse TAARs? Dividend exemption, patent box,… • Common feature: potential impact on ETR of group • Other TAARs - too many to mention all of them… • Unallowable purposes • Transactions in securities

  9. Structure of UK Branch Report • Overview • General anti-avoidance rules • Specific / targeted anti-avoidance rules (excluding CFC provisions) • CFC provisions • Tax treaty / EU considerations

  10. CFC provisions (1) • Subject 1 deals with: • Groups of companies • Profits of non-domestic / foreign entities • Passive investments • Low-taxed • CFC provisions: the primary focus… • …but only Part 9A TIOPA

  11. CFC provisions (2) • History and current policy • Transactional / jurisdictional approach • What is a (C)FC? • What amounts to control? • What about low-tax? • Targeted jurisdictions – white/grey/black lists?

  12. CFC provisions (3) • Attribution to the domestic taxpayer • Corporation tax assumptions • CFC gateways • “Safe” harbour(s) • Application to internal situations? • “Subject 1” entity-level exemptions: • Qualifying loan relationships exemptions • The ETE • Low profits exemptions • Remaining exemptions – entity- and shareholder-level

  13. CFC provisions (4) • Relieving mechanisms: • impact of CFC-level taxes and losses • double / multiple CFC taxation (case study) • disposal of CFC shares? • dividends from a CFC

  14. Structure of UK Branch Report • Overview • General anti-avoidance rules • Specific / targeted anti-avoidance rules (excluding CFC provisions) • CFC provisions • Tax treaty / EU considerations

  15. Tax treaty / EU considerations • Double non-taxation • Treaties overriding domestic anti-avoidance? • EU rules overriding domestic anti-avoidance? • Can Vodafone 2 be read into Part 9A TIOPA?

  16. Thank you.

  17. IFA UK Branch Report 2013 Subject 1: the taxation of foreign passive income for groups of companies James Anderson and Alex JuppPresentation to the UK Branch, September 2012

More Related