international tax planning for trading companies
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NEWCO © All rights reserved 2014
International tax planning for trading companies
We know how
Topics
1. Concept of trading
2. Key factors
Credibility and security Transparency Human resources and know-how Operational costs and infrastructures Tax regime
3. Trading in Madeira
4. Trading in Malta
5. NEWCO
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1. Concept of Trading
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Concept of international trading
• Purchase and sale of goods or provision of services involving more than one country:
ü Import and export operations or operations within the EU ü Triangular operations or those involving stock management ü With or without manufacturing ü Provision of services at the international level
• Operations with related entities vs operations with third parties
• Broad concept of trading: passive income vs active income
Concept of trading
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2. Key factors
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Key factors | Credibility and security
• Efficient and pro-business legal system
• Social and political stability
• Security
• Freedom of establishment and capital control policies
• Sector specific licencing and regulations
• Labour law
• European directives and compliance with EU law
• Consistency in the legislation and granted benefits
• Possibility of obtaining rulings
Key factors
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Key factors | Transparency
• Black lists
• Compliance with OECD criteria on transparency and exchange of information
Key factors
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Key factors | Human resources and know how
• Availability of qualified human resources
• Languages
• University and R&D resources
• International business environment
• Capability and capacity to import know-how
• Experienced and efficient professional services providers
• Soundness, sophistication and efficiency of the financial system
• Culture
Key factors
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Key factors | Operational costs and infrastructures
• Cost of wages and other labour costs
• Cost of supplies and external services
• Cost of living (real estate, food, transportation and so on...)
• Road network
• Telecommunications
• Air and maritime transportation
• Currency and exchange costs
• Fiscal costs
Key factors
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Key factors | Tax regime
• Corporate income tax
• VAT and other indirect taxes
• Withholding taxes
• Double taxation agreements
• Personal taxation
• Social security
• Taxation of expatriates
• Exit taxes
Key factors
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Key factors | Tax regime
• Efficiency and attitude of tax administration
• Anti-abuse rules
ü Tax havens
ü Transfer prices
ü GAAR
ü Other
Key factors
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3. Trading in Madeira
Trading in Madeira
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Trading in Madeira
Trading in Madeira
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Madeira companies benefit from the following tax regime: • 5% corporate income tax rate (IRC) • Withholding tax exemption • Tax credit for international double taxation • Capital gains tax exemption • Exemption from local taxes • Exemption from stamp duty • Exemption from taxes on real estate (IMT and IMI) • Exemption from notary and registration fees
Trading in Madeira | Tax regime
Trading in Madeira
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Trading in Madeira | general requirements
• Must be licensed to operate within the scope of the IBC by the regional Government of Madeira
• Tax exemption for payments to non-residents in Portugal or other entities operating within the scope of the IBC
• Reduced corporate income tax rate on income obtained with non-residents in Portugal or with other entities operating within the scope of the IBC
• Exemption from Real Estate Transfer Tax (IMT) and Municipal Property Tax (IMI) only for property located in Madeira used for the company’s business
Trading in Madeira
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Trading in Madeira| substance requirements
The company must have at least one paid employee or director (full-
time or part-time) on its payroll
If the company employs fewer than 6 employees (or directors),
during the first two years of activity, it must make a minimum
investment of €75 000 in the acquisition of tangible or intangible
fixed assets
NOTE:
- Requirement 1 must be fulfilled within 6 months.
- Requirement 2 must be fulfilled within 2 years.
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Trading in Madeira
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Trading in Madeira| ceilings
Trading in Madeira
Tax benefits have limits, depending on the number of employees (or directors) under the above referred conditions: If taxable income exceeds the limit, the excess will be taxed at 23% (general regime in Madeira)
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Double taxation treaties
Trading in Madeira
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Madeira offers investors many other advantages: • Advance rulings
• Non-resident company branch offices
• Redomiciliation of companies
• Transfer pricing
• Special regime for the Industrial Free Trade Zone
• Special regime for non-habitual residents
• Golden visa
Trading in Madeira| other advantages
Trading in Madeira
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Trading in Madeira
Trading in Madeira
4. Trading in Malta
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Trading in Malta
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Trading in Malta
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Trading in Malta
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Trading in Malta | tax regime
Trading in Malta
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Trading in Malta | Effective tax rates
Trading in Malta
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Double taxation treaties
Trading in Malta
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Malta’s tax regime offers many other advantages: • Withholding tax exemption on the payment of royalties, interest, dividends or proceeds of liquidation
• Exemption of Capital Gains tax
• Flexible and straightforward anti-avoidance rules
• Advance rulings
• Possibility to redomicile companies from and to Malta
Trading in Malta| other advantages
Trading in Malta
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Malta’s tax regime offers many other advantages: • The share capital of the companies can be denominated in any convertible currency
• Flexibility in the choice of the tax year
• Malta accounting standards based on IFRS
• Stamp duty exemption
• Group tax relief
• Malta has no capital tax or wealth tax
Trading in Malta| other advantages
Trading in Malta
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Trading in Malta
Trading in Malta
|1| Corporate income tax
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NEWCO
• Full service corporate service provider in Madeira and Malta
• 23 years of experience
• Strategic values: Know-how, customer satisfaction, integrity, service
excellence and innovation
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NEWCO
NEWCO ensures that its clients receive all the necessary support for effectively establishing their companies in Madeira and Malta, namely with:
• Company incorporation and registration
• Supply of the respective registered office and related services
• companies’ management and administration
• Tax compliance, legal, financial, tax and accounting assistance, consultancy and assistance in the creation of investment projects
• Services with the purpose to facilitate the setting-up in Madeira and Malta (offices, equipment, human resources…)
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NEWCO
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Consider that NEWCO has a wide knowledge of all issues related to their jurisdiction
87% of clients
Recognize that NEWCO offers leading services in its sector of activity
93% of clients
State that they are highly likely to recommending our company to their peers and partners
“Honest and Professional.” Giuseppe Luongo President YOUTHSTREAM GROUP Monaco
“I consider the understanding of customer needs and willingness to accommodate and find appropriate solutions the key differentiator of NEWCO service.”
Luís Franco Vice-President, SurveyMonkey Palo Alto, EUA
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Título
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THANK YOU.
Frederico Gouveia e Silva frederico.silva@newco.pro skype frederico.silva.newco M. (+351) 967 819 308
www.newco.pro
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