PwC Financial Services Tax News 2010

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2010  
December Special Editon 2011 Tax Reform Proposal Impact on the Financial Services Industry [PDF 105KB]
The 2011 tax reform proposals submitted by the Cabinet Office’s Tax Commission, known as Taiko, (“2011 Tax Reform Proposal”) were released on December 16, 2010, when it was approved by the Cabinet. These proposals will now be submitted to the lower house of Parliament (Diet) for consideration and review. The 2011 Tax Reform Proposal is not law and may change upon public and parliamentary review and discussion.

New Saudi Arabia/Japan Tax Treaty [PDF 156KB]
On November 15, 2010, the Ministry of Finance (Zaimusho) announced that the Kingdom of Saudi Arabia (“Saudi Arabia”) and Japan have signed the Convention between the Government of Japan and the Government of the Kingdom of Saudi Arabia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (“Saudi Arabia Treaty”).
This Newsletter outlines key provisions of the Saudi Arabia Treaty.
November New Hong Kong/Japan Tax Agreement [PDF 156KB]
On November 9, 2011 the Ministry of Finance announced that the Hong Kong Treaty had been signed. At the time of this announcement, the full text of the Hong Kong Treaty was released.

This Newsletter provides a general outline of key provisions of the Hong Kong Treaty, and investors are advised to seek detailed advice when applying or interpreting the provisions of the Hong Kong Treaty to their particular circumstances.
October EU Proposals on Taxation of the Financial Sector [PDF 144KB]
On October 7, 2010, the European Commission (EC) published a communication to the European Parliament and other European Union bodies (together, the EU) on proposals for the taxation of financial services in a paper entitled Taxation of the Financial Sector (EU paper).
The EU paper considers the prospects for a Financial Transactions Tax (FTT) and a Financial Activities Tax (FAT). The EU has sought to play a leading role in efforts to form a global approach for new levies and taxes on financial institutions, and this EU paper is its most recent contribution.
September Tax Treaties/Agreements signed by Japan since January, 2010 [PDF 173KB]
As of August 2010, Japan has concluded 48 tax treaties/agreements applicable to 59 countries (including Russia and other states of the former Soviet Union).
This Newsletter outlines the tax treaties/agreements signed by Japan since January, 2010.

Special Edition Foreign Account Tax Compliance Act(“FATCA”) - Outline of Notice 2010-60 issued by the IRS [PDF 74KB]
In August 2010, we issued a newsletter with regard to Notice 2010-60 issued by the IRS. The Notice provides preliminary guidance regarding priority issues involving the FATCA implementation.
August Special Edition Outline of FSA’s FY 2011 tax reform submissions [PDF 117KB]
The Financial Services Agency announced its submission for the fiscal year 2011 tax reform proposals on its website on August 30, 2010.

Special Edition Foreign Account Tax Compliance Act (“FATCA”) Update [PDF 73KB]
On August 27, 2010, the IRS issued Notice 2010-60, which provides preliminary guidance regarding the implementation of information reporting and withholding tax under FATCA. (Please refer to our Special Edition Newsletter issued in March 2010 for the background information regarding FATCA.)

2010 Tax Reform: Special Tax Concessions for Small and Medium Sized Entities [PDF 181KB]
The 2010 tax reforms were promulgated on March 31, 2010 (“2010 Tax Reforms”).
This Newsletter provides an introduction to the amendments under the 2010 Tax Reforms which relate to the special tax concessions for small and medium sized entities.
July 2010 Tax Reform:Amendments related to Consumption Tax [PDF 176KB]
The 2010 tax reforms were promulgated on March 31, 2010 (“2010 Tax Reforms”).
This Newsletter provides an introduction to the amendments under the 2010 Tax Reforms which relate to the adjustment of input consumption tax credits on adjustable fixed assets.
June New Protocol amending the Japan-Switzerland Tax Treaty [PDF 160KB]
The Protocol amending the Convention between Japan and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income was signed on May 21, 2010.
This Newsletter focuses on the headline amendments in the Protocol.
May New Kuwait/Japan Tax Treaty [PDF 155KB]
On February 17, 2010, the Ministry of Finance announced that Kuwait and Japan have signed the Convention between Japan and the State of Kuwait for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.
This Newsletter outlines key provisions of the Kuwait Treaty.
April 2010 Tax Reforms:Major Amendments Related to Tokutei Mokuteki Kaisha [PDF 168KB]
The 2010 tax reforms were promulgated on March 31, 2010. Under the 2010 tax reforms, the dividend deductibility requirements and preferential registration tax rates for a tokutei mokuteki kaisha (“TMK”) regulated under the Special Taxation Measures Law have been reformed. Also, under the 2010 Tax Reforms, a tax exemption for interest on book-entry corporate bonds (Furikae Shasai) was introduced. This exemption also applies to book-entry corporate bonds issued by TMKs.
This Newsletter provides an introduction to the major amendments under the 2010 Tax Reforms which relate to TMKs.

Special Edition IMF Interim Report for the G-20 – “A Fair and Substantial Contribution by the Financial Sector” – new taxes for the financial sector [PDF 82KB]
The Interim Report released on April 16, 2010 by the IMF responds to the earlier request of the G-20 for the IMF to prepare a Report on the range of options available to countries on how the financial sector could make a contribution towards paying for government interventions to repair the banking system.
This Newsletter outlines the key findings of the Report and provides comment on some of the important points emerging from the findings.

Special Edition New Hong Kong/Japan Tax Agreement [PDF 142KB]
On March 31, 2010, the Ministry of Finance announced that the Hong Kong Special Administrative Region of the People's Republic of China and Japan had reached an agreement in principle for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
March Valuation of debt in a debt-to-equity swap following a corporate restructuring [PDF 158KB]
A debt–to-equity swap has become one of the more common methods used when restructuring an insolvent corporation. However, the uncertainty of how to mark-to-market the loans and other receivables contributed for Japanese taxation purposes often did raise some uncertainty in practice as to the taxation consequences for both debtors and creditors.

Special Edition Foreign Account Tax Compliance Act (“FATCA”) Update [PDF 87KB]
On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment Act (“Act”). The Act includes provisions similar to those in the proposed Foreign Account Tax Compliance Act (“FATCA”), which was introduced in November 2009.
February Draft Bill for 2010 Japanese Tax Reforms: Taxation of Corporate Securities for Foreign Investors [PDF 157KB]
On February 5, 2010, a draft bill for amending taxation laws was submitted to the Japanese Parliament. This Newsletter provides a summary of the amendment for exemption from taxation on interest on corporate securities received by foreign investors; introduced in order to promote investments in Japanese capital markets.
January Impact on Real Estate Funds Under 2010 Tax Reform Proposal and the New Dutch Japan Tax Treaty [PDF 116KB]
This Newsletter provides an introduction to issues arising from the 2010 Tax Reform Proposal and the New Treaty as well as their potential impact on real estate funds, although all details have not yet been released.

Special Edition Financial Crisis Responsibility Fee- Obama’s proposals [PDF 35KB]
On January 14, 2010 President Obama announced his intention to introduce a series of measures designed to impose an annual levy on the largest and most highly leveraged Wall Street firms, including not only banks but also insurers and other financial services firms.