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A Mixed Bag of Taxes...

Kitty Miv, Editor
23 March, 2022

In this week's column, we will be looking at taxes that don't often get their moment in the spotlight, of which there have been quite a crop recently.

We start with Canada, where the Government has launched a consultation on draft legislative proposals, announced in Budget 2021, for the introduction of a tax on the sale of new luxury cars and aircraft with a retail sale price over CAD100,000 (USD78,200), and new boats over CAD250,000, from September 2022 (subject, of course, to Parliamentary approval).

The tax would be calculated at the lesser of 20 percent of the value above these price thresholds or 10 percent of the full value of the luxury vehicle, aircraft, or vessel.

The draft legislative proposals were released on March 11, and input is being sought until April 11, 2022.

Then, in Barbados, the newly-released Budget contained proposals to introduce a "windfall" tax on businesses and individuals, in order to recoup revenues lost as a result of the COVID-19 pandemic.

The Budget announced the temporary introduction of a 15-percent "Pandemic Contribution Levy on Corporate Profits". The levy will apply to companies with a net income of at least BBD5m (USD2.5m) that are engaged in the domestic supply of telecommunications services, the sale of petroleum products, commercial banking services, and general and life insurance services. The Government explained that these companies are considered to have fared relatively well during the pandemic.

It will be levied in respect of income during the fiscal years ended March 2021 and 2022. It will be payable in eight monthly payments over the periods July to October 2022 and November to February 2023, respectively.
Additionally, the territory will levy a one percent surcharge on individuals with a monthly income of more than BBD6,250, for a period of 12 months.

In Singapore, meanwhile, the authorities have recently clarified the tax treatment of income derived from the sale of non-fungible tokens, which are increasingly being used to facilitate the digital sale of unique items, such as photos or videos, using blockchain technology.

Singapore's Finance Minister, Lawrence Wong, has stated that income derived from NFTs is taxable under the country's existing income tax laws. Singapore does not levy a capital gains tax.

It was further confirmed that gains or losses should be included in a declaration including if the cryptocurrency is exchanged for virtual currency that is pegged to the US dollar, and that income received by the taxpayer as a "royalty" – for instance, a percentage of the proceeds of a subsequent, onward sale of the art – is also taxable.

In Venezuela, finally, the focus was firmly on the fungible, with a new financial transactions tax set to be introduced on foreign currency and virtual currency transactions.

The new levy will be introduced at a rate of three percent – one percentage point higher than the current financial transactions tax, and will be imposed on transactions through Venezuelan banks and with so-called "special taxpayers" (high-income individuals and businesses). However, transactions using the Venezuelan state's cryptocurrency, the Petro, will be exempt.

Until next week!


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About the Author


Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net

 

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