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Rodrigo Winter

Developing countries often impose withholding tax on payments for certain offshore services. Companies should be aware of where in the world this occurs and the potential protection under tax treaties so they can plan accordingly, says Konstantin Korobchenko of EY and the University of Leiden.

Vijay Krishnamurthy, CFO, company secretary and legal head at SmartPlay Technologies India, looks at the recently notified general anti-avoidance rules (GAAR) in India, analysing whether certain inconsistencies remain and whether the recommendations of the specialist Parthasarathi Shome-led committee should have been adopted in full.

Elena Kostovska, Eurofast Global In 2009, FYR Macedonia made an overhaul in the taxation approach to corporate profits, abandoning the previous adjusted profits tax base and moving to a tax base centered mostly on profit distribution but also on a number of taxable items. Therefore, profit tax in the country arises from two sources: profit distributions and non-deductible expenses plus any understated revenues and is no longer focused on the actual profit realised by the taxpayer. The first element (distribution) is quite straightforward, with tax arising in cases of dividend distribution (or any other profit distributions, such as expatriation in cases of branches of non-residents). An exemption was introduced in mid-2010 which is still in effect and stipulates the profit tax exemption of dividends distributed to resident legal entities; therefore effectively limiting the taxation to profits distributed to resident physical persons as well as foreign entities or physical persons.

David Cuellar

Jelena Zivkovic Increased tax liabilities related to yachts in many countries in the Mediterranean region, because of the strong effects of financial turmoil, has meant many yacht owners are looking for alternative jurisdictions to register their yachts. Montenegro is situated in south east Europe and is positioned in a strategic location for the maritime world, having access to major maritime centres throughout the Mediterranean. Its shipping sector is constantly developing, offering wider opportunities to investors.

Peter Duchars, of SMP Partners, a Russell Bedford member firm, looks at efforts to harmonise the EU VAT system and the unexpected new challenges this may create.

The US Supreme Court heard the oral arguments in the Woods dispute last month, which deals with whether valuation misstatement penalties are applicable in tax shelter cases. Professor David Shakow, of the University of Pennsylvania Law School and counsel at Chamberlain, Hrdlicka, White, Williams & Aughtry, who filed an amicus brief against the government in the case, explains why taxpayers hope the court’s judgment will help clarify two controversial areas of US tax law.

Bob van der Made, PwC Immediately after the EU Council's Working Party on Tax Questions – Indirect Taxes (EU FTT) was held on September 9 2013, a confidential opinion of the EU Council Legal Service on the legality of one important aspect of the European Commission's proposed directive for implementation under enhanced cooperation of an EU FTT, was leaked to the press. The opinion calls into question the territorial scope of the tax and, in particular, its application to financial institutions based outside of one of the eleven participating EU member states (ECP-11) where they transact with counterparties which are located within one of the ECP-11 countries. The legal opinion was prepared by the EU Council's Legal Service in response to a request from member states. The role of the EU Council's Legal Service is to provide advice to the Council and to represent the Council in all litigation. The opinion focuses on the compatibility of Article 4(1)(f) of the proposed directive with EU law. Article 4(1)(f) contains one of the establishment tests which is used to determine whether a financial institution is subject to the EU FTT in an ECP-11 country. It applies where a financial institution is physically located outside the ECP-11 zone but transacts with a counterparty located within the FTT-zone. The opinion concludes that Article 4(1)(f) exceeds member states' jurisdiction for taxation under international law, infringes on the taxing competences of non-participating member states and is discriminatory against them. The opinion does not comment on the legality of any other aspects of the proposed directive.

Mexico has plans to help taxpayers comply with reporting rules through the use of information technology