CCIA Legal and Compliance Questionaire PDF

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CCIA Legal and Compliance Questionaire PDF

Transcript of CCIA Legal and Compliance Questionaire PDF

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    Legal and Compliance Issues for Community Currencies - Questionnaire -

    Introduction: This questionnaire is intended to help the New Economics Foundation on behalf of CCIA to collect information from other community currency projects and organization about the existing knowledge,

    experiences and strategies concerning the impact of laws and regulations on the implementation, operation and scalability of community currencies. The input collected will support the production of a

    public document compiling and outlining of the current legal and compliance issues as faced by the

    different currency types in different countries. We hope to cover all pertinent community currency types, including but not limited to:

    (Legal-Tender) Backed (e.g. Bristol Pound, Sol Violette, Chiemgauer) Timebank/reward scheme with social focus (e.g. Spice) B2B mutual credit systems (e.g. Sardex, TradeQoin) B2B Closed Loop Payment Systems (e.g. WIR) Loyalty scheme/reward system with sustainable focus (e.g. ePortmonnee, Torekes) Local Fiat Currencies (e.g. Ithaca Hours)

    with a focus on but not limited to these countries:

    United Kingdom, Belgium, France, The Netherlands, Ireland, Germany, Luxembourg

    We encourage and seek contributions for other countries and continents for a more comprehensive understanding and potentially produce more coherent policy recommendations. Your responses will be compiled and used to generate a detailed report on the relevant regulations, laws

    and compliance issues and inform our future work. If you indicate to us that the information you submit is sensitive or confidential in nature, we will anonymise the information you submitted. As part of the process, all responses that do not request privacy will be made available to all other

    respondents through Google drive. This will help you to see related issues elsewhere early on and potentially enhance individual contributions. We know your time is precious, but we consider this a unique opportunity to compile this kind of information and we will make this shared learning available to all other practitioners worldwide. Please submit as much information as you can and/or send supporting documentation in any form that suites

    you to [email protected]

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    How to complete this document: We have divided this document into several legal and compliance topics with their associated sub topics. Overviews and examples are provided for each topic. Please fill-out:

    1. Your name, association (if relevant), and which currency or which country(ies) you are providing

    responses on. 2. What the legal and compliance issues are for each sub-topic for the currency or currencies you

    are responsible for or that you are knowledgeable about, in the country, that you are familiar with.

    3. Please try to include as many links and references to the original legal texts or resoureces as

    possible. Also add the contact details of the relevant authorities to support our search for further information.

    Legal and Compliance Topics covered:

    1. Taxation

    2. Insurance

    3. Labor Law 4. Data Protection and Safety

    5. Financial Services Regulation 6. Acceptance of Community Currencies

    Your Name: [Please insert response here.] Which Currency or Organisation and Country do you submit information about: [Please insert response here.]

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    Legal Topics 1. Taxation Tax authorities and regulators can consider community currencies to be a means by which individuals and companies can more easily escape the tax implications of the transactions that they engage in. It is

    therefore vital that any community currency seeks to mitigate these legitimate concerns by addressing the

    impact on VAT, Corporation tax and Income tax of individuals and companies using the scheme. For example, in the Netherlands a ruling has been obtained from the tax authorities that currency earned

    through social currency schemes are not taxed up to the equivalent of a maximum annual remuneration

    of volunteers up to 1500. However the situation varies in the different NWE countries and for some similar policies are yet to be. A further challenge is designing a calculation model which allows for

    computing equivalent legal tenders for currencies that are circulated on a completely different basis such as hours. To maintain the integrity of the community currency programs CCIA will do an in-depth risk analysis to understand how to mitigate the possibility of users avoiding paying all the tax due to the authorities. An

    initial assessment is, that social currencies (e.g. Timebanking, loyalty schemes etc.), due to their relatively

    limited scale in terms of individual balances and individual earnings, and spending opportunities, in general have a low risk of tax avoidance by users. For currencies in the professional/b2b mutual credit

    and legal backed tender, where the potential risks are higher, measures have already been implemented to verify the identity of participants when they enter the scheme. Your input here will help our further

    analysis of risk and development of adequate mitigation strategies. 1.1 Value Added Tax (VAT) How do community currencies comply with VAT law? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.] 1.2 Corporation tax How do community currencies comply with corporation tax laws? [Please insert response here.]

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    Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.] 1.3 Income tax How do community currencies comply with income tax law? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.]

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    2. Insurance Under this topic there are 2 sub-topics that will need to be investigated by the responsible partners.

    Firstly the impact on volunteers engaging in work on behalf of the currency operator and related need for

    insurance. Secondly how the governance board will be indemnified against major risks. In some cities/municipalities citizens engaging in volunteer work are covered by a municipal

    (accident/disability) insurance policy. There are, however, many municipalities where this not the case.

    The partnership will need to assess this for all programs we develop, and, where necessary, negotiate favorable terms with insurance companies to provide coverage in the event no city-wide volunteer

    insurance exists. The partners are required to research the appropriate/common arrangements for insuring volunteer work

    in their country. Please also indicate if city wide coverage exists at all, or in what ways institutions

    engaged in organizing volunteering ensure the required level of insurance. Companies, charities, foundations and other entities (either profit or non-profit) who seek to introduce a

    currency scheme will need to consider the issue of potential liability of governance board members in the

    case of default, bankruptcy or other eventualities. In some countries (e.g. NL), insurance products for this type of liability are available (as long as the liability is not a result of e.g. illicit activities). For insurance companies the risks involved in running a community currency scheme may not be straightforward to assess, which means a negotiation can be required to agree upon the appropriate

    insurance policy. 2.1 Volunteer insurance (accident/disability) How do community currencies ensure that they provide volunteer insurance? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.] 2.2 Liability of board How do community currencies limit or indemnify the liability of the currency governance board? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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    [Please insert response here.]

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    3. Labor law

    One of the main target groups for social currencies are vulnerable an excluded strata of society, such as people with disabilities, the unemployed and people in deprived communities generally. Many of the

    people that can be (re)engaged and could participate in a social currency scheme are recipients of government/municipal welfare or (unemployment) benefits. For them to safely participate it is important

    that a dialogue is started and rulings are obtained on the potential impact of participation in social

    currency schemes from the relevant national and local authorities in the countries in which we implement them. 3.1 Social security How do community currencies ensure that users understand the social security implications of participating? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.] 3.2 Unemployment and disability benefits How do community currencies ensure that users understand the unemployment or disability benefit implications of participating? [Please insert response here.] Links to original law texts and contact details regulatory authorities relevant for this sub topic: [Please insert response here.] 3.3 Employment Terms Do community currencies that you are knowledgeable about offer the possibility to (partly) pay wages or

    other employment benefits with community