The document provides an overview of international assignee tax services and the different tax treatment arrangements for expatriate employees, including tax equalization, tax protection, and a laissez-faire arrangement. It summarizes the tax implications of each arrangement using a hypothetical example where an employee earns $100,000 and is assigned to a country with a 20% tax rate from a home country with a 30% tax rate. It also briefly discusses UK tax residence rules, social security considerations, and other issues that an international assignee tax services firm can assist with.
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
This document discusses methods for eliminating double taxation, including exemption and credit methods. It provides examples comparing the tax burden under different double taxation relief methods, such as full exemption, exemption with progression, full credit, and ordinary credit. The examples show the total tax paid, tax relief provided by the state of residence, and tax paid to the source state. The document also discusses the deduction method for providing relief when no tax treaty exists, allowing foreign taxes paid to be deducted as a business expense.
This document discusses international taxation. It defines international taxation as the study of tax on individuals or businesses subject to different countries' tax laws. It outlines the objectives of taxation as tax neutrality and tax equity. Tax neutrality means a tax scheme does not incentivize moving money abroad and treats income equally regardless of where it is earned. Tax equity means the same tax rate applies regardless of where in the world income is earned. The document also describes various types of taxes like income tax, withholding tax, value-added tax, and defines them.
This document summarizes taxation policies for expatriates working in Nigeria, including that they are subject to personal income tax rates of up to 25% of taxable income, taxable income can be based on actual or deemed income amounts, and employers are responsible for withholding taxes and filing annual returns on behalf of expatriate employees.
This document provides an overview of taxation in India. It discusses the history of income tax, which was first introduced in India in 1860. It outlines the various tax authorities in India, including central and state governments and municipalities. It defines key terms related to taxation like income, assessment year, and previous year. It also provides examples of statements showing taxable income from sources like salary, house property, business/profession, and a summary statement of total taxable income. Finally, it briefly discusses value-added tax.
The document discusses the basic tax formula used to calculate individual tax liability in the Philippines. It includes the following key points:
1. Gross income is reduced by deductions for adjusted gross income to arrive at adjusted gross income. Adjusted gross income is then reduced by itemized deductions or the standard deduction and personal exemptions to get taxable income.
2. Taxable income is multiplied by the applicable tax rate to determine tax liability. Tax liability is then reduced by tax credits and prepayments to determine the net tax due or refund.
3. Key components of the tax formula include definitions of gross income, deductions for adjusted gross income, adjusted gross income, itemized vs standard deductions, personal exemptions, tax
This document summarizes different types of taxes in the United Kingdom, including direct and indirect taxes. Direct taxes include income tax, corporation tax, inheritance tax, and capital gains tax. Indirect taxes include value added tax (VAT), stamp duty, stamp duty land tax, and customs duty. It provides brief definitions and details for each of these taxes.
The document discusses India's direct tax code. It defines direct and indirect taxes, with direct taxes paid directly to the government like income tax and indirect taxes paid on goods and services. It notes that India has an established tax regime and the tax to GDP ratio has increased in recent decades. The majority of taxpayers are in the 1-5 lacs income group. The proposed direct tax code aims to benefit this group by introducing tax slabs of 10% for income from 2-5 lacs, 20% from 5-10 lacs, and 30% over 10 lacs. The code also lowers corporate tax to 30% and introduces reforms like potentially increasing income tax exemptions and abolishing securities transaction tax.
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
This document discusses methods for eliminating double taxation, including exemption and credit methods. It provides examples comparing the tax burden under different double taxation relief methods, such as full exemption, exemption with progression, full credit, and ordinary credit. The examples show the total tax paid, tax relief provided by the state of residence, and tax paid to the source state. The document also discusses the deduction method for providing relief when no tax treaty exists, allowing foreign taxes paid to be deducted as a business expense.
This document discusses international taxation. It defines international taxation as the study of tax on individuals or businesses subject to different countries' tax laws. It outlines the objectives of taxation as tax neutrality and tax equity. Tax neutrality means a tax scheme does not incentivize moving money abroad and treats income equally regardless of where it is earned. Tax equity means the same tax rate applies regardless of where in the world income is earned. The document also describes various types of taxes like income tax, withholding tax, value-added tax, and defines them.
This document summarizes taxation policies for expatriates working in Nigeria, including that they are subject to personal income tax rates of up to 25% of taxable income, taxable income can be based on actual or deemed income amounts, and employers are responsible for withholding taxes and filing annual returns on behalf of expatriate employees.
This document provides an overview of taxation in India. It discusses the history of income tax, which was first introduced in India in 1860. It outlines the various tax authorities in India, including central and state governments and municipalities. It defines key terms related to taxation like income, assessment year, and previous year. It also provides examples of statements showing taxable income from sources like salary, house property, business/profession, and a summary statement of total taxable income. Finally, it briefly discusses value-added tax.
The document discusses the basic tax formula used to calculate individual tax liability in the Philippines. It includes the following key points:
1. Gross income is reduced by deductions for adjusted gross income to arrive at adjusted gross income. Adjusted gross income is then reduced by itemized deductions or the standard deduction and personal exemptions to get taxable income.
2. Taxable income is multiplied by the applicable tax rate to determine tax liability. Tax liability is then reduced by tax credits and prepayments to determine the net tax due or refund.
3. Key components of the tax formula include definitions of gross income, deductions for adjusted gross income, adjusted gross income, itemized vs standard deductions, personal exemptions, tax
This document summarizes different types of taxes in the United Kingdom, including direct and indirect taxes. Direct taxes include income tax, corporation tax, inheritance tax, and capital gains tax. Indirect taxes include value added tax (VAT), stamp duty, stamp duty land tax, and customs duty. It provides brief definitions and details for each of these taxes.
The document discusses India's direct tax code. It defines direct and indirect taxes, with direct taxes paid directly to the government like income tax and indirect taxes paid on goods and services. It notes that India has an established tax regime and the tax to GDP ratio has increased in recent decades. The majority of taxpayers are in the 1-5 lacs income group. The proposed direct tax code aims to benefit this group by introducing tax slabs of 10% for income from 2-5 lacs, 20% from 5-10 lacs, and 30% over 10 lacs. The code also lowers corporate tax to 30% and introduces reforms like potentially increasing income tax exemptions and abolishing securities transaction tax.
Relevance of double taxation avoidance agreement and its impactAmudha Mony
This document discusses double taxation avoidance agreements and their impact in India. It begins by defining double taxation as the imposition of two or more taxes on the same income, assets, or financial transactions in different countries. It then outlines the basic rules of source taxation and residence taxation. The document discusses India's double taxation avoidance agreements (DTAAs) with over 85 countries, which agree on tax rates and jurisdiction to avoid double taxation. Sections 90 and 91 of the Indian Income Tax Act provide bilateral and unilateral relief from double taxation. Finally, it briefly outlines the exemption method, credit method, and tax sparing method for eliminating double taxation through these agreements.
Taxes imposed on the earnings of organizations and individuals are income taxes. Marginal tax rate and flat tax rate. Marginal tax rates are harmful to the economy.
This document provides information on various aspects of income tax in India including different types of income and applicable tax rates, common deductions and exemptions available, procedures for tax filing and payment, due dates and forms for tax returns. Key points covered include income from salary and applicable tax deductions, capital gains tax rates, section 80C deductions, filing tax returns online or physically and related timelines.
Phuong - Taxation - Chapter 8 - The tax practitioner and the UK tax environme...Phuong Nguyen
This document provides an overview of taxation in the UK. It discusses the main sources of UK tax legislation including Acts of Parliament, statutory instruments, and case law. It also describes the role and organization of HM Revenue & Customs, which administers the UK tax system. Finally, it defines different types of taxes such as income tax, corporation tax, capital gains tax, and inheritance tax, and how income is classified for taxation purposes.
An income tax is a government levy that varies based on an individual or entity's taxable income. It is imposed on income or profits. Many jurisdictions refer to income tax on businesses as corporate tax, and partnerships are not taxed directly but the partners are taxed on partnership income. Income tax is generally computed as the tax rate multiplied by taxable income, and the tax rate may increase as taxable income increases in a graduated system. Capital gains may be taxed at different rates than other income.
This document provides a comparative study of taxation systems in India and Australia. It discusses key aspects such as residential status, income from salaries, income from house properties, and computation of tax liabilities. Residential status rules and tax rates differ between the two countries. While both countries have income taxes deducted from salaries, Australia uses a PAYG system while India uses TDS. Deductions also vary for income from house properties. Overall tax rates tend to be higher in Australia, but a similar standard of living would require higher income due to differences in costs of living between the two countries.
This document discusses sources of income and classification of income for tax purposes. It defines income as coming from sources within the Philippines, without, or partly within and partly without. It provides examples of how different types of income like dividends, income from services, rent, royalties, and gains from property sales are treated. The document also discusses what constitutes gross income, how income is distinguished from capital, receipts, and revenue, and provides examples of different types of compensation that are considered taxable income.
The document discusses key aspects of the Direct Tax Code 2010 including its objectives to simplify the tax system and broaden the tax base. It compares tax rates and calculations under the current Income Tax Act versus the proposed Direct Tax Code through various case studies. Some of the major changes highlighted include a single tax rate for capital gains, reduced deductions for house property income, and treating retirement fund withdrawals as taxable which currently enjoy exemption. Overall, the Direct Tax Code aims to achieve a less complex and more equitable tax system.
This document provides an overview of the Dutch tax system and opportunities for tax planning for expatriates working in the Netherlands. It outlines the basics of taxation including tax rates, deductions, and social security contributions. It also discusses planning opportunities for structuring compensation packages and benefits to maximize tax efficiency. Grant Thornton's Global Mobility Services team can help expatriates and employers navigate the Dutch tax system and identify tax planning strategies.
What does the budget means for you and your clients and, importantly, any tax planning opportunities for high net worth individuals and business owners.
Most observers do not believe that further curbs on public spending can reduce our debts to an acceptable level, thus suggesting that George will have to increase taxes in a way that will not hurt the average citizen. It also suggests that hopes of reforms that reduce tax yields are likely to prove unrealistic. In particular, an increase in the IHT limit (other than the promised limited relief for family homes) seems unlikely. We also expect further pain for non-doms and tax avoiders. We think that some tax relief for small businesses is likely, but as such businesses create scope for tax evasion and avoidance, we are sceptical as to how helpful these are likely to be in practice.
This document provides an overview of taxes, specifically income tax. It discusses direct and indirect taxes, how income tax is collected internationally, and key concepts in double taxation treaties. Direct taxes are paid by the party bearing the cost, while indirect taxes are collected from one party but paid by another. Income tax can be collected at the source of income or in the country of residence through tax credits. Double taxation treaties determine which country has the right to tax different types of income like business profits, royalties, and fees to avoid double taxation between countries.
The document provides information about taxation systems in several countries in Southern Asia, including Australia, India, Myanmar, Philippines, and Thailand. It discusses how each country collects taxes, common tax types like income tax, VAT, and property tax. It also outlines some key aspects of the tax history and rates in each country. The top priorities for how tax revenue is spent include education, infrastructure development, defense, internal affairs, and agriculture.
This document covers principles of business taxation. It discusses major tax principles like equity and efficiency. It describes different types of taxes - direct, indirect, and how tax rates can be progressive, proportional or regressive. It also outlines tax bases, sources of tax rules, calculations for trading income and losses, capital gains tax, VAT, employee taxation, and issues around corporate residence, double taxation, tax avoidance and evasion.
This document provides an example computation of income tax for Mr. De Castro, a professor with a monthly salary of 85,000 pesos. It calculates his monthly and annual tax under two scenarios: as a single filer and as married with 4 dependents. As a single filer, Mr. De Castro's tax due is 270,792 pesos resulting in an overpayment of 55,608 pesos. As married with 4 dependents, his tax due is 238,792 pesos resulting in an overpayment of 87,608 pesos.
This document provides an overview of taxation in India. It defines taxation and its objectives, such as raising revenue. It describes different types of taxes like direct and indirect taxes. It outlines principles of a good tax system according to Adam Smith's canons of taxation. It also details India's individual income tax rates, exemptions, and deductions from taxable income. The document concludes that taxation helps increase economic activity and promote growth through mobilizing funds.
On Friday the 12th February Gordon presented to clients of MRA. The topic under discussion was the possible impact of the Davis Tax Committee on estate planning as we currently know it. The presentation also looked at updates made in a Webinar held between the DTC and the South African Institute of Tax Practioners.
Topical Tax Issues For Reducing Your Irish Income Tax LiabilityBrendan Brady
Our presentation at the 2016 CPA Ireland annual tax conference on filing your 2015 tax return and some great reveals for reducing your Irish income tax liability
1) The document discusses double taxation avoidance agreements (DTAAs) between India and other countries.
2) DTAAs aim to avoid double taxation that may occur when the same income is taxed in both the country of residence and the country of source.
3) India has 84 DTAAs currently with other countries based on either the OECD or UN model conventions. The DTAAs provide relief from double taxation and clarify taxing rights between the two countries.
1) The document provides an overview of taxation in the United Kingdom, outlining various taxes such as income tax, value added tax, corporate tax, capital gains tax, and others.
2) Key details are given for each tax, including tax rates, allowances, payment deadlines, exemptions, and penalties.
3) Taxes are levied by both central and local governments in the UK, with revenue from taxes going towards public services and programs.
The document discusses options for reforming and simplifying the UK tax system. It proposes replacing most taxes with a tax on the rental value of land. This would have several benefits:
1) It would not discourage economic activity like taxes on income, profits, or sales. Land value cannot be evaded or moved abroad.
2) Most people's tax burdens would not change dramatically as taxes paid are broadly proportional to property values, which reflect incomes.
3) It could help reduce housing costs and stabilize prices by acting like a higher interest rate, encouraging efficient land use.
The document provides guidance on property letting taxes in the UK, including:
- Stamp Duty Land Tax is charged on property purchases at incremental rates up to 12% depending on the value, with higher rates for additional properties.
- Income from property lettings is taxed as income at income tax rates of up to 45% or corporation tax of 19% if owned through a company. Allowable expenses can be claimed to reduce taxable profits.
- Capital Gains Tax of 18% or 28% may apply on gains made from selling properties not eligible for the main residence exemption. Private letting relief provides exemption up to £40,000 per owner.
- Inheritance Tax at 40% applies to property value transferred between
Relevance of double taxation avoidance agreement and its impactAmudha Mony
This document discusses double taxation avoidance agreements and their impact in India. It begins by defining double taxation as the imposition of two or more taxes on the same income, assets, or financial transactions in different countries. It then outlines the basic rules of source taxation and residence taxation. The document discusses India's double taxation avoidance agreements (DTAAs) with over 85 countries, which agree on tax rates and jurisdiction to avoid double taxation. Sections 90 and 91 of the Indian Income Tax Act provide bilateral and unilateral relief from double taxation. Finally, it briefly outlines the exemption method, credit method, and tax sparing method for eliminating double taxation through these agreements.
Taxes imposed on the earnings of organizations and individuals are income taxes. Marginal tax rate and flat tax rate. Marginal tax rates are harmful to the economy.
This document provides information on various aspects of income tax in India including different types of income and applicable tax rates, common deductions and exemptions available, procedures for tax filing and payment, due dates and forms for tax returns. Key points covered include income from salary and applicable tax deductions, capital gains tax rates, section 80C deductions, filing tax returns online or physically and related timelines.
Phuong - Taxation - Chapter 8 - The tax practitioner and the UK tax environme...Phuong Nguyen
This document provides an overview of taxation in the UK. It discusses the main sources of UK tax legislation including Acts of Parliament, statutory instruments, and case law. It also describes the role and organization of HM Revenue & Customs, which administers the UK tax system. Finally, it defines different types of taxes such as income tax, corporation tax, capital gains tax, and inheritance tax, and how income is classified for taxation purposes.
An income tax is a government levy that varies based on an individual or entity's taxable income. It is imposed on income or profits. Many jurisdictions refer to income tax on businesses as corporate tax, and partnerships are not taxed directly but the partners are taxed on partnership income. Income tax is generally computed as the tax rate multiplied by taxable income, and the tax rate may increase as taxable income increases in a graduated system. Capital gains may be taxed at different rates than other income.
This document provides a comparative study of taxation systems in India and Australia. It discusses key aspects such as residential status, income from salaries, income from house properties, and computation of tax liabilities. Residential status rules and tax rates differ between the two countries. While both countries have income taxes deducted from salaries, Australia uses a PAYG system while India uses TDS. Deductions also vary for income from house properties. Overall tax rates tend to be higher in Australia, but a similar standard of living would require higher income due to differences in costs of living between the two countries.
This document discusses sources of income and classification of income for tax purposes. It defines income as coming from sources within the Philippines, without, or partly within and partly without. It provides examples of how different types of income like dividends, income from services, rent, royalties, and gains from property sales are treated. The document also discusses what constitutes gross income, how income is distinguished from capital, receipts, and revenue, and provides examples of different types of compensation that are considered taxable income.
The document discusses key aspects of the Direct Tax Code 2010 including its objectives to simplify the tax system and broaden the tax base. It compares tax rates and calculations under the current Income Tax Act versus the proposed Direct Tax Code through various case studies. Some of the major changes highlighted include a single tax rate for capital gains, reduced deductions for house property income, and treating retirement fund withdrawals as taxable which currently enjoy exemption. Overall, the Direct Tax Code aims to achieve a less complex and more equitable tax system.
This document provides an overview of the Dutch tax system and opportunities for tax planning for expatriates working in the Netherlands. It outlines the basics of taxation including tax rates, deductions, and social security contributions. It also discusses planning opportunities for structuring compensation packages and benefits to maximize tax efficiency. Grant Thornton's Global Mobility Services team can help expatriates and employers navigate the Dutch tax system and identify tax planning strategies.
What does the budget means for you and your clients and, importantly, any tax planning opportunities for high net worth individuals and business owners.
Most observers do not believe that further curbs on public spending can reduce our debts to an acceptable level, thus suggesting that George will have to increase taxes in a way that will not hurt the average citizen. It also suggests that hopes of reforms that reduce tax yields are likely to prove unrealistic. In particular, an increase in the IHT limit (other than the promised limited relief for family homes) seems unlikely. We also expect further pain for non-doms and tax avoiders. We think that some tax relief for small businesses is likely, but as such businesses create scope for tax evasion and avoidance, we are sceptical as to how helpful these are likely to be in practice.
This document provides an overview of taxes, specifically income tax. It discusses direct and indirect taxes, how income tax is collected internationally, and key concepts in double taxation treaties. Direct taxes are paid by the party bearing the cost, while indirect taxes are collected from one party but paid by another. Income tax can be collected at the source of income or in the country of residence through tax credits. Double taxation treaties determine which country has the right to tax different types of income like business profits, royalties, and fees to avoid double taxation between countries.
The document provides information about taxation systems in several countries in Southern Asia, including Australia, India, Myanmar, Philippines, and Thailand. It discusses how each country collects taxes, common tax types like income tax, VAT, and property tax. It also outlines some key aspects of the tax history and rates in each country. The top priorities for how tax revenue is spent include education, infrastructure development, defense, internal affairs, and agriculture.
This document covers principles of business taxation. It discusses major tax principles like equity and efficiency. It describes different types of taxes - direct, indirect, and how tax rates can be progressive, proportional or regressive. It also outlines tax bases, sources of tax rules, calculations for trading income and losses, capital gains tax, VAT, employee taxation, and issues around corporate residence, double taxation, tax avoidance and evasion.
This document provides an example computation of income tax for Mr. De Castro, a professor with a monthly salary of 85,000 pesos. It calculates his monthly and annual tax under two scenarios: as a single filer and as married with 4 dependents. As a single filer, Mr. De Castro's tax due is 270,792 pesos resulting in an overpayment of 55,608 pesos. As married with 4 dependents, his tax due is 238,792 pesos resulting in an overpayment of 87,608 pesos.
This document provides an overview of taxation in India. It defines taxation and its objectives, such as raising revenue. It describes different types of taxes like direct and indirect taxes. It outlines principles of a good tax system according to Adam Smith's canons of taxation. It also details India's individual income tax rates, exemptions, and deductions from taxable income. The document concludes that taxation helps increase economic activity and promote growth through mobilizing funds.
On Friday the 12th February Gordon presented to clients of MRA. The topic under discussion was the possible impact of the Davis Tax Committee on estate planning as we currently know it. The presentation also looked at updates made in a Webinar held between the DTC and the South African Institute of Tax Practioners.
Topical Tax Issues For Reducing Your Irish Income Tax LiabilityBrendan Brady
Our presentation at the 2016 CPA Ireland annual tax conference on filing your 2015 tax return and some great reveals for reducing your Irish income tax liability
1) The document discusses double taxation avoidance agreements (DTAAs) between India and other countries.
2) DTAAs aim to avoid double taxation that may occur when the same income is taxed in both the country of residence and the country of source.
3) India has 84 DTAAs currently with other countries based on either the OECD or UN model conventions. The DTAAs provide relief from double taxation and clarify taxing rights between the two countries.
1) The document provides an overview of taxation in the United Kingdom, outlining various taxes such as income tax, value added tax, corporate tax, capital gains tax, and others.
2) Key details are given for each tax, including tax rates, allowances, payment deadlines, exemptions, and penalties.
3) Taxes are levied by both central and local governments in the UK, with revenue from taxes going towards public services and programs.
The document discusses options for reforming and simplifying the UK tax system. It proposes replacing most taxes with a tax on the rental value of land. This would have several benefits:
1) It would not discourage economic activity like taxes on income, profits, or sales. Land value cannot be evaded or moved abroad.
2) Most people's tax burdens would not change dramatically as taxes paid are broadly proportional to property values, which reflect incomes.
3) It could help reduce housing costs and stabilize prices by acting like a higher interest rate, encouraging efficient land use.
The document provides guidance on property letting taxes in the UK, including:
- Stamp Duty Land Tax is charged on property purchases at incremental rates up to 12% depending on the value, with higher rates for additional properties.
- Income from property lettings is taxed as income at income tax rates of up to 45% or corporation tax of 19% if owned through a company. Allowable expenses can be claimed to reduce taxable profits.
- Capital Gains Tax of 18% or 28% may apply on gains made from selling properties not eligible for the main residence exemption. Private letting relief provides exemption up to £40,000 per owner.
- Inheritance Tax at 40% applies to property value transferred between
International taxation and transfer pricing for transfer pricing ssuser47f0be
This document discusses international taxation and transfer pricing. It provides an overview of key concepts in international taxation such as double taxation, foreign tax credits, and tax treaties. It also discusses transfer pricing regulations and guidelines from the OECD and IRS that require transactions between related parties to be conducted at arm's length prices comparable to third party transactions. The document outlines methods used to determine appropriate transfer prices such as cost-plus and resale price methods.
Bank Account Structuring for Non-DomicilesNick Knight
This document provides an overview of remittances and bank account structures for non-UK domiciled individuals. It discusses topics such as overseas work day relief, mixed funds, clean capital, types of accounts, capital gains, remittances with foreign tax credits, and exempt property. Planning ideas are also presented, such as transferring funds between accounts to minimize tax liabilities when making remittances to the UK.
Basis and Income Tax Planning Through Retained Interests.pptxGriffinBridgers
This document summarizes a presentation about using retained interests to plan for income taxes through basis step-ups. Key points include:
- Estate tax exclusions have increased dramatically over time, so many existing estate plans may not be optimized for income tax.
- Paying some estate tax can sometimes make sense to obtain a basis step-up and reduce future capital gains taxes, if the income tax savings outweigh the estate tax costs.
- Various techniques were discussed to obtain basis step-ups, such as formula general powers of appointment, spousal trusts, and exchanges/loans involving grantor trusts. Care is needed to avoid wasting exclusions or running afoul of estate inclusion rules.
This document discusses simplifying the UK tax and welfare system. It proposes replacing the current complex systems with a flat tax on land values and a universal basic income/citizen's pension. Key points made include:
- The current systems of income tax, national insurance, corporation tax, VAT, and welfare are complicated and inefficient.
- A tax solely on land values could replace most current taxes and generate sufficient revenue while avoiding deadweight costs.
- A universal basic income set at the level of current welfare benefits could replace the entire welfare system in a simpler, less fraudulent way that does not discourage work.
- Collecting land rents publicly and distributing them as a citizen's income has advantages over private collection of land rents
International growth strategies for sm es the tax aspects - rachel lockwood...Jessica Roch
This document summarizes various UK taxes that are relevant for international companies expanding into the UK market, including corporation tax, employment taxes, and VAT. It discusses the tax implications of setting up a limited company versus having a permanent establishment in the UK. It also covers options for seconding employees to the UK on a temporary basis and how to structure this tax-efficiently depending on the length of the secondment. The main taxes covered are corporation tax, employment taxes, and VAT.
This document provides an overview and introduction to income tax concepts for the 2012 tax year. It covers topics such as taxation policy, authority in taxation law, tax reform, an overview of the Australian tax system, income tax rates for residents and non-residents, Medicare levy, tax offsets and rebates, taxable income calculation, and taxation of other entities like companies, trusts and partnerships.
The Tax Cuts and Jobs Act of 2017 made significant changes to the US tax code that will impact taxpayers. It lowered tax rates for individuals and doubled the standard deduction. However, it also capped state and local tax deductions, eliminated miscellaneous deductions, and increased the child tax credit. The act is temporary and many provisions will expire after 2025. Taxpayers need to check their withholding and adjust their W-4 forms to avoid underpayment of taxes owed or overpayment resulting in smaller refunds.
Tax Foundation University 2017, Part 3: Modeling Tax Changes — Which Help, Wh...Tax Foundation
This lecture explores how the consequences of policy options can be determined and why they should guide the reform effort. The Tax Foundation's Taxes and Growth Dynamic Tax Model will be demonstrated.
Also discussed: the benefits and limitations of dynamic vs. static analysis and scoring of tax changes, which tax features harm growth the most, which potential reforms help the most, and which revenue offsets hurt the least. Differing views of how to predict the effects of tax changes on economic growth, how different models view the effect of the federal budget deficit and the Federal Reserve on the outcomes, and the proper role of monetary policy.
Register for Tax Foundation University Online here: https://taxfoundation.org/tax-foundation-university-remote/#enroll
The document discusses taxation in Canada. It provides a brief history of Canada's taxation system and outlines its current tax structure. It describes Canada's tax policies and practices, including income tax and corporate tax rates. It also discusses Canada's Double Taxation Avoidance Agreement with India and special tax treatments for agricultural income in Canada, such as capital cost allowances, deductions, and property tax exemptions for farmers.
The Summer Budget 2015 document provides an overview and analysis of the key announcements from the UK Summer Budget 2015. It discusses changes to personal taxes including increases to the personal tax allowance and higher rate tax threshold. It also covers reforms to inheritance tax, including a new main residence nil rate band. Business tax measures are analyzed such as reductions to the corporation tax rate and changes to dividend taxation and annual investment allowance limits.
This document provides an overview of accounting for income taxes. It defines key terms like current tax, deferred tax liabilities, and deferred tax assets. It explains how to identify temporary differences between carrying amounts and tax bases to calculate deferred tax amounts. It also discusses limitations on recognizing deferred tax assets and presenting income taxes in financial statements. The objective is to prescribe accounting treatment for income taxes in accordance with IAS 12.
CONFLICT OF SOURCE AND RESIDENCE PRINCIPLES OF TAXATIONksanu
This document discusses various types of conflicts that can arise in international taxation between the principles of residence and source. Residence/source conflicts occur when the same income is taxed by both the country of residence under residence principles and the country of source under source principles. Source/source conflicts happen when multiple countries claim income was sourced from their territory. Residence/residence conflicts arise when two countries consider a taxpayer resident under their domestic laws. Double tax agreements aim to resolve these conflicts through provisions regarding sole residence or source taxation, or tiebreaker rules to determine sole residency.
Tax Equalization for Payroll Professionals Immedis
This document discusses tax equalization policies and administration for expatriate employees. It defines key terms like expatriate and outlines different types of international assignments. The main tax policy models - laissez faire, tax protection, and tax equalization - are explained. Tax equalization aims to make the employee's tax burden similar to what it would be in their home country. The document provides an example of how tax equalization works in practice, with the employer paying actual taxes and reconciling any difference from estimated taxes after filing. Issues like handling payments and gross ups are also addressed.
Double taxation occurs when the same income is taxed in two different countries under each country's tax rules. Bilateral relief agreements (also known as double taxation avoidance agreements or tax treaties) are entered into between two countries to provide relief from double taxation. These agreements typically use either the exemption method, which exempts the income in one country, or the tax credit method, which allows the country of residence to credit taxes paid in the source country. Unilateral relief is provided by some countries for their residents who pay foreign tax in countries they do not have a bilateral agreement with. The goal of these relief methods is to promote free international trade and investment by reducing double taxation.
This document discusses a proposed land tax on unused urban land in Saudi Arabia. It notes that large parcels of unused land are driving up housing prices and preventing development. The Shura Council has agreed to let the Ministry of Municipal and Rural Affairs impose annual fees on unused "white land" located in urban areas. The tax is aimed at increasing housing supply and pushing development of vacant lands that are being stockpiled without intention to develop. Key questions around implementing the tax include how to define unused land, minimum value thresholds, and whether tax rates should differ for individuals and companies.
1. IAS Offerings:
A whistle stop tour through the world
of Expatriate Tax
Nick Knight, Reading IAS
5 August, 2015
2. Tax is a funny old game
• ‘He was incredibly rich, occasionally buying
star systems, and once spent a year dead for
tax reasons.’ (Douglas Adams, The Restaurant
At The End Of The Universe)
• ‘The hardest thing to understand in the world
is the income tax.’ (Albert Einstein)
• ‘A fine is a tax for doing something wrong. A
tax is a fine for doing something right.’ (Anon)
3. What do we do?
• International Assignee Services deal with
individual and corporate compliance/advisory
issues arising from employers sending their
staff to work in other tax jurisdictions. We
mainly deal with individuals assigned to work
for a period of time in another tax jurisdiction,
but in theory working just one day in a foreign
country can give rise to tax compliance issues
in that country.
5. Tax
The tax treatment for expatriate employees can
be dealt with in one of three ways:
• Tax Equalisation
• Tax Protection
• A ‘laissez-faire’ arrangement
6. Tax Equalisation
• This is the most common method.
• It ties the individual to a ‘stay at home’ tax (and possibly social security)
liability in the home country, with the employer paying the taxes in the
host country. The employee remains employed in the home location.
• The assignment is therefore ‘tax neutral’ and the individual does not need
to worry about whether they are going to a country with high or low taxes
as the tax they pay will be the same as if they had never gone on
assignment. It does mean that the individual cannot take advantage of
any tax breaks for breaking tax residence in the home location.
• Tax equalisation is an advantage for the individual where a UK national is
going to a high-tax country (such as the Scandinavian countries).
• It is potentially a disadvantage if going to countries like Singapore (15% tax
rate) and the UAE (with no income tax!).
7. Tax Protection
• With tax protection the individual pays the lower of the
home or host-country tax liability (so UK to Singapore
would pay the 15% Singaporean taxes, rather than the
higher UK rates). Again home employer is maintained.
• This can be expensive for the employer and may sway
individuals against travelling to some (higher tax)
countries, so we don’t tend to see this very often.
8. Laissez-Faire Arrangement
• Here the individual pays their own taxes in each jurisdiction and usually
changes employer to the host location.
• This is becoming a more popular option with employers, as it is generally
cheaper for the employer (with no ‘grossed-up’ tax liability).
• If the individual moves to a low/no tax country, then they will generally be
amenable to this.
• If the individual moves to a high tax country they would normally want
additional compensation to counter the higher taxes to be suffered.
• Where the individual moves to a local contract in the new jurisdiction, this can
have issues around social security, pensions and employment rights for
continuous employment, which may not otherwise be in play where the
home-country employer is maintained (it’s never just about the tax).
• This arrangement doesn’t really work unless there is a clean tax break with the
home country and they break tax residence there. If not then there is likely to
be taxation in both countries, possibly with withholding due in each and which
can cause hardship for the individual in terms of cash flow.
9. Examples for each method
• Assume the following:
• Salary – 100,000
• Home tax rate = 30%
• Host tax rate = 20% (25% grossed-up rate)
• Individual does not remain liable to home-
country taxes whilst in host location (but
situation if they do also highlighted).
• Hypothetical rather than actual taxes are paid (so
usually included as negative salary) other than
laissez-faire example.
10. Tax Equalisation Example
• Home country ‘stay at home’ liability = 30,000.
• Host taxes are paid by the employer, so 20% becomes 25% (20 x 100/80)
and host liability is therefore 25,000.
• Here there would be a 5,000 tax ‘windfall’ for the employer, but there
would be other costs (accommodation, travel, etc.).
• The home-country tax return will probably show a nil liability (as the
individual has broken tax residence in their home location).
• Note: If home country taxes are due, then a Foreign Tax Credit (FTC) is
claimed re host-country taxes paid. In this example full FTC could be
claimed, but where the host-country tax rate is higher than home country,
then FTC is limited to the tax due on the same income in home country.
The residual host taxes, as paid by the employer, are then taxable in the
home-country, which would then have to be grossed up for home-country
tax purposes at 42.85% (30% x 100/70).
11. Tax Protection Example
• Assignee pays home-country taxes based on host-
country taxes of 20,000 only, being lower than
the home liability.
• Nil home country liability (as for tax equalisation).
• Host country liability is based on salary net of
hypothetical taxes, so 80,000. This is taxable at
grossed-up 25% rate and so 20,000 due (which is
covered by hypothetical taxes in this example).
• If home taxation still applies then employer pays
grossed-up tax rate in both locations after FTC
claim in home country.
12. Laissez-Faire Example
• Individual pays their own taxes, so no gross up or hypothetical
taxes.
• Host liability is therefore 20,000.
• Home liability is nil, so individual is happy at saving 10,000.
• If they didn’t break tax residence in home country then it gets
problematic.
• The liability there would eventually be 10,000 (30,000 less 20,000
FTC), but unless there is a ‘net of credit’ arrangement (or
equivalent) that credits the FTC via the payroll, the full 30% should
usually be paid via tax withholding and the FTC refund claimed later,
giving serious cash-flow issues with an effective 50% initial
withholding over the two countries (30% plus 20%).
• Note: Where double taxation is involved, the eventual overall tax
payable is equivalent to the highest rate between home and host
(so home here).
13. UK Tax Residence
• Statutory Residence Test (SRT) in the UK aims to simplify tax
residence (which was previously largely based on case law going
back decades). It often does no such thing!
• A UK tax resident/treaty resident will be taxed on UK income and
gains. The treatment of non-UK income and gains will depend on
their domicile. If a UK domicile then these will also be taxable in
the UK.
• A non-UK tax resident will normally only be taxed on: days worked
back in the UK (in some instances), UK rental income and UK
dividend income (to the extent that this has already been taxed).
This will depend on any tax treaty held with the other country and
the wording of this (a standard-model treaty is referenced above).
If there is no tax treaty then all UK income is potentially taxable in
the UK (as exclusion is claimed via a tax treaty).
14. Domicile
• Highly complex area.
• Tax resident but not UK domiciled individuals can be taxed on the arising
(worldwide income and gains) or remitted (UK income and gains taxed, but
non-UK only taxed where brought into the UK) basis.
• Remittance basis filers will lose personal allowance where non-UK income is
over £2,000 and will be subject to a ‘Remittance Basis Charge’ (RBC) after they
have been UK tax resident for 7 of the last 9 years (£30,000), 12 of the last 14
years (£50,000) and 17 of last 20 years (£90,000).
• New ‘deemed domicile’ rules (July 2015 Budget) effectively remove the
£90,000 RBC from 2017/18.
• Overseas workday Relief available for first three years, where non-UK work
days are not taxable in the UK, subject to certain conditions.
• We can assist individuals to UK with bank structuring and remittance issues
(subject to FROR restrictions).
• If an account contains ‘mixed funds’ (earnings, interest, dividends, capital
gains, etc.) then there are strict ordering rules around which elements are
remitted to the UK. Ideally there are separate accounts for each.
15. Short-Term Business Visitors to the UK
• Technically all those who come on short business trips to the UK
should have PAYE applied to their earnings.
• Administratively, this does not make sense, as normally the tax
would then be repaid via a UK tax return.
• As such, employers can make a STBV agreement (Appendix 4)
application to HMRC not to withhold UK PAYE for inbound travellers
to the UK in certain circumstances.
• Visits will then need to be tracked and reported to HMRC at the
year-end, with the level of detail required based on the number of
days spent in the UK (so only names of employees coming for up to
60 days from countries with which the UK has a tax treaty).
• Recent HMRC Expatriate Forum is proposing changes for STBV to
the UK where there is no treaty exemption, with a separate annual
return (and PAYE reference) and with the tax due for these paid by
22 April after the year end.
16. Shadow and Modified Payrolls for
Inbound Assignees in Host Location
• Known as a ‘modified payroll’ (Appendix 6).
• More relaxed format than a standard payroll and
estimates can be used, with later P11D deadline.
• Employee must be tax equalised back to their home
country.
• There is also a social security version of this for inbound
assignees (Appendix 7A), where needed, as well as for
equalised outbound assignees to report NI on the
NICable assignment expenses in the host location
(Appendix 7B).
• Note other potential payroll issues in home location
(such as ‘No Tax’ codes in the UK).
17. Social Security
• If local hire then immediately pay social security in host location. Where
assigned to host location depends on the countries involved.
• EEA Countries – usually can elect to remain in home scheme (via A1
application) subject to assignment-length limits.
• Totalisation Agreement countries (USA, etc.) - usually can elect to remain
in home scheme (via E101 application) also subject to limits.
• Non-totalisation agreement countries (Australia, India, etc.) – remain in
home scheme for first 52 weeks and then move to host scheme.
• Multi-state workers – special rules.
• Hypo social security – may be considered for non-totalisation agreement
countries after the 52 weeks have expired, with actual social security in
host location paid by the employer (therefore forming part of taxable
remuneration there).
• Voluntary NI contributions – available in some countries (such as the UK)
although may be a financial decision as to whether worth making (so we
cannot advise on this, just state the facts).
18. Other issues
• Trailing liabilities following the end of the
assignment (stock and bonuses – possibly years
later).
• UK outbound business visitors (track for any
compliance issues in countries visited – if tax is
due then Foreign Tax Credit in UK).
• Senior Accounting Officer reviews (ES Team).
• Share plans for globally mobile work force are
complex and we have teams who can also assist
with these.
19. Summary – ‘hooks’ for meetings
• Does company have employees working in
overseas jurisdictions?
• Do they have business visitors to the UK?
• Do they have people on an extended
assignment to/from the UK?
• If so, are they doing anything formally for
these individuals?
• IAS team can offer initial free meeting where
there may be issues of concern re above.