Hunter Biden, the son of US President Joe Biden, is expected to plead guilty to two federal misdemeanour tax crimes, as well as admitting to illegally possessing a gun while a drug user.
The tax crimes involve failing to pay over $100,000 in income tax in 2017 and 2018.
In theory, Biden still faces a maximum sentence of one year in prison for each tax crime and 10 years for possessing a gun illegally. His plea deal, however, is likely to keep him out of jail.
The BBC has reported that a former justice department official told the US broadcaster CBS that the tax amounts would land most clients “in the jail time range”.
Any final deal will have to be approved by the judge in the case, who will then also determine Biden’s sentence.
The conclusion of the trial will mark the end of a five-year investigation.
Ukraine to return to pre-war tax system
Ukraine plans to revert to its pre-war tax system by July, Finance Minister Serhiy Marchenko told Reuters yesterday, June 22.
To comply with the nation’s $15.6 billion IMF loan programme, various tax exemptions, which were enacted to maintain Ukraine’s economic output during the invasion by Russia, will be scrapped.
In an interview on Wednesday, June 21, Marchenko said the measure would increase government tax revenue by up to ₴10 billion ($271 million) for the rest of 2023.
“We expect the restoration will be (voted on) at the end of June or the beginning of July,” he said.
“We can't even cover our military expenditure with our taxes, but at least we can cover a part, and it gives us some space of manoeuvre.”
China’s $72bn tax break package to boost EV industry
China has revealed its plans for a major package of tax breaks to increase the sale of electric vehicles.
Tax exemptions will last for four years from 2024, and cost an estimated ¥520 billion ($72 billion), reported Reuters on Wednesday, June 21.
Buyers of new EVs in the first two years of the plan will not be required to pay purchase tax, which can cost up to ¥30,000. A purchase tax on EVs will continue into 2026 and 2027, but it will be capped at ¥15,000 per vehicle.
In January 2023, the purchase rate of new EVs in China dropped by nearly a third. By May, it had recovered to 2022 levels with reported sales of 580,000 new EVs.
Tax breaks for EVs have become a fixture in China since their introduction in 2014. These incentives have been extended three times in the years since.
US Senate ratifies long-awaited tax treaty with Chile
The US Senate voted for a new tax treaty with Chile in a near-unanimous vote after many years of political wrangling, reported Reuters on Wednesday, June 21.
The Tax Convention with Chile treaty was approved by 95 to just two in the Senate. The Chilean Congress ratified the counterpart treaty in 2015, though it was first put forward in 2010.
Rand Paul, Republican senator for Kentucky, held up the treaty over concerns that it would allow a foreign tax authority to gain information on US individuals and businesses.
Provisions of the treaty include new measures on reducing withholding tax rates on dividends, interest and royalties. In addition, the agreement introduces a withholding tax on the sale of certain stock.
Without the treaty, US businesses operating in Chile could be obliged to pay a tax rate as high as 44%.
The tax treaty will come into force once President Joe Biden signs it into US law.
Russia inches forward to legalising crypto mining
The Russian government has signalled its push to recognise crypto mining activities, despite uncertainty on how it should be taxed.
In a report from the country’s news agency TASS issued on Saturday, June 17, Russia’s Ministry of Energy said it now supports recognising crypto mining as a legal, taxable enterprise.
The deputy head of the ministry, Pavel Snikkars, urged lawmakers for “the introduction of taxation of [crypto] miners”.
Russian law permits a limited range of crypto activities. However, it is illegal to use crypto assets to pay for goods and services.
The energy ministry is unclear whether crypto mining will be charged at industrial energy tariffs or through a special crypto mining rate. Miners are charged at residential rates under current rules, which are heavily subsidised in the country.
Russia’s efforts to secure new revenue sources is a response to the growing budget deficit, which is estimated at ₽3.4 trillion ($4.3 billion) as of the first half of 2023.
European Parliament backs resolution in favour of UN tax convention
The European Parliament voted through a resolution motion calling on the EU to support a UN tax convention on June 15.
EU member states may still be at odds with the European Commission over the UN taking a greater role in tax policy. This change could threaten the OECD’s dominance in global tax matters.
The Africa Group put forward Resolution 77/244 at a UN General Assembly vote in November 2022. Many EU member states voted in favour of the resolution last year, but the European Commission sided with the US against the proposal.
Both the EU and the US opposed the proposal for a UN tax convention and a new global tax body on the grounds that it may duplicate the OECD reform process. This is after many years of work to establish the BEPS standards.
Next week in ITR
ITR will be following up on tax controversies and reform in the UK, especially a recent ruling in the case of Royal Bank of Canada against HM Revenue and Customs.
We will also be analysing the possible changes to the Australian proposal for public country-by-country reporting that was delayed this week.
Readers can expect these stories and plenty more next week. Don’t miss out on the key developments. Sign up for a free trial to ITR.
