Senior OECD officials defended draft changes to the OECD transfer pricing guidelines on risk, recharacterization, and special measures February 12, arguing that revisions to the guidelines are needed to strengthen the arm's length principle and to properly align a transaction's form with its substance. The discussion draft, released December 19, proposes significant . . .
The Obama administration, in its FY 2016 Budget, has proposed a minimum tax on US multinational corporation foreign income and a one-time14 percent tax on previously untaxed foreign deferred profits. Inversion transactions and earnings stripping were also among the targets of the $4 trillion FY 2016 budget . . .
The US Senate Finance Committee's top Republican, on July 22, said that he would consider supporting legislation to stop corporate inversions, independent of comprehensive tax reform, as long conditions were met. . . .
The UN Subcommittee on Base Erosion and Profit Shifting (BEPS), on July 8, extended the deadline for developing countries to respond to a questionnaire on BEPS. The subcommittee, established by the UN Committee of Experts . . .
The OECD's Working Party 6 has tentatively decided on a number of modifications to the OECD's discussion draft on transfer pricing documentation and country-by-country reporting, including the elimination of entity-by-entity reporting in favor of country-level reporting, said Joseph Andrus, head of OECD transfer pricing , on April 2 during a webcast updating the base erosion and profit shifting (BEPS) initiative. Pascal Saint Amans, the OECD's director of tax work, said that BEPS deliverables were "on track" for 2014 and that work has already begun on 2015 deliverables. . .
The Italian goverment, on April 21, released draft legislation which "significantly reshapes the tax rules applicable to cross-border scenarios and redefines the concepts of abuse of law and tax avoidance," writes EY in an April 27 tax alert. According to EY, the draft would replace Italy's general antiavoidance rules with a new "abuse of law" provision and would expand types of matters that can be the subject of an advance tax ruling. Also included are proposals to modify the tax treatment of transactions with black list countries, the computation of the interest expense deduction cap, attribution of income to Italian permanent establishments, foreign tax credit and controlled foreign corporation rules, and provisions on consolidation between sister companies. See, EY.
The US IRS on April 23 issued proposed regulations (REG-108214-15) defining the terms “active conduct” and “insurance business” for purposes of determining when a foreign insurance company’s income is excluded from the definition of passive income under section 1297(b)(2)(B). The regulations . . .
The OECD on March 31 released a discussion draft under the OECD/G20 base erosion profit shifting (BEPS) plan providing recommendations to tax administrations on how to structure mandatory disclosure rules to address aggressive tax planning. Included are recommendations on how to deal with international . . .
The OECD on November 21 released a discussion draft under Action 6 of the OECD/G20 base erosion and profit shifting (BEPS) plan relating to preventing abuse of tax treaties. The draft follows up on an OECD interim report, issued September 16, which reflects an agreement among countries to require minimum standards in tax treaties to prevent treaty abuse. The report states that treaties should include either a principle . . .
European Commission President Jean Claude Juncker on November 12 said advance tax rulings issued by Luxembourg to multinationals while he was the country's prime minister were legal even though the rulings helped multinationals avoid tax due other European nations. Juncker was responding the uproar over the release of leaked taxpayer private rulings and tax returns which were . . .
(Updated 10/15/2014) EU finance ministers on October 14 agreed to extend mandatory automatic exchange of information between tax administrations to interest, dividends, and other income, and to account balances and sales proceeds from financial assets. The agreement amends directive 2011/16/EU on administrative . . .
On behalf of 32 civil society organizations, Eurodad has written to the European Commission protesting the Commission's decision to hire PwC to assess the impact of proposals to require public disclosure of country-by-country reporting for banks . . .
HM Revenue & Customs, on June 30, published draft regulations that simplify the determination of the market value of shares in listed companies and similar instruments for tax purposes. The draft responds to recommendations made by the Office of Tax Simplification, replacing complicated valuation methods such as the "quarter up" method with methods that require no calculation, such as, in the case of shares, the closing price of the shares on the relevant day. Comments on the draft are requested by August 22. Draft statutory instrument (PDF 103K), Draft explanatory memorandum (PDF 103K),Release.
The European Court of Justice (ECJ), on June 12, ruled in SCA Group Holding BV and other joined cases that the Netherlands may not deny single entity tax treatment to a resident parent company and its indirectly held Dutch subsidiary (sub-subsidiary) in cases where the sub-subsidiary's parent is a not a Dutch . . .
-For implications of the ECJ opinion on Spain's rules governing tax consolidation, see a June 17 report by EY
Yuval Navot, a partner with Herzog, Fox & Neeman, Tel Aviv, analyzes draft guidance released by the Israel Tax Authority on April 2 which specifies when a foreign Internet firm has a permanent establishment in Israel giving rise to corporate taxation and has business activity in Israel requiring VAT registration.
Masao Yoshimura, an Associate Professor of Tax Law at Hitotsubashi University's Graduate School of International Corporate Strategy, analyzes a Japanese government proposal passed by the Lower House March 13 which would impose consumption tax on the supply of digital services by foreign providers. . .
Ireland's Minister of Finance Micheal Noonan on March 11 signed an order to commence legislation that establishes the Irish collective asset-management vehicle ("ICAV"), a new Irish corporate vehicle for investment funds. The ICAV will be a corporate entity with . . .
The OECD will invite some developing nations to participate in OECD Committee on Fiscal Affairs (CFA) meetings, will hold regional consultations, and will work on capacity development in an effort to increase developing nation input in the OECD/G-20 base erosion profit shifting (BEPS) plan decision-making . . .
UPDATE: Philippines Joining OECD Committee on Fiscal Affairs: The Philippines will join the OECD Committee on Fiscal Affairs to work on a global response to BEPS beginning January 2015, the Philippines Department of Finance announced November 14. See, Philippines release.
Draft guidance released November 3 would modify the OECD transfer pricing guidelines to provide elective, simplified, transfer pricing rules for low value-adding intra-group services. The guidance was released in response to Action 10 of the OECD Base Erosion and Profit Shifting (BEPS) plan, which directs the OECD to develop transfer pricing rules or special measures "to provide protection against common types of base eroding . . .
The European Commission on Oct. 7 announced that it has opened an in-depth investigation into whether Luxembourg granted private rulings to an Amazon subsidiary with too favorable terms, potentially violating EU rules on state aid. The 2003 tax ruling, which is still in force, sets a methodology for the payment of a tax deductible royalty by Luxembourg-based Amazon EU Sàrl to a related limited liability. . .
The South Korean government, on August 6, announced a wide-ranging package of tax reform measures, including requirement that large companies spend a minimum amount on investments, wage increases, and dividend payments or face an additional tax of 10 percent