Dr Aiste Medeliene’s Post

🇺🇾Uruguay signs Tax Information Exchange Agreement with the United States On September 19th, 2024, Uruguay took a significant step forward by approving Law No. 20.351, which establishes an agreement with the United States for the exchange of tax information (AII). This agreement will officially come into effect one month after Uruguay notifies the U.S. of its legal ratification. The idea is for this agreement to help in determining and assessing as well as ensuring compliance and enhancing enforcement. For Uruguay, the taxes covered include IRAE, IRPF, IRNR, IASS, IP, VAT and IMESI. On the U.S. side, it covers federal taxes on income, employment-related taxes, estate and gift taxes, and consumption taxes. Plus, any new national taxes introduced after the signing will also be included in this exchange. When one country requests information from the other, it must evaluate the details needed to identify the individuals or entities being investigated, the timeframe for the information requested, and the specific tax purposes for which the information is sought. This agreement is a significant leap in the fight against tax evasion, fostering greater financial transparency between Uruguay and the United States. Stay tuned for more updates as we follow this development.

Excellent sessions over the last two days at the ITC Munich - International Tax Conference Munich jointly organised by Business at OECD (BIAC), International Chamber of Commerce and BusinessEurope. Pleased to have contributed to the panel on #TaxCertainty and the integrity of the international tax system. Some key points I made: - Significant progress has been made in getting a critical mass of jurisdictions to agree on how best to reform international tax rules. However, dispute prevention and resolution tools have not necessarily developed at the same pace therefore double taxation remains an issue. - In the EU, adoption of global tax commitments has resulted in varied implementation across Member States with mismatched requirements and obligations. There is an urgent need for #stability - more specifically a pause in introducing new EU tax legislation aimed at fighting tax evasion and aggressive tax practices to allow for a reflection on what is in place, what remains necessary and effective, and to determine the direction of tax policy in the EU at a time when higher economic growth needs to be sustained. - More focus is needed on enhancing the #efficiency and #efficacy of tax administrations to establish easier cooperation with businesses and a climate of trust as more data gets exchanged. Tax policy will be an important lever for building economic resilience and sustainability. In the face of stiff competition from other regions, it will be important for the EU to streamline the current tax framework and prioritise principled and sustainable tax policies to align taxation with the broader economic and environmental goals.

INTERNATIONAL TAX PLAZA - 2 Tax items are on the provisional agenda for the ECOFIN Council meeting of May 14, 2024 The next meeting of the Economic and Financial Affairs (ECOFIN) Council is taking place on May 14, 2024. The Agenda highlights and a provisional agenda for this meeting have been published on the website of the European Council/the Council of the EU. The following 2 tax items are mentioned on the provisional agenda. But again the proposal for an unshell Directive is not mentioned on the provisional agenda. https://lnkd.in/emyM3ehA

In August 1920, the Dutch government presented a proposal for a tax treaty to their southern neighbors. This proposal was simple, principle based and similar to other early tax treaties being negotiated by European nations at the time. The initiative for the first comprehensive Double Taxation Agreement (DTA) between the countries stemmed from a Belgian appeal to resolve the issue of double taxation resulting from war profits taxes, mobilization tax, and other extraordinary taxes. More than hundred years later extraordinary taxes are on the rise again. What is different is that a comprehensive treaty network is in place, with treaty provisions that have grown more complex over time. Do they sufficiently address newly emerging tax issues? The Netherlands and Belgium are currently ratifying a revised tax treaty that will be the subject of a bilateral IFA Conference on 6 September 2024. Programme, speakers and registration are available at https://lnkd.in/gqxJPQVt. Join experts from government, practice, business and academia to explore the new convention between Belgium and the Netherlands and other international tax developments in the Low Countries. Registration is now open at a reduced rate for all IFA members! #IFAT #tax #internationaltax #taxtreaties #belastingverdrag #NederlandBelgië International Fiscal Association - Young IFA Network YIN - Young IFA Network (YIN Netherlands) - Women of IFA Network (WIN) - Bernard Peeters - IFA BELGIUM - Rhys Bane - Mahi Anastasiou - Linda Brosens - Wim Panis - Laurence Pinte - Frank Pötgens - Margriet Lukkien - Gijs Fibbe - Caroline Docclo - Rijkele Betten - Tim Wustenberghs

Recent cases and trends in beneficial ownership and treaty eligibility were some of the key topics at The New Era of Taxation conference, hosted by the International Bar Association’s Taxes Committee. WALLESS Partner Dr. Aiste Medeliene joined a panel of tax experts to discuss these issues and their impact on global tax practices. Here are Aistė's key takeaways: • The purpose of the beneficial ownership rule remains under debate: is it aimed at combating tax avoidance and treaty shopping, or is it primarily a framework for income attribution? • Globally, tax authorities often prioritize domestic rules (GAAR or SAAR) over double tax treaties, highlighting a lack of consistency that could shape future tax policy. • Bonus insight: the market is eagerly awaiting an update from the The Court of Justice of the European Union, as clarity is needed following the uncertainties raised by the Danish cases. As tax policies and global practices change, WALLESS is glad to take part in creating a more connected international tax landscape. #tax #insights #InternationalBarAssiciation

🚨 Pivotal ruling from The Tribunal of First Instance. Belgian taxpayers are allowed to deduct payments to tax havens if they can show it is ‘likely’ that the recipient entity was not set up to avoid Belgian income tax. This ruling offers useful guidelines for multinational corporations engaging with tax haven vendors. 🔍 Discover more in the insightful publication by our specialists Henk Vanhulle, Caroline Borgers, and Jan Van Cauwenberghe. https://lnkd.in/eMhZ8Nhk #TaxLaw #BelgiumTax #taxdeductions

The first step before the first step in terms of the UN work on UN Tax Framework Convention. Namely, a “zero draft” from the 20 members Ad-hoc Committee that have been working on the draft for the Terms of Reference for a UN Tax Framework Convention. In simple words the Terms of Reference are the parameters on which the envisioned convention would be negotiated. So, this is the first draft of such parameters. Some comments on the release: - Input can be shared by the 21st of June 2024 - There seems that the release does not have the backing of all 20 members - The current version highlights some of the key areas aimed to be discussed under the framework convention (among others - allocation of taxation rights including for MNEs or the taxation of high-net individuals). Some of them overlap the work from the OECD at least in terms of perceived themes - One proposal that may generate debates is the suggestion that some specific areas should be developed simultaneously with the negotiation of the framework convention. There are mentioned: taxation of the digital economy, taxation of cross-border services, tax-related illicit financial flows, prevention and resolution of tax disputes & taxation of high-net individuals.

René Matteotti again provides an expert opinion on Pillar 2 (P2) rules in Switzerland. This time as commissioned by SwissHoldings and with the focus on QDMTT. With this expert opinion, Rene becomes unquestionably the most influential academic (tax expert) in 2024 in the sphere of global minimum taxation. Rene discusses the leeway that Swiss cantons have regarding corporate tax rate increases. 💡 His key points are as follows [as per his post]: 1️⃣ Cantonal Tax Rate Autonomy: It is undisputed that cantons may increase their tax rates based on their constitutionally guaranteed tax rate autonomy. Introducing progressive profit tax rates is also constitutionally permissible. 2️⃣ Restriction Under the Federal Tax Harmonisation Act: The imposition of a cantonal top-up tax based on the GloBE tax base is not permissible without an amendment to the Federal Tax Harmonisation Act. 3️⃣ Narrow Legal Framework for Cantonal Tax Rate Increases Applicable Only to Pillar 2 Companies: The leeway for cantonal corporate tax rate increases specifically for Pillar 2 companies is severely restricted due to the jurisdictional blending under the GloBE-Model Rules. 4️⃣ Ineffectiveness of Conditional Flexible Tax Rates: Flexible profit tax rates applied conditionally to prevent the imposition of a QDMTT, IIR, or UTPR are not effective.

📣 𝗡𝗲𝘄 𝗦𝘁𝗮𝘁𝗲 𝗔𝗶𝗱 𝗕𝗹𝗼𝗴 𝗯𝘆 𝗣𝗵𝗲𝗱𝗼𝗻 𝗡𝗶𝗰𝗼𝗹𝗮𝗶𝗱𝗲𝘀 𝗶𝘀 𝗢𝗨𝗧 𝗡𝗢𝗪! -The Territorial Tax Systems May also Tax Profits Diverted Abroad- 🔍 This article dissects a recent judgment by the Court of Justice of the EU (CJEU) concerning tax exemptions in the UK’s corporate tax system and whether they constitute selective State aid. The judgment overturned a previous ruling and Commission decision on the UK’s Controlled Foreign Companies (CFC) regime. 1️⃣ Introduction: Taxes typically do not qualify as State aid. However, exemptions or reductions can be deemed State aid if they are selective and unjustified. The article unpacks how tax exemptions in the UK’s CFC rules were assessed and ultimately found not to constitute State aid. 2️⃣ The Situation: The UK’s corporate tax system is territorial, taxing profits generated within the UK. The CFC rules aim to prevent UK companies from shifting profits abroad. The European Commission ruled that exemptions from the CFC charge amounted to selective State aid, which the General Court upheld. However, the CJEU disagreed, stating that the exemptions were part of the UK’s general tax system. 3️⃣ Assessing the Presence of State Aid: The selectivity of a tax measure hinges on the correct definition of the reference system. The CJEU found that the UK’s general tax system, not the CFC rules alone, was the proper reference framework. The exemptions at issue were deemed part of the overall tax system, not a deviation from it. 4️⃣ Compatibility with EU Law: The CJEU emphasized that the UK’s interpretation of its tax laws was correct and that the CFC exemptions did not confer a selective advantage, as they were aligned with the general tax structure. As a result, the previous decision was annulled. 5️⃣ Conclusions: This case demonstrates the importance of defining the reference tax system when assessing selectivity in State aid cases. It shows that exemptions, when properly integrated into the broader tax system, may not constitute State aid. 🔗 Dive deeper into the CJEU’s ruling and its implications, read the full article here: https://loom.ly/B4m2Zkw #StateAid #TaxExemptions #CJEU #CorporateTax #UK #ControlledForeignCompanies #TerritorialTax

🌍 Simplifying Italian Wealth Taxes: What Foreign Investors Need to Know 🇮🇹 Understanding Italy’s wealth taxes, like IVIE and IVAFE, can be daunting - especially if you’re new to the Italian tax system. But fear not! We’ve broken down these complex topics in our latest blog post to make them accessible for everyone, whether you’re an investor or just curious. What’s in it for you? 🖋️ A straightforward explanation of what IVIE and IVAFE are, and why they matter if you own or plan to invest in property abroad 🖋️ Key differences between these taxes and how they are calculated 🖋️ Real-world examples to help you grasp how these taxes might impact your investments 👉 Ready to dive in? Read the full article here https://buff.ly/4ghwnFC and get the insights you need. Don’t forget to share this post with your network to help others navigate these important tax rules 🤝 #ACLegal #WealthTax #IVIE #IVAFE #ItalianTaxLaw #EstatePlanning #InvestInItaly