BANKING OPTION - Contents What you'll cover and what you'll gain Recommended ways to prepare for your exam Further information - Chartered ...
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BANKING
OPTION
Contents
• What you’ll cover and what you’ll gain
• Recommended ways to prepare for your exam
• Further information
www.adit.org.ukGLOBAL CHALLENGING PRACTICAL VALUED RECOGNISED ADVANCED UP-TO-DATE STRUCTURED FLEXIBLE EMPOWERING RENOWNED SPECIALIST THOROUGH CURRENT INTERNATIONAL MODERN UNIQUE GLOBAL ADVANCED 2 ADIT
Banking option
What you’ll cover and what you’ll gain
The Banking module is the newest of sixteen elective modules available to ADIT students. Launched in 2018, with
the first exam to take place in June 2019, this module will appeal to international tax professionals across the
financial service sector with an interest in the application of current tax issues to banking activities and financial
instruments in a global context.
What you’ll cover
The Banking module gives candidates in depth knowledge of the international taxation of the banking industry.
Subjects include:
• Investment banking
• Capital markets
• Global markets
• Asset financing
• Asset management
• Private banking
• Wealth management
What you’ll gain
• A thorough grounding in current international tax issues as they relate to the financial service sector
• A robust understanding of theory coupled with practical application, giving you the opportunity to
demonstrate your command of the subject matter and the confidence to apply these principles to your daily
work
• Up to date knowledge of fast-changing developments in legislation and practice, as exams are regularly
updated to cover current tax laws and emerging trends
ADIT 3Banking option
Syllabus
I Fundamental tax issues 10%
II Tax implications of bank operating models and capital / funding allocations 20%
III Tax implications for banking activities 20%
IV Transaction taxes and withholding taxes 20%
V Bank levy 5%
VI Client tax reporting 20%
VII The OECD context 5%
I Fundamental tax issues
A Residence 1
B Permanent establishments 1
C Beneficial ownership and withholding tax 1
D Double tax relief 1
E Transfer Pricing and thin capitalisation 1
F GAAR 1
II Tax implications of bank operating models and capital / funding allocations
A Tax considerations for using different operating models (e.g. representative offices,
branches, subsidiaries) 3
B OECD guidelines for attribution of profits to branches, with specific reference to the guidelines
for banking and financial trading business, and related bank internal derivatives 3
C Tax considerations for the treatment of different types of capital instrument, e.g. Common
Equity Tier One, Alternative Tier One, Tier Two, and hybrid capital 2
D Attribution of capital to banking branches 2
III Tax implications for banking activities
A Global developments in banking taxation code of conduct and tax transparency; UK Code of
Conduct for Banks; Australian Tax Transparency Code for Large Businesses 3
B Cross-border tax considerations when loan assets are originated, transferred between
entities/branches within a banking group, restructured (e.g. non-performing loans). Tax considerations
for the change of domicile by borrowers, or the cross-border sale of loan assets between creditors 2
C LMA documentation and tax clauses. Sub-participation and risk sharing within a banking group.
Intra-group guarantees 2
D Securitisation of assets (e.g. UK securitisation company regime) 1
E Tax representations in ISDA Master Agreement 2
F Cross-border tax considerations when functions are moved between branches/entities within
a banking group 2
4 ADITBanking option
Syllabus
IV Transaction taxes and withholding taxes
A Proposed European Financial Transaction Tax; extra-territorial impact of Italian Financial
Transaction Tax and French Financial Transaction Tax 3
B Stamp Duty and Stamp Duty Reserve Tax implications for in-scope products on and off-exchange
for London and Hong Kong securities relating to direct and indirect non-resident holdings 2
C Application of Withholding Tax on distributions and capital gains for the indicated markets
to in-scope products relating to direct and indirect non-resident holdings (US Non Resident
Alien Withholding Tax covered in (E) below) 3
D Withholding Taxes on cross-border manufactured dividend/interest payments in stock lending
and repo markets 2
E Application of withholding on Non-Resident Aliens for in-scope products 3
F IRS Qualified Intermediary Agreement and Qualified Derivative Dealer regime 3
G VAT, GST including partial exemption 2
V Bank Levy
A UK bank levy 2
B Overview of bank levies in other significant territories (France, Germany, South Korea) 2
VI Client Tax Reporting
A FATCA; Common Reporting Standard (CRS); Directive Administrative Co-operation – 2011/16/EU
(DAC2 – 2014/107/EU) 3
B. UK Corporate Criminal Offences for failing to prevent criminal facilitation of tax evasion (Criminal
Finances Act 2017, Part 3); Mandatory Disclosure Regime – 2011/16/EU (DAC6 – 2018/822/EU);
OECD, Model Mandatory Disclosure Rules for CRS Avoidance and Opaque Offshore Structures 3
VII The OECD Context
A The OECD’s Base Erosion and Profit Shifting (BEPS) project 1
ADIT 5Banking option
Recommended ways to prepare for the exam
Permitted Texts GOV.UK. The Code of Practice on Taxation for Banks
(GOV.UK, 2014)
Candidates may take a copy of the following texts into Available from GOV.UK:
the examination: www.gov.uk/government/collections/the-code-of-
practice-on-taxation-for-banks
OECD. Additional Guidance on the Attribution of Profits
to Permanent Establishments, BEPS Action 7 (Paris: HMRC. Stamp Taxes on Shares Manual (HMRC 2016)
OECD, 2018) Available from HMRC:
Available from the OECD: www.oecd.org www.gov.uk/hmrc-internal-manuals/stamp-taxes-
shares-manual
OECD, Committee on Fiscal Affairs. Model Tax
Convention on Income and on Capital: Condensed Hong Kong. Cap 117, Stamp Ordinance (Hong Kong,
Version 2017 (Paris: OECD, 2017) 2018)
Available from the OECD: www.oecd-ilibrary.org Available from Hong Kong eLegislation:
Or available from Turpin Distribution: www.elegislation.gov.hk/hk/cap117
ebiz.turpin-distribution.com
ISDA. 2002 Master Agreement (ISDA, 2002)
Both available in the following publication: Available from ISDA:
Van Raad, K. Materials on International, TP and EU Tax www.isda.org/book/2002-isda-master-agreement-
Law 2018-2019. Volume A (Leiden: International Tax english
Centre, 2018) [ISBN: 9789082585414]
Available from the International Tax Centre at Leiden ISDA. 2012 FATCA Protocol (ISDA, 2012)
University: Available from ISDA:
www.itc-leiden.nl or b.bosman@itc-leiden.nl www.isda.org/protocol/isda-2012-fatca-protocol
Or available from Wildy & Sons: www.wildy.com
ISDA. 2015 Section 871m Protocol (ISDA, 2015)
Available from ISDA:
Essential Reading – Primary Sources & www.isda.org/protocol/isda-2015-section-871m-
Model Agreements protocol
Association Francaise des Marches Financiers. French OECD. Action Plan on Base Erosion and Profit Shifting
Financial Transaction Tax FFTT Guidelines (AMAFI, (Paris: OECD, 2013) [ISBN: 9789264202702]
2017) Available from the OECD: www.oecd-ilibrary.org
Available from AMAFI:
www.amafi.fr/download/pages/ OECD. Addressing Tax Risks Involving Bank Losses (Paris:
dH8FTYCgpiPHWf0MYpep7odCfhESpPAZSUclCT3E.pdf OECD, 2010) [ISBN 9789264088672]
Available from the OECD:
Australian Tax Office. Voluntary Tax Transparency Code www.oecd.org/tax/aggressive/46023583.pdf
(ATO, 2016)
Available from the Australian Tax Office: OECD. Base Erosion and Profit Shifting Project, 2015
www.ato.gov.au/Business/Large-business/In-detail/ Final Reports: Executive Summaries (Paris: OECD, 2015)
Tax-transparency/Voluntary-Tax-Transparency-Code Available from the OECD: www.oecd.org
Council Directive 2014/107/EU and administrative OECD. Base Erosion and Profit Shifting (BEPS), 2015
cooperation in (direct) taxation in the EU Final Reports: Action 4, Limiting Base Erosion Involving
Available from the European Commission: Interest Deductions and Other Financial Payments
https://ec.europa.eu (Paris: OECD, 2015)
Available from the OECD: www.oecd.org
6 ADITOECD. Base Erosion and Profit Shifting (BEPS), US IRS. Notice 2016-76 on Enforcement and
Public Discussion Draft: BEPS Actions 8-10, Financial Administration of Section 871(m) and Related
Transactions (Paris: OECD, 2018) Withholding Provisions During the Phase-In Period (US
Available from the OECD: www.oecd.org IRS, 2016)
Available from the IRS:
OECD. The Conditions for Establishment of Subsidiaries www.irs.gov/pub/irs-drop/n-16n76.pdf
and Branches in the Provision of Banking Services by
Non-Resident Institutions (Paris: OECD, 2017) US IRS. Notice 2017-42 on Extension of the Phase-In
Available from the OECD Period for the Enforcement and Administration of
www.oecd.org/daf/fin/financial-markets/Conditions- Section 871(m) (US IRS, 2017)
for-establishment-in-the-provision-of-banking-services. Available from the IRS:
pdf www.irs.gov/pub/irs-drop/n-17-42.pdf
OECD. Co-operative Tax Compliance: Building Better Tax US IRS. Notice 2018-72 on Extensions of Phase-In,
Control Frameworks, (Paris: OECD, 2016) Transition Rules under Section 871(m) (US IRS, 2018)
Available from the OECD: www.oecd-ilibrary.org Available from the IRS:
www.irs.gov/pub/irs-drop/n-18-72.pdf
OECD. International Compliance Assurance Programme
Pilot Handbook (Paris: OECD, 2018) US IRS. Revenue Procedure 2017-15 on Qualified
Available from the OECD: www.oecd-ilibrary.org Intermediary Agreements (US IRS, 2017)
Available from the IRS:
OECD. Report on the Attribution of Profits to Permanent www.irs.gov/pub/irs-drop/rp-17-15.pdf
Establishments (Paris: OECD, 2010)
Available from the OECD: US IRS. Treasury Decision 9815 (US IRS, 2017)
www.oecd.org/tax/transfer-pricing/45689524.pdf Available from the IRS:
www.irs.gov/irb/2017-09_IRB
OECD. Standard for Automatic Exchange of Financial
Account Information in Tax Matters (Paris: OECD, 2nd US Treasury. Foreign Account Tax Compliance Act
edition, 2017) (FATCA), Model Intergovernmental Agreements (US
Available from the OECD: www.oecd-ilibrary.org Treasury)
Available from the US Treasury:
OECD, Committee on Fiscal Affairs. Transfer Pricing www.treasury.gov/resource-center/tax-policy/treaties/
Guidelines for Multinational Enterprises and Pages/FATCA.aspx
Tax Administrations (Paris: OECD, 2017) [ISBN:
9789264262737] US Treasury. US Treasury Regulations, Sections 1.1441-0
Available from the OECD: through 1.1446-7 and Sections 1.1471-0 through
www.oecd-ilibrary.org 1.1474-7 (US Treasury)
Or available from Turpin Distribution: Available from the US Government Publishing Office:
ebiz.turpin-distribution.com www.gpo.gov
PwC. Financial Transaction Taxes: Basic Materials on US Treasury. US Treasury Regulations, Section 1.871-15
the Italian, the French and the European Model of a (US Treasury)
Financial Transaction Tax (PwC, 2014) Available from the US Government Publishing Office:
Available from PwC: www.gpo.gov
www.pwc.com/gx/en/financial-services/financial-
transaction-taxes/assets/pwc-financial-transaction-
taxes.pdf
ADIT 7Textbooks IRS. FATCA FAQs (IRS, 2017)
Available from the IRS:
Miller, A., Oats, L. and Mulligan, E. Principles of www.irs.gov/businesses/corporations/frequently-
International Taxation (Bloomsbury Professional, 6th asked-questions-faqs-fatca-compliance-legal
edition, 2017) [ISBN: 9781526501691]
Available from Bloomsbury Professional: Kobetsky, M. International Taxation of Permanent
www.bloomsburyprofessional.com Establishments: Principles and Policy (Cambridge
University Press, 2011) [ISBN: 9780521516327]
Cases Available from Cambridge University Press:
www.cambridge.org
• ConocoPhillips Skandinavia AS and Norske
ConocoPhillips AS v Ojeskattekontoret, 2010 McGill, R. Investment Withholding Tax Best Practice and
• General Electric Capital Canada Inc (GE Capital Strategies for Intermediaries and Investors (Palgrave
Canada) v The Queen, Tax Court of Canada, 2009 Macmillan, 2009) [ISBN: 9780230221628]
• Portuguese Arbitration Tax Court Decision, 2012 Available from AbeBooks: www.abebooks.co.uk
• Bombardier v Danish National Tribunal, 2014 OECD, Committee on Fiscal Affairs. Model Tax
Convention on Income and on Capital (Paris: OECD,
Other Relevant Reading 2017) [ISBN: 9789264287945]
Available from the OECD:
De Mooij, R. Tax Biases to Debt Finance: Assessing the www.oecd-ilibrary.org
Problem, Finding Solutions (Washington DC: IMF, 2011) Or available from Turpin Distribution:
Available from the IMF: www.imf.org ebiz.turpin-distribution.com
Dixon, J. and Finney, M. Tolley’s International Corporate OECD. CRS-related FAQs (OECD, 2018)
Tax Planning (London: LexisNexis, 2002) [ISBN: Available from the OECD:
9780754513391] www.oecd.org/tax/automatic-exchange/common-
Available from Wildy & Sons: www.wildy.com reporting-standard/CRS-related-FAQs.pdf
Field Fisher Waterhouse, Commentary on the ISDA OECD. Standard for Automatic Exchange of Financial
Master Agreements (Field Fisher, 2008) Information in Tax Matters: Implementation Handbook
Available from Field Fisher: (Paris: OECD, 2nd edition, 2018)
www.fieldfisher.com/media/1979379/Commentary- Available from the OECD: www.oecd.org
ISDA-master-agreements.pdf
Russo, R., Finnerty, C., Merks, P. and Pettricione, M.
Heckemeyer, J. and R. de Mooij. Taxes and Corporate Fundamentals of International Tax Planning (IBFD,
Debt: Are Banks any Different? (Washington DC, 2013) 2007) [ISBN: 9789087220167]
Available from the IMF: Available from IBFD: www.ibfd.org
www.imf.org/external/pubs/ft/wp/2013/wp13221.pdf
Saunders, R. International Tax Systems and Planning
Halkyard, A. Butterworths Hong Kong Stamp Techniques 2011-2012 (London: Sweet & Maxwell,
Duty Handbook (London: LexisNexis, 2015) [ISBN: 2011) [ISBN: 9780414022683]
9789888231577] Available from Wildy & Sons: www.wildy.com
Available from LexisNexis: www.lexisnexis.com.hk
Wright, S. The Handbook of International Loan
IFA. “Withholding tax in the era of BEPS, CIVs and digital Documentation: Global Financial Markets (Palgrave
economy” (Cahiers De Droit 103b, 2018) Macmillan, 2nd edition, 2014) [ISBN: 9781137467584]
Available from SDU: Available from Amazon: www.amazon.co.uk
www.sdu.nl/ifa-cahier-volume-103b-2018-.html
8 ADITBanking option
Further information
Transparent and accessible exam papers Other papers available
Sample questions and answers for the Banking
PRINCIPLES OF INTERNATIONAL TAXATION
exam will be available to ADIT students to help
with their study. AUSTRALIA INDIA
Practice with sample exams helps students become BANKING IRELAND
familiar with the format of the exam, identify areas
for further study and focus on exam technique. BRAZIL MALTA
The sample questions and answers will be available CHINA SINGAPORE
to download at www.adit.org.uk/banking.
CYPRUS TRANSFER PRICING
EU DIRECT TAX UNITED KINGDOM
EU VAT UNITED STATES
HONG KONG UPSTREAM OIL & GAS
ADIT 9Banking option
Next steps
Register today at www.adit.org.uk/studentregistration
Leadership
An Academic Board of leading international tax
academics is responsible for overseeing and
evaluating the techincal content and rigour of the
ADIT designation, to ensure the highest standard of
assessment.
Prof. Philip Baker
Prof. Rita de la Feria
Malcolm Gammie
Prof. Ruth Mason
Prof. Philip Postlewaite
Dr Zhu Qing
Prof. Diane Ring
Prof. Luís Eduardo Schoueri
Dr Partho Shome
Prof. Dr Kees Van Raad
Jefferson VanderWolk
Prof. Richard Vann
Please visit www.adit.org.uk/academicboard
for more information.
For further information or if you have a question you
would like to discuss, please contact us:
T: +44 (0)20 7340 0550
E: education@adit.org.uk
W: www.adit.org.uk
ADIT is accredited by the Chartered Institute of
Taxation. For more information about the CIOT,
please visit www.tax.org.uk www.adit.org.uk
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