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Tag Archive for worldwide tax blog

The Unknown Tax Comic – Part 9

♦ America is the land of opportunity. Everybody can become a taxpayer.

♦ It’s hard to believe America was founded to avoid high taxation.

♦ Golf is a lot like taxes. You drive hard to get to the green and then wind up in the hole.

♦ The fourth of July, 1776 – that’s when we declared our freedom from unfair British taxation. Then, in 1777, we started our own system of unfair taxation.

♦ When you do a good deed, get a receipt in case Heaven is like the IRS.

♦ The best things in life are free – plus tax, of course. Read more

REITs – A South African perspective as an OTC investment option

iStock_ Africa Money and Flag XSmallReal Estate Investment Trusts or REITs is a well known internationally known appropriate business structure yet South Africa only adopted its tax law as of April 1st, 2013 and its stock exchange listed or publicly listed trading rules to accommodate REIT’s as of May 1st, 2013.

Since then many property groups not only converted to a listed REIT but also restructured their balance sheets to remove the debt linked to a unit or a share. Now, on September 6th, the first American Depositry Receipt (ADR) status was granted to a South African listed REIT. One ADR unit equals 10 REIT units on the Johannesburg Stock Exchange. Despite the ZA Rand being at a 3 week high, the more recent currency exchange is circa R10=1U$D.

Real Estate Investment Trusts (REIT)

REIT’s are tax transparent or tax through flow investment vehicles that invest in and derive their income from real estate properties and mortgage, without necessarily paying tax on their trade result. To qualify for the South African REIT dispensation, a the REIT (either a company or a trust) must be tax resident in South Africa and be listed as an REIT in terms of the JSE (Johannesburg Stock Exchange) listing requirements.

REIT profits are distributed as tax deductible expenses (effectively pre-tax income) which is then received and taxed in the investors’ hands as taxable dividend income. As of 1 January 2014 the SA dividend withholding tax at 15% or the treaty governed rate where the investor is resident in a treaty country, will apply to nonresident investors. Read more

“B” is for Bad Debt Expense

“B” is for bad debt expense.  As the name suggests, it is a debt that goes bad because the party who owes the money is unable to pay.  It is similar to a stock investment that goes bad because the company goes bankrupt.  If you buy a stock for $10 a share hoping the company will be profitable and you will be able to get your money back, but if they go bankrupt, the stock is worth $0.

Companies have bad debt expense when their customers can’t pay for the goods they have purchased.  For tax purposes the bad debt expense can be claimed when the receivable is written off.  Often times companies use an allowance to estimate the amount of bad debt that they will incur.  Maybe the estimate is 5% of accounts receivable.  That can be helpful for understanding the true financial position of a company, but for tax purposes, creating an estimate of the bad debts is not deductible.  It is only a tax deduction when the specific receivable is written off and you are not on the cash basis.

Individuals have a few different types of bad debt expense.  If I loan my friend $100 and then my friend is unable to pay me back I have lost my $100, but that is not a tax deduction.  That is a personal transaction which won’t affect the tax return.  If you are making investments that generate capital gains, then a bad debt would generate a capital loss.  If instead you are operating more like a bank and you are in the business of lending money, the investments would generate ordinary income (and self-employment taxes) so a bad debt expense would be an ordinary tax deduction.  When in doubt remember this one thing: the character of the bad debt expense is going to match the character of the income.

Taxes A to Z – still randomly meandering through tax topics, but at least for 26 posts in  alphabetical order.

Saving And Budgeting Is A Science

Saving money can be a tricky proposition for many people.  The first step to saving is creating a budget  –   a detailed budget.  This is not a guestimate based on your recollection of prior month expenses; this needs to be an exact science.  First figure out your monthly income and then take out the taxes (payroll and income taxes).  If your withholding doesn’t cover your tax liability each year, consider changing your withholding so the monthly withholding covers all your taxes for the year.  From there I like to set aside savings.  Retirement may be 40 years in the future or it might be just around the corner, but saving for retirement is always one of my top priorities.

The tax code allows you some choices when saving for retirement.  Most employers offer a 401(k) plan and at least a partial match of your contributions.  If the employer is willing to match 6% of your salary, then the first place to save is 6% of your salary.  If you don’t, you are leaving money on the table right off the bat.  Nowadays many employees can choose between the Roth and traditional 401(k)s  –   the Roth/traditional works like the IRAs.  For a traditional you get a tax deduction when you put the money in, but it is taxed when you take it out in retirement.  For a Roth, the money is not deductible when it goes in and then it is not taxed when it comes out in retirement.  I prefer the Roth for most people, but to each their own depending upon the circumstances.  Keep in mind that you can make both a 401(k) and an IRA contribution.  Sometimes people think it is one or the other, but you can do both. Read more

2013 Finance Act – Part 10 – Irish Tax System

This is the final post in a ten-part Worldwide Tax Blog Series.  Due to the amount of changes it is not possible to detail each individual provision so I decided to focus on a cross section of amendments to give a general overview.  The legislative provisions I have selected will have an affect on most if not all Irish individuals whether resident and domiciled or resident and non-domiciled; employed or unemployed; retired or still working; self employed or PAYE workers; corporate structures or individuals, etc.

Finance Act 2013 contains the legislative provisions for a number of changes to the Irish tax system under all the main tax heads including Income Tax, Corporation Tax, Capital Gains Tax, Excise, Value Added Tax, Stamp Duty and Capital Acquisitions Tax.

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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10. STAMP DUTY

Finance Act 2013 introduced anti-avoidance measures to target “resting in contract” and other structures used in relation to certain land transactions.

The main points are as follows: Read more

2013 Finance Act – Part 9 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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9. CLOSE COMPANY SURCHARGE

Finance Act 2013 increases the de minimis amount of undistributed investment and rental income from €635 to €2,000 which may be retained by a Close Company without giving rise to a surcharge.

A similar amendment is being made to increase the de minimis amount in respect of the surcharge on undistributed trading or professional income of certain service companies.

The aim of these changes is to improve cash flow of close companies by increasing the amount a company can retain for working capital purposes without incurring a surcharge.  Although it’s difficult to imagine how undistributed income of €2,000 could possibly make that much of a difference.

2013 Finance Act – Part 8 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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8. FATCA – US FOREIGN ACCOUNT TAX COMPLIANCE ACT

The US Foreign Account Tax Compliance Act 2010 comes into effect in 2014.

The aim of this legislation is to ensure that US citizens pay US tax on income arising from overseas investments.

The Finance Act 2013 introduced legislation which allows for the Irish Revenue Commissioners to make regulations for the purpose of implementing this Ireland US agreement. 

The regulations will require that certain financial institutions register and provide a Read more

2013 Finance Act – Part 4 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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4. TAXATION OF CERTAIN SOCIAL WELFARE BENEFITS

From 1st July 2013 certain Social Welfare Benefits not previously chargeable to Income Tax will come into the Income Tax net including:

1.  Maternity Benefit
2.  Adoptive Benefit
3.  Health & Safety Benefit

Revenue will now be permitted to amend tax credit certificates and standard rate cut off points to collect the tax arising on these benefits. Read more

2013 Finance Act – Part 2 – Irish Tax System

Finance Act 2013 contains the legislative provisions for a number of changes to the Irish tax system under all the main tax heads including Income Tax, Corporation Tax, Capital Gains Tax, Excise, Value Added Tax, Stamp Duty and Capital Acquisitions Tax.

Due to the amount of changes it is not possible to detail each individual provision so I decided to focus on a cross section of amendments to give a general overview.  The legislative provisions I have selected will have an affect on most if not all Irish individuals whether resident and domiciled or resident and non-domiciled; employed or unemployed; retired or still working; self employed or PAYE workers; corporate structures or individuals, etc.  This is a ten-part Worldwide Tax Blog Series:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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2. THE REMITTANCE BASIS FOR INCOME TAX

This legislative amendment was introduced as an anti-avoidance measure to ensure that an individual who is resident and/or ordinarily resident in Ireland but non-domiciled cannot avoid paying the correct tax on the remittance of income into Ireland. Read more

Social Media Secrets and Strategies – For Tax Professionals Only (#2)

Do you know blogging more than five times a week creates seven times more search traffic for your tax brand? Blogging is a proven business model, it works! The best tax bloggers write every day and that is how they build very successful tax brands nationally and internationally. You can easily attract a lot of attention by blogging about your area of tax expertise. The key to blogging about your tax expertise is consistency and quality content. Tax Blogs are a valuable asset to develop as breakthrough ideas emerge that innovate the tax world.

Now is the time to start a Tax Blog and attract followers who build trust with you through your writing.  Tax Professionals have very interesting professional life experiences they can share that will help so many save money and reduce their tax burden. People want to hear what you have to say, they also want you to break it down into a language they can understand. Sharing your professional experiences enables you to develop new relationships and that is why creating a Tax Blog is so important for you. Now is the time to start your tax blog and present your views on your area of tax expertise. TaxConnections offers its members free blog space and then they promote you and your tax blog globally. The best place to start is by being listed in TaxConnections Worldwide Directory of Tax Professionals which costs  $19.95 a month. This site makes tax professionals visible to the world by promoting tax professionals and their tax expertise.  It is the perfect service for anyone who needs help building a client base or brand visibility for corporate tax professionals.  One of the many benefits of membership on the site is a special area for you to post your blog on the Worldwide Tax Blogs at TaxConnections.  You can join at http://www.taxconnections.com and then request your free blog space at taxblog@taxconnections.com.

Tax Bloggers Increase Audience on TaxConnections.com

Tax Bloggers now have a site dedicated to them on TaxConnections Worldwide Tax Blogs.  The idea of Worldwide Tax Blogs was created after spending time moving from one blog space to another to read the opinions of my favorite tax bloggers. What I discovered is there is an extraordinarily talented community of tax bloggers who may not yet have the attention of main stream media and would benefit from the Worldwide Tax Blogs platform. Tax professionals who want to blog can now do so easily and help drive traffic to all of their tax blog content by working together to attract readers to one tax blog platform.

TaxConnections provides tax bloggers with one site location they can publish tax content, provide tax opinions, and increase the number of people reading their posts in order to grow their audience. The opportunity to promote tax bloggers and their opinions on TaxConnections is very exciting. Tax bloggers can now post their tax blogs by going to http://taxconnections.com/taxblog/.

Go to www.taxconnections.com and discover the newest tax media platform called the interactive Worldwide Directory of Tax Professionals.