The challenge of imposing taxes in logistical investments across the border is one of the most important things to overcome as a fund manager.
Also read: E -border e -commerce thrives: Here is how logistics develop
The international logistical services industry, which includes warehouses, distribution centers, ports and transportation systems, is attractive in terms of revenues and a difficult set of tax systems, regulations and reporting policies.
A clear understanding of these issues is not just administrative requirements, but one of them is strategic to ensure the best possible returns and that expensive fines are not incurred. Fund managers should not only look at the main numbers of the deal, but also look at the tax effects.
The basic dilemma: double taxation
The issue of the main tax in the border investment is: there is a possibility for taxes twice. This arises when the same income or gains are exposed to tax imposition by more than one country.
As for the logistical services fund, this country in which the material property (such as the warehouse) may mean, and the country where the fund and its investors are headquarters, and both seek to force them on the pie.
Fund managers are also required to overcome the difference between direct investment and investment in the portfolio. Warning taxes can be imposed, as the investor practices a large level of control of the original, differently from the investment of the wallet, as the investor is negative.
This is a crucial discrimination in the logistical sense, with the box structures usually blurring these limits.
The main tax considerations of the fund managers
The structure of the entity and boxes
The most important and first step is to choose the appropriate legal structure for the fund. Traffic entities are usually used, such as limited partnerships or limited liability companies, by fund managers so that the entity is not subject to the imposition of taxes at the entity level. This is because the fund itself is not subject to tax, but profits and losses are transferred directly to the investors themselves, who must then pay taxes in the relevant judicial states.
However, the nature that passes through it is not so simple. The foreign entity may not be treated as a pass by some countries and may undergo an additional level of taxes. The specified structure should also be according to the tax statute of the mother country, as well as the host country where the assets are located.
Withhold taxes and tax treaties
The income obtained by a logistical drug, such as rental revenues or the sale of a property, may undergo a tax to dispense with the host country and not to be distributed to the fund. It is a hypothesis tax at the payment point that can vary greatly across the two countries.
This is where DTTS comes within reach. DTTS treaties between the two countries to prevent double taxation either:
- It involves exempting income from the tax in one country.
- Allowing the investor to receive tax credit in the mother country, based on paying taxes in the host country.
The director of the funds should be well aware of the DTTS between the home of the fund, the investor or the logistical assets location. A properly organized box can use these treaties to reduce shattered taxes and ensure investors that they may demand related tax credit.
3. Taxes on operations and real estate
The logistical services industry is a heavy real estate industry, and this offers a series of real estate taxes. These can include:
- Property taxes: There is an annual tax as an amount of land and buildings.
- Transfer taxes: one -time tax on the transfer or sale of property.
- Capital profit tax: a tax on gains to get rid of assets.
- VAT tax/value -added tax (tax tax/goods and services with added value): taxes imposed on the value of goods and services that may be imposed on the contract or sale of commercial property; It may depend on the judicial mandate.
As a fund manager, knowing that these taxes are not sufficient. The impact of these taxes on the expected returns of the fund must be simulated. The profitable transaction can become an unintended speed if the box has not sufficiently calculated for large taxes from property or capital gains.
4. OECD Dual -Numbers and beps
One of the important developments is the bilateral solution proposed by the Organization for Economic Cooperation and Development (Organization for Economic Cooperation and Development), which targets Tax issues of the digital economy But it has extensive effects on multinational companies. Bailar One is interested in redistributing the tax rights to the judicial states, which may affect the money in which logistical services are dependent on digital or e -commerce.
Brain Two suggests 15 percent minimal corporate tax on large multinationals around the world. Most logistical funds are not directly involved in this, although the regulations are complicated and may affect governor companies and their local operations through the fund.
Fund managers need to keep pace with this, among other efforts, including the basic corrosion and profit transfer project, which seeks to reduce the efforts to avoid taxes.
Best practices for fund managers
To move through this difficult environment, the fund managers should:
- Taste the performance of adequate tax care: This is something that should be part of the investment, instead of the subsequent idea. The involvement of tax specialists early to determine the tax effects of each of the possible deals and structures, especially those that are presented Tax services for fund managers.
- Improving the fund and investment structuresSelect a neutral legal structure for investors, reduces tax leakage, and ensures adherence to all local regulations.
- Take advantage of tax treatiesLearn about the DTTS system and its conditions. This can significantly reduce taxes on distributions, while tax efficiency for investors.
- Keeping pace with international tax reformThe world’s tax system does not stand steadfast. To prevent surprises and control strategies for new regulations and reforms, it is important to monitor new rules and changes constantly.
conclusion
The global expansion of e -commerce chains and supply of logistical investments across the border has made interesting borders for the fund managers. However, there is a complex tax obstacle on the way to successful investment.
Determining the risk of double taxation in an early age, and ensuring the organization’s organization appropriately, keeping the fund managers in view of developments in the international tax field will enable them to transform what could be a burden on a strategic benefit and achieve a more efficient and profitable result.
Eden Blascino
Eden is a university coach that has turned into Wordsmith, with a passion for both teaching and writing. With years of experience in higher education, he brings a unique perspective of his writing, formulating attractive and information -rich content about a variety of topics. Now, he is excited to explore his creative side and follow the content writing as a hobby.
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