- Advisory on Double Taxation Agreements
In some scenarios, a taxpayer could be taxed twice on the same income. Double tax agreements (DTAs) are intergovernmental agreements entered to avoid and/or reduce double taxation. Generally speaking, the benefits of tax treaties are available only to tax residents of one of the treaty countries and establishing the tax residency of a business is not always a straightforward process. To take the most advantage of DTAs, the guidance of an international tax professional might be highly recommended.
- Advisory on Optimization of use of tax incentives and exemptions
Tax systems around the world provide for numerous tax regimes, tax incentives, and exemptions to attract investments, business, and human capital. Such measures change very often and entrepreneurs usually do not have the time, experience and knowledge to research and study the offered tx benefits and how to obtain the most advantages out of them.
- Advisory and assistance on Tax Audit and Tax Investigation
Tax audit and tax investigation are time consuming and call for a great deal of attention. They usually take months or years to settle. The appointment of a tax consultant is strongly recommended to any taxpayer subject to audit or investigation.
- Application for Tax Clearance Certificate
Tax Clearance Certificate is a certificate issued by the Tax Authority to a foreigner who is departing to indicate that he has already paid taxes or that he has provided a guarantor or securities as guarantee for his tax liabilities and tax payable.
- Application for Certificate of Tax Residency
A Certificate of Tax Residency, sometimes called Certificate of Resident Status, is a document issued by the competent authority to a resident taxpayer (individual or corporate) who requires proof of resident status for the purposes of claiming tax benefits under the Comprehensive Double Taxation Agreements (DTAs).
- Application for revision of tax assessment
If it can be established to the satisfaction of a tax assessor that the tax charged for any year of assessment is excessive by reasons of error or omission in any tax return or any arithmetical error or omission in the calculation of the amount of the assessable income or profit assessed, a claim to revise the assessment can be made in many jurisdictions. In Hong Kong, a claim to repayment can be made within six years of the end of the Year of Assessment affected or within six months of the Notice of Assessment being serve, whichever is the later.
- Commercial Contract Tax Planning
Commercial contracts affect the tax obligations of businesses. It is advisable for companies and individuals who enter a commercial agreement to have a tax preparer draft and/or revise the tax clause of commercial agreements in order to ensure tax compliance and protection of interests.
- Corporate Treasury Centres
A corporate treasury centre is a company within a multinational group providing treasury services for its group companies. If designed and implemented properly, a CTC can bring great benefits to companies. Hong Kong has always been one of the premier location of choice for CTC. The direction of an international tax consultant is advisable for the structuring a CTC in an efficient and effective way.
- Estate Tax Planning
It is important to have an estate plan. People want to make sure the assets accumulated during their lifetime go to the people or organizations they care about. Estate planning can be a complex process, but the support of experienced and capable professionals can make it much easier.
- Filing and Submission of Tax Returns with Tax Authorities
Almost always, taxpayers are required to complete and submit tax returns to the competent tax authority. In some occasions, taxpayers must request the tax authority to issue tax returns. Both accounting and tax knowledge and experience are needed to be able to fill in properly a tax return. The assistance of a professional to complete or revise a tax return is highly advisable.
- Fiscal Due Diligence
Fiscal Due diligence is the investigation of all the tax matters that a reasonable business or person is expected to take before entering into an agreement, transaction or act with a certain standard of care.
The help of a tax expert is necessary to conduct a proper fiscal due diligence.
- Foreign Tax Credit Application
A foreign tax credit (FTC) is generally offered by income tax regimes to mitigate the potential for double taxation. It is essential to keep proper business and accounting records in order to apply for a foreign tax credit and the support of a tax expert is highly recommended.
- International and Local Tax Planning for Companies and Individuals
Every taxpayer can arrange his affairs lawfully to reduce his tax payable. Tax planning (sometimes called tax mitigation) involves tax reduction arrangements that may meet the specific wording of the relevant legislation. Effective tax planning occurs when the results of these arrangements are consistent with the intent of the law. When tax planning reduces taxes in a way that is inconsistent with the overall spirit of the law, the arrangements are sometimes referred to as tax avoidance. Aggressive tax planning refers to arrangements that "push the limits" of acceptable tax planning.
Tax avoidance occurs when a person undertakes transactions that contravene specific anti-avoidance provisions. Tax avoidance also includes situations where a person reduces or eliminates tax through a transaction or a series of transactions that comply with the letter of the law but violate the spirit and intent of the law.
Tax planning demand a sound knowledge and good understanding of both law and accounting principles. The applicability pf tax saving measures vary from taxpayer to taxpayer as it is obvious that every taxpayer has different circumstances and requirements. Tax planning strategies therefore need to be developed on a case by case basis between the taxpayer and the professional advisor.
- Local and International Compliance and Advisory on Value Added Tax (VAT)/Goods Services Tax (GST)
Goods and Services Tax or GST is a broad-based consumption tax levied in some jurisdictions on the import of goods, as well as nearly all supplies of goods and services. In some countries, GST is known as the Value-Added Tax or VAT.
VAT/GST zero rate or exemptions can apply to several industries and businesses as well as on export and international services depending on the tax system.
- Local and International Compliance and Advisory on Customs Duties
Customs duties are taxes on the importation of goods. The impact of customs duties must be considered and carefully quantified in order to assess the competitiveness and profitability of a business. The help of a tax planner can be invaluable to optimize the impact of customs duties and maximize profits.
- Local and International Advance Tax Rulings
An advance tax ruling is a tool provided to the taxpayers by the Tax Authorities in numerous jurisdictions for clarifying and conforming specific taxation arrangements. A written interpretation of the revenue laws is issued by tax authorities to taxpayers who request clarification of taxation arrangements. An advance tax ruling binds tax authorities to comply with the tax arrangements set out in the ruling.
- Negotiations with Tax Authorities
In some cases, it might be possible to negotiate with tax authorities. It is not something easy and/or common for a taxpayer and therefore the help of a tax expert is advised to safeguard the taxpayer’s interests.
- Objections to Tax assessments
A taxpayer has the right to object to a tax assessment. Tax objections must be made in the required form and within a prescribed time. Depending on the complexity of the case, objections to tax assessments can be very difficult to handle. Consultation with a tax expert for proper evaluation of the circumstances will increase the probability of success.
- Patent Box
The Patent Box regime is a tax bonus introduced in order to improve the development of intellectual property (i.e. copyrights, trademarks, patents), granting tax benefits to residents and non-residents. Many jurisdictions implement a patent box regime and a tax professional should be consulted to exploit the advantages of such a scheme.
- Registration of Transfer of Shares
There may be times when the ownership structure of a corporation must change; either by adding a new shareholder or by changing the existing proportion of shares between existing members. A share transfer is a process of transferring existing shares from one person to another; either by sale or gift. In some jurisdictions (i.e. Hong Kong) the share transfer is usually done at the tax authorities, in some jurisdictions (i.e. Italy), the process is performed with the help of a public notary or in some cases the process simply consists in updating the register of members.
- Registration of Declaration of Trust Ownership
A declaration of trust is a document that transfers the beneficial ownership of an asset from the legal owner to the beneficial owner. A declaration of trust is usually registered at the competent tax authority and stamp duty it is usually paid upon registration. In some jurisdictions (i.e. Thailand) there is no difference between legal and beneficial ownership and therefore such a document is void.
- Special Purpose Vehicles
Special Purpose Vehicles are used in a technique called layering. The choice of jurisdiction for SPVs is vital and should take in consideration aspects such as tax, reliable legal system, secrecy, and stability of the local economy and all additional particular concerns of the parent company. In terms of tax structuring, the parent company should aim to set up a holding in a jurisdiction with zero to low income and dividend tax rates, considering that the sole purpose of this company is to be a connector. In addition, existing tax treaties should be taken into consideration, so any withholding taxes applicable in receiving or paying dividends should be minimized.
- Tax Exemption Application
Different jurisdictions implement different tax systems. Some countries have a residence-based tax regime, some have a remittance-based tax regime, some a citizenship-based tax system, some have a mix system etc.
Hong Kong uses a source-based tax system. In accordance with the provisions of the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), two conditions, inter alia, must be satisfied before profits tax is charged on a person:
1 a trade, profession or business is carried on by that person in Hong Kong and 2 profit from that trade, profession or business arises in, or is derived from Hong Kong.
The offshore Profits Tax exemption claim is a time consuming and complicated process because the assessor has a statutory duty to raise assessment and to make enquiry. The supervision of a tax professional is highly recommended.
- Tax Refund Applications
If an excessive tax has been paid, a claim to repayment can be made in many jurisdictions. In Hong Kong, a claim to repayment can be made within six years of the end of the Year of Assessment affected or within six months of the Notice of Assessment being serve, whichever is the later.
- Transfer Pricing Analysis
The term transfer pricing refers to the way the stated price of goods or services, in a given transaction impact the parties’ respective tax exposure. Tax authorities want to prevent multinationals from manipulating the price of goods and services in intergroup transactions as a way to evade tax. Transfer pricing rules include different valuation methods. In some cases, taxpayers may submit a transfer pricing strategy to the tax authority for approval in advance.