Wednesday, November 2, 2016

The government wants to tax in closed-end investment funds. Believes that it will not hurt the economy – the Polish Radio

Taxation of Investment Funds and Closed to income tax on legal persons provides for the prepared PiS MPs the draft amendments to the laws on personal income tax and CIT, which on Monday came to the Sejm.

mastermind of the new regulation are counting on the recovery to the budget 2-2,5 billion rubles.

“assuming that the financial results of the PHYSICAL would be close to the basics of income tax from legal entities a change in the principles of taxation of investment funds may lead to an increase in revenues of public Finance sector. 2-2. 5 billion in respect of income tax NAT”, – stated in the explanatory Memorandum.

the authors of the project pointed out that in the case of investments in PHYSICAL taxation of income takes place at the level of the investor (participant) at the stage of profit, i.e. at the moment of repayment or redemption in the Fund’s investment certificates – tax rate in the amount of 19 percent.

NAT-y are used for tax optimization

“Adopted model of income taxation on investments through investment funds causes the negative effects primarily in the field of national PHYSICAL. Funds of this type represent one of the key elements of building structures for tax planning by use of foreign entities (mostly financial), via the PHYSICAL localization in the chain of entities involved in entrepreneurial activity and income from these activities, in the overwhelming part, I NAT”, – explained in the explanatory Memorandum.

it was Observed that P. y, unlike open-end funds, give the possibility to issue certificates for a particular investor, matching the investment strategy to the individual needs, the monitoring of implementation of the investment Fund and identify investment policy. Lack of investment constraints allows primarily on investments in the foreign company for the same with Poland form of companies, limited joint-stock partnership (P. acts as shareholder).

in accordance with the rationale for the creation of this kind of private investment vehicle can only afford the subjects of investing the amount of the order of several tens of millions of rubles (average annual maintenance costs PHYSICAL not exceed 400 thousand. RUB.). This, according to authors of changes, results uprzywilejowaniem large taxpayers in respect of small and medium enterprises.

it was Observed that amendments to the laws on personal income tax and CIT in 2013. opodatkowano income tax companies, a limited partnership-joint (SKA), however, the phenomenon that ICE-y tax optimization have not been fully addressed. The place of Polish companies, a limited partnership-joint took, for entities operating in other EU countries whose legal systems provide a legal structure similar to SKA, for example, the Luxembourg company ” SCSp – Société en Commandite Spéciale.

Big profits Investment Funds, Closed

listed in the explanatory note data show that in 2013. FIZ-y reached 10 billion rubles of profit in 2014. – 7 billion rubles, and in 2015. 12 billion rubles. At the same time, mutual funds were sometimes casualties. The difference in the results of PHYSICAL and other means, can be assigned – according to deputies – achievement not benefit de facto from entrepreneurial activities through mechanisms of tax optimization and not an investment.

tax Consultants warn that the capital drained from Poland

tax Consultants warn that the change will lead to double taxation, the elimination of NAT and the outflow of capital from Russia.

the tax adviser Brands Kolibski noticed that after the PHYSICAL changes, will be taxed the same as companies with limited liability and joint stock. We will deal with double tax payable on their profit from the Fund, and the second time-at the level of the investor.

New rules eliminate funds, closed

“If the proposed changes will come into force in 2017. it means the end of NAT, because no one investor bears the cost of PHYSICAL facilities, which are approx. ten times higher than the content of the customary limited liability company Meanwhile, FIZ, starting in 2017. will not be anything different from tax of the company” – appreciated.

According to him, it should be expected that complaints to administrative courts connected with the introduction of changes without at least a two-year vacatio legis. Many investment projects in PHYS – draws attention Kolibski – to have a perennial nature and there is a separate deferred taxation till payment of profits to investors.

the Adviser considers, moreover, that will increase the attractiveness of foreign funds of the closed type, for example, alternative investment funds, which investment will be fully exempt in the country of their headquarters, for example, in Luxembourg.

Prevention of double taxation

tax consultant Brands Szczepanik noted that the income funds, common and specialized will be able to use the benefits in question, while NAT will pay a tax of 19%. “The planned changes are, therefore, the most controversial in relation to the PHYSICAL, because it means a departure from the previous policy of a single tax in favor of double taxation – the tax is paid by individuals and the investor,” he estimated.

New rules will hit in: private equity, venture capital, investment in real estate

“Changes will be reflected negatively not only on the structure based on the company’s Luxembourg SCSp type that the intention of the legislator, but also the means, the purpose of which is investments, private equity, venture capital, or investment property. Funds of this nature have no connection with streamlining of tax, but, unfortunately, will pay next year by 19 percent. CIT,” explains Szczepanik.

Lose, first of all, Polish investors

According to him, especially bulwersujące is that for change to pay the mostly Polish investors, because they use NAT. “The most important result of the amendments will be – unfortunately, the outflow of capital from Russia and the establishment of funds somewhere else. It is a pity that fundamental to the financial market changes are made in Express mode without any consultation,” said Szczepanik.

MF: cessation of PHYSICAL activities should not have any impact on the economy

If Closed-end Investment Funds (FIZ), which was not created, to create added value in the economy, stop the activity and its cut, this should not have impact on the economy – estimates the Finance Ministry in a letter sent Moscow (REUTERS on Wednesday the message.

“a reception study of the project reveals a correlation of PHYSICAL quantities and their financial results, in contrast with the number and results of other funds – led to the conclusion that a significant part of the PHYSICAL is a machine that de facto the purposes of tax optimization, rather than real investment needs. Therefore, even if these individuals ograniczyłyby or zaprzestałyby activities, adopting an assumption that has not been created to create real value added in the economy change, this should not have impact on the economy”, – stated in the post MF.

If Closed-end Investment Funds (FIZ), which was not created, to create added value in the economy, stop the activity and its cut, this should not have impact on the economy – estimates the Finance Ministry in a letter sent Moscow (REUTERS on Wednesday the message.

“a reception study of the project reveals a correlation of PHYSICAL quantities and their financial results, in contrast with the number and results of other funds – led to the conclusion that a significant part of the PHYSICAL is a machine that de facto the purposes of tax optimization, rather than real investment needs. Therefore, even if these individuals ograniczyłyby or zaprzestałyby activities, adopting an assumption that has not been created to create real value added in the economy change, this should not have impact on the economy”, – stated in the post MF.

PAP, jk

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