wksp3- toine presentation (final) ican2 review 1

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KPMG

Date: 10/09/2014

Date: June 2014 www.amicorp.com

Presented by: Toine Knipping

CEO – Amicorp Group

KPMG

www.amicorp.com

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Value Orientation : A key issue for national development and the role of the accounting profession. An International Tax Planning Perspective.

Date: 10/09/2014


Presented by: Toine Knipping

CEO – Amicorp Group

Perspective.

www.amicorp.com







AgendaAgendaAgendaAgendaAgendaAgendaAgendaAgenda

1. Introduction

2. Issues of tax and national development?

3. Anti avoidance policies

4. Not just a Nigerian problem

5. What is FATCA


5. What is FATCA

6. G20+OECD towards GATCA: Multilateral Automatic EOI

7. The impact of global transparency

8. The responsibility of the Accounting Professional

9. Introducing Amicorp

10.Our solutions

11.Conclusions

IntroductionIntroductionIntroductionIntroductionIntroductionIntroductionIntroductionIntroduction

What is the Accounting philosophy?

•Professional and value-driven preparation and auditing of financial statements and accounts

•The moral basis of disclosure and discretion : Honesty must be placed over profits. All of the stakeholders to the enterprise need to be served, not just


profits. All of the stakeholders to the enterprise need to be served, not just the owners (Jamnalal Bajaj ,known by Gandhi as the 'merchant prince’)

•…..but Accountants and Lawyers are some of the many guilty parties inperpetuating unlawful financial flows.

Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development

• Tax Evasion and Tax Avoidance

– Tax evasion and tax avoidance remains the greatest challenge facing tax revenue administration worldwide. It erodes profits from national tax bases.

– Global tax evasion is estimated to be worth 5% of total global GDP. By one estimate, 28 developing countries lose over 1bn USD in annual tax revenue (according to a report on the use of the Dutch tax system by multinationals).

– African economies lost between USD 597 billion and USD 1.4 trillion from 1980-2009 in net resources transferred away from the continent primarily through


2009 in net resources transferred away from the continent primarily through transfer mispricing and other tax evasion schemes (2013 joint research by Global Financial Integrity and the African Development Bank ).

– Nigeria has lost as much as USD 89.5bn between 1970 and 2008 to illicit financial outflows. This outflows represent monies and resources needed for the provision of infrastructure, and increases the burden on tax paying residents (The Africa Report 2014)

Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development Issues of tax and national development

• Mechanism of BEPS– Include Transfer Pricing (TP), use of Special Purpose Enterprise/Vehicles (SPE/SPV’s)

with few or no employees and little or no physical presence in the host country.

– All can be perfectly legal but has low effective tax rates (ETR)

• Drivers of BEPS awareness– Cash strapped economies and overall climate of austerity has renewed focus on


– Cash strapped economies and overall climate of austerity has renewed focus on contributions from business and Ultra High Net Worth Individuals.

– Increasing global business integration and migration of people and assets.

– Growing social responsibility consciousness

And thus, it is becoming more imperative for national tax authorities as well as Accountants to improve their efforts at ensuring that there is a vast network of TIEA’s and DTAA’s to simplify the process of evaluating transfer pricing schemes.

Issues of tax and national development 2/2Issues of tax and national development 2/2Issues of tax and national development 2/2Issues of tax and national development 2/2

• Tax Avoidance by way of Base Erosion and Profit Shifting (BEPS)– Many multinationals use BEPS mechanism to reduce effective tax rates (ETR)

– Include Transfer Pricing (TP) structures to shift profits to low tax countries

– Use of SPV’s with hardly no employees and little presence in the host country.

– apply tax treaty shopping to reduce taxation and withholding taxes, taxes, erosion of tax base by creating extensive intragroup interest or royalty payments..

– All can be perfectly, but triggers more and more awareness legal

• Drivers of BEPS awareness


• Drivers of BEPS awareness– Cash strapped economies and overall climate of austerity has renewed focus on

contributions from business and Ultra High Net Worth Individuals.

– Increasing global business integration and migration of people and assets.

– Growing social responsibility consciousness.

• Becoming more imperative for tax authorities as well as Accountants:– to improve their efforts to evaluate TP schemes and adhere to TP principles

– ensuring that there is a vast network of TIEA’s and DTAA’s, but without abuse

– To apply anti-abuse rules and combat tax erosion

National antiNational antiNational antiNational anti––––avoidance policiesavoidance policiesavoidance policiesavoidance policies

• Anti-Abuse rules – empowers the relevant tax authorities (RTA) to make adjustments to any

transactions considered artificial or fictitious.

• Transfer pricing regulation (TPR) in Nigeria

– Both IFRS and TP Regulations require that transactions between ‘connected persons’ or between ‘related parties’ should reflect market conditions i.e. arms


length principles.

– Transactions between related persons are deemed to be artificial and fictitious if it violates the arms length principle

– Uses UN Practical Manual on TP for developing countries , and the OECD TP Guidelines for MultiNationals and Tax administrators.

– Statutory provision in the Income Tax Act , Regulation No1 2012

– TPR Commenced Jan 1, 2013.

Not just a Nigerian issue: Not just a Nigerian issue: Not just a Nigerian issue: Not just a Nigerian issue: A TRANSPARENT world by 2016A TRANSPARENT world by 2016A TRANSPARENT world by 2016A TRANSPARENT world by 2016

• Struggling economies --> Need for income.

• All countries want to combat tax evasion and tax avoidance

• G20 and OECD are taking measures:

1. Private wealth market: Combat tax evasion, Automatic Exchange of Info, Reporting by FIs, up to UBO


– FATCA per July 2014 FATCA per July 2014 FATCA per July 2014 FATCA per July 2014 (exchange of information for US Persons and passive income, directly to the US and vice versa under IGA)

– GATCA per January 2016 GATCA per January 2016 GATCA per January 2016 GATCA per January 2016 (exchange of information on passive income with 70+ countries)

2. Corporate market: Combat tax avoidance by Multinationals with aggressive tax planning : BEPS action plans

– BEPS (intro 2015BEPS (intro 2015BEPS (intro 2015BEPS (intro 2015----2017 2017 2017 2017 (exchange of information on active income with 70+ countries; no more gimmicky solutions)

BEPS: Base Erosion Profit ShiftingBEPS: Base Erosion Profit ShiftingBEPS: Base Erosion Profit ShiftingBEPS: Base Erosion Profit Shifting

• Most tax planning schemes are legal, but with low ETR.

• OECD says it distorts competition, and shifts activities. Citizens more sensitive to “tax fairness”.

• BEPS Action Plan, developed by OECD early 2013,


• BEPS Action Plan, developed by OECD early 2013, endorsed by G20 in Sept 2013

• Tackles tax planning strategies that exploit gaps and tax rules to erode tax basis or shift profits to low tax jurisdiction.

• Action plans will result in fundamental changes, based on 3 principles: Coherence, substance, transparency.

BEPS: 15 actions plans to recommendationsBEPS: 15 actions plans to recommendationsBEPS: 15 actions plans to recommendationsBEPS: 15 actions plans to recommendations

BEPS Action plan: fundamental changes to tax rules

15 sub-actions, based on 3 principles:

• Coherence (Gaps) on Corporate Taxes:

• Deductible for A if taxable for B, neutralize hybrids, avoid double dips, strengthen CFC and Thin Cap.

• Substance (Frictions):


• Substance (Frictions):

• economic justification of involving party in tax treaty country, mitigate treaty shopping, justify transfer pricing with value creation

• Transparency:

• data collection and analyses, disclosure tax strategies and targeted transfer pricing reporting.

Action plans will result in recommendations to OECD and G20 countries by Sept 2014 and Sept 2015

• Foreign Account Tax Compliance Act

• A US law to enforce tax compliance by US Persons by US Persons by US Persons by US Persons with financial assets and accounts outside the USA.

• RRRReporting of US accounts:eporting of US accounts:eporting of US accounts:eporting of US accounts:

• Foreign Financial Institutions (FFIsFFIsFFIsFFIs) to IRS or in case of IGA M1 to local tax authorities , or

FATCA FATCA FATCA FATCA –––– in a nutshell in a nutshell in a nutshell in a nutshell

US TREASURY US TREASURY US TREASURY US TREASURY NEEDS YOUNEEDS YOUNEEDS YOUNEEDS YOUto fill a US$ 17 trillion to fill a US$ 17 trillion to fill a US$ 17 trillion to fill a US$ 17 trillion debt.debt.debt.debt.


case of IGA M1 to local tax authorities , or

• through Non Financial Foreign Entities (NFFENFFENFFENFFE) who report to the Banks and other FIs.

• Imposing a 30% withholding 30% withholding 30% withholding 30% withholding on US source payments to parties that fail to comply

• Intergovernmental Agreements (IGAs) concluded by USA to roll out FATCA to many partner countries.

• Went into effect per 1 July 2014

US Persons US Persons US Persons US Persons –––– impact dual residentsimpact dual residentsimpact dual residentsimpact dual residents

• Many Nigerian tax residents have strong US connections

• US Person: Residency, US Citizenship orGreencard

• Tax on worldwide income (incl non US)• Disclosure foreign accounts and foreign assets. • Failure to comply highly penalized


• Offshore structures should be reported to IRS

• Many compliance options available:

– Offshore Voluntary Disclosure Program

– Non-program voluntary disclosure

– Complying going forward ?

– Renounce, relinquish US citizenship?

• Other solutions?

What else is happening ?What else is happening ?What else is happening ?What else is happening ?G20 Summit St. Petersburg - Sept 5th, 2013


Lets talk about Global Lets talk about Global Tax TransparencyTax Transparency

Tax transparency is on agenda OECD, G20, G8.

Summit G20 in St Petersburg Sept 2013

Leaders Declaration - Tax Annex:

•G20 endorsed OECD plan to a global system of Automatic EOI

•G20 committed to introduce AEOFI system between

Global Tax TransparencyGlobal Tax TransparencyGlobal Tax TransparencyGlobal Tax Transparency


•G20 committed to introduce AEOFI system between G20 countries by end of 2015

•Multilateral Tax Convention as legal basis

•Requesting all countries to sign up to this Convention, “without delay”

•OECD to develop system, standards and platform, based on IGA model 1

•50+ countries committed to apply Global System of Automatic EOI on Financial Accounts as of 2016

GATCA / AEFAIGATCA / AEFAIGATCA / AEFAIGATCA / AEFAIGATCA / AEFAIGATCA / AEFAIGATCA / AEFAIGATCA / AEFAI

In February 2014 the OECD introduced the Global Standard for Automatic Exchange of Financial Account Information (AEFAI)

1.Competent Authority Agreement (model CAA)

• Model Agreement which establishes a legal basis for the Automatic EOI:

– Modalities of exchange between countries. Confidentiality, Infrastructure.

– Comparable with body of IGA.


2.Common Reporting Standard (CRS)

• CRS with rules for DD and reporting of financial information by FI, to be exchanged with UBO residence jurisdiction (like IGA-Annex 1), outlining:

– The scope of financial information to be reported

– The scope of account holders subject to reporting

– The scope of FIs to report

• Standards approved by G20 Finance Ministers end Feb and May

• To be approved by G20 in September/October 2014

• Start date January 2016 with over 50 countries who committed to cooperate

How to anticipate Global Tax Transparency ?How to anticipate Global Tax Transparency ?How to anticipate Global Tax Transparency ?How to anticipate Global Tax Transparency ?

� Ensure beneficial compliant structures that provide asset protection, tax deferral, estate planning, etc, in which:

Entities in the structure fully comply with the (tax) legislation and regulations in the country where they are established or used

Each entity is also compliant to FATCA and GATCA as


�This is different from region to region, from country to country.

Each entity is also compliant to FATCA and GATCA as embedded by IGAs in local law

The UBO fully complies with (tax) legislation, like CFC, TP regimes, its tax reporting requirements and other regulations in the country(ies) where the UBO is tax resident

Impact of Global Tax TransparencyImpact of Global Tax TransparencyImpact of Global Tax TransparencyImpact of Global Tax Transparency

Who will be impacted by Global Tax Transparency?

1. HNWIs, MNC’s & MNE’s worldwide, including the entities used in the investment structures, with undeclared assets

2. Banks and other financial


This will be a game changer in the way the industry is organized

18

2. Banks and other financial businesses worldwide, • as tax agents to collect info, identify

and report• to support clients in maintaining

their compliance• find a balance: disclose client data

vs maintain privacy

Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?Impact of Global Transparency on Nigeria?

• Nigeria has committed to G-20 and OECD ?

• Developments in Nigeria are NOT different from the rest of the world, independent of what happens in the local political arena


• Tax systems will be integrated worldwide because it benefits the interests of all large countries and gives governments more control over (the assets of) its citizens

• Because now it is technicallytechnicallytechnicallytechnically possible, it will happen

In which direction will the international global In which direction will the international global In which direction will the international global In which direction will the international global In which direction will the international global In which direction will the international global In which direction will the international global In which direction will the international global trust and company management business trust and company management business trust and company management business trust and company management business trust and company management business trust and company management business trust and company management business trust and company management business develop?develop?develop?develop?develop?develop?develop?develop?

• KYC and AML rules are now common place, and over time will only become stricter

• Having undeclared assets will become harder, and if abroad it will become


• Having undeclared assets will become harder, and if abroad it will become almost impossible to repatriate them over time

• Unsophisticated tax planning and estate planning techniques will be disregarded, nominees will no longer exist, controlled offshore entities will be transparent

• Confidentiality is an illusion, transparency is the ‘new normal’

How to react?How to react?How to react?How to react?How to react?How to react?How to react?How to react?

• UBO’s moving money out of the banking system into real assets

• Money moving out of jurisdictions with (temporary) tighter controls (you can run but you can’t hide)

• Take distance from assets: transfer to family, other third parties, charities, insurance wrappers, certain funds, listing


charities, insurance wrappers, certain funds, listing

• Transfer to Trust and Foundations with no or limited control by UBO,

• Migration of UBO to low tax jurisdictions (Dubai, Singapore)

• Temporary migration of UBO with step up

• Voluntary tax disclosure

• Tax amnesty?

• Time to sanitize existing structures with undeclared assets

• Advise your clients to hold and protect assets and to structure income in a manner that is compliantcompliantcompliantcompliant with the regulations in the UBO country(s) of (tax) residence

• Make SURE you know all of the nationalities and tax residencies of your client

What is your role as an Accountant / tax lawyer? What is your role as an Accountant / tax lawyer? What is your role as an Accountant / tax lawyer? What is your role as an Accountant / tax lawyer?


client

• Maintenance of adequate TP documentation by Accountants

• Make 100% sure you document and can proveproveproveprove that:

– you checked that the structure used is in line with legislation in the client’s tax residence, and

– that you have on file that you properly advised your client regarding his personalpersonalpersonalpersonal obligations (like reporting the structure for tax purposes on his personal tax return)

Practical solutionsPractical solutionsPractical solutionsPractical solutionsPractical solutionsPractical solutionsPractical solutionsPractical solutions


The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?The purpose of life of our business?

• We are in the company management/trust business, fostering long term relationships, often passing to the next generation(s). No trust, no business

• Greed (Madoff, Credit Suisse, HSBC) ultimately leads to disaster, relationships build business, create revenues, success


relationships build business, create revenues, success

• Only mutually rewarding relationships lead to stable success

• Not only God sees everything. Soon the revenue collector as well

• A good night’s sleep is worth a lot. Better to be ahead of the wave than be swallowed up by it

The Way We WorkThe Way We WorkThe Way We WorkThe Way We WorkThe Way We WorkThe Way We WorkThe Way We WorkThe Way We Work

• Amicorp is specialized in setting up companies, trusts and other entities

and structures in different jurisdiction to optimize the tax implication of

cross-border transactions.


• We help lawyers, tax or other advisors, to identify structures which suit

their clients’ requirements, and then we set up and manage the

structures based on the lawyers or other advisors’ confirmation.

• Therefore we distinguish our services from that of lawyers, tax or other

advisors very clearly.

How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?How do we assist with tax planning ?

• We do not facilitate tax evasion or avoidance

• We assist with tax planning of a transaction as long as it is backed by proper commercial and business purpose.

• We recommend that our clients get appropriate opinions issued by


• We recommend that our clients get appropriate opinions issued by independent and reputable tax advisors / accountants.

• We often utilize non tax–haven entities to avoid transfer pricing

ConclusionConclusionConclusionConclusionConclusionConclusionConclusionConclusion

“Try not to become a man of success, but rather try tobecome a man of value”.


Albert Einstein

Confidentiality is Dead Confidentiality is Dead Confidentiality is Dead Confidentiality is Dead


Time is over to hide assets

Date: 10/03/2014


www.amicorp.com







THANK YOUAmicorp GroupAmicorp GroupAmicorp GroupAmicorp GroupAvda. Diagonal 399, 1º 1ª08008BarcelonaSpain

Telephone: +34 (93) 208 2581

For information purposes onlyFor information purposes onlyFor information purposes onlyFor information purposes only

This presentation material is intended for informational purposes only and does not constitute tax, legal or professional advice. Nothing herein is to be considered as creating a service provider-client relationship between the recipient and Amicorp.

Recipients should not act or rely on any information contained in this presentation material without seeking appropriate legal, tax, or other


presentation material without seeking appropriate legal, tax, or other professional advice on the particular facts and circumstances at issue.

The information is “AS IS” and Amicorp makes no express or implied representations or warranties or guarantee as to the completeness, accuracy or timeliness of this information. Your use of this information is at your own risk and responsibility.

wksp3- toine presentation (final) ican2 review 1

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