Tag Archives: taxes

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CSRF: Amounts received for constitution on onerous usufruct of shares are taxed

The Superior Chamber of Tax Appeals recently confirmed an understanding of the 3rd Ordinary Class of the 1st Chamber of the 1st Judgment Section, which, by a vote of quality, determined that the value received for the grant of usufruct onerous and temporary usufruct should be taxed by the IRPJ.

For judges, the amounts received as temporary grant of usufruct of shares must receive the same tax treatment of a lease, and should be understood as taxable operating income.

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How to save tax like a duke

Using family trusts to save IHT is not just for the super-rich, but it does help to have had some well-advised ancestors…

No doubt you’ve read the press reports about the sixth Duke of Westminster who has arranged his financial affairs so that the bulk of his £9bn property portfolio passes to his son, Hugh, without having to pay much in the way of death duties.

So have you ever wondered how the very wealthy seem to pay little or no Inheritance Tax (IHT)?

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Tax and the gig economy

The ‘gig economy’ has been very much in the news in recent months. While much of the political attention has been focused on the employment effects of this phenomenon, the implications for UK tax are wide-ranging and hugely significant.

What is the gig economy?

The name refers to the general trend of workers using an online platform to source small on-demand pieces of work (gigs) for which they are paid on a self-employed basis, rather than working for a typical employer. A related development is the sharing economy (generating income by the sharing of assets such as through Airbnb).

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South Dakota: State Supreme Court sides with sellers in the battle for online tax revenue

n eagerly awaited opinion that the South Dakota Supreme Court filed last week says that the state’s hands must remain tied when it comes to taxing the sales of internet retailers.

It was just two weeks ago that we addressed the positions each side presented to the state Supreme Court during oral arguments. To recap, the plaintiffs, internet sellers Wayfair, Overstock.Com, and Newegg, were fighting the state law, SB 106, that required remote sellers with no physical location in South Dakota to remit sales tax, and follow all procedures of the law, if they meet one of two criteria in the previous calendar year or the current calendar year:

  1. The remote seller’s gross revenue of sale of tangible property, any products transferred electronically, or services delivered into South Dakota, exceeds $100,000.
  2. The remote seller has 200 or more separate transactions tangible property, any products transferred electronically, or services delivered into South Dakota.

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Illinois: Efforts to repeal soda tax continue

There continue to be new developments in the seemingly never-ending fight over Illinois’ newly enacted soda tax, which just took effect on Aug. 2, 2017. The last time we visited this tax, the court had dismissed a lawsuit seeking to have the tax struck down, and the plaintiffs, including the Illinois Retail Merchants Association (IRMA) and several food markets, had filed their notice of appeal.

Since then, Cook County Board of Commissioners President Toni Preckwinkle spearheaded a county lawsuit against those same plaintiffs for $17 million in damages, on the grounds that their legal challenges, which delayed implementation of the tax by eight months, caused the county to lose revenue. On Aug. 8, 2017, she withdrew the suit, and released the following statement: “Now that the Appellate Court has rejected the emergency motion that would again prevent us from collecting the sweetened beverage tax, we believe we should move forward cooperatively and in good faith with the County’s retail industry.”

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Ohio: Plan to replace lost revenue chugs along

When Gov. John Kasich signed the budget legislation for the new fiscal year, which began on July 1, 2017, he vetoed a number of provisions, as we explained at the time. One of these was designed to help counties and transit authorities cope with the revenues that they were going to lose from the elimination of the sales tax on Managed Care Organizations (MCO). At issue is more than $600 million.

A fact sheet put out by the state, titled Responsibly Replacing the Medicaid MCO Sales Tax, notes that Ohio’s sales tax on MCOs, which is based on Medicaid payments that the MCOs receive from the state, has been in place since 2009. But in 2014, the federal Centers for Medicare and Medicaid Services (CMS) declared that as of July 2017, Ohio’s Medicaid MCO sales tax would no longer be a permissible taxing method used to draw down Medicaid matching funds from the federal government.

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Cyprus introduces new attractive tax residence criteria for individuals

The Cyprus Parliament has approved in July 2017 an amendment to the Cyprus Income Tax Law, Law 119(I)/2017 (the “Law”) pursuant to which the definition of an individual considered as a Cyprus tax resident has been extended. The amendment is effective as from 1 January 2017.

Before the amendment to the Law, an individual is considered as a Cyprus tax resident if he/she stays in Cyprus for one or more periods exceeding in aggregate 183 days in a tax year.

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Massachusetts: Recreational marijuana taxes increase before it is available for sale

In November 2012, 63.3 percent of voters approved Massachusetts’ medical marijuana initiative, An Initiative Petition for a Law for Humanitarian Medical Use of Marijuana, making it the 18th state in the nation, along with the District of Columbia, to legalize medical marijuana.

Four years later, by a vote of 53.6 percent to 46.3 percent, voters did the same for recreational marijuana with the Massachusetts Marijuana Legalization Initiative (also known as Question 4). Both were citizen-initiated efforts.

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UK beneficial ownership registers: now it’s your turn, trustees

On 26 June 2017, the UK Government introduced a beneficial ownership register for trusts for the first time, in response to its need to comply with the EU’s 4th Anti-Money Laundering Directive.  Which trusts will be affected and what will trustees have to do?

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Texas: A different approach to collecting taxes from online purchases

We recently discussed New York’s attempt to tax online purchases by requiring online marketplaces with more than $100 million in annual sales to collect the state’s sales tax from customers who are New York residents, regardless of whether the seller is located in or outside of New York. Even though the measure was estimated to bring in $275 million in fiscal year 2018-19, a robust campaign to kill it was successful.

Other states continue trying with their own measures. In Texas, Senate Bill 1713 (SB 1713) is now making its way through the law-making process, having been introduced in March. It passed out of the Senate in mid-May, by a vote of 31 to 0, and is now pending with the House Ways and Means Committee. Though its only effect is to study methods that would increase sales and use tax collections, it floats the possibility of subjecting third party “persons who refer purchasers in [Texas] to out of state retailers” to registration or information reporting requirements.

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