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| VAT-FREE PURCHASES IN ITALY: PLAFOND ARRANGEMENTS |
27/07/2010 |
THE BACKGROUND
When businesses buy goods or services in Italy for resale outside Italy, they can do so without paying VAT under a “Plafond Arrangement”.
Of course, there are a few tests which must be passed, but these are relatively easy to meet.
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| Double Tax Treaty Passport Scheme to be launched |
23/07/2010 |
BACKGROUND
Certain international flows of funds (such as royalty payments, interest on loans, etc.) are taxed in the country from which the payment is made (“withholding tax”).
If the same flow of funds is also taxed as income/profit in the recipient country, this transaction is taxed twice. To avoid this, countries enter into “Double Taxation Conventions/Agreements” (Treaties), agreeing in which country transactions should be taxed (i.e. so it is taxed only once), at what rates, etc.
These Treaties also set the tests to be satisfied before a transaction qualifies for these benefits.
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| CROSS-BORDER VAT RECLAIMS: EU EXTENDS DEADLINE |
19/07/2010 |
BACKGROUND
Businesses can reclaim foreign VAT charged on purchases in EC Member States where the business is not registered for VAT.
New EC VAT laws required a new electronic system to be operated by each Member State from 1 January 2010 for repaying VAT to foreign businesses. These new systems replaced the old paper procedure and also imposed penalty interest on those Member States which did not pay the VAT refunds within a specific timeframe.
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| CHANGE OF UK VAT RULES FOR ZERO-RATING AIRCRAFT |
29/06/2010 |
BACKGROUND
HMRC’s rules permit VAT zero rating for airplanes over 8,000kg and requires the VAT standard rate to be charged for lighter aircraft. As a result, both the UK and the Isle of Man have long been attractive jurisdictions in terms of aircraft importation. |
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| INCOME TAX: SEAFARERS EARNINGS DEDUCTIONS |
28/06/2010 |
THE BACKGROUND
People who work on ships and who are taxed in the UK can obtain a relief from UK Income Tax. This relief (the seafarers’ earnings deduction, “SED”) means they are effectively not taxed for work they do on ships outside the UK.
But the SED relief is only available to those who are “resident and ordinarily resident” in the UK.
These concepts are not defined in UK tax legislation. But as an example, an Italian sailor might work for 7 months on a ship in the UK and become “tax resident” in the UK (i.e. pays income tax in the UK). Yet it might be possible for HMRC to claim that the Italian is “ordinarily resident” in Italy and is therefore not eligible for the SED relief.
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| CROSS-BORDER VAT RECLAIMS |
25/06/2010 |
THE BACKGROUND
Much VAT that is suffered abroad goes unreclaimed.
If a business, VAT registered in one country, suffers VAT in another country, it cannot reclaim that VAT on its “home” VAT return. There are mechanisms available to reclaim such VAT, but they are not used as regularly as they could be.
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Italiano