Value Added Tax
The United Kingdom instituted significant changes to its Value Added Tax (VAT) system effective January 1, 2010. Changes were made to coincide with intra-European Union (EU) changes adopted in 2008 and currently being implemented.

Modifications made to the “place of supply” and “time of supply” rules increase efficiency and introduce a “reverse charge” system, which now captures transactions between EU countries and foreign businesses. Through the reverse charge system, VAT is attributed to the location where the recipient is established and receiving businesses are required to account for VAT by self-reporting. The rules are subject to phase-in procedures.

The change to the system affects every business operating in the United Kingdom and Europe including those whose parent companies are in the United States.

Canadian Unlimited Liability Companies
On January 1, 2010, new anti-hybrid rules introduced as part of the Fifth Protocol to the U.S.-Canada Income Tax Treaty came into effect. These rules deny certain treaty benefits, such as reduced withholding rates on dividends, interest and royalties for transactions involving Canadian Unlimited Liability Companies (ULCs). On March 4, 2010, the Canada Revenue Agency issued a ruling stating that certain transactions regarding ULCs will qualify for the reduced withholding rates specified in the treaty. This ruling does not apply to all transactions involving ULCs but does provide significant planning opportunities for taxpayers to avoid the 25 percent withholding tax in Canada. For more information, see our extended article, Canadian Unlimited Liability Companies.

Please contact your BC Engagement Executive or one of our tax partners below, if you have questions.
 
Ronald J. Manse, CPA
Corporate Tax & Succession Planning

Scott T. Warburton, CPA/PFS
Corporate, Individual & Estate Tax Planning

Gregory F. McNulty III, CPA, JD
Individual Tax & Estate Planning

David L. Groves, CPA
Corporate & International Tax Planning

Daniel R. Riemenschneider, CPA, CMA
Corporate & Individual Tax Planning