Worldwide legal news LEGAL NEWS


20 | ROUND UP What’s it about?


This is a regular feature of OPP magazine. Lawyers and accountants around the world have agreed to keep us informed about any new developments in the law that they think will be of particular interest to the overseas property industry. If you know of any interesting changes to the law or taxation in the country where you liveor do business, contact john.howell@opp-connect.com. Alternatively, if you know of a good, reliable lawyer or accountant who might be prepared to help, please do the same.


The most important of this month’s legal news from our correspondents around the world. More legal news is available in the News section at www.opp-connect.com


Brazil grants permanent visas to foreigners representing organizations


The Brazilian government has announced that they will grant permanent residence visas to foreigners who come to the country to represent a Corporate Organization or an Economic Group. Currently, management positions of a corporate entity established in Brazil can only be occupied by foreigners bearing a permanent visa, as the Brazilian legislation expressly prohibits the exercise of management position or function by a bearer of a Temporary


“Permanent residence visas to foreigners who represent a Company or Economic Group.”


Visa (Foreigner Statute, article 99, headline). To be eligible for the visa, the company must invest at least US$200,000 per foreigner to be assigned to work in Brazil, or the investment of an amount equal or superior to US$50,000. In the fi rst case, the permanent visa may be valid for up to fi ve years, while in the second case the visa may be valid for up to two years, bound to a plan to hire Brazilians.


[Reported by Daniela Antunes at Maxwell Alves Solicitors – Email: daniela@maxwellalves.com]


China’s Property Tax to expand to more cities


Taiwan: inheritance tax for the Interests of the Benefi ciary on Land under a Trust On February 19th 2013, the National Taxation Bureau of the Central Area, Ministry of Finance announced that in the event that the beneficiary dies during the life of a trust, the interests on Land under a Trust shall be subject to Paragraph 2 of Article 3-2 of the Estate and Gift Tax Act (i.e. inheritance tax regulations in Taiwan).


If the beneficiary of a trust dies


during the life of the trust, his/her interest in the trust that is not yet received shall be subject to estate tax under this Act. The distinction shall be drawn to the land itself under a trust and the exempted types of lands shall not be subject to inheritance tax under the Estate and Gift Tax Act. [Reported by Amanda Tseng at Maxwell Alves Solicitors – Email: a.tseng@maxwellalves.com]


Shanghai and Chongqing, as two trial cities, have started to charge Property Tax since January 2011. In Chongqing, the Property Tax is targeted at villas, luxury apartments and the second property bought by people who do not have local working papers and as investments. The tax rate is between 0.5% and 1.2%. In Shanghai, the tax is levied on the second or latter properties purchased by local residents and properties purchased by non-local residents. The rate is 0.6%. The Chinese authority wishes to assess these trials and then gradually extend them all over the country. The Ministry of Finance is considering expanding the levy of Property Tax and asking for the opinion from various cities. These measures do not target fi rst-time buyers. The aim is to control property transactions in the market and stabilize the property price. [Reported by Carina Xu at Maxwell Alves Solicitors – Email: q.xu@ maxwellalves.com]


UK clamps down on non- residency tax exemptions From 6th April 2013, the new UK Statutory Residence Test (SRT) will be used by HMRC to determine whether an individual is resident or not resident in the UK for the purposes of income tax, capital gains tax and inheritance tax in each tax year. The new test is said to be more clear-cut than existing rules, so


“China: Property Tax is targeted at villas, luxury apartments and the second properties”


anyone treading a thin line with regards to their tax status may well need to take action to legally maintain their non-residency tax status in the UK. The SRT will assess individuals on two levels, namely the automatic residency test and the sufficient ties test. Given the complexity of tax residency and that every individual’s situation and requirements are different; anyone in any doubt over their tax status should book a consultation with a tax consultant.


[Source: Overseas Guides Company]


The Common law section of the Spanish Supreme court has declared the nullity of mortgage clauses establishing a minimum percentage on the interest charged on Spanish mortgages. Those clauses affected people who were paying interest at a higher rate than the one initially agreed. The clauses, commonly known as “fl oor clauses”, established a minimum rate, usually between 2.5% to 3%. Last year, the Euribor reached a historic low of 0.5% and mortgagors have not been able to benefi t from those low interest rates. This decision, in any case, will not refund the amounts that have already


www.opp-connect.com | APRIL 2013


This month it is taxes, taxes and more taxes. Various crises mean that governments around the world are, increasingly, looking worriedly at their empty coffers and coming up with ever more imaginative ways of taxing people, especially foreigners. Luckily for them, foreigners generally don’t have a vote!


Singapore makes changes to property taxes


In the Singapore budget statement on February 25th, Deputy Prime Minister and Finance Minister Tharman Shanmuraratnam announced changes to existing property taxes, which will be introduced on January 1, 2014 and January 1, 2015. In summary, the revisions will reduce property tax for around 950,000 homes in the city state, while at the same time adding a maximum of around GBP 9,000 per year for the most expensive properties. “Those who live in the more expensive homes should pay higher taxes,” he said. In addition, the Inland Revenue Authority has issued an e-Tax guide for property developers, which sets out the tax treatment of transactions carried out by property developers and the deductibility of development and related expenses. [Reported by Andrew Batt at PropertyGuru Group - Email: andrew@ allproperty.com.sg]


Spanish Supreme Court declares the nullity of minimum interests on mortgages


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