December 04, 2024

The Evolution of Tax Enforcement in Switzerland

December 04, 2024/ Ruchelman P.L.L.C.

As in the rest of Europe, Swiss tax authorities have ramped up examinations of cross border transactions of Swiss residents and cooperation with tax authorities in other countries. Examinations of Swiss residents focus on the abuse of offshore structures and increases in the number of tax examinations and aggressiveness of tax authorities. Regarding Swiss holding companies owned by nonresidents, Switzerland now has an active exchange of information program that provides administrative assistance within the framework of the more than 100 double tax treaties. Thierry Boitelle, the Founding Member of Boitelle Tax Sàrl, in Geneva, and his colleagues Sarah Meriguet and Marine Antunes, Senior Associates at the firm, explain all.

March 28, 2023

Teleworking From Bulgaria: Different Arrangements Have Different Consequences

March 28, 2023/ Ruchelman P.L.L.C.

Bulgaria has benefitted as a preferred remote working location for digital businesses. While it does not have a digital nomad visa for work, it has a cadre of skilled individuals working as computer engineers available to be employed by foreign based multinationals. In their article, Viara M. Todorova, a Partner of Djingov, Gouginski, Kyutchukov & Velichkov, Sofia, and Ivan Punev, a Senior Associate at Djingov, Gouginski, Kyutchukov & Velichkov, Sofia explain the specific tax issues that face a foreign company looking to engage local talent to carry on functions from Bulgaria. Several different arrangements are common, and each has its own set of employment tax obligations for the service provider and the company. Adding to the mix, the threshold of activity in Bulgaria that creates a P.E. is relatively low and the choice of arrangement can affect the outcome.

January 30, 2023

Tax 101: Is Crypto Growing Up?

January 30, 2023/ Ruchelman P.L.L.C.

Crypto assets are rarely out of the news these days, and the last months have been no exception. The well-publicized troubles of the FTX exchange have made crypto headline news again. Depending on one’s point of view, The FTX bankruptcy will underscore everything that some people think about the subject matter. Some will say the FTX bankruptcy is exactly what was to be expected and confirms the view that crypto assets are some sort of Ponzi scheme. Others will say this serves to justify the need for much greater regulation. And still others will point to the rise in the power of the exchanges, bemoaning that crypto was created to avoid powerful monopolies. Nonetheless, crypto and its technology are here to stay in the financial world. In his Tax 101 article, Gary Ashford, a Tax Partner (non-lawyer) of attorneys Harbottle & Lewis LLP, London, explains that (i) regulation of exchanges and service providers and (ii) taxation on a global basis are in the works. Will they effectively bring normalcy to a “wild west” asset? Readers should stay tuned.

March 30, 2022

Expanded I.R.S. Reporting Obligations for Digital Assets

March 30, 2022/ Ruchelman P.L.L.C.

If DeFi is the Ying in the crypto world, new I.R.S. reporting obligations are the Yang. I.R.S. reporting requirements for cryptocurrency and other digital assets have been substantially expanded, and as a result, are expected to have a significant impact on the wide range of businesses and individuals to which they apply. Among other things, information reporting requirements for certain brokers now include digital assets, and digital assets valued at more than $10,000 are treated as “cash.” Lawrence S. Feld, a New York attorney whose practice concentrates on Federal and State criminal and civil tax controversies, explains all.

March 30, 2022

The Door to a New World: Decentralized Finance (DeFi)

March 30, 2022/ Ruchelman P.L.L.C.

1. The world of crypto is fast-moving. An exciting development in this space is Decentralized Finance (“DeFi”), which entered the scene in March 2020. Its use has exploded ever since. The term refers to the offering of traditional financial services not by centralized players such as banks, insurance companies, and exchanges, but through smart contracts running on blockchains. Niklas Schmidt, a partner of the Vienna office of Wolf Theiss and leader of the firm-wide tax team, and Lioba Mueller, a Rechtsreferendarin at the Regional Court of Aachen and PhD student at the University of Bonn, Germany, explain the ups and downs of this relatively new financing vehicle.

March 20, 2020

Foreign Tokens – U.S. Tax Characterization: Questions and Discussion

March 20, 2020/ Ruchelman P.L.L.C.

· Initial coin offerings (“I.C.O.’s”) provide blockchain-based companies with a new way to raise capital. Companies in the U.S. and abroad have been raising capital using blockchain technology since 2016. As this means of raising funds gained popularity, the S.E.C. ruled that some tokens are securities, making U.S. I.C.O.’s subject to Federal securities laws. Tax questions also arose, but not all questions have been addressed by the I.R.S. Specifically, no guidance exists with respect to the proper characterization of a token, and as a result, U.S. investors are not assured of the tax consequences of their investments. Galia Antebi and Andreas A. Apostolides guide the reader through the issues, identify the problems, and suggest solutions where appropriate.

November 20, 2019

I.R.S. Placing Watchdog Agents in International Financial Centers

November 20, 2019/ Ruchelman P.L.L.C.

In 2015, approximately 21 million people globally owned virtual currencies, but the I.R.S. estimates less than 900 people reported holding virtual currencies in U.S. tax returns. Now, the I.R.S. has adopted measures to ferret out crypto tax cheats. Whether modifying tax forms, cooperating with tax authorities through the J-5, or most recently stationing agents in international financial centers, the I.R.S. is serious in its attempts to track and tax cryptocurrency transactions. In their article, Stanley C. Ruchelman and Lisa Singh, an extern at Ruchelman P.L.L.C. and a student at New York Law School, look at recent global efforts.

September 30, 2019

Cryptocurrencies – Latest Developments on Either Side of the Atlantic and Beyond

September 30, 2019/ Ruchelman P.L.L.C.

The issues raised by virtual currency and the underlying blockchain technology affect tax law, transfer pricing, regulatory rules, civil law accounting rules, and valuation. The issues in all these areas share one common goal: protection of users and investors through the prevention of fraud and abuse. Beate Erwin explains recent guidance by the Financial Action Task Force in this area and the likely effect of the guidance on national laws around the world.

July 30, 2018

Blockchain 101

July 30, 2018/ Ruchelman P.L.L.C.

Blockchain has been in the spotlight since early 2017, mostly due to the 2017 surge in cryptocurrency values and the rise of initial coin offerings (“I.C.O.’s”). Many legal advisors have clients who use or wish to use blockchain in their businesses, and yet, the actual technology is often not discussed in the legal field. In a series of Q&A’s, Fanny Karaman and Galia Antebi explain the rationale behind blockchain technology and reasons for its reliability. Because blockchain is a decentralized system with inherent proof of work built into the program, it can eliminate the need for intermediaries, such as banks, lawyers, and brokers. Advisers should be aware of the benefits of the technology, as well as its potential for disrupting the legal landscape.

July 30, 2018

Insights Vol. 5 No. 6: Updates & Other Tidbits

July 30, 2018/ Ruchelman P.L.L.C.

This month, Neha Rastogi and Nina Krauthamer look at several interesting updates and tidbits, including (i) an I.R.S. notice that addresses legislative workarounds to limitations on deductions for state and local tax payments effective in 2018, (ii) new rules under Code §83(i), which allow a qualified employee to defer income attributable to stock received in connection with the exercise of an option or the settlement of a restricted stock unit (“R.S.U.”), and (iii) a call for guidance regarding cryptocurrency accounting.

June 14, 2018

Vol. 5 No. 5: Updates and Other Tidbits

June 14, 2018/ Ruchelman P.L.L.C.

This month, Rusudan Shervashidze and Nina Krauthamer look at several interesting updates and tidbits, including (i) limited relief for transition tax, (ii) a new twist to phishing that involves fake I.R.S. calls, (iii) another twist on phony correspondence requesting W-8BEN information that is used to obtain persona information often used by banks to confirm identities of customers, and (iv) new FinCEN money transmitter rules that apply to I.C.O.’s.

December 27, 2017

Tax 101: Virtual Currency – What Is It? And How Is It Taxed?

December 27, 2017/ Web Admin

With the recent launch of Bitcoin futures trading, this once obscure asset class may soon become a mainstream investment. Alev Fanny Karaman delves into the details of virtual currency in the U.S. context. She explains the blockchain computations that make Bitcoin and other cryptocurrencies attractive to investors and the U.S. tax treatment and reporting obligations of virtual currency holders.