Autumn Tax Update. Tony Mancini, Paul Beale & Sinéad Leddy. 23 November 2017

Transcription

1 Autumn Tax Update Tony Mancini, Paul Beale & Sinéad Leddy 23 November 2017

2 Agenda 1. Welcome and introduction 2. UK Chancellor s Autumn Statement 3. Paradise Papers 4. EU screening process 5. Questions 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 2

3 Introduction Tony Mancini

4 All hell broke loose Paradise Lost, Book IV Paradise Papers EU Screening Brexit Competitive environment What will it all mean? Paradise lost? 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 4

5 UK Chancellor s Autumn Statement Paul Beale

6 Budget changes 1. NRCGT extension: a) Commercial property (April 2019) b) Indirectly held property (April 2019) c) Disposals of residential property by non-resident widely held companies (April 2019) Scoreboard 2. Non-Resident Landlord companies within scope of corporation tax from April UK SDLT removed for first time buyers on purchases under 300k and first 300k on first time buyers up to 500k 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 6

7 Budget changes 4. Consultation Scoreboard on the taxation of trusts expected next year 5. Requirement to notify HMRC of offshore structures 6. Extending time limits for offshore non-compliance 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 7

8 Other points to remember Trust Registration Service Corporate Criminal Offence Worldwide Disclosure Facility UK Non-Dom changes Requirement to Correct 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 8

9 Paradise Papers Tony Mancini

10 Previous informal disclosures Event Consequence Liechtenstein LGT bank Offshore disclosure facilities UBS FATCA Lux Leaks HSBC Private Bank Suisse Panama Papers CRS and focus on anti-tax avoidance Transparency and beneficial ownership register Paradise Papers? 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 10

11 Impact of Paradise Papers? EU project on noncooperative jurisdictions Focus on anti-tax avoidance Common sense? Public beneficial ownership register 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 11

12 Global principles for a responsible tax practice 1 We act lawfully and with integrity and expect the same from our people, our firms clients, tax authorities and other parties with whom we interact. Above all else, in every respect our work shall be fully compliant with relevant legal, regulatory and professional requirements. 6 We shall only advise clients to enter into, or assist them to implement, transactions or arrangements on the basis that they have any substance required by law, as well as any business, commercial or other non-tax purpose required by law. 2 3 We are committed to providing clients with high quality tax advice tailored to their particular circumstances. We shall explain clearly and objectively to our clients the technical merits and the sustainability of any tax advice we give. 7 We shall not advise clients to enter into transactions with the purpose of securing a tax advantage clearly and unambiguously contrary to the relevant legislation and shall not assist them to implement such transactions. If, in our view, the language of the legislation is uncertain, we shall consider the intention of the relevant legislators when advising clients. 4 5 Whenever relevant and practical to assess, we may discuss with clients any likely impact of any tax advice we give on relevant communities and stakeholders and any potential reputational risk. We shall make recommendations to clients only where: i. we consider, at least on the balance of probabilities, that the relevant interpretation of law is correct; or ii. it otherwise clearly meets the applicable local professional standards We support a relationship with tax authorities aimed at building mutual trust and respect which will enable constructive dialogue and responsiveness by all parties, facilitate compliance and reduce or assist in early resolution of disputes. We shall comply with all our disclosure requirements and advise our clients to do the same. When advising clients on entering into transactions we shall do so on the understanding that all material facts will be known to the tax authorities KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 12

13 EU screening process Sinéad Leddy

14 EU list of non-cooperative jurisdictions Objective: Mechanism to evaluate third countries to determine whether they are non-cooperative Based on the concept of tax good governance standards on tax transparency, fair taxation and anti-beps measures 3-stage process underway 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 14

15 The process 2008 We introduced Zero/ Zero/10 reviewed by the Code Group; compliant Jan 2016 EC said it would screen and list noncooperative third countries Code Group tasked with the screening process Sept 2016 Preassessment of 160 third countries Nov x criteria to define a noncooperative third country released Jan 2017 Guernsey + 91 others received letters from the CCG July 2017 Technical response from Guernsey submitted to the CCG 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 15

16 The 3 criteria Tax transparency 1.1 Committed to implement CRS 1.2 At least largely compliant for exchange of information 1.3 Participate in OECD MCAA Fair taxation 2.1 No preferential tax measures 2.2 The jurisdiction should not facilitate offshore structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction Implementation of anti-beps measures TBC 3.1 Addressing harmful tax practices 3.2 Tax treaty abuse 3.3 Country-by-Country reporting 3.4 Improvement in cross-border tax dispute resolution 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 16

17 Real economic activity To date the Code Group has not provided meaningful guidance on criterion 2.2 And we have asked Clear though that attention is on quality of business activities 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 17

18 Where are we now? November 2017: Letter received from Code Group - further steps to be taken in relation to economic substance All CDs and OTs Response ongoing commitment to the screening process, and to resolving any issues identified Commitment to dialogue with the CCG from early 2018 Commitment by the end of To what??? Code Group report presented on 5 December 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 18

19 Guernsey - the path ahead? Tony Mancini

20 Guernsey - the path ahead? No commitment to dialogue listing as non-cooperative Listing as non-cooperative => Defensive measures by EU => Reputational damage => Potential economic damage => Impact on UK/EU negotiations 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 20

21 The Code Group s concerns Zero % tax Tax advantage without economic activity /substance Inadequate corporate reporting Lack of transfer pricing rules 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 21

22 Possible outcomes Territorial Tax Satisfy Code Group that economic activity and substance requirements met Flat 10% with exemptions - funds - capital gains - participations Enhanced reporting and information exchange with EU Listed as non-cooperative 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 22

23 Final thought Long is the way, and hard, that out of Hell leads up to Light Paradise Lost, Book II 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 23

24 Thank you

25 Questions?

26 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.