Expatriate Tax

Switzerland’s federal administration reveals that, the Swiss economy showed rapid and strong recovery from the recession in 2010.

According to Credit Suisse data industry in the Confederation benefited from a recovery of international trade, while domestic market-orientated companies were able to rely on immigration and an excellent climate for consumption.

In its statement, the administration admitted that demand from abroad is expected to increase more than domestic demand this year, undoubtedly giving export-orientated sectors of the economy an advantage.

Factors, which have up until now contributed to the economic upturn, including various fiscal initiatives, are progressively disappearing, the administration notes.

Some sectors of the economy which are well represented in economically booming emerging countries are expecting to experience above average growth, the administration continues, noting that the watch industry will lead the way. Nevertheless, a strong Swiss franc could serve to slow export sectors, even though international economic climates have a much greater influence on exports than the exchange rate.

Especially surprising, the administration concludes, is the robust state of the job market in Switzerland, adding that unemployment rose less than in previous recessions on account of recourse to reduced working hours. This measure, the administration notes, was, in the short-term at least, able to prevent job losses

As a result of structural problems, weaker growth is expected in certain sectors of the country’s economy according to Credit Suisse, including the textile, clothing, printing and publishing industry as well as in the paper industry. The Confederation’s hospitality industry looks set to face the greatest challenges, the administration reveals, again as a result of the strong Swiss franc, and especially with regard to visitors from the euro area and the United Kingdom.

Tax Credits Available For NZ for Earthquake Donations

Bill Shorten Australian Assistant Treasurer informed last week that funds need to apply to the Australian Tax Office (ATO) for formal endorsement, and that the ATO had established a fast track process for this purpose. Donations to such funds are tax deductible for a period of two years from February 22, 2011.

The Australian government has recognized other overseas disasters for the purposes of tax deductibility in the past, including the bush fires in Greece in August 2007, the Abruzzo earthquake in Italy in April 2009 and the Taiwan typhoon in August 2009

Peter Dunne New Zealand Revenue Minister has reminded residents that all Christchurch earthquake cash donations over NZD5 by individuals through approved done organizations can gain a tax credit, and will be tax deductible when made by companies.

“This is worth being aware of at a time when New Zealanders are getting generous for the people of Christchurch in their hour of need,” Mr Dunne said.

Mr Dunne said that it was also great to see that Australia, as well as supplying invaluable assistance in the actual rescue and recovery operations in Christchurch, has recognized the disaster for donation tax purposes for Australian taxpayers.

This allowed Australian taxpayers to claim an income tax deduction for donations to the relief effort, and that public funds established and maintained by a public benevolent institution solely to provide money for the relief of people in New Zealand could be endorsed as ‘developed country relief funds’.

Dunne admitted: “There has been a huge amount of support flowing between our two countries in what has been a string of natural disasters on both sides of the Tasman in recent months.”

“The help and heart that has gone both ways has indicated how strong the bonds that tie us are, and further strengthened them.”

US Expatriate Tax Deadlines
March 15th Form 1120 and 1120S due date for US Corporations and Sub-Chapter S corporation unless extended with Form 7004
March 15th Due date of Form 3520A for foreign trusts
April 15th Due date for payment of any taxes due for previous calendar year (though if you are living abroad on 4/15 your tax return gets an automatic extension until 6/15)
April 15th Form 1040 ES – No 1 pay current years first installment of quarterly income and self employment taxes to avoid penalties.
June 15th Form 1040 ES – No 2 pay current years second installment of quarterly income and self employment taxes to avoid penalties.
June 15th Due date of Expatriate tax return (for expatriate living abroad on 4/15) or time to file for an extension on Form 4868
June 30 th Form TDF 90-22.1 US Treasury Form Report of Foreign Bank Accounts Due Date.
July 30th Due date for self administered Pension Plan and 401K Tax Return From 5500 or 5500EZ
September 15th Form 1040 ES – No 3 pay current years third installment of quarterly income and self employment taxes to avoid penalties.
September 15th Extended Due Date for US Corporation Returns 1120 and 1120S
October 15th Final Expat Form 1040 Due date (no further extensions can be given)
January 15th Form 1040 ES – No 3 pay past calendar years fourth installment of quarterly income and self employment taxes to avoid penalties.
NOTE: If any of days list above fall on a weekend or national holiday, the due date is automatically moved to the first week day following the weekend or holiday.

The IRS recerntly announced that the due date for 2010 individual federal income tax returns will be Monday, April 18, 2011.

Italy has the highest level of Tax Bureaucracy for SME

CIGA (the association of sole traders and small businesses) has made statistics showing that the size of the tax administration and payment burden on Italian small and medium-sized enterprises (SMEs) has no accordance with the rest of the principal countries in the European Union (EU).

The 285 hours undertaken annually over tax administration by SMEs in Italy compares less than favourably to the 215 hours in Germany, 197 hours in Spain, 132 hours in France and 110 hours in the UK. With regard to the actual tax burden, the 68.6% of profits taken in Italy can be compared with the 65.8% in France, 56.5% in Spain, 48.2% in Germany and 37.3% in the UK. In each case, Italy is the top of a league that it would prefer not to win.

To discharge all of the 15 separate payments necessary under the country’s tax system, CIGA has calculated that Italy’s SMEs are required, on average, to expend 285 hours every year and suffer a tax burden equivalent to 68.6% of their profits.

CIGA’s Secretary Giuseppe Bortolussi, said that, amongst all of the European SMEs, Italian businesses were the most suffocated by tax and bureaucracy. Notwithstanding efforts made in recent years, the mix of bureaucratic procedures in the tax system continues to penalize the “connecting fabric” of the Italian economy represented by SMEs. He went as far as to say that, by continuing to run their firms in the face of such obstacles, small business owners show a “level of heroism” that could not be found in any other part of western Europe.

In fact, with regard to the number of tax payments to be made in any year, Germany tops the list with 16, just ahead of Italy’s 15. However, the majority of European SMEs find themselves having to make nine payments, except for Spain and the UK with eight, and Sweden with only two.

CGIA also pointed out that the definition of an SME in the European Union (a business with at least 250 employees, and a turnover not exceeding EUR50m (USD69m) or not more than EUR43m of total assets) covers 23m businesses, with 75m employees and representing 99% of all firms in the member states.