Welcome to Europe Focus, bringing you news and opinions from Sovereign’s offices across Europe, covering our range of products and services including Corporate Services, Private Client Services and Retirement Planning.
Gibraltar and UK to negotiate double tax treaty ‘within months’
In a highly positive development, Robert Jenrick, Exchequer Secretary to the UK Treasury, announced on 15 July that Gibraltar and the UK are to negotiate a Double Taxation Agreement (DTA) and aim to sign the deal “within a matter of months”.
The value of this move should not be understated. The DTA will add more substance to Gibraltar’s international status and provide a new, stronger framework that will underpin and encourage trade and investment between Gibraltar and the UK. It will also put Gibraltar on an equal footing with competing jurisdictions that currently enjoy the benefit of a DTA with the UK. >>Read more
Jiu Jitsu becomes first film to use new Cypriot Film Scheme
Jiu Jitsu, a science fiction and martial arts movie starring US actor Nicolas Cage, has become the first international film production to utilise the new Cyprus Film Scheme launched by Invest Cyprus, the government investment promotion agency.
Production companies that opt to film in Cyprus are able to choose between cash rebate of up to 25%-35% on eligible expenditures or a tax credit of up to 35% of the eligible expenditure. They will also benefit from tax discounts on investments made on equipment and infrastructure, and VAT returns on expenditure in scope.
Jiu Jitsu has been approved within the framework of the Cyprus Film Scheme by the Filming Plan Assessment Committee chaired by Invest Cyprus, which is responsible for promoting and developing the audiovisual industry in Cyprus. The committee took two days to review and approve the project. >>Read more
Apple co-founder sets up blockchain-based firm in Malta
Co-founder of Apple Steve Wozniak has set up a new blockchain-based business in Malta. He praised the government’s willingness to provide legal certainty to the blockchain sphere by passing specific legislation, while other governments have been wary of the application of this technology.
According to the firm’s website, EFFORCE will allow contributors to invest in energy efficiency projects and earn profits based on energy savings that are generated, while also doing something positive for the environment. >>Read more
Upper Tax Tribunal finds Jersey SPVs to be non UK-resident
The UK Upper Tax Tribunal overturned, on 5 June 2019, a 2017 decision of the First-tier Tribunal (FTT) in deciding that three special purpose vehicles (SPVs) incorporated in Jersey as part of a tax planning arrangement were not managed and controlled in the UK.
In Development Securities plc & Others v HMRC [2019] UKUT 0169 (TCC), a property development and investment group undertook a tax avoidance scheme in 2004 designed to crystallise latent capital losses. Development Securities plc set up three SPV subsidiaries in Jersey, which were granted call options to acquire shares in property owning companies and certain properties.
The price payable by the Jersey SPVs on exercise of the call options was an amount equal to the historic base cost of the asset plus indexation accrued to that time. This was significantly in excess of current market value. The UK parent company funded the entire acquisition of the assets by subscribing for shares and making a capital contribution. >>Read more
