- India-Singapore Double Tax Changes In Force 24th March 2017
On March 23, India published a notice in its Official Gazette confirming that a third Protocol to the double tax agreement with Singapore has entered into force.
The protocol is aimed at limiting abuse of the Indo-Singapore tax treaty. It provides India with the right to tax capital gains arising from the alienation of shares acquired on or after April 1, 2017. The protocol provides that in respect of capital gains arising during the transition period from April 1, 2017, to March 31, 2019, the tax rate will be limited to 50 percent of the Indian domestic tax rate (subject to the limitation of benefits clause).
The protocol provides for a new limitation of benefits clause to ensure that the protocol can only be enjoyed by tax residents with substantive economic activities.
The protocol was signed on December 30, 2016, and entered into force on February 27, 2017.
- Trinidad And Tobago Passes FATCA Bill 10th March 2017
Trinidad and Tobago’s Ministry of Finance has confirmed that a bill to facilitate domestic financial institutions’ compliance with the US Foreign Account Taxpayer Compliance Act (“FATCA”) has been passed by the territory’s parliament.
FATCA, enacted by the US Congress in 2010, is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
The territory’s Senate voted unanimously (29 to zero) in favor of the Tax Information Exchange Agreements Bill 2016, also known as the FATCA (Foreign Account Taxpayer Compliance) Bill, with one abstention.
This follows the passage of the Bill through the House of Representatives on February 23, 2017, where all 39 MPs present on that day voted in favor of the Bill.
The Ministry of Finance said that, with the passage of this Bill, the country has avoided the adverse consequences of a potential loss of banking business and the imposition of withholding taxes.
The Ministry of Finance said it will now work with the Board of Inland Revenue, the Central Bank of Trinidad and Tobago, and all other stakeholders to ensure that all necessary systems are in place to meet the reporting deadline to the US Treasury of September 30, 2017.
The Ministry also said a post-enactment communications plan has been developed, to ensure the general public is made aware of the requirements of FATCA and its implications for citizens of Trinidad and Tobago.
- Bermuda Budget Features New Financial Services Tax, Defers GST 3rd March 2017
Bermuda’s Minister of Finance, Edward Richards, has announced a new Financial Services Tax will be introduced in April 2017.
The new tax will be payable by banks, local insurance companies, and money services businesses.
Banks will pay the new tax at a rate of 0.02 percent on their assets, while local insurance companies will pay the tax at a rate of 2.5 percent on gross premiums earned, excluding premiums from health insurance. Money services businesses will pay the tax at a rate of five percent on their aggregated incoming and outgoing transmission volume.
Other measures announced in the Budget include a move away from the current flat rate of payroll tax. Those earning up to BMD96,000 (USD96,000) a year will see their payroll tax liability fall, while higher earners will pay more. Employment tax on employers will also be amended so that the tax burden falls more on larger companies than on small businesses.
The implementation of the five percent General Services Tax (GST) has been delayed until April 1, 2018. The GST, which was announced last year, will be levied on turnover from the provision of most services by service providers to the public. Banking, insurance, and money services businesses will be exempt.
Customs duty has been simplified with a reduction in the number of tariff bands. The top rate of duty has been increased by 1.5 percent to 35 percent. Excise duties on alcohol, tobacco, and petrol have also been increased.
Land taxes for the coming year remain unchanged, and the previously announced roll-back of non-legislated tax concessions for hotels restaurants and retailers will be completed.
Certain fees will also increase including annual fees for “investment/holding/trading” permit companies, which will rise from USD1,995 to USD25,000.
Richards said the Budget measures were intended to broaden the tax base and ease cost-of-living pressures on lower-income earners.