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Austria, France, and Italy to Introduce Digital Services Taxes

Austria, France, and Italy to Introduce Digital Services Taxes

A limerick that is popular among members of the U.S. Congressional tax writing committees sheds wisdom on the development of tax policy:  “Don’t tax you.  Don’t tax me.  Tax the person behind the tree.”  Several countries in Europe have taken the rhyme to heart in developing unilateral digital services taxes designed to impose tax on extra-territorial activity of out-of-country companies.  The issue, as Austria, France, and Italy see it, is that these companies make huge profits in Europe but pay no tax there, while payments for digital services are often tax deductible in the countries where the services are used.  According to proponents such as Austria, it is only fair to tax those profits on a destination basis.  Benjamin Twardosz of CHSH Attorneys-at-Law, Vienna, explains the various proposals under consideration.

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Foreign Investment in U.S. Real Estate – A F.I.R.P.T.A. Introduction

Foreign Investment in U.S. Real Estate – A F.I.R.P.T.A. Introduction

Many economic, political, and cultural factors make U.S. real estate an attractive investment for high net worth individuals resident in other countries.  These factors are supported by a set of straightforward tax rules that apply at the time of sale.  Alicea Castellanos, the C.E.O. and Founder of Global Taxes L.L.C., looks at the U.S. Federal income taxes and reporting obligations that apply to a foreign investor from the time U.S. real property is acquired to the time of its sale.

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The Impact of Brexit on German Taxes for Private Clients and Nonprofit Organizations

The Impact of Brexit on German Taxes for Private Clients and Nonprofit Organizations

American business executives responsible for regional operations in Europe often see different approaches to problem solving in terms of cultural differences between various European countries.  It can be said that British colleagues often continue to rethink decisions even after solutions are adopted, and German colleagues focus on engineering a unified approach to reach the best solution to the matter at hand.  These cultural characteristics seem to have manifested in the different ways Parliament in the U.K. and the Bundestag in Germany are addressing Brexit.  Parliament continues to debate whether, when, and how to implement Brexit, while the Bundestag has enacted several laws to address how a hard or soft Brexit will affect various aspects of German tax law.  Dr. Andreas Richter of P+P Pöllath + Partners, Berlin and Frankfurt, provides the reader with an overview of the German tax consequences to be anticipated from a U.K. departure from the E.U. – with or without a formal Brexit agreement.

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Strategies for Foreign Investment in Indian Start-Ups

Strategies for Foreign Investment in Indian Start-Ups

Foreign investment in Indian high-tech start-ups can yield significant profit opportunities for savvy investors.  During 2018, over 1,000 deals were struck, reflecting $38.3 billion in new investments.  If these investments turn out to be profitable, the tax exposure for the investor will vary with the form of the investment.  Choices of investment vehicles include (i) L.L.P.’s, (ii) Category I, Subcategory I alternative investment funds (“A.I.F.’s”) registered with the Securities Exchange Board, (iii) Category III A.I.F.’s, and (iv) trusts.  Each has unique tax consequences for investors receiving dividends and realizing gains.  Raghu Marwah and Anjali Kukreja of R.N. Marwah & Co L.L.P., New Delhi, explain the entities choices and the resulting tax costs.

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Trust Regulations and Payment Services: Dutch Law in 2019

Trust Regulations and Payment Services: Dutch Law in 2019

The Dutch government has taken steps in recent months to enhance regulatory oversight.  The new Act on the Supervision of Trust Offices 2018 adopts serious best practices for trust companies designed to prevent Dutch entanglement in the next set of Panama Papers.  KYC due diligence must be real.  At the same time, the Second Payment Services Directive (“P.S.D. II”) was transposed into Dutch law.  With customer permission, companies involved in payment service businesses will have greater access to information on spending habits of customers.  This generates a win-win scenario – a miracle for companies engaged in marketing activities and insights for consumers into their spending patterns, enabling them to make better financial decisions.  Lous Vervuurt of Buren N.V., the Hague, explains how the new rules work, including new standards of account security.  

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