The October edition of the ITSG Global Tax Journal features articles authored by the following tax advisers.
1. Paul Kraan, of Van Campen Liem, Amsterdam, writes on an alternative method of obtaining relief from double taxation. “How B.I.T.s May offer a Legal Remedy in International Tax Disputes” explores an alternative method available to taxpayers under bilateral investment treaties. Traditionally, international tax disputes focus on provisions in income tax treaties. However, income tax treaties may not be the only legal remedy available in an international tax dispute, as countries also conclude bilateral investment treaties with the aim of protecting and stimulating cross-border investment. They allow a taxpayer to initiate and participate in the process, quite a change from the process provided in tax treaties.
2. Stephan Neidhardt and Marius Breier, of Walder Wyss Ltd., Zurich, explore the ways by which Swiss Federal and cantonal tax laws will change under the referendum held in May. “Swiss Corporate Tax Reform – An Overview” explains the provisions of tax reform that establish new rules on Swiss corporate taxation and repeal corporate tax rules that attracted intense international criticism. The authors explain the new progressive measures that will become effective in 2020, such as (i) the patent box regime, (ii) an additional super R&D deduction, (iii) two options for bringing hidden reserves into cantonal taxation (in relatively tax neutral ways), (iv) a notional interest deduction applicable at the cantonal tax level, and (v) a cap on the foregoing cantonal tax benefits. Choices must be made, and sophisticated advice is at a premium.
3. Marek Bytof of K18 WPP. Sp. Z o.o., Poland, delves deeply into recent changes in Polish tax law and administrative practices designed to bring the country’s tax system into the 21st Century. “Main Features of Polish Income Taxation” illustrates the way Poland has embraced the anti-abuse provisions of B.E.P.S., A.T.A.D. II, and DAC6. It also explains methods adopted by the Polish government to encourage emerging enterprises and foreign investors. Clearly “carrot and stick” measures have been adopted and must be navigated when investing in Poland.
4. Michael Fischer and Marc Buchmann of Fischer Ramp Partner AG, Zurich, address the new procedures in Switzerland allowing for exchanges of tax information with other countries. “http://www.itsgnetwork.com/itsg/globalTaxJournal.asp?aid=29Tax Matters – Sea Change in a Landlocked Country” provides an overview of the status quo and expected developments in Switzerland, such as information exchanges on an automatic basis, a spontaneous basis, on request under an income tax treaty, and the basis of the CbC requirements of B.E.P.S. Latest cases are discussed concerning how Swiss tax authorities react to “fishing expeditions” seeking out unknown holders of Swiss bank accounts on the basis of tax information exchange agreements and the limitations on exchanges of information when the request is based on stolen bank information. While there is much to be said for transparency as a means of preventing tax evasion, the authors conclude that automatic exchanges of information reflect an indiscriminate one-size-fits-all approach that often results in an exchange of data that is irrelevant for the receiving country’s tax purposes.