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Doing Business Guide in the Baltics.
US – Latvia tax treaty on avoidance of double taxation seminar presentation.
25 September 2012
US – Latvia tax treaty on avoidance of double taxation
- Exchange of information
- 6 months presence in construction creates PE (permanent establishment)
- Residency
- Credit system (Foreign tax credits)
- Witholding taxes
U.S. Indicts Four Credit Suisse Bankers in Increasing
Crackdown on Offshore Accounts: 2011
From 1953 - Bank Leumi (Israel), Bank Frey (Swiss), Maerki Baumann (Swiss)
charged with:
- causing U.S. customers to travel outside the United States,
- opening secret accounts for U.S. customers in the names of nominee tax-haven entities;
- advising U.S. customers to structure withdrawals from their secret accounts in amounts less than $10,000 in an attempt to conceal the secret accounts and the transactions from U.S. authorities; and
- advising U.S. customers to utilize offshore credit and debit cards linked to their secret accounts and providing the customers with such cards, including cards issued by American Express, VISA and Maestro.
Failure to report offshore accounts
- UBS AG, Switzerland
- HSBC in India
- HSBC in Bailiwick of Jersey, Channel Islands
- Swiss bank Wegelin
US Taxpayers are required to report their worldwide income.
Taxpayers who have a financial interest in, or signature or other authority over, a bank account in foreign country with an aggregate value of more than USD 10,000 at any time during a particular year, are required to file for each qualifying account.
Taxpayers who have a financial interest in, or signature or other authority over, a bank account in foreign country with an aggregate value of more than USD 10,000 at any time during a particular year, are required to file for each qualifying account.
Willful blindness to the FBAR requirement
The Court of Appeals stated that willful violation may include “willful blindness to the FBAR requirement” or “intentional ignorance” (i.e. A conscious effort to avoid learning about reporting requirements.)
- his testimony that he did not read line 7a or paid any attention to any written words on his federal tax return;
- his false answers that were given to his accountant and on his tax return regarding the existence of his offshore accounts; and
- willfully failed to report the existence of his offshore accounts to the IRS or the US Department of the Treasury as part of his larger scheme of tax evasion
Detection of offshore accounts
Offshore company - Latvian credit card - 1 use in abroad - Inquiry to Latvia from USA - Loan agreement justification
Suspect transactions
- Cash LVL 40000 (except salary, pension and social fee)
- Cash LVL 1000 exchange of small nominal
- LVL 10000 lump-sum payments
- Currency exchange more than LVL 5000 in cash
- Credit card withdraws per month LVL 40000
- Prohitition to execute cash transaction exceeding LVL 10000 for services
- Cash declaration from April 14, 2007 exceeding LVL 3000
- Penalty 5% on non-declared cash transactions exceeding LVL 3000
- Penalty 15% of whole transaction amount on cash transactions exceeding LVL 10000 (except bank account payments).
List of Low Tax Countries
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Antilles
Andorra
Anguilla
Antigua & Barbuda
Aruba
Bahamas
Bahrain
Barbados
Belize
Bermuda
British Virgin Islands
Brunei Darussalam
Cayman Islands
Cook Islands
Costa Rica
Dominican Republic
Ecuador
Gibraltar
Grenada
Guam
Guatemala
Guernsey
|
Hong Kong (Sjangana)
Isle of Man
Jamaica
Jersey
Jordan
Jisbuty
Kenya
Kuwait
Labuana (Malaysia)
Lebanon
Liechtenstein
Liberia
Maldives
Macao
Mauritius
Marshall Islands
Monaco
Montserrat
Nauru
New Caledonia
Niue (New Zealand)
|
Olderne
Panama
Qatar
San Marino
Seychelles
St. Helens
St. Kitts and Nevis
St. Pierre and Michel (France)
Samoa
Santome and Prinsipi
St. Lucia
St. Vincent and Grenada
Tahiti (French Polynesia)
Tonga
Turks and Caicos Islands
United Arab Emirates
Uruguay East Republic
Vanuatu
Venezuela
Virgin Islands (USA)
Zanzibar Islands (Tanzania)
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Capital gains
- From 2013 capital gains in company is not taxed, except sale of offshore stock
- Individual gain – 15%, but tax losses may be used
- Individual stock holdings to be moved to companies
Royalties & Interest
- From 2014 no witholding taxes
- Now – royalties 5-15 % (USA tax treaty 5-10%)
- Interest 10%