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OECD officials highlight key decisions in final BEPS reports

October 6, 2015

Senior OECD officials provided an overview the 13 final reports issued under the OECD/G20 base erosion and profit shifting plan (BEPS) during two webcasts that aired October 5, just after the reports were released. Discussion covered all 15 action items, including . . .

IRS regs extend section 956 antiabuse rules to partnership transactions, address FPHCI exception for active rents and royalties

September 3, 2015

The US IRS on September 2 released temporary and proposed regulations on the application of the section 956 deemed dividend rules to partnership transactions. Regs were also issued providing that a controlled foreign corporation (CFC) must conduct relevant activities itself to take advantage of the foreign personal holding company income (FPHCI) active rent and royalties exception, including in situations where a cost sharing . . .

China takes tough stance on transfer pricing for royalty and service payments

March 26, 2015

China's State Administration of Taxation (SAT) on March 18 announced that it will no longer permit deductions for royalty fees paid to an overseas related party that did not contribute to the creation of the intangible asset or allow deductions for fees paid to an overseas related party for services that do not provide economic benefit to the subsidiary, writes Dezan Shira & Associates in the March 25 edition of the China Tax Briefing. In its guidance, . . .

India will not appeal Vodafone ruling, agrees that related-party share transfers not taxed under transfer pricing rules

January 28, 2015

The Indian government will not appeal the Bombay High Court's decision in Vodafone, accepting the Court's conclusion that transfer pricing laws can not be used to tax an Indian subsidiary's issuance of shares at a premium to its overseas parent. The decision was announced by Telecom minister Ravi Shankar Prasad during a January 28 press conference following a Union Cabinet meeting. Prasad noted that the Bombay High Court . . . <

UPDATE (1/29/2015): India to apply principles in Vodafone transfer pricing ruling to all cases: The Indian government on January 29 explicitly instructed tax officials to apply the rational behind the Bombay High Court's decision in Vodafone to all tax cases. Tax officials must follow . . .

FATCA challenged in Canadian court and United Nations

August 13, 2014

Two Canadian-U.S. dual citizens, on August 11, filed suit in the Federal Court of Canada challenging the constitutionality of the intergovernmental agreement signed by the U.S. and Canada that implements FATCA. The lawsuit, funded by the Alliance for the Defense of Canadian Sovereignty (ADCS), alleges that the intergovernmental agreement violates provisions of the Canadian Charter of Rights and Freedoms . . .

G7 leaders agree to arbitration for double tax disputes, say OECD should monitor BEPS implementation

June 8, 2015

G7 leaders, in a joint declaration issued June 8, made a "commitment to establish binding mandatory arbitration to ensure that the risk of double taxation does not act as a barrier to cross-border trade and investment." The leaders also said they support work being done on binding arbitration as part of the OECD/G20 base erosion profit shifting (BEPS) project, and encouraged others . . .

UPDATE (6/9/2015): Christian Aid sounds alarm over G7 plan for mandatory tax arbitration: Christian Aid, on June 9, called the G7 leaders' expression of support for compulsory binding arbitration in multinational tax disputes "deeply troubling," stating . . .

Tax officials at BEPS hearing reject business reps’ interest deduction proposal

February 18, 2015

Government and OECD tax officials at a February 17 OECD hearing suggested that, contrary to business representative assertions, a 30 percent of EBITDA fixed ratio is too high to effectively combat excessive multinational corporation interest deductions. Officials suggested that a lower percentage is appropriate for guidance on interest deductions being drafted under the OECD/G-20 base erosion and profit shifting (BEPS) plan. The day-long hearing concerned draft BEPS guidance under action 4, released December 18, that would limit . . .

OECD BEPS guidance includes anti-treaty shopping rules, country-by-country reporting requirements

September 16, 2014

OECD and G20 country tax officials have agreed that minimum standards should be added to tax treaties to prevent treaty shopping; have decided on the content required for transfer pricing documentation, including country-by-country reporting; and have narrowed the scope of hybrid mismatch proposals, OECD officials said during a Sept 16 OECD webinar introducing the first seven OECD base erosion profit shifting (BEPS) deliverables.   The OECD guidance, released as part of . . .

Ireland launches its own BEPS consultation

May 27, 2014

Ireland's Department of Finance, on May 27, announced a consultation to consider international stakeholder's views on how Ireland's tax system should respond to the OECD's base erosion and profit shifting (BEPS) initiative. "Ireland remains 100% committed to the 12.5% corporation tax rate. . . .

See also, Why Ireland should address corporate tax residency rules before we’re forced to, By Feargal O'Rourke, The Irish Times

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