In June 2018, the European Union (“EU”) issued a scoping paper highlighting how economic substance issues affect countries, taking into account local tax policies and whether they meet EU standards for good governance and fair taxation. In November 2018, the OECD BEPS Inclusive Framework agreed to restore the substantial activities factor to no or only nominal tax jurisdictions, and jointly developed guidelines on how to interpret these factors. Effective from 1 January 2019, certain offshore jurisdictions such as Cayman Islands, the British Virgin Islands and Bermuda, have introduced new Economic Substance Laws. The entities incorporated in these offshore jurisdictions (“relevant entities”) are potentially within the scope and required to meet the economic substance requirements if they carry on the relevant activities including banking, insurance, fund management, distribution and service centre, shipping, headquarter business and intellectual property business activities. Economic Substance Laws of these offshore jurisdictions had been enacted in response to the work of EU and OECD on fair taxation. What would be the profits tax and tax audit implications of the entities under this new Economic Substance Laws? Would this new Economic Substance Laws bring more controversies or settlement of tax issues?
This workshop aims to provide you an overview of the profits tax and tax audit implications of the entities under the new Economic Substance Laws and the controversies or settlement of tax issues under this Laws.
Key topics covered:
- The overview of the new Economic Substance Laws
- The impact of the new Economic Substance Laws on the relevant entities in the offshore jurisdictions
- Obligations of the relevant entities within the scope of new Economic Substance Laws and consequences of non-compliance
Trainer profile:
Wilson Cheng, Partner, Business Tax Services, EY
Wilson is a Tax Partner in Hong Kong, with 20 years of Hong Kong corporate tax and transaction tax experiences. He provides tax advisory and compliance services to conglomerates, listed companies as well as US and European-based multinational corporations. Wilson has diverse industry experience, including retail and consumer products, food and beverage, technology, real estate, entertainment, media and telecommunications sectors. Wilson regularly contributes tax technical articles to newspapers and technical journals and is a frequent speaker at tax seminars organized by various professional bodies in Hong Kong.
