Dear Colleague,

This week:

• Tax-news Headlines
• British Virgin Islands
• Malaysia
• Updated - Offshore Service Provider's Directory
• 25% Discount: LowtaxLibrary

I hope you find this update useful. Please remember that you can customise your mailing preferences by visiting your own profile page to choose from 29 offshore tax and law subjects in order to receive just the information you want. You can also unsubscribe completely by following the instructions at the bottom of this page.

Kind regards,

Kate James

Offshore

Malaysia

Malaysia is a reasonably tax friendly jurisdiction. There are no annual wealth taxes, no estate duties, no gift taxes, no accumulated earnings tax, no federal (as opposed to national) income tax, no controlled foreign company legislation, no thin capitalization rules and no transfer pricing rules (although the tax authorities will apply normal transfer pricing principles to related party transactions). Moreover capital gains tax when levied is only levied in very limited circumstances. The regular rate of corporate income tax was 28% but has recently been cut- see below. In addition, Malaysia offers a number of attractive incentives and special regimes, linked from below.

Although the October, 2005, Malaysian government budget stopped short of cutting rates of corporate tax, the Prime Minister and Minister of Finance, Datuk Seri Abdullah Ahmad Badawi, detailed a number of tax-related measures designed to boost economic activity.

One of the more significant proposals outlined by the Prime Minister was the introduction of group relief for losses, a measure which is likely to be welcomed by the business community. This will allow firms within a group with a minimum of 70% ownership between them to offset the current year losses of a company against the profits of another. By doing so, it is hoped that more companies will be encouraged to take part in high-risk projects requiring a large initial capital outlay.

The Prime Minister also proposed to tempt more technology firms to establish in Malaysia through a widening of the Multimedia Super Corridor Incentives (MSC), which extended the Investment Tax Allowance Incentive to qualifying firms currently operating outside of the MSC.

Small-and medium-sized firms were also slated to receive a tax break in the form of 50% stamp duty remission on instruments for loans not exceeding RM1million (US$265,250).

Learn more in our full Malaysia Knowledgebase.

Directory

For Visitors

Our aim is to offer you the ability to locate a service provider specialising in the field of your choice, in the jurisdiction of your choice, with just a few clicks. We only list confirmed entries to reduce the number of dead-ends and strictly enforce categorisation criteria to ensure that you find exactly the service you are after. As of September 2007 we have begun to implement a new, expanded format to make the directory even more user friendly and comprehensive.

Click here for the new directory home page.

For Service Providers

The Lowtax Offshore Service Provider's Directory offers firms the ability to highlight their services to one of the web's largest specialised tax, legal and offshore audiences. Our visitors include large numbers of corporates and HNWIs. Standard entry in the directory is free as long as your details are kept up to date. Premium entry options are available. Please contact diectory@lowtax.net for further details.

Click here for the new directory home page.

Offshore

British Virgin Islands

Cable And Wireless Launches BlackBerry Internet Services In The Caymans, by Amanda Banks, Tax-News.com, London 02/07/2008

Cable And Wireless To Refocus Caribbean Business, by Amanda Banks, Tax-News.com, London 30/06/2008

EU And CARIFORUM Countries To Deepen Integration On IP, by Amanda Banks, for LawAndTax-News.com, London 27/06/2008

The British Virgin Islands are an English-speaking Dependent Territory of the United Kingdom, located in the Caribbean off Puerto Rico. The BVI is politically stable; under the 1967 constitution, the Governor represents the Queen and heads an Executive Council. There is a 13-member elected Legislative Council.

Until 2005 the only significant tax in the BVI was income tax, which applied to the relatively few local companies and to individuals; there are customs duties and some real estate taxes. The population of 23,000 (2006) is of mixed European and Caribbean origin. There is minor tension between the settled population and recently-arrived Caribbean economic migrants. The economy is highly dependent on tourism, with financial services also important. In 2004 the government abolished income tax for companies and individuals, replacing it with a 'payroll' tax, shared between companies and employees.

While there is no pressure for major constitutional change, in 2002 the BVI Government said it wanted to increase its establishment and asked for some of the Governor's powers to be transferred over, recognising the BVI's 'constitutional maturity and prudential system of government'. At the end of February 2007, the UK and the BVI government successfully completed negotiations for a new constitution for the islands. Described by Lord Triesman, British Minister responsible for the Overseas Territories, "as an important step forward for the territory," the new constitution devolves significant new powers to the BVI Government. The local currency is the US Dollar, and there are no exchange controls.

The BVI introduced its outstandingly successful International Business Company (IBC) in 1984, and by the time the Act was superseded by the BVI Business Companies Act 2004, which effectively removed the distinction between 'offshore' and 'onshore' companies, well over 600,000 had registered in the jurisdiction, Hong Kong and Latin America being the main sources of clients. The BVI has significant mutual fund and captive insurance sectors. Banking activity is, by design, quite minor. The BVI has tried hard to exclude money-laundering, mostly with success, and has a relatively good reputation.

In 2002 the BVI introduced a Financial Services Commission to ensure independent and effective supervision of financial institutions.

As from 1st July, 2005, the BVI, like other British 'dependent territories', was forced to apply the EU's Savings Tax Directive, and chose to apply a withholding tax (initially of 15%) to the returns on savings paid to nationals of EU Member States. The Directive does not apply to corporate entities.

The BVI is a reasonably cheap jurisdiction compared to its local rivals, and has quite strong professional services. The Government is responsive to the needs of business, and its legislation is mostly flexible and straightforward. There is an international airport at Road Town; connections are mostly to Puerto Rico.

Learn more in our full British Virgin Islands Knowledgebase.