March 2021: International Tax Planning Review

March 2021: International Tax Planning Review

Cyprus extends tax return deadline for companies

Cyprus has extended the 2019 tax filing deadline for companies and self-employed businessmen.

The corresponding decree provides the extension of the deadline for electronic filing of tax returns for 2019 by companies until 30 September 2021. In the standard case, this period ends on 31 March of the second year following the reporting year.

A similar extension is also granted to natural persons – entrepreneurs, whose income exceeds 70,000 euros and who are required to prepare audited financial statements.

At the same time, there is no extension provision for tax returns filed by individuals not engaged in business. They file their tax returns by 31 July of the year following the reporting year.

New contribution on immovable property sales in Cyprus

On 22 February 2021, amendments entered into force in Cyprus, introducing a 0.4% contribution on immovable property sales in Cyprus.

The funds collected this way will be used to support citizens who lived and owned immovable property in the northern part of Cyprus (which until now remains outside the control of the Republic of Cyprus) and who are unable to own and use it.

The contribution is payable by the seller of the property and applies to income from:

  • sale of immovable property located in the Republic of Cyprus; and
  • sale of shares in the company that owns the immovable property provided that the seller exercises control over such company.

Owners who are planning to sell their property in Cyprus should consider the need to pay this contribution.

Changes to the BVI trust legislation

The British Virgin Islands (BVI) has introduced a number of substantial amendments to the local trust and estate legislation. The amendments are expected to enter into force in the nearest time.

The Trustee (Amendment) Act, 2021 includes provisions related to:

  • variation of trusts (including the power of the BVI High Court to vary the terms of a trust without the consent of beneficiaries, if, in the opinion of the court, circumstances so require);
  • court jurisdiction to set aside the flawed exercise of a fiduciary power;
  • strengthening the protection of trusts and trustees in the BVI against foreign laws (in particular, foreign forced heirship rules) and foreign judgments (such rules are known as “firewall provisions”);
  • introducing extra reserved powers for settlors (which should increase the interest in BVI trusts among settlors from countries without the concept of trust).

Another significant change concerns the resealing of foreign inheritance judgments by the BVI Supreme Court. Until now, the grants of probate or letters of administration issued by foreign courts could be resealed in the BVI only if they were issued in the United Kingdom or some of its overseas territories. The new law provides for the resealing of grants from more than 60 countries, including all countries of the British Commonwealth, the United States and Hong Kong.

Montenegro to close its citizenship by investment program at the end of this year

The government of Montenegro announced plans to discontinue the national citizenship by investment program on 31 December 2021. This measure is explained by the process of the country’s accession to the European Union, the leadership of which is critical of programs of this kind, seeing in them a contradiction to the fundamental principles of the EU (Cyprus and Malta show illustrative cases).

The program, which has been in operation since 2019, provides for the granting of citizenship in exchange for investment in government-approved real estate projects. However, according to Montenegro’s Government, the program’s continuation may complicate and slow down joining the EU.

The final decision on the future of the current program and on the further procedure for granting Montenegro’s citizenship will be made before the end of this year. Perhaps, in a modified form, the program will be limited only to highly qualified professionals in specific sectors of the economy.

If Montenegro joins the European Union, citizens of the country, including those who have received a national passport under the investment citizenship program, will become EU citizens.  

LGT Group reports good results in 2020  

LGT Group (Liechtenstein), with banking divisions in Austria, Switzerland and the Asian region, announced the end of the 2020 financial year with a profit of CHF291.5 million. Despite the known circumstances in the world, the net inflow of the Group’s assets amounted to CHF11.6 billion. Tier 1 capital ratio is 21,9%. The growth is expected to continue in 2021.    

As reported on the Bank’s website, in a market environment affected at all levels by the coronavirus pandemic, LGT’s key priority was to serve as a reliable partner for its clients at all times. LGT achieved further organic revenue growth as a result of its well-established and broadly diversified international client business.

In December 2020 LGT Group signed an agreement with UBS Europe SE to acquire its wealth management business in Austria. Upon completion of this transaction, which is expected in the third quarter of 2021, LGT will become one of the leading private banks in Austria.

Seychelles submitted AML report after legislation update

Following a series of legislative changes aimed at ensuring compliance with international anti-money laundering standards, the Republic of Seychelles has submitted its report to ESAAMLG, the regional Anti-Money Laundering Group in Eastern and Southern Africa.

The report reflects the actions taken by the jurisdiction to implement the recommendations published in the 2018 ESAAMLG report. The 2018 assessment of the country’s implementation of 40 FATF Recommendations showed full compliance with 20 of them, partial compliance with 16 and non-compliance with four. Based on the new assessment results, the rating of Seychelles is expected to be revised in relation to the indicators that required improvements.

Since then, in Seychelles, amendments have been made to the laws on mutual legal assistance in criminal matters, on extradition, on combating money laundering and terrorism financing, on beneficial ownership, and on combating terrorism.

According to the Seychelles Minister of Finance, Economic Planning and Trade, bringing the legal framework in line with the FATF recommendations demonstrates Seychelles’ adherence to international standards, protecting its reputation and safeguarding the integrity of the global financial system.

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