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Acumum Exhibits at Legal Futures Conference – Malta BPO & LPO Services

Acumum to Exhibit at Legal Future’s Conference

‘Era of the Entrepreneur’, London, 18 November 2014

Legal Process Outsourcing (LPO) & Business Process Outsourcing (BPO)

Malta – A Near-Shore Solution

Acumum will be attending Legal Future’s Conference ‘Era of the Entrepreneur’ to exhibit it’s Malta LPO & BPO service offering.

Acumum enables corporations and law firms to leverage Legal Process Outsourcing (LPO) and Business Process Outsourcing (BPO) strategies to reduce cost and engineer efficiency.

With a concentration on EU & US legal markets, Acumum opens the door to a deep near-shore talent pool of highly qualified legal, accounting and corporate professionals.

Acumum’s service offering is targeted at:

Why Malta?

Malta represents an ideal outsourcing destination, particularly as a near-shore option for the UK, continental Europe & the USA:

  • Full EU member state since 2004 – in close proximity to all major European capitals
  • Surplus of expertly qualified and experienced lawyers and accountants available at costs competitive with Asian outsourcing destinations and lower than competing mainland European near-shore destinations
  • Classified as an Advanced Economy by the IMF, Malta operates as one of the world’s financial centers, and possesses a mature business environment with an established BPO industry. Note that offshore destinations such as India, the Philippines, and South Africa, do not posses this classification.
  • English is an official language, with Italian and French common second languages
  • Secure and reliable telecommunication infrastructure
  • Low operating costs and unique tax advantages

Why Acumum?

Acumum brings to the table a wealth of managerial experience in the areas of legal process outsourcing, process management and lean project execution that ensures our LPO/BPO support team deliver optimal value.

The hallmarks of Acumum’s outsourcing practice are:

  • Providing consistent and high-quality work product – on time and within budget
  • Providing transparent and flexible pricing
  • Protecting confidentiality and data security

Language Capabilities

  • English
  • French
  • Italian
  • German
  • Maltese
  • Russian

If you would like to know more about how Acumum can serve to enhance your business, please contact Acumum’s Managing Partner, Geraldine Noel: gnoel@acumum.com | +356 2778 1700 | Skype: acumum

Malta – Mexico Tax Treaty – Now In Force

Malta & Mexico Double Tax Treaty In Force; 9th August 2014

The treaty provides for double taxation relief in relation to

  1. Mexico’s federal income tax and the business flat rate tax; and
  2. Malta income tax.

The main features of this treaty are as follows:

  • Dividends – 0% withholding tax.
  • Interest arising in one Contracting States and paid to a resident of the other may be taxed in that other state and may also be taxed in the Contracting State in accordance with the laws of that State.

If the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed:

  1. 5% of the gross amount of the interest from loans granted by a bank;
  2. 10% of the gross amount of the interest in all other cases.
  • Royalties - the same rules apply as for interest, however if the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed: 10% gross of the royalties.

The Malta – Mexico double tax treaty with Mexico, following the Malta – Uruguay double tax treaty, signals Malta’s intention to strengthen economic relations with Latin American Countries, with the aim of concluding other similar agreements with countries of the same region.

 Acumum – Legal & Advisory – Malta’s International Law Firm

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Changes to Malta’s Remittance Tax System – Long Term Residents

Changes to Malta’s Remittance Basis of Taxation

Malta Permanent & Long Term Residents now Taxed on a World-Wide Basis

Pursuant to Malta’s Income Tax Act, any person that is considered to be ordinarily resident and domiciled in Malta is subject to Malta tax on a worldwide basis –  on any income or gains whether arising in Malta or not.

Persons that are either resident or domiciled in Malta are subject to Malta tax on income and gains arising in Malta and on income arising outside Malta (excluding capital gains) that is remitted to or received in Malta.

What are the changes?

Due to changes to the Global Residence Scheme and the newly enacted Retirement Residency Programme laws of 2014,  Malta Permanent Residents and Long Term Residents will be taxed on a world-wide basis on income and gains.

Notwithstanding the changes, Malta’s Global Residence Scheme and Malta’s Retirement Residence Programme still allow non-permanent residents who are EEA or Swiss nationals to enjoy favourable rates of income tax on foreign-source income received in Malta, subject meeting certain conditions.

“Permanent Resident” is defined as:

  1. a person who has right of permanent residence in terms of article 6 and is in possession of a permanent residence certificate issued in terms of article 7 of the Free Movement of European Union Nationals and their Family Members Order; or
  2. a person who applies for right of permanent residence in terms of article 6 of the Free Movement of European Union Nationals and their Family Members Order.

“Long-Term Resident” is defined as:

  1. a person who has long-term resident status in terms of the Status of Long-term Residents (Third Country Nationals) Regulations; or
  2. a person who applies for long-term resident status under the Status of Long-term Residents (Third Country Nationals) Regulations.

Effect of Malta’s Remittance Amendments

Whilst Malta’s remittance system has been amended in respect of Permanent and Long Term Residents, Malta’s remittance system remains the same and applicable for both individuals – not seeking long term residence in Malta – and companies.

For more information as to the tax benefits that Malta’s Remittance System can provide, please see our detailed presentation:

Malta’s Remittance System – Presentation

 Acumum – Legal & Advisory – Malta’s International Law Firm

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Acumum Attends Women’s International Shipping & Trading Association (WISTA)

The Women’s International Shipping & Trading Association (WISTA) is holding its 40th International AGM and Conference in Limassol, Cyprus, between the 8 & 10 October 2014.Dr Geraldine Spiteri

WISTA International’s first such AGM and Conference took place in 1981 in Hamburg.

WISTA Malta is the Malta branch (WISTA Malta) of WISTA International, both being non-profit organisations. WISTA Malta was established in September 2014 by a number of female professionals in shipping. The aims of WISTA Malta include the promotion of active participation within WISTA International and to support the involvement of females in the maritime industry.

WISTA Malta members will be attending the WISTA conference to network and exchange ideas and information with other members of the worldwide organisation.

Dr. Geraldine Spiteri, one of the founding members of WISTA Malta, has been appointed as the first treasurer of WISTA Malta. Geraldine Spiteri will also be attending on behalf of Acumum – Legal & Advisory and will be spreading the word about the incentives which the Maltese flag holds for the shipping industry, which include:

Malta has a very long-standing maritime tradition. Furthermore, the strategic location of Malta, its deep natural harbours and the wide range of services available make Malta an excellent choice to register vessels.

Dr Geraldine Spiteri may be contacted on +356 2778 1700 Ext 102, Cell +356 9985 8000 or at spiteri@acumum.com should you like to meet her at the conference or discuss Malta yacht or maritime solutions.

Switzerland to End Corporate Tax Breaks

Swiss Flag

Swiss Cabinet Presents Plans for Corporate Tax Reform

  • Notional Interest Deduction on Equity
  • Reduction of Headline Corporate Tax Rate
  • Royalty Box Schemes Under Attack by OECD
  • $1.8 Billion Estimated Swiss Revenue Shortfall

The Swiss government has made plans to abolish certain tax privileges for international firms and introduce a royalty box and an interest-adjusted profit tax.

Swiss Finance Minister Eveline Widmer-Schlumpf said the aim of the reform is to adapt the fiscal policy to international standards, boost Switzerland’s competitive edge as an attractive business location and encourage companies to continue to make an important contribution to funding the tasks of the government, cantons and local authorities.

Switzerland has been under pressure from the Organisation for Economic Co-operation and Development (OECD) and the European Union for the past ten years to review its preferential corporate tax policy.

Switzerland has three levels of taxation:  federal, cantonal and municipal.  Under ordinary circumstances, Swiss tax rates historically ranged from 11.5 percent -24 percent, depending upon the canton.  Pursuant to certain beneficial federal and cantonal tax regimes, however, the effective tax rate (ETR) for a foreign multinational could be as low as 0 percent – 10 percent.

About 25,000 firms – holding companies, mixed companies and management companies – are granted special tax breaks by Switzerland’s 26 cantons. The firms are either exempt from tax or subject to lower rates for the activities they engage in outside the country.

Royalty Box

A key pillar of the reform is the introduction of so-called royalty boxes – a method of preferential tax treatment for certain types of profits, notably royalties from a patent.

The OECD is due to define the legality of royalty boxes by the end of next year amid calls to abolish their use.

But Widmer-Schlumpf is confident that the practice will not be scrapped as Britain, Luxembourg and Belgium are defending their corporate fiscal regimes.

“The question is not whether royalty boxes will continue to exist or not. The question is how they will be defined. Switzerland might have to adapt its law accordingly,” she said.

Adrian Hug of the Federal Tax Authorities hinted that Switzerland could maintain its corporate tax system for a while if the international community needs more time to find a consensus.

Widmer-Schlumpf maintained that Switzerland has to act now to give investors the necessary legal security.

“Many international companies would leave Switzerland,” she warned.

The planned reform is expected to lead to a shortfall in revenue to the tune of CHF1.7 billion ($1.8 billion) annually for the federal authorities. The finance ministry plans to offset the costs without spending cuts but by introducing a capital gains tax on securities. It also suggests increasing the number of federal tax inspectors from about 300 to about 370.

The overhaul of corporate taxes also has a major impact on the fiscal rates of the country’s largely autonomous 26 cantons and on the system of financial payments between rich and less affluent cantons.

Summary of Present Swiss Tax Regimes and Likely Fate as a Result of Swiss Tax Reform

Model

Authority

General Description

Current Tax Features

EU Commission View

OECD

View

Likely Effect of Swiss Tax Reform

Holding Company

Cantonal

Company or Swiss branch of a foreign company engaged in long term holding and administration of certain qualifying participations; no Swiss business activities

Federal participation exemption on certain dividends and capital gains income; cantonal tax exemption; ETR ~0% for income from qualifying investments and 7.8% on other activities

 

Alleged to constitute unlawful state aid because income from certain activities is taxed solely at the federal level

Pursuant to BEPS Action 5 – “Counter Harmful Tax Practices,” identified as potentially harmful

To be abolished

Domiciliary Company

Cantonal

Company limited to the performance of administrative functions in Switzerland

Beneficial tax rates on qualifying participations and certain foreign source income;

ETR ranges from 0%-10% depending upon  type of income

Criticized because it may result in unequal treatment of domestic versus foreign sourced income

Pursuant to BEPS Action 5, identified as potentially harmful

To be abolished

Mixed Company

Cantonal

Corporations primary business is abroad (i.e., 80% or more of income foreign source / 80% or more expenses are paid outside Switzerland)

Beneficial tax rates on qualifying participations and certain foreign income and partial tax relief based on cantonal benefits; ETR 0%-11% depending upon type of income

Concern that home country profits are shifted to Switzerland

Pursuant to BEPS Action 5, identified as potentially harmful

To be abolished

Nidwalden IP Box

Nidwalden Canton only

Available to companies resident in the canton and which own IP

Reduced ETR of 8.84% on net royalty income

IP Boxes in general are suspected by EU Commission of unfairly benefiting mobile businesses without creating corresponding research and development activities; the Commission’s general probe of patent box regimes is ongoing.

 

 

Assuming that patent boxes are ultimately determined to comply with EU rules this regime may survive

Principal Company

Federal

Available to companies that meet either the Domiciliary or Mixed Company status at cantonal level but that also sell through an affiliated company commissionaire or limited risk distributor

Certain income exempt from tax;

ETR can be as low as 0%-9%

 

Pursuant to BEPS Action 5, identified as potentially harmful

To be abolished

Swiss Finance Branch

Federal

Company acting as internal affiliate group “bank” due to the volume of financing including loans, hedging and cash pooling

Certain beneficial deductions are permitted and the company can also apply for Domiciliary or Mixed Company regimes;

ETR 3%-4%

Currently N/A

Certain financial instruments and interest deductions have been identified as problematic in BEPS Action 2 – “Neutralize the effect of hybrid mismatch arrangements” and Action 4 – “Limit Base Erosion via Interest Deductions and Other Financial Payments”

To be abolished

Timing

Timing of implementation and the length of any grandfathering period is not yet certain.  The Swiss government anticipates completing the first draft of the legislation, as well as the consultation process, by the end of 2014; entry into force will occur sometime after 2018, following parliamentary debate and the requisite referendums.  At present, the grandfathering period is estimated to last from 2018-2020.

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Acumum – Legal & Advisory – Malta’s International Law Firm