DOCSLIB.ORG

Changes to Withholding Tax and Beneficial Ownership Rules At

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Changes to Withholding Tax and Beneficial Ownership Rules At 14 March 2019 Tax Messenger Tax Edition Changes to Withholding Tax and Beneficial Ownership Rules at the End of 2018: What Needs to be Done? The end of 2018 brought further amendments to articles of International Tax Review the Tax Code dealing with the application of withholding tax ranked EY Russia Tax & Law and beneficial ownership rules in certain situations. practice as a leading tax firm Federal Law No. 424-FZ of 27 November 2018 (Tier 1) in Russia in its annual World Tax guide for 2018. The key changes made by Federal Law No. 424-FZ of 27 November 2018 are as follows: Proof of beneficial ownership of income must be provided for each individual payment of dividend income and/or for a group of payments under a single contract for other types of income (paragraph 3 of clause 2 of Article 7 of the Tax Code) It is established in clause 1.1 of Article 312 of the Tax Code that the look-though approach may be applied to all kinds of Russian-source income A simplified procedure for confirming As things stand, a number of issues appear to beneficial ownership, involving the arise with regard to the practical application of provision of a confirmation letter, is these provisions, including the following: introduced for individuals, state sovereign Regarding the amendments to paragraph 3 of funds, companies that are at least 25% clause 2 of Article 7 of the Tax Code: publicly traded and companies with a controlling government interest (at least 1. Does the requirement to provide proof of 50%) (clause 1.5 of Article 312 of the Tax beneficial ownership for each individual Code) payment of dividend income allow for confirmation letters and certifications to A list is laid down of documents to be be obtained once a year, and if so, subject provided for withholding tax purposes in to what conditions? relation to income on securities constituting the object of a repo or the 2. Given that interest payments on securities subject of a securities loan (or other may be made under a single depositary similar agreement) that is paid to a foreign agreement, is it acceptable for a foreign company which is the purchaser of company to provide confirmation letters securities in the first leg of the repo or the and certifications once, at the time when a borrower under the securities lending depositary agreement is concluded, even agreement (or other similar agreement) though payments under that agreement between the settlement dates of the first may be made in respect of securities of and second legs of the repo or during the different issuers and in different periods? term of the securities lending agreement 3. Is it possible to declare oneself a beneficial (or other similar agreement) (clause 1.2-1 owner in relation to some payments of of Article 312 of the Tax Code) interest income on securities under a Information in publicly available guides single depositary agreement but not in may now be used to confirm the residence relation to other interest payments under of a foreign bank in a foreign state in order the same agreement? for tax to be calculated and withheld at 4. How would a change in beneficial owner appropriate reduced rates (clause 3 of status during the term of an agreement Article 310 of the Tax Code) affect the applicability of reliefs (for Income from a participating interest in example, if a foreign company did not other entities that is paid in the form of name itself as the beneficial owner of dividends is defined as including income in income at the time of concluding an the form of assets (property rights) agreement but its status changed during received by a company shareholder the term of the agreement)? (participant) upon departure (exit) from Regarding the amendments to clause 1.5 of the company or upon the distribution of Article 312 of the Tax Code: the assets of a company being wound up among its shareholders (participants) to 5. Can the simplified procedure for the extent that it exceeds the amount confirming beneficial ownership for certain actually paid by the shareholder persons/entities be applied in relation to (participant) in question for shares payments of dividend and interest income (participating interests, equity units) in on foreign nominee accounts that are that company (subsection 1 of Article 250 subject to withholding tax in accordance of the Tax Code) with Article 310.1 of the Tax Code? The amendments to Article 312 are effective Regarding the amendments to clause 1.2-1 of from 1 January 2018, and the other Article 312 of the Tax Code: amendments from 1 January 2019. 6. Does this mean that similar documents may be requested by the tax authorities when conducting an audit based on the provisions of Article 310.2 of the Tax Code 2 and may have to be gathered by a foreign depositary that pays the dividends in question, nominee holder before income is paid? before they are paid, of the foreign company’s acknowledgement that it is not the beneficial Regarding the amendments to clause 3 of Article owner of the income, of the quantity of shares in 310 of the Tax Code: the Russian company on which the dividends in 7. Should it be understood, taking into question were paid and of the size of the Russian account the provisions of subsection 4 of company’s direct interest in the foreign clause 2 of Article 310 of the Tax Code, company. that information in publicly accessible In the event that the amount of dividends information sources may be relied on when received from the Russian company, insofar as it income is paid to foreign banks by Russian corresponds to that company’s participating tax agents that are not Russian banks or interest in the foreign company, exceeds the the development bank state corporation amount of dividends paid by the foreign only in cases where reduced tax rates are company within the above-mentioned time applicable, but not where there is an period (increased by the amount of withholding exemption from taxation? taxes charged on those dividends), the Russian The above list is not exhaustive, but provides issuer must calculate and pay tax on that excess just a few examples of difficulties that may arise. at the rate of 15% not later than ten days after Another issue regarding the amendments to the expiry of the time limit set for the payment Article 312 of the Tax Code is how, in practical of dividends by the foreign company to the terms, they are to be implemented post factum, Russian company for the purposes of the given that they apply retrospectively to provisions in question. payments made from 1 January 2018 onwards. Dividend amounts should be translated into Federal Law No. 493-FZ of 25 December 2018 roubles using the Central Bank exchange rate prevailing on the date of the decision to pay the The amendments made by Federal Law No. 493- dividends. FZ of 25 December 2018 alter the withholding tax rules for circular ownership structures These amendments are effective from 1 January whereby shares in a Russian company are owned 2019. by a foreign subsidiary of that company. In A number of issues might arise in applying these particular, the amendments exempt a dividend provisions, such as the following: payment from Russian withholding tax and Can the provisions be applied to individual exempt a depositary that makes such a payment dividend payments at the discretion of the from performing tax agent functions in relation persons involved (rather than all to that payment provided that all the following payments)? conditions are met: Can the provisions be applied where a the person claiming beneficial owner Russian company’s participating interest is status is a Russian company exercised through not one but a number of the Russian company has a direct interest foreign companies and (or) unincorporated in a foreign company that is a direct structures? shareholder in that Russian company Are the provisions applicable only when the foreign company must distribute dividends are paid directly, or also when a dividends to the shareholder that set-off occurs? Would the applicability of beneficially owns them within 120 days of the provisions depend on the manner in receiving the dividends from the Russian which such a set-off is documented? company Does the timing of the receipt of dividends In this situation, beneficial ownership is by a Russian company from a foreign determined relative to the Russian company’s company affect the applicability of the participating interest in the foreign subsidiary. provisions (i.e. if money is credited to the The Russian company is obliged to notify the 3 Russian company’s accounts after the Although the amendments in question were expiry of the 120-day period)? intended to clarify tax rules and address existing ambiguities, there are, as shown above, a whole If withholding tax has been charged on range of issues that may arise when applying dividends at the rate of 15%, can a claim them in practice, including questions of for a refund of that amount be submitted interpretation and of procedure. In our view, to the Russian authorities, and if so, who therefore, Russian issuers, depositaries and would have the right to apply for the other tax agents should consider the need to refund? review positions held and processes used with Where payments are made on depositary regard to withholding tax and devise appropriate receipts, what arrangements must be approaches to new issues. We would be happy to made with the issuer in order for zero provide any assistance that may be needed in taxation to be applied, given that the these areas.
Load more

Recommended publications
  • Form W-4, Employee's Withholding Certificate
    Employee’s Withholding Certificate OMB No. 1545-0074 Form W-4 ▶ (Rev. December 2020) Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. ▶ Department of the Treasury Give Form W-4 to your employer. 2021 Internal Revenue Service ▶ Your withholding is subject to review by the IRS. Step 1: (a) First name and middle initial Last name (b) Social security number Enter Address ▶ Does your name match the Personal name on your social security card? If not, to ensure you get Information City or town, state, and ZIP code credit for your earnings, contact SSA at 800-772-1213 or go to www.ssa.gov. (c) Single or Married filing separately Married filing jointly or Qualifying widow(er) Head of household (Check only if you’re unmarried and pay more than half the costs of keeping up a home for yourself and a qualifying individual.) Complete Steps 2–4 ONLY if they apply to you; otherwise, skip to Step 5. See page 2 for more information on each step, who can claim exemption from withholding, when to use the estimator at www.irs.gov/W4App, and privacy. Step 2: Complete this step if you (1) hold more than one job at a time, or (2) are married filing jointly and your spouse Multiple Jobs also works. The correct amount of withholding depends on income earned from all of these jobs. or Spouse Do only one of the following. Works (a) Use the estimator at www.irs.gov/W4App for most accurate withholding for this step (and Steps 3–4); or (b) Use the Multiple Jobs Worksheet on page 3 and enter the result in Step 4(c) below for roughly accurate withholding; or (c) If there are only two jobs total, you may check this box.
    [Show full text]
  • Publication 509, Tax Calendars
    Userid: CPM Schema: tipx Leadpct: 100% Pt. size: 8 Draft Ok to Print AH XSL/XML Fileid: … tions/P509/2021/A/XML/Cycle13/source (Init. & Date) _______ Page 1 of 13 10:55 - 31-Dec-2020 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Publication 509 Cat. No. 15013X Contents Introduction .................. 2 Department of the Tax Calendars Background Information for Using Treasury the Tax Calendars ........... 2 Internal Revenue General Tax Calendar ............ 3 Service First Quarter ............... 3 For use in Second Quarter ............. 4 2021 Third Quarter ............... 4 Fourth Quarter .............. 5 Employer's Tax Calendar .......... 5 First Quarter ............... 6 Second Quarter ............. 7 Third Quarter ............... 7 Fourth Quarter .............. 8 Excise Tax Calendar ............. 8 First Quarter ............... 8 Second Quarter ............. 9 Third Quarter ............... 9 Fourth Quarter ............. 10 How To Get Tax Help ........... 12 Future Developments For the latest information about developments related to Pub. 509, such as legislation enacted after it was published, go to IRS.gov/Pub509. What’s New Payment of deferred employer share of so- cial security tax from 2020. If the employer deferred paying the employer share of social security tax in 2020, pay 50% of the employer share of social security tax by January 3, 2022 and the remainder by January 3, 2023. Any payments or deposits you make before January 3, 2022, are first applied against the first 50% of the deferred employer share of social security tax, and then applied against the remainder of your deferred payments. Payment of deferred employee share of so- cial security tax from 2020.
    [Show full text]
  • Publication 517, Social Security
    Userid: CPM Schema: tipx Leadpct: 100% Pt. size: 8 Draft Ok to Print AH XSL/XML Fileid: … tions/P517/2020/A/XML/Cycle03/source (Init. & Date) _______ Page 1 of 18 11:42 - 2-Mar-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Publication 517 Cat. No. 15021X Contents Future Developments ............ 1 Department of the Social Security What's New .................. 1 Treasury Internal Reminders ................... 2 Revenue and Other Service Introduction .................. 2 Information for Social Security Coverage .......... 3 Members of the Ministerial Services ............. 4 Exemption From Self-Employment Clergy and (SE) Tax ................. 6 Self-Employment Tax: Figuring Net Religious Earnings ................. 7 Income Tax: Income and Expenses .... 9 Workers Filing Your Return ............. 11 Retirement Savings Arrangements ... 11 For use in preparing Earned Income Credit (EIC) ....... 12 Worksheets ................. 14 2020 Returns How To Get Tax Help ........... 15 Index ..................... 18 Future Developments For the latest information about developments related to Pub. 517, such as legislation enacted after this publication was published, go to IRS.gov/Pub517. What's New Tax relief legislation. Recent legislation pro- vided certain tax-related benefits, including the election to use your 2019 earned income to fig- ure your 2020 earned income credit. See Elec- tion to use prior-year earned income for more information. Credits for self-employed individuals. New refundable credits are available to certain self-employed individuals impacted by the coro- navirus. See the Instructions for Form 7202 for more information. Deferral of self-employment tax payments under the CARES Act. The CARES Act al- lows certain self-employed individuals who were affected by the coronavirus and file Schedule SE (Form 1040), to defer a portion of their 2020 self-employment tax payments until 2021 and 2022.
    [Show full text]
  • Cross-Border Planning for Canadian Registered Retirement Plans
    CROSS-BORDER PLANNING FOR CANADIAN REGISTERED RETIREMENT PLANS Elise M. Pulver, David J. Byun, Ryan M. Murphy and Amy P. Walters* Each year, many Canadians choose to move to the United States for various reasons, including, inter alia, employment opportunities, retirement destinations, and lower tax rates. Whatever the reason may be, there are several important planning questions to consider before making the move. The purpose of this paper is to address one such key consideration: the cross-border tax implications in respect of registered retirement plans. This paper is divided into three parts. The first part analyzes the Canadian taxation of distributions from Canadian registered retirement plans, upon the plan owner's death, to a beneficiary who is a non-resident of Canada. The second part discusses how a Canadian who moves south of the border and becomes a U.S. citizen or resident alien would be taxed by the U.S. tax system vis-aÁ-vis the distributions from his or her Canadian registered retirement plans. Conversely, the final part of the paper provides an overview of the U.S. taxation of a U.S. non-resident alien with respect to distributions from his or her U.S. retirement plans. I. CANADIAN TAXATION OF CANADIAN REGISTERED RETIREMENT PLANS UPON DEATH This part of the paper looks at the Canadian taxation of the payment from a registered retirement plan (namely, a Registered Retirement Savings Plan (ªRRSPº) and Registered Retirement Income Fund (ªRRIFº)) upon the plan owner's death, to a beneficiary who is a non-resident of Canada. In particular, it addresses whether a non-resident beneficiary of such registered plan would be subject to any withholding tax on such payment * Elise M.
    [Show full text]
  • Publication 523 Reminders
    Userid: CPM Schema: tipx Leadpct: 100% Pt. size: 10 Draft Ok to Print AH XSL/XML Fileid: … tions/P523/2020/A/XML/Cycle04/source (Init. & Date) _______ Page 1 of 22 12:06 - 1-Mar-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Department of the Treasury Contents Internal Revenue Service Future Developments ....................... 1 Publication 523 Reminders ............................... 1 Cat. No. 15044W Introduction .............................. 2 Does Your Home Sale Qualify for the Exclusion of Gain? .............................. 2 Selling Eligibility Test ........................... 3 Does Your Home Qualify for a Partial Your Home Exclusion of Gain? ...................... 6 Figuring Gain or Loss ....................... 7 For use in preparing Basis Adjustments—Details and Exceptions ..... 8 Business or Rental Use of Home ............ 11 Returns 2020 How Much Is Taxable? ..................... 14 Recapturing Depreciation ................. 15 Reporting Your Home Sale .................. 15 Reporting Gain or Loss on Your Home Sale .... 16 Reporting Deductions Related to Your Home Sale ............................... 17 Reporting Other Income Related to Your Home Sale .......................... 17 Paying Back Credits and Subsidies .......... 18 How To Get Tax Help ...................... 18 Index .................................. 22 Future Developments For the latest information about developments related to Pub. 523, such as legislation enacted after it was published, go to IRS.gov/Pub523. Reminders Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children se- lected by the Center may appear in this publication on pa- ges that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 800-THE-LOST (800-843-5678) if you recognize a child.
    [Show full text]
  • Pub 515, Withholding of Tax on Nonresident Aliens and Foreign
    Userid: CPM Schema: tipx Leadpct: 100% Pt. size: 8 Draft Ok to Print AH XSL/XML Fileid: … tions/P515/2021/A/XML/Cycle05/source (Init. & Date) _______ Page 1 of 56 16:15 - 3-Feb-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Publication 515 Cat. No. 15019L Contents What's New .................. 1 Department of the Withholding Reminders ................... 2 Treasury Internal Introduction .................. 2 Revenue of Tax on Service Withholding of Tax .............. 3 Nonresident Persons Subject to Chapter 3 or Chapter 4 Withholding ......... 5 Aliens and Documentation ............... 10 Foreign Entities Income Subject to Withholding ..... 23 Withholding on Specific Income ..... 26 Foreign Governments and Certain Other Foreign Organizations .... 39 For use in 2021 U.S. or Foreign TINs ............ 40 Depositing Withheld Taxes ........ 41 Returns Required .............. 42 Partnership Withholding on Effectively Connected Income ... 43 Section 1446(f) Withholding ....... 46 U.S. Real Property Interest ........ 48 Definitions .................. 51 Tax Treaties ................. 52 How To Get Tax Help ........... 52 Index ..................... 55 Future Developments For the latest information about developments related to Pub. 515, such as legislation enacted after it was published, go to IRS.gov/Pub515. What's New New requirement to fax requests for exten- sion to furnish statements to recipients. Requests for an extension of time to furnish cer- tain statements to recipients, including Form 1042-S, should now be faxed to the IRS. For more information see Extension to furnish state- ments to recipients under Extensions of Time To File, later. COVID-19 relief for Form 8233 filers. The IRS has provided relief from withholding on compensation for certain dependent personal services, for individuals who were unable to leave the United States due to the global health Get forms and other information faster and easier at: emergency caused by COVID-19.
    [Show full text]
  • 2021 Clergy Tax Return Preparation Guide for 2020 Returns
    2021 Clergy Tax Return Preparation Guide For 2020 Returns A Supplement to the 2021 Clergy Tax Return Preparation Guide for 2020 Returns For the 2020 tax year, the Church Pension Group (CPG) is providing the 2021 Clergy Tax Return Preparation Guide for 2020 Returns and the 2021 Federal Reporting Requirements for Episcopal Churches, Schools, and Institutions (Federal Reporting Requirements Guide) as references to help clergy, treasurers and bookkeepers, and tax preparers in better understanding clergy taxes. These guides are available on CPG’s website at cpg.org. This supplement complements the guides. The supplement is presented in two sections. First, a section on tax highlights addresses recent tax changes. Second, a question-and-answer format addresses key tax issues, and information provided in the guides and how it specifically applies to clergy of The Episcopal Church. Note: If you have questions about clergy federal income taxes that are not covered here, please call CPG’s Tax Hotline: Nancy Fritschner, CPA (877) 305-1414 Mary Ann Hanson, CPA (877) 305-1415 Dolly Rios,* CPA (833) 363-5751 *Fluent in English and Spanish Please note that the service these individuals will provide is of an informational nature. It should not be viewed as tax, legal, financial, or other advice. You must contact your tax advisor for assistance in preparing your tax returns or for other tax advice. Tax Highlights The SECURE (Setting Every Community Up for Retirement Enhancement) Act of 2019 is now law. Most provisions in the law became effective January 1, 2020. Listed below are some of the most important changes that could have a significant impact on you.
    [Show full text]
  • Guide to Kansas Withholding Tax (KW-100)
    Withholding Tax Guide NEW WITHHOLDING TAX RATES for wages paid on or after January 1, 2021 ksrevenue.org KW-100 (Rev. 6-21) TABLE OF CONTENTS INTRODUCTION TO KANSAS WITHHOLDING TAX .... 3 KANSAS CUSTOMER SERVICE CENTER ................... 8 Who Must Withhold Kansas Income Tax? File, Pay and Make Updates Electronically Who are Employees/Payees? What Can I Do Electronically Sole Proprietors and Partners Requirements to File and Pay Pay by Credit Card PAYMENTS SUBJECT TO KANSAS WITHHOLDING .. 3 Wire Transfers Wages Record Keeping Supplemental Wages Filing Frequencies and Due Dates Fringe Benefits Completing a KW-5 Deposit Report Cafeteria, 401K, and Profit-Sharing Plans Correcting a KW-5 Deposit Report Payments Other Than Wages ANNUAL RETURNS AND FORMS .............................. 12 Pensions, Annuities & Deferred Income Interest and Dividends Completing a Withholding Tax Return (KW-3) Lottery and Gambling Winnings Wage and Tax Statements (W-2) Annual Information Returns (1099 and 1096) WITHHOLDING REGISTRATION ................................... 4 ADDITIONAL INFORMATION ...................................... 13 Who Must Register How and When to Register When Returns are Late Your Kansas Tax Account Number Employer/Payer and Officer Liability Your Registration Certificate About Our Billing Process Reporting Business Changes HOW TO WITHHOLD KANSAS TAX ............................. 5 Changing Your Filing Frequency Kansas Withholding Allowance Certificate Closing Your Withholding Account Additional Kansas Withholding When in Doubt… Exclusion
    [Show full text]
  • Review of Key "Deoffshorization" Concepts in Russia Taxation of Controlled Foreign Companies 03
    Review of key "deoffshorization" concepts in Russia Taxation of controlled foreign companies 03 Taxation of Russian tax resident foreign companies 08 Definition of beneficial owner of passive income 09 Taxation of capital gains from indirect sale of Russian-based real estate 10 Review of key "deoffshorization" concepts in Russia The Russian “deoffshorization” agenda • this person has decisive influence over Apart from settlors/founders, any sets the new rules for taxation of foreign the company’s decisions regarding its other person that exercises control entities’ income. This publication profit distributions. over a foreign non-legal entity provides an overview of the rules. (i.e. has a decisive influence over profit An individual or an entity will not be distribution decisions) may be treated Taxation of controlled foreign recognized as a controlling person as a controlling person if at least one companies of a foreign company, if this person’s of the following conditions is met: Under the controlled foreign direct and/or indirect interest companies (the “CFC”) rules, a tax in the company is held exclusively via • The person is a beneficial owner on the CFC’s undistributed profits may a Russian public company (companies). of the entity’s income; be charged to its controlling person at 13% (if the controlling person A settlor/founder of a non-legal entity • The person is entitled to dispose is a Russian tax resident individual) is normally deemed a controlling person of the entity’s property; or 20% (if the controlling person of such entity. However, the settlor/ is a Russian tax resident organization).
    [Show full text]
  • State Guidance Related to COVID-19: Telecommuting Issues Updated Last on June 9, 2021
    State Guidance Related to COVID-19: Telecommuting Issues Updated last on June 9, 2021 State Nexus imposed State Guidance What state gets to tax the State Guidance due to income of a telecommuter? telecommuting? Alabama No The Alabama DOR issued guidance that Employee’s regular place of “Alabama will not change withholding requirements “Alabama will not consider temporary work (i.e., the employer’s home for businesses based on an employee’s temporary changes in an employee’s physical work state) telework location within Alabama that is location during periods in which temporary necessitated by the pandemic and related federal or telework requirements are in place due to state measures to control its spread.” AL DOR, the pandemic to impose nexus or alter Alabama Department of Revenue Coronavirus apportionment of income for any business.” (COVID-19) Updates AL DOR, Alabama Department of Revenue Coronavirus (COVID-19) Updates Alaska Yes Checkpoint surveyed all 50 states, and the No state income tax Alaska DOR replied that “Alaska does not (for corporate have any de minimis standard or exception income tax) provided in statute or regulation, so an employee whose compensation is assignable to Alaska under 15 AAC 19.241 would create nexus for that business entity.” (Email on File with Checkpoint Catalyst, 05/18/2020.) Arizona No Checkpoint surveyed all 50 states, and the No guidance Arizona DOR replied that the agency “has (for corporate determined that in general, there is no income tax) requirement to waive nexus” for corporate privilege tax.
    [Show full text]
  • Withholding and Reporting of Tax on Wage Payments to Foreign Persons
    Federal Agency Seminar 2011 Withholding and Reporting of Tax on Wage Payments to Foreign Persons 1 Objectives • Know why tax residency is important • Which income non-resident alien are subject to FIT withholding • Introduce the special W-4 rules • Know that non-resident aliens are subject to FICA tax 2 Income from independent personal services… • Provided by a Non-Resident Alien is generally subject to 30% withholding for self employment income per Code § 1441 3 Income for personal services qualify as wages when… • There is an employer-employee relationship • Individual who performs the services subject to the will and control of an employer • Employer has the legal right to control both the method and the result • This is call dependent personal services 4 Tax Residency • Resident Alien • Non-Resident Alien • Dual-Status Taxpayer 5 Tax residency is based on… • Green Card Test – A lawful permanent resident of the U.S. • Substantial Presence Test – Numerical formula for counting days of presence in the U.S. over a 3 year period 7 Exempt Individuals from the SPT • 5-calendar-year non-resident rule for students. They are individuals typically issued an F, J, M or Q visa • 2/7-calendar-year nonresident rule for teachers and trainees 8 Why tax residency? • A resident alien is a U.S. Person, and is usually taxed the same as a U.S. citizen on their worldwide income • A nonresident alien is a Foreign Person, and is subject to special rules of taxation on their U.S. source income 9 Source Rules on Fringe Benefits • Housing – EE's main job location
    [Show full text]
  • 8. Taxation 8.1 Introduction Over the Past 16 Years Russia Has Been Engaged in a Significant Reform of Its Tax System, Which Has Been Implemented in Phases
    Doing Business in Russia 8. Taxation 8.1 Introduction Over the past 16 years Russia has been engaged in a significant reform of its tax system, which has been implemented in phases. This reform has improved procedural rules and made them more favorable to taxpayers, has reduced the overall number of taxes, and has reduced the overall tax burden in the country. Part I of the Tax Code of the Russian Federation (the “Tax Code”) came into effect in 1999, dealing largely with administrative and procedural rules. More recent amendments to Part I clarified certain administrative and procedural issues raised by over 10 years of practice of the application of Part I of the Tax Code (in particular, regarding tax audit procedures, procedural guarantees for taxpayers, operations with taxpayer bank accounts and bank liability). The provisions of Part II of the Tax Code regarding excise taxes, VAT, individual income tax, and the unified social tax (currently replaced by social security contributions) came into force in 2001, followed by the profits tax and mineral extraction tax provisions of the Tax Code in 2002. In 2003 further amendments introduced a simplified system of taxation, a single tax on imputed income, a new Chapter on transportation tax, and established a special tax regime for production sharing agreements in Russia. A Chapter on corporate property tax came into effect as of 1 January 2004. In 2005 the water tax, land tax, and state duty Chapters came into effect. On 1 January 2013 a Chapter on a patent system of taxation (for small businesses) and on 1 January 2015 a Chapter on trade levy took effect.
    [Show full text]