TPC UK has prepared a paper which is designed to provide an insight into the main types of share plans available in the UK and practical guidance for international companies wishing to extend their existing plans to UK-based employees. Many internationally-based companies have major operations in the UK, but few consistently extend their share incentive plans to include UK employees, due to misconceptions over the associated cost and complexity.
If you would like a copy of the white paper or would like to discuss any share planning ideas, please contact Les Secular or Abbas Sadak.
Online filing changes for corporation tax are due to be effective from April 2011. A significant impact of this change is the requirement for companies to file their returns and accompanying documentation in Extensible Business Reporting Language (“XBRL”).
We are currently assisting finance and tax departments in managing iXBRL. with tagging statutory accounts as well tax computations such that these are filed in the required formats as required by HMRC and Companies House.
Our accounting software incorporates the following features:
• Convert statutory accounts documents (Word) into an iXBRL format
• Automatically tags most of the statutory account numbers
• Compliant with UK GAAP and IFRS accounting standards & taxonomies
• User may adopt manual tagging or override automatically assigned tags
• Intelligent data dictionary memory tagging
Our tax software also includes a fully automated tagging process into Alpha tax.
Feel free to contact Abbas Sadak at True Partners Consulting (UK) LLP incase you would like to have a demonstration of the accounting software or would like to outsource your UK entities accounts or tax computations for converting into the IXBRL. format.
Many multinational corporations face increased fiduciary and legal challenges in order to comply with specific transfer pricing requirements of multiple European tax jurisdictions.
Based on our experience, a number of European countries are implementing much stricter transfer pricing documentation requirements as well as imposing penalties where no support exists.
To prevent US groups with European Subsidiaries having to take a country-by-country transfer documentation approach with all its inherent downsides the European Council approved the Transfer Pricing Documentation Code of Conduct and encourages member states to implement the EU Transfer Pricing Documentation (EU TPD) approach, allowing taxpayers to avoid transfer pricing penalties if they maintain a ‘master file’ of standardised information; and ‘country-specific’ versions of standardised documentation for each member state in which the taxpayer has related party transactions, including documents relevant for that country only. In line with these developments, this provides an opportunity to streamline this process for your European operations.
We have assisted a number of our US clients prepare such documentation in Europe and have also been involved in defending such transfer pricing policies with the relevant European Tax Authorities.
Please ontact Les Secular our European Transfer Pricing Partner based in our London office to discuss your requirements further. Les has over 30 years experience assisting multinational companies with transfer pricing matters.
Do you have subsidiaries in Europe? If so, why not make use of our tax filing tracking tool which enables groups to monitor filing deadlines in a number of European tax jurisdictions. It is expected that this will enable companies to streamline their compliance processes and tax reporting deadlines as well as quantify any tax exposures.
Contact Abbas Sadak for more information.
Multinational Companies (MNC’s) face increasing pressure from various tax authorities to ensure they pay their correct taxes, particularly now when governments attempt to fill their tax coffers whilst businesses face commercial pressures and incur significant losses. By Les Secular, Partner True Partners Consulting (UK) LLP
Employment Taxes
Payroll costs are one of the largest overheads and reducing these costs can generate substantial savings. Most of these ideas involve using “salary sacrifice” so that employees receive additional benefits and/or increased net pay at a lower cost to the employer and are most appropriate if, for example, a full inflationary pay increase cannot be awarded, or you are conducting a review of employee benefits or pension arrangements.
Background
One of the main features of the VAT regime in the European Union (EU) is the VAT invoice, as this is the main tax document that determines when VAT has to be accounted for. It is also the primary document for a business to determine when it is entitled to recover what it has been charged. Historically, the invoices have been in paper form and the rules governing their content and issue have reflected this. However, increasingly businesses have been adopting electronic invoicing and although the VAT Directive provided for electronic invoicing the rules were more restrictive and not consistent across the Member States. In order to address this issue the Council of the EU has adopted a Directive aimed at simplifying the VAT invoicing requirements in particular as regards electronic invoicing.
Summary of the UK Budget delivered by the chancellor on 22nd June 2010
TRUE PARTNERS CONSULTING INTERNATIONAL NETWORK (TPCI) CORDIALLY INVITES YOU to an International Tax seminar to be held in Munich, Germany on June 17th and June 18th, 2010. This seminar will focus on the challenges of managing your tax exposure and risk in an ever changing global marketplace. The topics will be presented both in panel discussions and comprehensive case studies.
Background
The recovery of VAT on deal costs has for many years been a source of dispute between taxpayers and HM Revenue & Customs. This has led to much litigation over the years, with the last few months seeing two high profile cases, both of which resulted in victory for the taxpayer. Although HM Revenue & Customs has already launched an appeal in the first case, and are likely to do so in the second, taxpayers and their advisors should be considering the implications both for deals done in the past and those currently underway.
Viability Studies
The first case that was dealt with in 2009 by the Tribunal, concerned the recovery of VAT on a viability study commissioned to provide information to a prospective lender. The case was taken by My Travel Group (now Airtours Transport Limited), who had been having financial difficulties and needed to restructure their borrowings. Under a tripartite arrangement with a bank and a third party advisor, a viability study was prepared with the advisor invoicing My Travel for the work rather than the bank. My Travel successfully argued that under the principles established by the much earlier Redrow case, it paid for the viability service to be supplied to it and the bank.
As the primary purpose of commissioning the study was to ensure that My Travel could continue to trade and make taxable supplies, it was entitled to recover the VAT in full. HM Revenue & Customs had argued that the supply was made to the bank, with the benefit to My Travel being ancillary. HM Revenue & Customs has appealed against this decision.
Fees incurred by Acquisition vehicle.
The second case concerned the acquisition by Spanish infrastructure group, Ferrovial, of the UK airport operator BAA Plc. As is the case with most large acquisitions Ferrovial set up a new vehicle, NEWCO, to make the acquisition, and NEWCO incurred numerous fees from advisors on which it incurred VAT. Once the acquisition was completed, NEWCO joined the BAA VAT group, though there was a two month gap between the completion of the acquisition and NEWCO becoming a member of the VAT Group.
HM Revenue & Customs argued that the VAT incurred on advisers fees (by NEWCO), was a direct cost of the finance it raised and did not relate to any taxable supplies made by the BAA VAT group.
The Tribunal, however, accepted the argument that NEWCO, as the holding company for BAA, always intended to provide management, strategic advice, corporate governance and financing services to BAA. It was, therefore, carrying on an economic activity from its inception, despite the fact it did not make any charges to its subsidiaries before becoming a member of the VAT group. The Tribunal also concluded that as NEWCO was a member of the BAA VAT group they were a single entity for VAT purposes and the taxable supplies of BAA could be imputed to NEWCO.
Way Forward
The two decisions of the Tribunal provide guidance on a number of technical issues which taxpayers need to be aware of when considering the recovery of VAT on deal costs. Consideration should now be given to the recovery of VAT incurred in the past and the structure of deals in the future, whilst continuing to monitor the further litigation there will be in respect of these cases.
The Irish Finance Bill for 2010 has introduced transfer pricing rules based on OECD Transfer Pricing Guidelines.
The legislation will apply in 2011 to any intercompany trading transactions entered into on or after 1 July 2010. All transactions entered into before 1 July 2010 will be wholly exempt. This grandfather clause provides a one off planning opportunity for multinationals to ensure that their arrangements fall outside the scope of the new rules.
Key features
• Applies only to transactions by a taxpayer engaged in a trade or business attracting the 12.5% tax rate.
• Passive income that is subject to tax at 25% will fall outside the scope.
• The effective date is accounting periods commencing on or after 1 January 2011 in relation to any arrangement entered into on or after 1 July 2010.
• Purely domestic arrangements will also be caught.
• Adjustments will apply only where profits of an Irish taxpayer are understated as a result of non arm’s length transfer pricing practices. Where the transaction is between domestic companies, a corresponding adjustment can be claimed by the counter party.
• Documentation is required although the exact nature and timing is to be classified further.
• Small and medium sized enterprises (“SME”) will be exempt. A group will be considered a SME if it has:
- less than 250 employees, AND
- either turnover of less than Euros 50m or assets of less than Euros 43m.
• There are no specific transfer pricing penalty provisions but it is likely that the general corporation tax penalties will apply.
Planning
Due to the grandfathering provisions, multinationals should review their Irish transactions and ensure they are adequately documented before 1 July 2010.
Background
Where a non EU business purchases goods or services from a UK VAT registered business, in many cases it will not be charged UK VAT. However, there are many instances where UK VAT will be charged and if a non EU business is not registered for VAT in the UK it will not be able to recover this charge through the submission of a VAT return.
There are though, provisions which allow a non EU business to seek to recover VAT incurred in the UK directly from the UK authorities. The UK has though placed restrictions on certain businesses using this procedure which have now been challenged before the European Court. The implications of this challenge are set out below.
Businesses eligible to use the scheme
A non EU business can use the refund scheme so long as:
• It is not registered, liable, or eligible to be registered for VAT in the UK;
• It has no place of business or other place of residence in the EU;
• No supplies of goods or services are made in the UK, with the exception of international transport services or services where the customer accounts for VAT.
• The VAT incurred has not been used for the purpose of insurance and financial transactions.
European Court Hearing
The legislation which blocks non EU businesses recovering VAT which is incurred in relation to insurance and financial transactions was introduced with effect from 3 December 2004. The change in the legislation was designed to block a specific VAT planning scheme which was subsequently defeated on the principle of abuse on rights. However, the block on VAT recovery for insurance and financial transactions has remained within the UK legislation.
The European Commission, however, took the view that this part of the UK legislation was not allowed under the Thirteenth VAT Directive, which sets out the rules that each Member State should introduce into their domestic legislation. In particular it has argued that the UK can not refuse to refund VAT to non EU businesses where a business established in the UK is entitled under UK domestic legislation to recover the VAT in relation to supplies to non EU recipients.
As a consequence, the Commission took infringement proceedings against the UK and the case will be heard by the European Court of Justice on 10 February 2010.
Way Forward
If the European Court finds in favour of the Commission, it means that the UK has been refusing to repay claims from non EU businesses in breach of the EU VAT legislation. This will require the UK to amend its domestic legislation so that such claims will be accepted in the future, and it will also have to address claims which have been rejected in the past.
The position of non EU Businesses which never submitted claims because of the UK legislation must also be addressed.
Those non EU businesses which have had claims rejected, or never submitted claims, should consider establishing the VAT which has been incurred since 2004 in relation to insurance and financial transactions, so that if the Court rules against the UK they can consider making claims for the VAT.
To help companies carefully plan their intercompany transfer pricing strategies and minimize their global tax rates, True Partners Consulting (UK) LLP hosted a free one-hour Web seminar entitled “Transfer Pricing: Compliance, Planning and Process in a Time of Scrutiny,” on 29th January 2009 3 pm UK time.
Les Secular and Abbas Sadak, our UK teams leading transfer pricing specialists went through the following:
- how UK transfer pricing rules work
- essentials of transfer pricing compliance
- benefits of “best methods” reviews and
- the necessary documentation to withstand enquiries from the UK tax authorities and other taxing authorities throughout the world.
To obtain a recording of the web seminar, please email Abbas Sadak on Abbas.Sadak@tpctax.co.uk
A free paper on transfer pricing is also available on request which was circulated as part of this web seminar.
Rapidly growing firm establishes offices in China, Italy and Spain
CHICAGO – Sept. 10, 2008 – True Partners Consulting LLC today announced that True Partners Consulting International Network, an association of tax consulting firms in select markets around the world, has reached agreement with three new affiliates in key international markets.
The three new member firms will join TPCI’s growing affiliates network in Beijing and Shanghai, China; Barcelona, Spain; and Turin, Italy; the company announced. The affiliates, which will be identified as “Member Firms of the True Partners Consulting International Network,” are:
•True Partners Consulting International (China) "挚盟咨询";
•Toda & Nel-lo Abogados, (Spain); and
•Studio Manzoni Pagliero Vanz e Associati (Italy).
“It is thrilling to further strengthen our ability to support our clients in the important global markets where they do business,” said Cary McMillan, chief executive officer of True Partners Consulting. “In less than three years of existence we have made aggressive efforts to support our clients wherever they do business and we’ll continue moving in that direction as we look ahead.”
The three new member firms of True Partners Consulting International will offer a powerful blend of services that True Partners Consulting clients can utilize in key international financial markets, according to McMillan.
True Partners Consulting International – China, is being formed by the owners of Hua-Ander, one of the first partnership accounting firms approved by the Ministry of Finance of the People's Republic of China. Hua-Ander is a full-service accounting, auditing and attestation firm. The new firm will provide tax services. True Partners China, will be led by Wang Guoqi, who has a rich knowledge of tax and international accounting, finance and auditing, and extensive experience in servicing multinational businesses. Guoqi and his partners have served a number of foreign investment enterprises (FIEs) and hi-tech ventures in China in the fields of business services, IFRS audit and review, due diligence, financial advisory, and management consultancy.
Founded in 1991, Toda & Nel-lo Abogados is a mid-sized Spanish firm in Barcelona, also servicing the rest of Spain (especially in Madrid), that specializes in tax & legal services. Serving clients throughout Spain, the firm’s main practice areas are taxation, company & commercial law, litigation, real estate, administrative law and labor law, and for clients in a variety of industries, such as administration (public and semi-public), real estate, pharmaceutical, health, chemical, energy and finance. The founding partners are Ignacio Toda, public prosecutor (abogado del Estado) on voluntary leave, and Ricard Nel-lo. Joan Pons is the partner who leads the tax department and will head the firm’s work with the TPC International Network.
Studio Manzoni Pagliero Vanz e Associati has been providing tax and business legal assistance for nearly four decades to select domestic and foreign clients who are leaders in their fields. The firm has significant experience in M&A transactions, business reorganization and enterprise appraisals, and its lawyers represent clients in disputed tax law matters in all degrees of Italian jurisdiction, including the Supreme Court of Cassation (Corte di Cassazione). Founded by Michele Pagliero, the firm was enlarged to Ignazio Manzoni and Giuseppe Vanz, professors of tax law at the University of Turin, and to other professionals. Natalia Operti, partner of the firm, will lead the work with the TPC International Network.
Through TPC International (a network of independently owned tax advisory firms), True Partners also has an affiliated member firm in Paris, ArtemTax International. Its first wholly owned office outside the United States is located in London and named True Partners Consulting (U.K.) LLP.
About Hua-Ander Certified Public Accountants
Now in its 11th year, Hua-Ander’s international expertise and experience, facilitated by strong English communication abilities, gives Hua-Ander an advantage in servicing foreign entities in China. The knowledge and insight into the practice of local tax and other regulatory requirements enables the firm to provide practical solutions. High quality services, personal attention to each client and issue, and reasonable fees, make Hua-Ander the best cost-effective alternative to the 'Big Four' in China.
About Toda & Nel-lo Abogados
Founded in 1991, Toda & Nel-lo Abogados offers clients 18 professionals with more than 290 years of combined experience in multidisciplinary and diverse tax and legal issues, including work with “Big Four” advisory firms, the Spanish government and major Spanish universities. Toda & Nel-lo Abogados always provide clients with traditional values, professionalism, integrity, confidentiality, honesty, and ethics, to ensure their objectives and needs are met.
About Studio Manzoni Pagliero Vanz e Associati
Established in 1971, Studio Manzoni Pagliero Vanz e Associati provides tax and business legal assistance to select domestic and foreign clients who are leaders in their fields. Made up of seven partners and eleven professionals with law and economics expertise, the firm works to create customized solutions for clients, leveraging a multidisciplinary and global approach. Studio Manzoni Pagliero Vanz e Associati also maintain close working relationships with Turin University and the academic community, and some of its members teach and/or contribute to legal and economic publications.
About TPC (UK) LLP
TPC’s London office provides tax and business advice and specializes in transfer pricing, cross border tax planning, structuring and reconstructions, start up operations and VAT and Customs Duties advice throughout the EU. With its expanding professional team, the London office offers constructive tailored advice and also provides cost effective tax compliance services. For a complementary expert tax consultation, visit www.tpctax.com
About ArtemTax International
ArtemTax International is a tax law firm specializing in inbound and outbound transactions. The team is at the forefront of tax structuring, having implemented one of the first cross-border mergers between two entities in France and in the Netherlands that encompasses tax and accounting matters. ArtemTax International is characterized by its independent and personalized approach, without the restrictions of Sarbanes-Oxley and the French law on financial securities (“Loi sur la Sécurité Financière”), and by granting clients access to a dedicated partner from start to finish, ensuring the highest level of service. The team also differentiates itself through its global approach in taking into consideration financial, accounting, and economic services.
About True Partners Consulting LLC
True Partners Consulting is a world-class tax and business advisory firm that helps large public and private enterprises navigate complex financial regulations without the Sarbanes-Oxley created conflicts inherent in offering both consulting and audit services. The firm provides a broad range of services, including analysis and counsel concerning the tax impact of business issues such as organic or acquisition-driven growth, filing practices, business restructuring or bankruptcy. True Partners provides a wide range of services to its multinational clients, including global structuring, transfer pricing, repatriation planning, international compliance and treaty planning. The firm also conducts refund reviews, analyzes clients’ tax exposure and prepares responses to audit inquiries, in addition to helping clients address compliance issues.
True Partners has offices in Chicago; New York; Los Angeles; San Jose, Calif.; Tampa, Fla.; Boston; and London. Find additional information at www.tpctax.com.
Rapidly growing firm extends global reach to serve multinational clients
CHICAGO – April 18, 2008 – True Partners Consulting LLC announced today that it is launching its first wholly owned office outside the United States, which will be located in London and named True Partners Consulting (U.K.) LLP.
The new office will be led by Kim Brandt and Les Secular, who together have more than 40 years’ experience advising on tax issues throughout Europe, particularly for U.S. companies expanding operations overseas.
“The tremendous growth we’ve experienced in the last two years has greatly increased our need to establish a global presence for our clients with operations around the world,” said Cary McMillan, chief executive officer of True Partners. “We are thrilled to add a London office that will enhance our ability to provide clients in key global markets with ‘world-class’ tax and business advisory services.”
Additional new offices are currently in the discussion phase for Spain, the Netherlands, Italy and China—some of which will be network member firms through TPC International, an affiliated company, formed in October 2007. There is also a Paris office, ArtemTax International, which is the first member firm in the True Partners Consulting International network.
True Partners Consulting (U.K.) LLP will advise companies based in the United Kingdom, as well as multinational companies doing business in the United Kingdom and other European markets, on a range of tax and business issues including transfer pricing, VAT, cross border transactions, structuring business operations and reorganizations. The office will also undertake all local compliance requirements.
“We are extremely pleased to be part of True Partners Consulting,” said Kim Brandt, Partner, True Partners Consulting (U.K.) LLP. “We believe that the firm’s distinctive approach is well-suited to the needs of companies doing business in Europe, and we look forward to providing a differentiated offering to companies in need of fresh thinking on corporate tax and other business issues.”
Les Secular, Partner, True Partners Consulting (U.K.) LLP, added, “The core service strengths we offer in the London office will be further complemented by True Partners’ ability to work fluidly across geographies to access specialized areas of industry expertise and create customized solutions that fit clients’ needs.
About True Partners Consulting LLC
True Partners Consulting is a world-class tax and business advisory firm that helps large public and private enterprises navigate complex financial regulations without the Sarbanes-Oxley-created conflicts inherent in offering both consulting and audit services. The firm provides a broad range of services, including analysis and counsel concerning the tax impact of business issues such as organic or acquisition-driven growth, filing practices, business restructuring or bankruptcy. The firm also conducts refund reviews, analyzes clients’ tax exposure and prepares responses to audit inquiries, in addition to helping clients address compliance issues.
True Partners has offices in Chicago; New York; Los Angeles; San Jose, Calif.; Tampa, Fla.; Boston; and London. Find additional information at www.tpctax.com.
TRUE PARTNERS CONSULTING TO FORM TRUE PARTNERS CONSULTING INTERNATIONAL; FIRST MEMBER FIRM OUTSIDE U.S. OPENS IN PARIS
Rapidly growing firm expanding to support multinational clients
CHICAGO – October 24, 2007 – True Partners Consulting LLC (TPC) announced that it is forming True Partners Consulting International, an affiliated company that will become a network of tax consulting firms in select markets around the world.
The first member firm in the network opens today in Paris, the company announced. To be known as ArtemTax International, “a Member Firm of the True Partners Consulting International Network,” the new firm will be led by Hervé Bidaud, who has nearly 30 years of experience in international tax matters, cross border transactions, group restructuring mergers and acquisitions, and joint ventures.
“We have referred to True Partners as a ‘world-class’ tax and business advisory firm since our founding 18 months ago, and today we are very pleased to have extended our services beyond the U.S. into other parts of the world,” said Cary McMillan, chief executive officer of True Partners. “As the world of business becomes increasingly globalized, we need to be able to support our clients wherever they do business – and we soon will be taking additional steps in that direction.”
Through TPC International, True Partners eventually will have affiliated member firms in strategically selected markets in Europe, Asia and potentially, Latin America.
ArtemTax International will advise companies based in France, as well as multinational companies doing business in France, on a range of tax and business issues including management of tax risks, the optimization of effective tax rates and the implementation of transfer pricing policies. Artemtax International is also handling tax litigation matters.
“The senior professionals of our global network, including ArtemTax International, have the technical skills and problem-solving ability to understand the accounting, financial and economic aspects of international business challenges,” said Hervé Bidaud. “In addition, many of our network members have been part of networks of independent accountants in the past, exerting a great deal of leadership on the accounting and economic aspects of structuring international transactions, including transfer pricing issues.”
About ArtemTax International
ArtemTax International is a tax law firm specializing in inbound and outbound financial transactions. The team is at the forefront of tax structuring, having implemented one of the first cross-border mergers between two entities in France and in the Netherlands that encompasses tax and accounting matters. ArtemTax International is differentiated by its independent and personalized approach, without the restrictions of Sarbanes Oxley and the French law on financial securities (“Loi sur la Sécurité Financière”), and by granting clients access to a dedicated partner from start to finish, ensuring the highest level of service. The team also differentiates itself through its global approach in taking into consideration financial, accounting, and economic services.
About True Partners Consulting LLC
True Partners Consulting is a world-class tax and business advisory firm that helps large public and private enterprises navigate complex financial regulations without the Sarbanes-Oxley-created conflicts inherent in offering both consulting and audit services. The firm provides a broad range of services, including analysis and counsel concerning the tax impact of business issues such as organic or acquisition-driven growth, filing practices, business restructuring or bankruptcy. The firm also conducts refund reviews, analyzes clients’ tax exposure and prepares responses to audit inquiries, in addition to helping clients address compliance issues.
Thefirmhas offices in Chicago; New York; Los Angeles; San Jose, Calif.; Tampa Bay, Fla.; Washington D.C.; and Boston. Find additional information at www.TPCtax.com.