Europe Focus May 2019

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.

Tax-free pensions between Sweden and Portugal under threat
Portugal and Sweden signed, on 16 May 2019, a Protocol to their existing 2002 double tax treaty. Amongst other changes, an amendment to Article 18 (Pensions) provides that pensions earned in Sweden will be taxable in Sweden if not taxed in Portugal. As a result, Swedish pensioners who are living in Portugal under the non-habitual residents (NHR) regime may lose the double exemption of income tax from which they currently benefit. >> Read more

Sovereign’s market-leading ISIPP: The importance of following the Code
Individuals resident outside the UK have for many years been able to hold their UK pension funds within a UK Self Invested Personal Pension arrangement (SIPP). However, the attractiveness of the SIPP increased markedly in 2017 when HMRC introduced the 25% Overseas Transfer Charge (OTC) on funds transferred from UK-registered pension schemes to qualifying recognised overseas pension schemes (QROPS) outside the UK. >> Read more

Important payroll changes in Malta
Malta introduced some important new changes to its payroll regulations on 1 January 2019. Under Legal Notice 274 of 2018, all employees are to receive itemised payslips from their employers in Malta. >> Read more

UK and Spain sign post-Brexit tax treaty over Gibraltar
Spain’s Foreign Minister Josep Borrell and UK Cabinet Office minister David Lidington signed a treaty on 4 March 2019, covering areas such as harmful tax practices, anti-money laundering regulations and rules to resolve conflicts over tax residency between Spain and Gibraltar. It was the first treaty to be signed by the UK and Spain over Gibraltar since 1713. >> Read more

Crown Dependencies issue further guidance on economic substance
The governments of Jersey, Guernsey and the Isle of Man issued jointly a second guidance to provide further assistance on the scope and application of the economic substance legislation for companies in the Crown Dependencies. The legislation, which applies to all companies resident for tax purposes in the Crown Dependencies, was approved by the respective parliaments in December 2018 and is effective for accounting periods commencing on or after 1 January 2019. >> Read more

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