Hundreds of investors In Britain involved in tax avoidance schemes face paying huge sums

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The aggressive tax avoidance scheme the supreme court is refusing a final appeal was based on Disney film rights. Film partnerships became popular as a means of avoiding tax after Gordon Brown set up tax breaks for the industry in 2005. In 2012 officials launched a push to close such schemes in the belief that some had stepped over the line into aggressive tax avoidance.

Eclipse Film Partners 35 is one of the film partnerships accused by HM Revenue & Customs of using industry exemptions to help its members avoid paying their fair share of tax. Sir Alex Ferguson, the former Manchester United manager, and Sven-Göran Eriksson, the former England manager, were among a host of City figures and celebrities in Eclipse 35, a £1 billion film investment scheme with Disney that created tax relief worth £117 million.

The Eclipse 35 scheme, who has another 289 members besides Sir Alex Ferguson and Sven Goran Eriksson, denies using distribution rights to Disney films Enchanted and Underdog to generate tax relief. However, The Telegraph reports otherwise. According to this source, investors in Eclipse 35 put in $50m towards buying distribution rights to Enchanted and Underdog in 2007. The purchase fund was then topped up by a Barclays loan facility that contributed another £790m. On the same day, the partnership sub-leased the rights on to another arm of Disney, thereby generating tax relief.

Investors in Eclipse Film Partners 35 were told that same year that they were not entitled to £117m in tax relief that the scheme had been intended to provide.

Eclipse 35 had already lost its case at the court of appeal, which ruled in February last year that the scheme amounted to tax avoidance on the grounds that there was no trade being carried out.

The supreme court’s refusal last month of a final appeal could have huge ramifications for similar schemes. The Financial Times reported last year that the scheme was one of over 30 film financing partnerships promoted by the Future Capital Partners firm in the mid-2000s. Hundreds of wealthy investors are now facing having to pay out huge sums after the Supreme Court finally closed the door on a seven-year battle with Revenue & Customs.

 

Duties of a Company Director of a Spanish Limited Company (Sociedad Limitada – SL)

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The Sociedad Limitada (SL), the Spanish name for Limited Liability Company  (LLC), is the most common form of company in Spain and is similar to a limited company in other countries.  Like any form of company, a Sociedad Limitada (SL) is aimed at performing all sorts of commercial activities subject to commercial law. It is composed of a limited number of partners, it requires a minimum of capital, and the liability of the owners is also limited.

To incorporate a Sociedad Limitada in Spain the appointment of a company director is required.  It can either be a Sole Director, Joint Directors, Joint and Several Directors, or a Board of Directors composed by a minimum of three members.

This article provides an overview of the implications and duties of a company Director of a Sociedad Limitada.
Duties of a company director

 

A company director manages and runs the day-to-day decisions of the company and has full authority to represent the company in all activities related to the company’s corporate purpose.  This authority cannot be limited as regards to third parties.

 

In the case of the joint directors, each director can act independently and represent the company. However, in the case of joint and several directors, all members must agree on all acts or contracts entered into by the company.
The first director’s duty is to comply with tax and social security issues. Below are the instances in which a Director must register as an “autónomo” (freelancer), a legal figure in Spain, as regulated in the Additional Provision 27th of the General Law of the Spanish Social Security RDL 1/1994 of June 20th(Disposición Adicional 27ª de la Ley General de la Seguridad Social (RDL 1/1994 de 20 de junio):

  • Directors with effective control of the company must register as an autónomo (freelancer) in Spain;
  • If the director has been assigned a wage;
  • Whenever the director has actual control of the company (at least half the capital);or when the director happens to be the ultimate beneficiary.
  • When he has a stake equal to or greater than a third of the capital;
  • When the director exercises functions of management and has a percentage of at least 25% of shares in the Company.

The role and responsibilities of the directors are usually regulated in the statutes of the company, or through a Shareholders’ Agreement, which will delimit their role and how to perform their obligations. However, the Spanish Corporations Act regulates a number of basic obligations that the directors must comply with as representatives of a company:

  • Perform their duties diligently and loyally to defend the interests of the company.
  • Must not use the name of the company to conduct business of their own, or take advantage of their position to make business operations for personal gain.
  • Have the obligation to inform the other partners of any conflict of interests with the company, especially those involving competition.
  • Must keep secret any confidential company information, even after their removal or resignation, and should never share any information that may entail negative consequences for the interests of the company.

If they fail to fulfil these obligationsthey may have to respond with their own assets for the damaged caused.
Directors are also responsible for the following duties:

  • Lodge the incorporation deed at the Mercantile Register;
  • Update the shareholders’ book;
  • Call general meetings;
  • Represent the company;
  • Prepare and disclose the annual accounts and the directors’ report;
  • Call a general meeting to dissolve the company, if it is to be dissolved;
  • Challenge resolutions of the general meeting when they are contrary to the objects of the company; and
  • Keep the minutes book

 
Third party liability

The Spanish Corporations Act states that a corporation may have a cause for dissolution when “it causes losses that reduce the company`s worth to less than half its initial capital.” To avoid this situation the company must raise its capital or reduce it to a sufficient extent, as long as it is not appropriate to request the filing for bankruptcy.
If the company is clearly in the event of dissolution the director is required to call a general meeting within 2 months to adopt the agreements to, either approve the dissolution of the company, increase capital, or agree on a capital reduction. If the director fails to comply with this obligation he or she may be liable for all amounts owed to any creditor acquiring the company after its dissolution.

Conclusion

Being a company director is a serious commitment. Directors represent the company and manage its daily activities, and in principle, are not liable for the acts or debts of the company, provided they act diligently and in accordance with the law. It is, therefore, imperative that directors know the limits of their duties in accordance with the law, statutes or, where appropriate, derivatives of a Partnership Agreement.

 

 

 

Huffington Post Arabi hires  Spanish firm Del Canto Chambers

The Huffington Post has recently launched its Arabic edition. The launch is the result of nearly two years of negotiations managed by the firm DelCantoChambers in London, which has solved the complexities of launching an media such as the Huffington Post simultaneously in 20 Arab countries with different legislation.

Commenting on the launch, the lawyer Leon Fernando Del Canto, company founder of Del Canto Chambers says: “We have been privileged to see how this project was born and advise on it form the begining. Working with Wadah Khanfar and Arianna Huffington is a lesson in optimism on the future of journalism. ”

The giant media created by Arianna Huffington already has local editions in eight countries, including Spain, where it is published in collaboration with media group PRISA. The new edition marks the opening of the first media of this nature in the Arab world, which makes “independent and original journalism” and will be a platform for new generations of bloggers in the Middle East.

In the words of Leon Fernando Del Canto, “the Huffington Post in Arabic will give voice to many young people with a mobile phone and something important to say. Young people who nobody has heard yet.”

The new platform, entirely in Arabic and directed from London, adds to the French version of the Huffington Post that targets the North African countries.

For more information visit www.delcantochambers.com

Spanish Real Estate investments are back!

Back from a six years’ gap, we, Spanish lawyers are watching a substantial increase on real estate transactions in Q1 2015.

The international tourism influx has substantially increased the queries and interest in Spanish properties, but also the interest in the #goldenvisa.

As reported in Konsilia blog, the Spanish golden visa requires investments in commercial or residential real estate. 

You can find mire information at 

   

Los expertos piden una reforma fiscal equitativa y antifraude

Excelente artículo analítico escrito por Ana Balseriro de “La Voz de Galicia” sobre la petición de expertos y agentes sociales de una reforma fiscal de alcance,  que solucione la falta crónica de capacidad recaudatoria, recupere la equidad, simplifique el sistema y reduzca la sangría del fraude.

El informe de la comisión de sabios que preside Manuel Lagares y que servirá de base a la reforma tributaria del Gobierno está listo. El ministro de Hacienda recibirá las conclusiones el jueves 13 y las elevará al Consejo de Ministros del 14, con una semana de retraso sobre lo anunciado inicialmente por Montoro.

Pero a la espera de las recomendaciones de la comisión Lagares, expertos y agentes sociales insisten -al hilo de los últimos anuncios de Rajoy- en pedir una reforma fiscal de alcance, que solucione la crónica falta de capacidad recaudatoria, recupere la equidad, simplifique el sistema y reduzca la sangría del fraude. «El margen de maniobra del Gobierno va a depender de si la economía despega con fuerza. Pero sería bueno que se revirtieran las medidas introducidas que están haciendo daño a contribuyentes y empresas. La crisis nos ha llevado a un estado de excepción tributario y hay que ponerle fin», resume Ricardo Gómez-Acebo, socio de Deloitte Abogados. Algunas propuestas de los expertos para los grandes impuestos se detallan a continuación:

IRPF

Deshojando la margarita de la rebaja impositiva. El vehículo recaudatorio por excelencia, el impuesto sobre la renta de las personas físicas (IRPF), divide a los especialistas, aunque hay consenso en reducir los tipos, al menos para las rentas más bajas. El centenar de expertos que integran el Consenso Fiscal que elabora semestralmente PwC y que acaba de publicarse bajo el título de Un punto de partida para la reforma fiscal, recoge la opinión de que hay que reducir la presión fiscal. «Lo primero que hay que hacer es crear un sistema que tenga una capacidad recaudatoria significativa y que esté bien gestionado», señala Ignacio Zubiri, catedrático de Hacienda de la Universidad del País Vasco, que resume los objetivos de la reforma en «depurar bonificaciones, cerrar vías de elusión y reducir el fraude», añadiendo que «inicialmente no deben aumentarse los tipos de los impuestos más importantes».

¿Mantener o no el sistema dual? En la misma línea de Zubiri está la batería de propuestas enviada por el sindicato de técnicos de Hacienda (Gestha) al ministerio, abogando, entre otras cosas, por «reducir los efectos contrarios a la progresividad derivados de la dualidad fiscal de las rentas del trabajo y del capital, excluyendo las ganancias especulativas del concepto de renta del ahorro», e incluyendo las rentas generadas en sicavs (vehículos de inversión de las grandes fortunas), fondos de inversión o sociedades instrumentales. Desde la CEOE, sin embargo, plantean mantener el sistema dual del IRPF con un tipo de gravamen único sobre el ahorro, mientras que piden eliminar el recargo adicional temporal que se aprobó para los años 2012 y 2013 y que se ha prorrogado este 2014. A favor de esta supresión también se posiciona Ricardo Gómez-Acebo, de Deloitte, por considerar que «aunque el IRPF ha sido de los impuestos que mejor han aguantado la crisis, en parte por la introducción del gravamen especial que elevó los tipos entre los más altos de Europa, a medio y largo plazo el efecto es perjudicial y no se mantiene la recaudación». También el recientemente fallecido David Taguas, en su última entrevista a La Voz, defendía un IRPF de tipo único (flat tax) con un mínimo exento «lo suficientemente elevado».

IVA

¿Subirlo o mantenerlo? Montoro aseguró que no se tocaría de nuevo. Sus palabras apagaron el incendio que provocó la filtración de que el comité Lagares propondría subir el IVA, algo sobre lo que este lunes volvió a insistir la presidenta del FMI, Christine Lagarde, en el Global Forum Spain de Bilbao. Desde el Registro de Asesores Fiscales (REAF) del Consejo General de Economistas defienden que se estudie la eliminación de algunas exenciones y de operaciones a tipo reducido, revisando los regímenes especiales. La patronal, por su parte, se opone a cualquier subida del impuesto y también «a desplazar bienes y servicios desde tipos reducidos al general», por entender que repercutiría en la ya debilitada demanda interna y comprometería la recuperación. Los sindicatos lo comparten. Zubiri defiende «depurar» los tipos reducidos porque tienen un coste elevado (más del 40 % de la recaudación) y sus ganancias de equidad son dudosas, ya que, en realidad, los ricos se ahorran más que los pobres. «Habría que tender, como en Dinamarca, a un sistema de tipo único con algunos bienes esenciales a tipo cero». Eliminar las declaraciones simplificadas y establecer mecanismos efectivos de lucha contra el fraude son propuestas de consenso.

Sociedades

Corregir la brecha entre el tipo nominal y el efectivo. Hay diversas opiniones. Gestha, por ejemplo, plantea establecer «uno o varios tipos impositivos superiores» para las bases imponibles positivas superiores al millón de euros. Así se nivelaría el tipo medio efectivo con las pymes y microempresas, a la vez que se eliminan los beneficios fiscales y la mayoría de las deducciones. Desde Deloitte Abogados, el socio en Galicia Fernando Vázquez defiende una «simplificación». «Se trataría de eliminar las deducciones que quedan» y reducir el tipo impositivo nominal para acercarlo al efectivo.

Otros impuestos

Nuevas fórmulas y lucha contra el fraude. Zubiri subraya que la forma de luchar contra el fraude es «haciendo que no sea rentable». Los expertos también plantean nuevas figuras impositivas, como clarificar la fiscalidad medioambiental o crear impuestos sobre la contaminación o las transacciones financieras.

Artículo original en:

http://www.lavozdegalicia.es/noticia/economia/2014/03/06/expertos-piden-reforma-fiscal-equitativa-antifraude/0003_201403G6P34992.htm

The Spanish Financial crisis and its source, the Spanish Saving Banks

The Spanish savings banks (SSBs) built-up excess capacity and risk concentration influenced by many stakeholders’ interests, including politicians in their decision-making bodies. SSBs were not subject to typical market discipline mechanisms, and blurred competences between the central government and the autonomous provoked the crisis of the Spanish financial system. Read the full analysis by the IMF in the attached documents.

SpanishBanksIMF

SpanishFinancialIMF

Balancing the Books

£2.9bn, the cumulative worth of the 92 league clubs in England and Wales for 2010/11, up 9% on the previous season.

Deloitte’s Annual Review of Football Finance showed that despite the challenging economic conditions, football clubs are continuing to increase revenues and with £1.2bn paid to the treasury in Tax, football’s worth to the overall health of the economy cannot be underestimated.

Significantly, capital expenditure by these clubs totalled £167m in 2010/11 with over £3bn invested in stadia and facilities over the last 20 years. Continue Reading

Is Marriage a Legal Contract?

In the Volokh conspiracy blog, the question about  marriage being a contract is asked.

He responded “I thought I’d respond to this on-blog because it illustrates a considerably broader point: In law, as in life, concepts like “contract” aren’t unitary things, so that either something is a contract and has all the properties of a contract or something isn’t a contract. There are different kinds of contract, with different qualities, and different possible definitions for the term “contract.”

To begin with, “contract” is a quite broad concept. I don’t want to try to give a thorough definition here, but suffice it to say that an exchange of promises might well be a contract even if the promises don’t involve money, goods, or even services. Thus, for instance, “Each of us promises not to be anyone else’s bridge partner” can be a contract; it’s an exchange of promises not to engage in certain conduct. (Note that the contract doesn’t promise that I’ll be your bridge partner, just that I won’t be anyone else’s.) Substitute something else for “bridge,” and you’ll have one aspect of a marriage contract. Continue Reading

Multiplication Philanthropy

Leverage is the mantra of the times in philanthropy, and rightly so. People want to know that the charities they support are using donations as effectively as possible. Donors and institutional funders are more demanding, more discerning, and less detached. They’re no longer content with writing a check and securing their place in heaven. They want results.

But they’re looking for them in the wrong places. They’re missing the greatest leverage point of all: the multiplying effects of smart investments in fundraising. If you want to maximize the social effects of your donation, why would you buy, for example, $100,000 worth of great educational programming for inner city kids when the same $100,000 directed toward fundraising could generate enough money to buy $1 million worth of it? Continue Reading

Football Financial Future

As reported by FC Business, Football League clubs took a huge step to self sufficiency when they agreed to the implementation of Financial Fair Play (FFP) regulations last week. Based on the UEFA model, Championship clubs will have until the 2014/15 season to get their house in order or face stiff penalties.

Leagues One and Two will also introduce a version based on limiting a club’s spending on player wages as a proportion of total turnover. A similar rule has been in place in the League Two for a number of years now. Continue Reading