Sunnyvale, CA -- (SBWIRE) -- 06/20/2012 -- With an aim to liberalize documentation requirements, the Reserve Bank of India (RBI) has raised the limit for foreign exchange remittance for miscellaneous purpose without documentation process to US$25000 from US$5000.

In the year 2002, Authorized Dealers were directed to release up to US$500 or its equivalent for all transactions upon obtaining a letter from the applicant that includes basic information. In the year 2003, the foreign exchange limit was extended to US$5000 and the same has now been further increased to US$25000.

The RBI has now made it clear that authorised dealers do not require obtaining Form A-2 in cases where foreign exchange is bought for current account transaction and if the sum does not surpass US$25000 or its equivalent. Also, the payment must be done using a cheque drawn on the applicant's bank account or by a demand draft.

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About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 4000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

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Sunnyvale, CA -- (SBWIRE) -- 06/05/2012 -- The Indian Ministry of Finance has proposed certain amendments to the Union Budget 2012-13, which introduced certain provisions to check tax evasion. To address concerns of the adverse impact of the provisions, the Indian finance minster has announced revision of the Union Budget.

The proposed amendment highlights areas like deferred implementation of General Anti-Avoidance Rules (GAAR), retrospective amendments to indirect transfers abroad and capital gains on private equity.

The proposed revisions to the tax evasion laws are as follows:

Revisions to General Anti-Avoidance Rules (GAAR)

- Provisions of the GAAR are expected to be applicable in the financial year 2013-14 and following years.
- Proposed amendments for the GAAR include:
- Shift of onus of proof from the taxpayer to the Revenue Department in case of any action taken under the GAAR.
- To ensure transparency, an independent member will be introduced in the GAAR approving panel.
- In order to check if proposed transactions do not contravene provisions of the GAAR, resident as well as non-resident taxpayers can apply for an Advance Ruling.

The Committee formulated under Director General of Income Tax (International Taxation) is to provide suggestions to formulate guidelines for the successful implementation of the GAAR by May 31, 2012.

Retrospective amendments involving Capital Gains arising out of indirect transfers abroad on sale of assets located in India

- Such amendments will be applicable to specific cases where a transfer is facilitated through a low tax or no tax jurisdiction which does not have a Double Taxation Avoidance Agreement (DTAA) with India. In addition to this, the provisions of DTAAs signed by India with foreign countries will not be overridden.
- The retrospective amendments which are under consideration of the Parliament of India won't be used to reopen cases where assessment orders have already been done.
- The benefits will not be applicable to Vodafone like cases which involve low tax and non-DTAA destinations like Cayman Island.

Share Taxability (Taxability of shares transferred between closely held companies at a value in excess of the fair market value of shares)

In order to encourage angel investors, it has been proposed to provide a provision to exempt a notified class of investors. Any considerations obtained by a closely held company exceeding the market value will be taxable.

Security Transactions Tax (STT)
Unlisted Securities in an Initial Public Offering (IPO) will be subject to an STT of 0.2%. However, long term capital gain on the same will be non-taxable.

Capital gains tax
Long term capital gains arising upon the sale of unlisted securities by Non-resident investors (other than Foreign Institutional Investors-FIIs) will be subject to 10% tax (such sale transactions have been subject to 20% tax). To bring fairness to such investors, the finance minister has proposed to bring down the tax rate to 10% as applicable to FIIs.

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New changes to the social security contribution for Brazilian employers may take effect from August 1, 2012, subject to Congress' approval.

Sunnyvale, CA -- (SBWIRE) -- 05/24/2012 -- New changes to the social security contribution for Brazilian employers may take effect from August 1, 2012, subject to Congress' approval.

Provisional Measure* 563/2012 was issued on April 4, 2012, introducing the following changes:

- Information technology (IT), Information and communication technology (ITC) and call center service companies will now pay 2% Contribuicao Para O Instituto Nacional de Seguridade Social (INSS) instead of 2.5%. The rate will also be extended to the hotel industry sector.

- Furniture, leather, apparel and sports equipment manufacturers will now have to pay INSS at the rate of 1% instead of 1.5%.

Previously, the social security contribution due by employers at the rate of 20% on payroll was preventing them from recruiting new employees. In a bid to minimize the burden, the Government introduced a new tax on gross income for certain business sectors instead of the social security contribution. The latest measure is an amendment to this law.

- The Brazilian President can issue a Provisional Measure (PM) using his/her lawmaking power with a validity of 60 calendar days which can be further extended for another 60 days. If the issue does not get approved by the Congress, the PM would lose its power.

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Sunnyvale, CA -- (SBWIRE) -- 05/24/2012 -- A Brazilian Supreme Court ruling declared that a taxpayer can be charged with criminal charges even if the tax debt is not confirmed by the administrative courts. This is a major shift from its earlier stand where criminal charges could be filed against a defaulting taxpayer only on confirmation of the actual debt.

The Supreme Court verdict was given within the case records of the Habeas Corpus 108.037 proposed by a Brazilian taxpayer.

Background:
In 2009, the Supreme Court had established that there was no material crime against the tax system before definitive constitution of tax debt. Post administrative court proceedings and determination of the amount of tax being due, definitive constitution of the tax debt is verified. Criminal charge against the taxpayer could be filed only after the administrative court's confirmation of the actual tax debt amount.

The taxpayer argued against the criminal charges stating that the charges had been initiated prior to the administrative courts confirming if the tax debt existed or not.

Decision:
Dismissing the taxpayer's argument, the Supreme Court panel handling this case held that when the due tax debt is obvious and there is fraud against the system, it is not obligatory to wait for the final conclusion by the administrative courts.

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Sunnyvale, CA -- (SBWIRE) -- 05/14/2012 -- Australia will soon launch the National Business Names Register which will enable companies to use a single form to register a business name across all Australian states and territories.

In accordance with the Business Names Registration Act 2011 (Cth), from May 28, 2012, the Australian Securities and Investments Commission (ASIC) will maintain a new business names register on a centralized database.

The current process requires business names to be registered in each state and territory where the business operates (with certain exceptions).

Process for Existing Business Names
For companies with registered business names before the commencement date, ASIC will have it transferred automatically to the new Register on the start date. Entities that wish to continue business under the existing name after the start date will need to renew it before it expires.

Registering a Business Name After the Commencement Date
The process for registering a business name after the start date involves creating an 'ASIC Connect' account with ASIC and completing an online application.

Information Displayed on the Register
Certain details of the business name such as the name, ABN and period of registration will be available to public via online search, once applications have been submitted successfully.

Multiple Business Names
Businesses with names registered in more than one state will find all the names transferred to the new Register on the commencement date.

This could result in a business name holder having multiple business names. In such cases, the owner would be allowed to keep one name and cancel the others at no cost.

Identical business names with different business name holders will be distinguished by providing additional information.

Additionally, ASIC has the authority to cancel identical business names provided that it can confirm that the same holder owns multiple identical names.

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Sunnyvale, CA -- (SBWIRE) -- 04/24/2012 -- Switzerland and United Kingdom signed a protocol of amendment that supplements their withholding tax agreement of October 6, 2011. The agreement is awaiting approval from the Parliament of both, Switzerland and United Kingdom, to take effect at the beginning of 2013.

According to the Swiss Federal Department of Finance (FDF), interest payments have not been included in the agreement and taxpayers can discharge tax liabilities on interest payments.

Post implementation, the residents of United Kingdom can pay their tax retrospectively, on bank relationships in Switzerland, either by a one-off payment or by disclosing their banking transactions to UK authorities. If accounts were open on December 31, 2010, and remain functional till May 31, 2013, anonymous lump sum amounts can be paid.

For bank clients, the legal structure will change, inheritance will be included to get rid of loopholes, protection of privacy will be ensured and improvements in conditions for mutual market access will be introduced.

Tax tariff will be within the range of 19% to 34%, depending on the asset, initial and final amount of capital held in the account and on the duration of the client-bank relationship.

Furthermore, withholding tax of 48% on investment income and 27% on capital gains will be levied on UK bank clients in Switzerland.

The above payment will satisfy all UK tax liabilities on such transactions (involving investment income/ capital gains). However, those making full disclosures to HMRC need not make such payments.

As per the agreement, UK can make up to 500 requests for information to Swiss authorities in order to prevent deposit of undeclared funds in the future.

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China Plans to Extend VAT Pilot Scheme to Beijing in July

Sunnyvale, CA -- (SBWIRE) -- 04/23/2012 -- China's pilot scheme for VAT which is intended to replace the current business tax in Shanghai is likely to be extended to Beijing in July, this year. Currently, VAT is being applied only to the manufacturing industry. The pilot VAT rates of 11% and 6% are mainly being introduced to support the services sector such as transportation. China commenced the VAT pilot scheme in Shanghai earlier this year with the aim to start unifying all turnover taxes into VAT and reduce the tax burden on the services sector. The pilot scheme is likely to be extended to other Chinese cities of Tianjin, Chongqing and Shenzhen, and Jiangsu Province.

Czech Republic Validates Local Reverse Charge for VAT Rules
Czech Republic confirms the treatment of local reverse charge where both the supplier and the customer are VAT payers. Previously, the rule was limited to certain situations. Confirming its prior stance on the treatment of local reverse charges, the Czech tax administration held that the customers have to acquire the supply from the suppliers for business purpose only and provide a valid tax identification number to the supplier.

Portuguese Govt Raises VAT and Excise Duty in Madeira
Portuguese government raises VAT and Excise Duty in the autonomous region of Madeira effective from April 1, 2012. The standard VAT rate has been increased from 16% to 22%, intermediary rates from 9% to 12% and reduced rate from 4% to 5%. Excise duty on electricity has been introduced and the revised excise duty will be applied on tobacco and alcoholic drinks.

EU Council Authorizes Romania to Increase VAT Registration Threshold
EU Council authorizes Romania to increase the VAT registration threshold to the national currency equivalent of €65,000 (from €35,000) on March 26, 2012.

Turkey Slashes VAT Rate on Raw Materials for Pharma to 8%
The Turkish Government has reduced the VAT rate on the supply of raw materials for pharmacy products to 8% from the previous standard rate of 18%. The new rates are effective since March 25, 2012.

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Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

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Sunnyvale, CA -- (SBWIRE) -- 04/23/2012 -- India's Central Board of Direct Taxes (CBDT) in a recent notification has provided detailed information that foreign companies with representative or liaison offices must provide to tax authorities in accordance to a 2011 tax law amendment.

Under the 2011 amendment, non-resident companies with Liaison Offices in India must file an annual statement. The latest CBDT notification provides details on the specific form for the statement (Form No. 49C) and the rules that are effective since April 1, 2012.

A Liaison Office is easier to establish, maintain and close down than other entities making it a popular choice for foreign companies starting their operations in India. A Liaison Office in India cannot engage in business or commercial activities or earn revenue but is allowed to conduct preparatory and auxiliary activities. It does not constitute a Permanent Establishment (PE) i.e. has no taxable presence.

Indian tax authorities have, however, been increasingly scrutinizing Liaison Offices and in some cases Indian Courts ruled that certain Liaison Offices by the nature of their activities did constitute a PE. India's transfer pricing authorities as well have acted by attributing significant profits to Liaison /Offices that were ruled to have a taxable presence.

The new reporting requirements allow the government greater access to information about Liaison Offices allowing them to crackdown on errant operations. The key highlights for the requirements are:
- The annual statement must be signed and verified by a chartered accountant or a signatory duly authorized by the Liaison Office parent
- The annual statement must be provided via an electronic form with a digital signature
- The information that must be provided in the form about the Liaison Office to include:

1. All details for the financial year that relate to India. This includes receipts, income and expenses of the nonresident from or in India (this is not information related to the Liaison Office only);

2. Details of all purchases, sales of materials and services from or to Indian parties during the year by the nonresident parent (not just transactions entered into by the Liaison Office);

3. Salary or compensation details where the salary or compensation is paid or is payable outside India to any employee working in India or for services rendered in India;

4. Total count of employees working at the Liaison Office for the current year

5. Complete details about the representatives, distributors and agents of the nonresident parent in India and details of the top five parties in India with whom the Liaison Office has liaised;

6. Complete information about the product or service for which research or preparatory activity is carried out by the Liaison Office along with details of any other entity for which liaising activity is carried out by the Liaison Office;v

7. Information about group entities that maybe present in India e.g. branch office, company, limited liability partnership, etc., established in India

8. Details of other Liaison Offices of group entities in India; and

9. Information regarding other group entities operating from the same premises as the office of the Liaison Office.

This annual statement must be submitted within 60 days from the close of the Liaison Office's financial year.

These reporting requirements are in addition to a separate guideline that requires a Liaison Office to submit an Annual Activity Certificate to the designated authorized bank in India with a copy to jurisdictional Directorate General of Income Tax.

Foreign companies with operations in India need to revisit their Liaison Offices and do a health-check on their operations to spot any PE risks. With heightened scrutiny from India tax authorities, companies should make it best practice to maintain robust documentation of their Liaison Office operations. In cases where a risk of PE is found, voluntary filing of corporate tax returns could help the case.

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Sunnyvale, CA -- (SBWIRE) -- 04/18/2012 -- The Inland Revenue Department (IRD) announced that it has changed its stance on the long disputed tax deduction of inter-group recharge of employee stock options.

In the current scenario, for example, where employees receive share based compensation from a group company either based in Hong Kong or overseas, often known as the 'issuing entity', the issuing entity will regain the costs associated with disseminating such share based benefits from the Hong Kong based company. However, a recent statement from the IRD indicated that it has altered its position on the deductibility of taxes for intergroup recharge for share options or share awards. IRD had, in the past, disapproved the deduction of such inter-group regain/recharge of share-related compensations if new shares were issued to fulfill the option obligations.

Changes in Deduction of Recharge 

Recharge related to new issue of shares as well as acquisition of shares will be considered as expenses if certain conditions are met and allowed. A written recharge agreement is mandatory. The tax deduction timing will take place at the point of exercise of the stock options or when the share awards are given. The deduction amount claimed should not be more than the open market value of the shares acquired at the date when the options are exercised or the awards are vested less the amount or value of consideration given by the grantee/awardee. Deductions made before any of the stock options or award shares are forfeited or cancelled should be written back as a trading receipt and will be subject to assessment.

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Sunnyvale, CA -- (SBWIRE) -- 04/17/2012 -- France revises the reporting requirement criteria to grant tax-qualified stock options, free share and Bons de Souscription de Parts de Createurs d'Entreprise (BSPCE) on January 31, 2012.

New Reporting criteria for Stock Options and BSPCE on or after January 1, 2012:
- Companies are required to issue individual certificates of stock options and BSPCE containing details of French-sourced portion of the income by March 1, 2012 following the exercise. A copy of the same has to be sent to the plan administrator as well.
- The individuals have to affix the certificates to their French income tax return of the year of exercise of stock options or BSPCE.
- Companies are required to furnish the information on the certificate on their employer annual wage returns (DADS).
- In case the holding period is not respected by the participant during the year of sale, the company has to issue an individual certificate by March 1 of the following year and send it to the tax office of the company and also a copy to the plan administrator.

New Reporting criteria for Free Shares on or after January 1, 2012:
- Companies are required to issue individual certificates of free share vesting containing details of French-sourced portion of the gain by March 1, 2012 following the vesting. A copy of the same has to be sent to the plan administrator.
- The beneficiaries have to affix the certificates to their French income tax return of the year of vesting of free shares.
- Companies are required to furnish the information on the certificate on their employer annual wage returns (DADS).
- In case, the usual holding period of two years is not respected by the participant or in case of a specified share exchange during the year, the company has to issue an individual certificate to the beneficiary, to the tax office of the company and to the plan administrator as well.

Awards Vesting in 2011:
- Such Companies must issue certificates against the free shares vested in 2011 and copies of the same to be furnished to the French Tax Centre by April 30, 2012.
- Employees must furnish the certificate on their tax returns for 2011.

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Sunnyvale, CA -- (SBWIRE) -- 04/16/2012 -- Belgium's prolonged budgetary discussions resulted in an increase in tax on equity based payments particularly stock options and dividends where most taxable benefits on stock options granted will be increased to 18% from the current 15%.

Currently, stock options are taxed from the moment it is granted, if they are accepted in writing within 60 calendar days after the offer is made. Capitals gains tax on the subsequent exercise, possession or sale of acquired shares is exempted as earned income. The taxable portion on non-quoted stock options (with a term of five years or less) is 15% of the value of the underlying shares at the time of stock option grant. The taxable portion of such stock options increases if their term is for more than 5 years.

Effective January 1, 2012, for non-quoted stock options having term of up to 5 years, the taxable benefit on stock options which has been extended to 18 %. Individuals who opt for stock options under a plan qualifying under the law of March 26, 1999 will see an increase in the taxable base.

Belgium Withholding Tax on Dividends:

The current withholding tax of 25% which applies to dividends received from either a Belgian company or a foreign company through a Belgian intermediary will remain the same.

Plans to increase the withholding rate of 15% on dividends of publicly issued shares (since 1994) to 21%.

Taxpayers whose annual movable income surpasses € 20,000 will be subject to a solidarity surcharge of 4% over and above the 21% withholding rate.

Belgium Capital Gains Tax on Employee Stock Options

Capital gains on shares, securities are tax free. For employee stock option plans' participants (individuals), this year's budgetary discussions did not introduce a general capital gains tax.

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Sunnyvale, CA -- (SBWIRE) -- 04/16/2012 -- The Peruvian Government plans to introduce a new Personal Data Protection Law to protect personal data in private and public databases within Peru.

The new law aims at keeping the Peruvian data protection Law at par with the rigorous data protection law of the European Union.

However, the Law is not applicable to databases created by individuals for private or personal purposes or to databases created by the Government of Peru with regard to national security and criminal matters.

Important Aspects of the Law
- Collection, processing or transfer of personal data has to be done legally with prior express permission of the owner, and in case of case sensitive data, written consent is mandatory.

- International transfer of data to a receiver outside Peru can only be possible if the receiver country is at par with Peru's data protection standard, if not, the owner or the manager of the data is required to ensure the same.

- The aforesaid provisions will not be applicable to International treaties, international judicial cooperation, bank transfers and exchanges.

- National Authority for the Protection of Personal Data will have the authority to manage, direct, regulate, supervise and provide sanctions with regard to the protection of personal data.

- Personal Data Bank owner can stop providing data in case of any fundamental right infringement issue and can even claim compensation for the same.

Any violation of the Law, depending on its gravity, will be penalized, with fines ranging from 0.5 to 100 tax units (1 tax unit = US $ 1,350 approximately).

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Sunnyvale, CA -- (SBWIRE) -- 04/11/2012 -- A conservative budget plan for 2012 in Canada proposes to gradually phase out the Overseas Employment Tax Credit (OETC) from the 2013 tax year onwards and reduces the Scientific Research and Experimental Development Program (SR&ED) investment tax credit from 20% to 15%.

While the 2012 budget presented by Finance Minister, Jim Flaherty, on March 29, 2012 had no effect on business tax rates, proposals to amend the Canadian Income Tax Act could specifically affect income tax adjustments undertaken by corporations and the taxability of dividends.

Highlights of Canada Budget 2012:

Income Tax

Canada Business Tax Update

- No changes in tax rates.

- Proposals to amend the thin capitalization rules by way of:

- Reduction in the debt-to-equity ratio to 1.5:1 (from from 2:1), 

- Disallowed interest expenses to be treated as dividends for withholding tax purposes under the thin capitalization rules

- Extension in the scope of thin capitalization rules to cover debts of partnerships of which a Canadian corporation is a member, etc. 
- Proposals for changes to the Scientific Research and Experimental Development Program (SR&ED) include:

- The SR&ED investment tax credit rate which applied to a qualified expenditure pool balance to be reduced to 15% (from 20%). This will take effect from January 1, 2014. 

- From 2014 onwards, capital expenditures will not be eligible for SR&ED deductions and investment tax credits

- In case of arm's length SR&ED contracts, only 80% of contract payments will be included in computations for investment tax credits, etc.

- Budget 2012 has proposed to phase out the Overseas Employment Tax Credit (OETC) over 4 years, from the 2013 tax year onwards. Employees being Canadian residents who qualify for the OETC are entitled to a tax credit equal to the federal income tax otherwise payable on 80% of their qualifying foreign employment income, capped at a maximum foreign employment income of CAD 100,000.

- The Income Tax Act enables a taxable Canadian Parent Corporation which has acquired control of a taxable Canadian subsidiary corporation to benefit from an increased cost of certain capital assets acquired by the Parent by way of a winding up/vertical amalgamation of/with the subsidiary (often referred to as the bump), subject to certain limitations. Since corporate partnerships have been increasingly used to avoid the denial of the aforesaid benefit in respect of a subsidiary's assets, it has been proposed to introduce suitable measures to ensure that partnerships cannot be used as a vehicle to avoid the denial of the bump.

- It has been proposed to amend the Income Tax Act to enable secondary adjustments to be treated as dividends for withholding tax purposes. It is pertinent to note that Canadian corporations which are subject to primary adjustments would also be deemed to have paid a dividend to its non-resident participants in transactions not carried out at arms'-length price. This would be in proportion to the amount of the primary adjustment relating to the non-resident participant irrespective of whether the non-resident is a shareholder of the Canadian corporation).

- Budget 2012 has made an attempt to clarify that non-residents are allowed to repatriate to a Canadian corporation (subject to a primary adjustment), an amount equal to the portion of the primary adjustment that relates to the non-resident.

- It has been proposed that upon meeting certain conditions, a dividend will be deemed to have been paid by a Canadian subsidiary to its foreign parent for any non-share consideration against the acquisition of the shares of a foreign affiliate. The paid-up capital of any shares of the subsidiary that are given as consideration would be disregarded for this purpose. Such deemed dividend would attract withholding tax, which may be reduced by an applicable tax treaty.

At present there are provisions in the Income Tax Act on taxability of dividends which provide for a partial imputation system allowing a Dividend Tax Credit (DTC) for individuals which is proportionate to the share of income tax assumed to have been payable at the corporate level. It has been proposed to simplify the manner in which a Canadian corporation pays and designates eligible dividends. Proposals allow a corporation to designate any portion of the dividend to be an eligible dividend. The portion of a taxable dividend that is designated to be an eligible dividend will qualify for an enhanced DTC, and the remaining portion will qualify for the regular DTC.

Personal Tax

- It has been proposed to increase the eligibility age for Old Age Security (OAS) and Guaranteed Income Supplement benefits to 67 (from 65) from April 2023 and is expected to get fully implemented by January 2029. Additional proposals include:

- Introduction of a plan for supporting retirement income system by way of Pooled Registered Pension Plans, -Making available options to defer OAS benefits against higher annual benefits, etc. 

- It has been proposed that employees' income shall include the amount of employers' contributions to a group sickness or accident insurance plan in the year when the contributions are made. This would only happen if the contributions are not in respect of wage-loss replacement benefits, payable on a periodic basis.

- The Medical Expense Tax Credit which provides federal income tax relief of 15% on certain eligible medical and disability-related expenses in excess of a threshold will now enjoy more inclusions to the list of eligible expenses.

- It has been proposed that a special tax would be payable by specified employees on an "excess Employees Profit Sharing Plans (EPSP) amount". Such amount being the portion of an employer's EPSP contribution exceeding 20% of the specified employee's annual salary for the year.

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Sunnyvale, CA -- (SBWIRE) -- 04/05/2012 -- In the case of Mastek Ltd., India's Income Tax Appellate Tribunal (ITAT) upheld that Mastek's (the taxpayer) UK subsidiary was not undertaking merely distributing activities and should be classified as a marketing service provider. The ITAT upheld the benchmarking used for transfer pricing purposes.

The ruling was delivered during February 2012 in the case of Mastek Ltd. v. ACIT (ITA No. 3120/Ahd/2010).

Facts of the Case: How to Benchmark for Transfer Pricing Purposes? The Taxpayer (Mastek Ltd) is an Indian software services company which many subsidiaries. It has a subsidiary in the United Kingdom, i.e. Mastek UK Ltd (Mastek UK), which in this case acted as a distributor to the Taxpayer's software products in the UK.

The Taxpayer named Mastek UK as a distributor for the purposes of Indian transfer pricing, benchmarked the return on sales earned by Mastek UK against returns earned by comparable distributors. Indian tax authorities contested the Taxpayer's claim. They classified Mastek UK as a pure marketing service provider, and for the purpose of calculating transfer pricing, the tax payer compared the operating profit divided by the value added expenses against similar margins earned by other marketing service providers.

The taxpayer took the case to India's Dispute Resolution Panel, which ruled in favor of the Tax Authorities. The Taxpayer then appealed before the ITAT.

The Issue: Is the Subsidiary a Distributor or Providing Marketing Services? The main issue before the ITAT was whether the Tax Authorities were right in terming the nature of services provided by Mastek UK as marketing activities thus affecting the benchmarking for transfer pricing purposes.

The Decision: What Benchmarking Holds? The ITAT ruled that Mastek UK should be treated as a distributor because:
- Mastek UK is not just a customer-facing entity but undertakes contract negotiations on behalf of the Taxpayer.
- Both the credit risk and the market risk was borne by Mastek UK
- As per the Organization for Economic Co-operation and Development (OECD)Transfer Pricing guidelines, functional comparability takes precedence over product comparability. The Taxpayer was accurate in considering Mastek UK as a "distributor".

According to ITAT's statement, the return on sales was the correct benchmark for comparing the margin earned by distributors.

The case emphasizes that companies engaged in distribution and sales activities for their group entities should give due consideration to agreements, employee functions, remuneration and business strategies that may be scrutinized in transfer pricing related cases.

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Sunnyvale, CA -- (SBWIRE) -- 04/04/2012 -- Chinese authorities have released an updated guidance on the registration process for share plans with the State Administration of Foreign Exchange (SAFE), broadening the scope to cover most types of share plans.

Circular 7 replaces Circular 78 (issued on April 2007) and contains the following:

Changes to scope on initial SAFE registration
As per the new guidance, the registration requirement has been extended to cover a majority of plans offered including share options, stock purchase plans, restricted stock units, restricted shares, performance shares, etc.

Plans involving awards to non-employees belonging to a certain category, such as board directors or independent contractors can now be included in SAFE.

Share plans can also be extended to employees of representative offices.

Coverage has been extended to non-PRC nationals in order to standardize the administration procedure for both, PRC and non-PRC nationals.

Documents needed for initial SAFE registration 

The new application process calls for lesser number of documents particularly removing the need for broker agreements. The application docket will include the following items:
- An application letter
- Standard registration form
- Proof of overseas listing
- An employment letter and certain other administrative documents

SAFE Reporting Standards 

The administration of the new guidelines will be scrutinized closely. Quarterly reporting deadlines have been established which reduces the deadline from 10 working days to three working days after the end of a quarter.
Major revisions to registered SAFE plans will require supplementary registration generally within three months. In case of a merger and acquisition or expiration of plans, a deregistration process needs to be implemented.

The requirement of obtaining local SAFE approval when foreign currency is converted to RMB on the net proceeds derived from stock transactions by a company has been abolished. This will be taken care of by the concerned banks.

Please call/email for more details.
Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you areexpanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 04/04/2012 -- Chinese authorities have released an updated guidance on the registration process for share plans with the State Administration of Foreign Exchange (SAFE), broadening the scope to cover most types of share plans.

Circular 7 replaces Circular 78 (issued on April 2007) and contains the following:

Changes to scope on initial SAFE registration
As per the new guidance, the registration requirement has been extended to cover a majority of plans offered including share options, stock purchase plans, restricted stock units, restricted shares, performance shares, etc.

Plans involving awards to non-employees belonging to a certain category, such as board directors or independent contractors can now be included in SAFE.

Share plans can also be extended to employees of representative offices.

Coverage has been extended to non-PRC nationals in order to standardize the administration procedure for both, PRC and non-PRC nationals.

Documents needed for initial SAFE registration 

The new application process calls for lesser number of documents particularly removing the need for broker agreements. The application docket will include the following items:
- An application letter
- Standard registration form
- Proof of overseas listing
- An employment letter and certain other administrative documents

SAFE Reporting Standards 

The administration of the new guidelines will be scrutinized closely. Quarterly reporting deadlines have been established which reduces the deadline from 10 working days to three working days after the end of a quarter.

Major revisions to registered SAFE plans will require supplementary registration generally within three months. In case of a merger and acquisition or expiration of plans, a deregistration process needs to be implemented.

The requirement of obtaining local SAFE approval when foreign currency is converted to RMB on the net proceeds derived from stock transactions by a company has been abolished. This will be taken care of by the concerned banks.

Please call/email for more details.

Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you areexpanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 04/02/2012 -- The German Federal Council's amendment of the German anti-treaty-shopping (ATS) rule no longer requires a non-German resident company to generate more than 10% of its gross revenues through its own business activities.

The amendment which is effective since January 1, 2012 was made in response to a European Commission infringement procedure against Germany. The amendment is relevant for Non-Resident Corporations (NRCs) that rely on a double tax treaty or the EU Parent-Subsidiary-Directive to claim an exemption from / reduction of German Withholding Tax (WHT).

New Amendments to the German ATS Rule
The new rules in relation to payments received by NRCs which have been subjected to German WHT are as follows:

Tax relief is available if one of the two following requirements is met:
- The NRC is owned by shareholders that would be entitled to a corresponding benefit under a tax treaty/EU directive (had they received the income directly), OR
- The NRC's gross receipts are generated from its own genuine business activities

If the NRC does not satisfy either (1) or (2) then it will be entitled to WHT relief* as long as both of the following requirements are met in relation to its income that is not generated from its own genuine business activities :
- There is a business purpose (economic or other relevant non-tax purpose) for the NRC being inserted in the middle of the payment route, AND
- The NRC has adequate business substance

(* WHT relief is given on a pro-rata basis in relation to the proportion of the business activities of the NRC which relate to genuine business activities vs. non business activities (e.g. management of assets).

Earlier treaty benefits were denied in case a company which either relied on a double tax treaty or the EU Parent-Subsidiary-Directive and was not generating more than 10% of its gross income from its own active business activities.

The European Commission felt that the 10% rule on income was disproportionate and it has therefore been abolished.

Please call/email for more details.

Get the latest press releases and updates on international tax, compliance and other legal news atNair & Co. Industry Alerts.

About Nair & Co.
Nair & Co. provides you with your one touchoutsourced finance,internal audit compliance, HR and legal department for your international operations. If you areexpanding abroadfor the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 03/30/2012 -- Businesses whose accounting year starts on or after April 1, 2012 are required to file VAT returns online including VAT due to HM Revenue & Customs (HMRC). This is applicable for companies who have registered for VAT before April 2010 and with annual sales less than £100,000 (excluding VAT).

Payments can be made electronically using direct debit, internet or telephone banking, BACS (Bankers Automated Clearing System) direct credit, etc.

Companies trading in goods with EU nations need to ensure that Intrastat declarations are completed, specifically if their EU imports are over £600,000 and EU exports exceed £250,000.

Intrastat Declaration Deadlines 
Intrastat Declarations are required to be submitted by the 21st day of the following month after which a company has EU trade declarations to be made. Therefore, Intrastat declarations for March 2012 must be received by HMRC by April 21, 2012.

Intrastat paper declarations on forms C1500 and C1501 will no longer be accepted by HMRC. Intrastat declarations must be made online or using other electronic formats such as Comma Separated Variable file (CSV) or Electronic Data Interchange (EDI).

Payroll Tax Deadline
The deadline for filing Employer payroll returns, P35, P14 and P60 is May 19, 2012.

VAT Registration Thresholds
UK's annual budget revealed a string of tax measures including increase in the VAT registration threshold from £73,000 to £77,000 and increase in the VAT deregistration threshold from £71,000 to £75,000 (effective from April 2012).

The VAT registration threshold for businesses not established in the UK will be removed from December 2012.
Nair & Co.'s International Deadlines and Compliance Calendar(www.nair-co.com/internationaltaxdeadlines2012.aspx) makes it easy to keep track of tax filing deadlines across multiple countries.

Please call/email for more details.

Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you areexpanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

UK’s annual budget revealed a string of tax measures including a reduction in business tax to 24% with further 1% cuts announced until 2014, while the top personal income tax rate will be reduced to 45% from 50% in 2013.

Sunnyvale, CA -- (SBWIRE) -- 03/28/2012 -- UK's annual budget revealed a string of tax measures including a reduction in business tax to 24% with further 1% cuts announced until 2014, while the top personal income tax rate will be reduced to 45% from 50% in 2013.

The 2012 Budget presented by finance minister, George Osborne, on March 22, 2012 also announced changes in capital allowances for plant and machinery, low emission cars and certain enterprise zones.

The threshold for VAT registration for UK based companies has been increased from £73,000 to £77,000 effective April 2012, while the VAT threshold for non-UK companies will be removed in December 2012 affecting VAT compliance requirements of foreign businesses.

Important UK Income Tax Announcements

UK Business Tax Rates
- From April 2012, the main rate of Corporation Tax will be reduced to 24% (from 25%), with further yearly reductions of 1% until it reaches 22% in 2014. The small profits rate of corporation tax will remain at 20%.
- Previously announced changes to the rates of capital allowances will take effect from April 1, 2012 e.g. Plant and machinery in the main pool will attract reduced writing down allowances at a rate of 18% instead of 20%.
- Additional capital allowance to be granted to designated enterprise zones from April 2012 in Scotland, North Wales and London.
- Extension of capital allowance for low emission cars - The first-year allowance has been extended for two years to March 31, 2015. Also the 110g/km threshold will be reduced to 95g/km from April 1, 2013.
- The Enterprise Management Incentive scheme, mainly applicable to share option schemes provided by small and medium sized businesses, will be expanded with limits for individual employees increasing from £120,000 to £250,000.
- New controlled foreign companies (CFC) provisions to be introduced in Finance Bill 2012, with new provisions likely to be effective for year beginning January 1, 2013. The CFC provisions will aim to tax artificially diverted profits from the UK.
- Certain anti-avoidance provisions are introduced in relation to capital allowance for Plant and Machinery.
- General Anti-Abuse Rules (GAAR) to be introduced from April 2013 to curtail abusive and aggressive tax planning schemes.

UK VAT Compliance
- VAT registration threshold has been increased from £73,000 to £77,000. This is effective from April 2012.
- The VAT registration threshold for businesses not established in the UK will be removed from December 2012.

UK Personal Income Tax Rates
- The top rate of Income Tax to be reduced from 50% to 45% from April 2013.
- Personal allowance will be increased by £1,100 to £9,205 from April 2013.
- The dividend additional rate will be reduced to 37.5% (from 42.5%). Thus, the effective tax rate on dividends will be 30.55% after the dividend tax credit.
- A cap on income tax reliefs claimed by individuals will be set from April 2013. The cap will be applicable for individuals claiming a tax relief of more than £50,000 and will be set at 25% of the income.

Please call/email for more details.
Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you areexpanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

The Portuguese Tax and Custom Administration issued a circular listing the revised withholding tax rates on salaries and pensions for resident individuals in Portuguese Mainland, on 13 February 2012.

Sunnyvale, CA -- (SBWIRE) -- 03/23/2012 -- The Portuguese Tax and Custom Administration issued a circular listing the revised withholding tax rates on salaries and pensions for resident individuals in Portuguese Mainland, on 13 February 2012.

Withholding Tax on Wages earned by Unmarried Taxpayers
Unmarried taxpayers, with up to four dependent children, would be subject to 0% to 40% withholding tax, and taxpayers, with five or more dependent children would be subject to a withholding tax of 0% to 39%.

Withholding Tax on Wages earned by Married Taxpayers
Married taxpayers where only one spouse is earning with up to four dependent children, would attract a withholding tax of 0% to 37.5%; and those with five or more dependent children would attract a withholding tax of 0% to 36.5%.

If both spouses are earning, withholding tax rates range within 0% to 40%.

Withholding Tax Rates on Wages of Disabled Persons
Disabled persons will be subject to a withholding tax within the range of 0% to 33.5% on their income.

Withholding Tax Rates for Pensioners
Unmarried pensioners, and married taxpayers where both of the spouses are pensioners, would be subject to a withholding tax within 0% to 40%.

If only one spouse is a pensioner, the withholding tax rate would be 0% to 34.5%.

Pensioners with disabilities will be subject to withholding tax rates of within 0% to 24.5%.

Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance,internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 03/13/2012 -- The European Union and India have advanced negotiations on the free-trade agreement which is expected to be finalized by the end of 2012. The agreement, once complete, is expected to boost bilateral trade leading to increased international business expansion opportunities for both European and Indian companies.

Representing the European Union at the recently held EU –India Summit in New Delhi, Commission head Jose Manuel Barroso said that the EU-India trade agreement would be the largest trade agreement in the world, leading to sustained growth and increased job opportunities.

In 2010, the European Union traded with India for around €86 billion in goods and services - exported €35 billion and imported €33 billion and recorded a 20% increase in bi-lateral goods trade between 2010 and 2011.

Consequently, India's rank advanced from fifteenth to eighth on EU's main trading partners list since 2002. Both countries agreed to collaborate on research studies in energy, health, information and communication technologies, while also develop links between universities and industries.

Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.

About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 03/12/2012 -- The UK Supreme Court has ruled that employees of UK companies who worked outside the UK could raise a claim of 'unfair dismissal' in a UK employment tribunal, signifying far reaching implications for companies that employ UK expats.

The Supreme Court ruled that the employee (who worked outside the UK) has the right to file a case of unfair dismissal owing to his "substantial connection" to the United Kingdom. This verdict brings clarity to the "substantial connection" clause forunfair dismissal cases in the private sector.

Facts of the case - Ravat v Halliburton Manufacturing and Services Limited [2012] UKSC 1)
- Mr. Ravat, a British citizen lived in the UK and was employed by a UK subsidiary for the Halliburton group of companies. Since 2003 Mr. Ravat has been working on a rotational basis with 28 days in Libya and 28 days of leave in the UK.
- At the time of dismissal Ravat was working in Libya.
- Ravat was categorized by Halliburton as a 'UK commuter' and the company took care of his travel and overseas accommodation costs. He received UK salary and benefits package and was paid in sterling pound.
- Ravat also paid income taxes and national insurance contributions in the UK.
On being dismissed for redundancy in 2006, Ravat filed a case of unfair dismissal in the UK employment tribunal.

The Supreme Court Ruling

The UK Supreme Court (SC) ruled that even though the employee worked outside the UK, he could file a case of unfair dismissal in a UK employment tribunal due to his "substantial connection" to the UK involving his employment. This subsequently brought his claim under the scope of the Employment Rights Act 1996 ("ERA 1996"), which does not have any territorial limitations. Therefore, UK expats working abroad whose employment hassubstantial connection to the UK can fall under the jurisdiction of the ERA.

The SC ruling will be applicable to all types of unfair dismissal claims as well as other claims (e.g.: those involving unlawful deduction from wages and statutory redundancy payments, etc.).

Please call/email for advice on UK Employee termination, Remuneration advice orinternational benefits management.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 03/05/2012 -- Canada has announced a federal tax credit for families which came into effect on January 1, 2012.

The Family Caregiver Tax Credit will allow care-givers of infirm dependent family members a 15% non-refundable tax credit on C$2,000.

For the first time, the tax credit can be claimed by care-givers of infirm dependent relatives including, spouses, common-law partners and minor children. Canadians will be allowed to claim the credit on their tax returns for the year 2012 and after.

Canada's Budget 2011 also announced the decision to remove the C$10,000 cap on the Medical Expense Tax Credits which could be claimed by a taxpayer caring for a financially dependent relative.

The Canadian Government has previously announced relief measures for persons with disabilities such as the Registered Disability Savings Plan (RDSP), expanding eligibility for the Disability Tax Credit and enhancing the Child Disability Benefit.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 03/02/2012 -- Croatia's parliament passed the amendments related to the Corporate Income Tax Law which is expected to come into effect from March 1, 2012.

The amendments bring the tax laws in line with the Parent-Subsidiary Directive (90/435).

Withholding Tax on Dividends and Profit Participation
A withholding tax of 12% will be levied on dividends and participation in profits paid by Croatia based companies to non-resident companies.

The new amendments are applicable to dividends and participation in profits paid after March 1, 2012, with the exception of distributions of profits earned before December 31, 2000.

After Croatia becomes a member of the European Union from July 1, 2013, dividends and participation in profits paid to non-resident companies (who fall under the common regime applicable to parent companies and subsidiaries of different EU Member States) will be exempted if:

- The recipient has a shareholding of 10% or more in the company paying the dividends or participation in profits;
- The recipient has owned the aforesaid minimum of share capital of 10% or more for 24 months continuously.

Croatia Income Tax Base
Starting January 1, 2013, the tax base could be reduced by the realized profits used to increase the nominal capital. Tax payers need to prove to tax regulators the actual increase of the nominal capital, within 6 months from the date the corporate income tax return needs to be filed. From 2012, the provision will be applicable for corporate profit tax returns.

About Nair & Co.
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at http://www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Sunnyvale, CA -- (SBWIRE) -- 02/29/2012 -- The Bulgarian Ministry of Finance announced new amendments to the application of VAT laws which includes compulsory deregistration of certain foreign entities for VAT. The amendments came into effect on February 21, 2012 and include the following changes:

Deregistration for VAT, of entities and branches of foreign entities has been made compulsory for companies that have not re-registered their entities with the Commercial Register by close of calendar year 2011.

Proposed amendments to descriptions of "permanent address" and "usual residence" for determining the individual service receiver's place of supply have been deleted.

The special VAT scheme for tourist services mandates tour operators to obtain a declaration from their clients which should state that the service received will not be used for further supplies specifically when the client is a taxable person.

About Nair & Co. 
Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm