International Tax Planning

Taxes on Internet and e-commerce

tributaria — Fri, 15 Apr 2011 10:19:27 +0000

Taxes on Internet and e-commerce
US State and local governments may in the future be permitted to levy additional taxes on Internet access and electronic commerce transactions, which could result in a decrease in the level of usage of e-commerce services.
On November 19, 2004, the US federal government passed legislation placing a three-year ban on state and local governments’ imposition of new taxes on Internet access or electronic commerce transactions. Unless the ban is further extended, state and local governments may begin to levy additional taxes on Internet access and electronic commerce transactions upon the legislation’s expiration in November 2014. On October 31, 2007, this ban was extended for another seven years.An increase in taxes may make electronic commerce transactions less attractive for advertisers and businesses, which could result in a decrease in the level of usage of our services. Additionally, from time to time, various US state, federal and other jurisdictional tax authorities undertake reviews of the e-commerce Companies. In evaluating the exposure associated with various tax filing positions, the e-commerce Companies on occasion accrues charges for probable exposures. Braxton cannot predict the outcome of any of these reviews.

Generic proactive measures to stimulate SME internationalization

tributaria — Wed, 16 Mar 2011 10:53:56 +0000

Generic proactive measures to stimulate SME internationalization
The analysis above has highlighted support provision for redressing the previously identified top five barriers for SME internationalization. The review now turns to the more generic proactive measures used by governments to stimulate international activity among SMEs (see Table 8). These major motivating factors have been identified in Section three as including growth motivations, knowledge-related motives, network/social drivers and domestic/regional environment drivers. It should be noted that some of the support programs aimed at redressing the barriers to SME internationalization may also serve to stimulate international activities among SMEs. There is little doubt, for example, that support programs aimed at redressing limited managerial capacity among SMEs, a top five barrier, may also have the proactive effect of equipping SME business owners or managers with key internationalization-promoting skills and attributes, including growth orientation, an important motivating factor. It is also the case that support programs directed at mitigating SMEs‟ characteristic lack of contacts with foreign market partners may have a dual positive effect of giving them access to valuable network links, an important internationalization driver.
The present analysis has identified some support programs that may respond to these internationalization stimulating factors. For example, Brazil’s assistance program to improve the technological capabilities of export-oriented SMEs and the UKTI‟s work with innovative SMEs to boost the latter’s R&D output and identify adaptations that might enhance product suitability for new overseas markets appear to be good programs that recognize the salience of knowledge-related motives. The support for developing alliances and networks by Czech, French and Spanish agencies also seems to reflect the observed importance of network and supply chain links and social ties in stimulating SME internationalization. Australia’s Trade smart program of assistance for export innovation in regional areas, where exporter numbers are reportedly growing at triple the rate of their metropolitan counterparts, further appears to reflect the observed salience of regional factors in stimulating SME internationalization.

Solvency upon the central bank

tributaria — Thu, 24 Feb 2011 10:17:44 +0000

International Tax planning must consider concepts sucha as ‘Solvency’. Solvency is a meaningless concept when applied to a central bank operating a fiat money system, since such a bank has infinite implicit capital opportunity. Conventional accounting rules are also rather meaningless, since both the assets and liabilities of the bank are essentially fictitious in nature. The new rules are therefore as arbitrary as the old ones, and tell us nothing we didn’t already know.
However, I think the article is correct in pointing out that the change itself is worthy of some note because it indicates the Fed is worried about something. The Fed can never be insolvent regardless of how its balance sheet appears. And what it’s worried about are balance sheet cosmetics as it expands the scope of its operations with QE. If the Fed continues to use its power to acquire depreciating assets - be they failed mortgage securities or long-term Treasuries getting hammered by inflation fears – the cosmetic problem only gets worse. Hence the somewhat useless attempt to dress it up.

There is a real underlying issue here, which is what seems to be the Fed’s increasing willingness to use is power to subsidize bad finance on the part of both private banks and governments. That’s part of what caused the recent financial crisis and what may trigger a relapse.

It appears now the Fed can never go on paper insolvent due to new accounting rules. Great article to read is linked below.

Accenttchuate-the-Positive-The-New-Accounting-at-the-Fed
http://mises.org/daily/5057/Accenttchuate-the-Positive-The-New-Accounting-at-the-Fed

international Control of Location called TRAFIP

tributaria — Mon, 21 Feb 2011 15:16:00 +0000

Approving the comprehensive system of control,
Tracking and Location-called

TRAFIP, I’ve found NDOS including
taxpayers and / or guardians that
are of the character of subjects enrolled
in respect of the Internal Revenue
following products:
Cigarettes and manufactures too s
snuff.
Alcoholic drinks.
Beers.
³ analcoholic drinks beverages, carbonated or not,
syrups, extracts and concentrates and
mineral water, mineral or
flavored, carbonated or not.
Phone services and satellite-to-mobile
regarding the sale of cards
prepaid and rechargeable for
rendering of such services.

Tax Planning in Hong Kong

tributaria — Thu, 06 Jan 2011 11:04:20 +0000

The press recently wrote about Hong Kong’s stamp duty increase in reaction to the yuan renminbi influx. The Hong Kong Monetary Authority reported that yuan renminbi deposits increased 29 percent at the end of November, compared with October 2010, and that year on year, at the end of October yuan renminbi deposits in Hong Kong increased 246 percent. If you want to see what this means, come to Hong Kong and look at prices! That’s why Hong Kong had to do something.
Effective November 20, Hong Kong‘s new stamp duties covered all properties resold within 24 months of acquisition. This levy is enforced even if there is no sale but the property changes hands by way of a gift – if the transferee sells that property within 24 months or if it is an inheritance and the inheritor sells within 24 months. Even if the buyer made the wrong gamble and has to sell at a loss (unlikely unless there is a bubble burst), the stamp duty will still be in effect.
There are three levels of Hong Kong stamp duty:
15 percent if the property is held for six months or less;
10 percent if the property is held between six and 12 months; and
5 percent for property held between one and two years.

I doubt that this will have any real effect on the Hong Kong property market. The South China Morning Post reported on January 29 that prices soared so much last year that luxury flats are now 112 percent more expensive than their comparables in London, Moscow, and New York.A lot of people cannot afford to live in Hong Kong.
What the price spiral is doing, though, is creating another humongous Hong Kong surplus – to the tune of HKD 75 billion when the fiscal year-end of March 31 comes. Stamp taxes are indeed profitable. What will happen because of this? I’d bet that Hong Kong‘s corporate tax rate will go down from 16.5 percent to 15 percent. We won’t know until the Hong Kong budget is presented on February 23.
The Hong Kong Institute of Certified Public Accountants (HKICPA) issued its recommendations to the Hong Kong financial secretary on January 28. Instead of asking the government to give tax rebates, the HKICPA asked that the surplus be used to fund an otherwise nonexistent old-age fund and to raise allowances (tax exemptions) by 20 percent for dependent parents, grandparents, brothers, sisters, and the disabled.
To encourage hiring of disabled persons, the HKICPA asked the government to grant employment tax credits of 150 percent. It also asked for a reduction of the corporate tax rate to 15 percent for corporate income under HKD 2 million.
A year ago, Hong Kong was neither on the OECD blacklist nor the white list. I called Hong Kong gray. Boy, did I get flack for that one even though it was 100 percent correct. As of today, Hong Kong has 18 double tax avoidance agreements with tax information exchange agreements. The most recent signings were with France, Japan, New Zealand, and Switzerland, and more are on the way. Yet no matter how many are signed, Hong Kong simply will not catch up with Singapore in this area. What is notable, though, is that neither Hong Kong nor Singapore has anything on the books with the United States – and a U.S. double tax avoidance agreement for either jurisdiction appears highly unlikely.