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Events > IFA Ukraine > The Fourth IFA Ukraine Knowledge Seminar on EU Jurisdictions Conducted

The Fourth IFA Ukraine Knowledge Seminar on EU Jurisdictions Conducted

16 December, 2014, Kyiv, Ukraine

December 16, 2014 IFA Ukraine held its fourth Knowledge Sharing Seminar on International Taxation, where IFA speakers from key EU jurisdictions - Switzerland, Luxembourg, the Netherlands and Cyprus - provided first-hand information on structuring under the current regimes, as well as highlighted new opportunities and the upcoming challenges.

The Seminar panel was joined by Martin Busenhart, Walder Wyss (Switzerland); Chris Damianou, Eurofast (Cyprus); Yulia Logunova, Rakuten (Luxembourg); Svitlana Musienko, DLA Piper; Roustam Vakhitov, International Tax Associates B.V. (the Netherlands), and Anna Vitko, KPMG.

Martin Busenhart presented to Seminar attendees the detail overview of the current Swiss tax regime, as well as pointed out new incentives of Swiss policy, such as general profit tax reduction, license box regime, introduction of notional interest deduction, abolition of issue tax on equity capital etc.

When commenting the subject of information exchange, Martin noted that Switzerland is on its way of adopting the OECD standard on exchange of information, and this time the Swiss reservation to Article 26 of the OECD Model Tax Treaty will be withdrawn. The exchange of information is practically conducted on request only, and no automatic or spontaneous exchange of information is being performed. As for Swiss privacy laws, there will be no changes, i.e. banking secrecy will remain intact domestically.

Chris Damianou updated IFA Ukraine Members and Seminar guests on the most recent developments in Cyprus. In particular, Chris mentioned that in December 2014 Cyprus signed Model 1 Inter Governmental Agreement (IGA) with the US treasury in accordance with FATCA, and in October 2014 in Berlin Cyprus signed the new OECD/G20 Standard for Automatic Exchange of Financial Information in Tax Matters. As for information exchange statistics, it was mentioned that quite a lot of requests are being rejected by the Attorney General of Cyprus.

In describing the Netherlands jurisdiction, Roustam Vakhitov focused on Netherlands' own anti-offshore measures, tougher compliance procedures and active exchange of information. Roustam also discussed existing options for IP regime, as well as presented some exemplary court cases.

Luxembourg jurisdiction was presented via telecom by Yulia Logunova in her 1.5 hour presentation. Yulia provided insider's view on the situation with "Lux Leaks", as well as presented detail overview of Luxembourg existing tax regime and the upcoming changes.

According to Yulia, Luxembourg remains optimistic despite the "Lux Leaks" situation. Certain steps, however, will be taken to smooth out the situation, such as widening transfer pricing rules from 2015, joining information exchange and cutting the bank secrecy, making advance tax ruling process more transparent, and encouraging investment outside the financial sector, e.g. ICT and logistics. Yulia also discussed the details of the major tax reform prepared for 2016-2017, such as lower standard tax rate, wider participation exemption and revised IP regime.

In terms of general EU trends, Anna Vitko discussed the on-going European Commission's fiscal state aid investigations against Ireland, the Netherlands and Luxembourg, giving specific attention to the arguments of European Commission. Anna also covered the latest amendments to the EU Parent-Subsidiary Directive, i.e. anti-hybrid mismatch amendments, aimed to neutralize possible double non-taxation in intra-group financing, as well as general anti-abuse amendments against corporate tax avoidance (approval of GAAR clause as a "de minimis" rule in the Parent-Subsidiary Directive).

Svitlana Musienko finalized the discussion by making special focus on trends that are relevant to all four jurisdictions, e.g. active exchange of information, increased compliance and transparency rules, BEPS effect, substitution of aggressive regimes by lower tax rates etc. According to Svitlana, the possibility to exploit non-full disclosure of information seems to be going to its end, and the taxes overall are considered as a building block to the state strategy, the aim being to attract businesses and create favorable conditions for their operations.

During interactive discussion on possible implications for Ukrainian tax environment, Svitlana passed the floor to Seminar attendees, including representative of the Ministry of Finance of Ukraine Tetiana Bondarenko, as well as to the representative of the State Fiscal Service of Ukraine Serhii Suprun who stated their own opinion to the raised topics.

The event was attended by representatives of State Fiscal Service of Ukraine, Ministry of Finance of Ukraine, National Center for Tax Issues Research, multinational companies, leading law and audit firms.

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