FEBRUARY 2013 |
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government in 2011, if he succeeds in the February elections. The tax was introduced as part of several austerity measures to cut defi cit and restore confi dence to the market, but had a negative effect on consumer spending and proved detrimental to the recession. Mr. Monti, in an interview with SkyTG24, stated that the property tax “should be restructured and modifi ed, with a greater portion set aside for city governments.” He has also suggested that, should he be re-elected into government, he wants to cut income taxes for low earners. Former Prime Minister Silvio Berlusconi stated that he too would abolish the property tax as his fi rst act of government, should he win the vote. [Source: Yahoo News]
France to see new tax for high- earners The French government has announced that it will introduce a new tax by autumn for those with incomes over €1 million a year. The tax will replace President Francois Hollande’s original law which proposed a 75% tax rate, and was the centrepiece of the country’s 2013 budget. This was rejected by the Constitutional Council in December, on the basis that it was calculated on individuals rather than households, and would create inequality. It is unclear what the new tax will propose, since the government is still keen on a 75% rate. It will be part of this year’s fi nance law, and if approved, will be included in the government’s 2014 budget. Jérôme Cahuzac, the Junior Minister for the Budget in the French fi nance ministry, suggested the possibility of the tax being a permanent measure. “Either it can stay temporary – two years – like the rejected measure, or it can be for the whole [of the government’s] term, or why not an extended and on-going measure,” he said. [Source: RFI]
Turkey sees new Capital Markets law
LEGAL NEWS
wrong or misleading information, start rumours, or provide news, commentary or prepare reports with the intention of infl uencing prices, values of capital markets instruments or investor decisions.” The punishment is up to fi ve years in prison for anyone found guilty of breaching the law. The report caused a series of concern across the country, particularly for Journalists, who feared that any ‘wrong or misleading information’ could cause them to face imprisonment. Aydin Haskebabci, head of corporate communications at the Board clarifi ed “the old law was the same, it wasn’t punishing getting things wrong, it was about the motivation, the intent.” As a result of the misunderstanding, the board is to release a secondary legislation, clarifying what is considered criminal and what isn’t. [Source: Bloomberg; Financial Times]
US government makes changes to Estate Tax for Canadians The US government has altered its Estate Tax Law for Canadians owning US property. The unifi ed tax credit for Canadians is based on the ratio of US assets to total worldwide assets. In 2012, there was a tax exemption for assets of up to $5.12 million - unless new legislation came into force by the end of December 2012 the tax was to be reverted to a $1 million exemption, with the maximum tax rate increasing to 55%. This resulted in many Canadians
“The French tax law, to be introduced by autumn, will affect those earning over €1 million a year”
making changes to their properties, including signing title over to children, setting up a cross-border trust and buying life insurance for a monthly payment to match their tax implications. As part of the ‘Fiscal Cliff’ deal in The American Taxpayer Relief Act of 2012, the law altered the Estate Tax, seeing the changes as important to taxpayers. The bill was passed on January 1st. This means that the $5+ million exemption has been maintained, and is also indexed for infl ation. Rates prior to the exemption are subtracted from tax payable and range from 18%-40%. [Source: Wire Service]
US Federal Transfer Tax stays at fi xed rate
A new code from Turkey’s Capital Markets Board (SPK) came into force at the end of December, detailing the rules on fi nancial commentary. The new law sets out the punishment for “those who provide untruthful,
From the start of this year, the federal estate tax and gift tax exclusion is fi xed at $5,250,000, while the top marginal rate for both taxes is set at 40%. The generation-skipping transfer tax (GST), which applies to transfers to those two or more generations below the transferor, is also fi xed at the same amount. Absent Congressional
action, the exclusions would have been reverted to $1,000,000, which caused many clients to make signifi cant gifts in order to utilise the higher exclusion rate. Any gift tax exclusion not used by clients is carried forward to future lifetime gifts purchases. However, those who made gifts in 2011 and 2012 to avoid scheduled reductions may still have benefi ted owing to rising investment values. Prior gifts and future gifts may allow families to incur a lower overall income tax burden by shifting assets to family members in lower income tax brackets. A gift made earlier at lower values removes the post-gift appreciation in value and the income generated by the gift from later gift or estate taxes. The new legislation also makes the deduction for state death taxes permanent. [Source: Lexology]
Ukraine issues new property tax
ROUND UP | 21
comes as a relief to residents who have not paid property tax for 2008-2009 or 2009-2010, owing to discrepancies in the manner in which the corporation had calculated the tax. “The way the MCG has calculated the tax is not foolproof and that’s why most of us have not paid,” said Rakesh Sharma, a resident of Palam Vihar. Residents are now exempt from any penalties, as long as they pay the property tax for the two years by June. In order to encourage residents to pay the tax, the Municipal Corporation of Gurgaon (MCG) is taking steps including tie-up with private banks in the city where residents can deposit the tax amount through cheque, demand draft or cash. [Source: The Times of India]
Greece to see new tax increases On 12th January, the Greek government approved a number of tax rises aimed at creating revenue of up to 2.3bn euros this year. For those earning more than €42,000 a year, there is a new top tax rate of 42%, while corporate rates have also risen and the tax base now includes low- earning farmers. The government insists that the new measures are fair. “We are
“Ukraine’s property tax is set to bring in a revenue of UAH 75 million during the year”
At the start of January, the Ukraine government issued a new property tax, which is set to affect 28 million housing facilities. The tax is expected to bring in revenue of UAH 75m during this year, but the government assures taxpayers that it will not create extra expense. It is payable once a year, set locally, and will affect both individuals and companies. Residential properties excluded from the tax include state-owned properties, properties in the Chernobyl Exclusion Zone, country houses (although only one per taxpayer), hostels, children’s homes, and homes with three or more adopted children (although only one per family). There is also an exemption for apartments smaller than 120 square meters, and houses smaller than 250 square meters. However, a person owning several properties can claim benefi ts in relation to one property only. [Source: Tax-News]
Haryana government extends property tax amnesty
The government in Haryana, India, has made the decision to extend its property tax amnesty scheme until 30th June 2013, after it ended on 31st December 2012. A notifi cation was issued by the urban local bodies department to all the municipal corporations, councils and committees across Haryana. This
not in favour of taxes,” Deputy Finance Minister Giorgos Mavraganis said, “but in the current situation we must lead the country out of its impasse.” The changes are part of an overall package approved in November to allow Greece to qualify for further bailout funds. But the opposition say the tax rises will increase hardship for ordinary Greeks. [Source: BBC]
Northern Ireland sets fi nes for rogue developers
Northern Ireland has introduced new planning laws for reprobate developers. If builders fail to meet regulations, they could face fi xed penalty enforcement notices – used as an alternative to costly and lengthy court prosecutions. A key part of the bill will be an increase in potential fi nes from £30,000 to £100,000 to those who do not obey. The bill is intended to speed up reforms and modernise the planning system before the majority of planning powers transfer to local government in 2015. Environment Minister Alex Attwood said “It is part of a range of measures to make planning processes more accountable and speedy and protect against unsightly or illegitimate construction.” [Source: Belfast Telegraph]
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