As part of our service to clients, we provide information on current tax-related issues through periodic law firm tax services memos. These memos are meant to highlight new legislation, discuss relevant tax cases, analyze revenue rulings or procedures and offer insight on how all these developments may impact law firms and/or their partners.
German Federal Fiscal Court decision dated October 17, 2007 on the subject-to-tax clause in the DTT Italy (82kb)
The German Federal Fiscal Court stated in its decision dated October 17, 2007 that Art. 24 para. 3 letter a of the 1989 double tax treaty between Italy and Ger-many (DTT Italy) contains a subject-to-tax clause. This decision could have an impact on structures established to create "white income" which rely on the interpretation that the 1989 DTT USA (in effect until the end of 2007) does not contain an effective subject-to-tax clause.
Proposed UK legislation will institute yearly £30,000 charge to remittance-based, non-domiciled taxpayers (61kb)
From April 6, 2008, a claim for the remittance basis will need to be made by all UK residents who are eligible to claim and who wish to be taxed on that basis in relation to employment income, investment income and capital gains.
New York State 2007 tax legislation affecting personal service corporations (60kb)
New York has enacted aggressive legislation against attorney-owners of personal service or
S-corporations who are not residents of New York. The LiFTS memo explains this change and how it is likely to be applied.
Changes in French tax treatment of UK limited liability partnerships (LLP) distribution (44kb)
A new ruling from French authorities that signals changes in the tax treatment of distributions for UK limited liability partnerships in France. This memo discusses the scope of the recent ruling that initiatied the chnag and its ramifications for UK firms considering an LLP conversion or those alread in or contemplating alliances with French firms.
Archived LiFTs memos
Reducing withholding on nonresident alien partners by utilizing individual partner losses (93kb)
Treasury regulations now allow, under certain circumstances, for foreign partners to certify deductions and losses to a partnership in order to deduct the withholding tax imposed under Internal Revenue Code Section (IRC Sec.) 1446. Moreover, the regulations now permit partnerships to consider the relevant type of income or gain when determining the highest rate of tax to apply against the effectively connected income.
Updated NYS exemption certificates (15kb)
The New York State Department of Taxation and Finance ("Department") issued new forms that must be completed and signed by each nonresident person or entity claiming exemption from the New York State withholding rules. All existing certificates expire February 1, 2006. The new certificates apply to tax years 2006 & 2007 and will expire on Februrary 1, 2008. Access the corporate and individual forms below.
IRS audits for Section 1441 compliance may affect law firms (53kb)
In 2005, the IRS targeted other taxpayers (e.g., banks, broker dealers, insurance companies, etc.) for Section 1441 audits. Now, we believe that the IRS is starting to focus on law firms. Some proactive planning/defense may be helpful.
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