Financial Services Tax in Tax and Legal blog
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New webinar date - Practical implications on the Pillar 1 & 2 policy solutions developed by the OECD
The much anticipated, updated model rules relating to Pillar 2 have now been published by the OECD on Monday, 20 December. With this in mind, we are excited to announce that our Pillar 1 and Pillar 2 webinar will take place on Wednesday, 12 January from 16:00-17:30.
On 20 December 2021, the G20/OECD Inclusive Framework on BEPS ("inclusive framework") published Tax Challenges Arising from the Digitalisation of the Economy Global Anti-Base Erosion Model Rules (Pillar Two) ("model rules"). This follows on from the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, agreed by more than 135 of its members on 8 October 2021.
Since 2017, the 141 member countries of the inclusive framework have developed a "two-pillar" approach to address the tax challenges arising from the digitalization of the economy: addressing nexus and profit allocation challenges ("Pillar One") and global minimum tax rules ("Pillar Two").
The long-awaited model rules provide more clarity on the future of a global minimum tax rate. Although the model rules have now been published and confirm the key parameters, further clarification on certain aspects is still required. Additional details shall be provided in a commentary that is expected to be published by the OECD by the end of January 2022.
Financial Services Industry Tax Webinar on 14 December - tax and transfer pricing insights from Thibaut Urbain (SFTA)
We would like to invite you to our next Financial Services industry webinar on Tuesday, 14 December at 09.30am (CET) where we will discuss recent tax developments relevant to the Swiss FS industry. We are delighted to be joined by Thibaut Urbain, who is a transfer pricing expert with the Swiss Federal Tax Administration (SFTA).
Nature equipped our trees with the astonishing ability to drop their summer leaves when fall approaches to get ready for a new start of our everlasting seasonal cycle. The US Internal Revenue Service (IRS) this year is in sync with nature and is ready to replace various W-Forms for the next season. The IRS published new draft Forms W-8BEN, W-8BEN-E, W-8IMY and W-8ECI between late August and early September 2021, as well as the corresponding draft instructions.
The International Tax Review (ITR), is a world recognised authority and publisher for tax professionals in industry, government, private practice and research and have just awarded Deloitte Switzerland with the accolades of being the Swiss Tax Firm of the Year and the Swiss Transfer Pricing Firm of the Year for the 9th time.
Partnership withholding regulations: IRS defers the applicability date for certain provisions to 1 January 2023
After the publication of the final regulations under section 1446(f) of the US Internal Revenue Code in late 2020 (see prior blog post), the financial industry intensively lobbied for an extension of the applicability date.
On 24 August 2021, the Internal Revenue Service (IRS) announced in Notice 2021-51 that it intends to amend the regulations to defer the applicability date of certain provisions by one year to 1 January 2023.
How tax authorities use the data received under the Automatic Exchange of Information (AEOI) – An Italian example
Tax authorities around the globe are making use of the financial account information they receive through the AEOI regime based on the OECD Common Reporting Standard (CRS); Italy is no exception. The Italian Tax Authorities (ITA) are using the gigabytes of AEOI data collected to confront certain taxpayers who have presumably omitted and/or only partially fulfilled their tax settlement and reporting obligations. Consequently, the ITA are issuing letters of compliance to certain taxpayers with respect to financial assets held abroad in 2017 (and any related income), which encourage them to take voluntary remediation action to meet their obligations. Notably these letters now specifically refer to assets held in Switzerland. The letters aim at highlighting discrepancies between the data taxpayers have filed in their tax return and the data the ITA received through the AEOI mechanism. Such discrepancies do not necessarily reflect taxpayer mistakes as there may well be differences between the AEOI data and the information captured on tax returns. That being said, recipients of compliance letters are strongly recommended to proactively engage with the ITA to clarify their situation, which may mitigate the risk of further inquiries.
The ever-evolving role of an Automatic Exchange of Information (AEOI) responsible person - Join our live training on 3 March at 16.00 CET
Both US FATCA and the OECD’s Common Reporting Standard (CRS) require Financial Institutions (FIs) to put in place processes, procedures and overall governance to enable accurate reporting of information about the FI’s account holders and/or controlling persons thereof, to certain tax authorities. These rules, which are commonly referred to as the Automatic Exchange of Information (AEOI), have become business as usual over the past six years. However, these rules are practically complex to implement and maintain, and can expose FIs to significant risks. Key challenges include manual processes, local expertise requirements, systems interfacing, documentation and data deficiencies, and requirements that are often unclear and continuously change. Jurisdictions around the globe are starting to take audit action.