The Swedish government, on April 22, proposed legislative amendments that would disallow a tax exemption for dividends paid to a Swedish company that can be deducted as interest by the distributing company and that would strengthen antiabuse rules pertaining to withholding taxes, writes EY in an April 24 Global Tax Alert. See, EY.
The European Court of Justice on February 3 ruled that a UK law that puts restrictions on the ability of group companies to offset gains with nonresident subsidiary losses is compatible with EU law, rejecting the European Commission's claim that the law made it "virtually impossible" . . .
India signed its first bilateral advance pricing agreement (APA) on December 19, agreeing with Japan and a Japanese company to aspects of the company's transfer pricing for five year term, according to a Central Board of Direct Taxes release. The CBDT said that the APA was finalized in about 18 months, and noted that this is a shorter period than most governments take to finalize an APA. See, release.
An OECD discussion draft scheduled to be released this week includes a proposal to put limits on an MNE's net interest deductions based on worldwide net third party interest expenses, OECD officials said December 15 during a webcast updating work on the OECD/G20 base erosion and profit shifting (BEPS) project. Officials also said that the OECD intends . . .
Canada's Department of Finance has released proposed international tax legislation, including measures to implement the government's 2014 budget, but said it decided to postpone action on anti-treaty shopping legislation. The proposals, released on August 29, include amendments to Canada's foreign affiliate dumping rules . . .
The Council of the European Union, on July 8, formally adopted an amendment to the parent-subsidiary directive to prevent multinational groups from achieving double non-taxation from hybrid loan arrangements. A political agreement on the matter was reached on June 20. States have until December 31, 2015, to add the amendment to their laws. Press release; Amendment to Council Directive: 10996/14, 11291/14,11291/14 ADD1;Prior coverage
The OECD's Base Erosion and Profit Shifting (BEPS) initiative has increased tax controversies between nations and is likely to continue to do so in the future, Samuel Maruca, U.S. IRS Director of Transfer Pricing Operations said April 30."My fear is that some of our treaty partners view this as a license [and are] reaching out and helping [themselves] to the tax base," said Maruca, who spoke during a webinar sponsored by EY. Maruca . . .
The US and India remain at loggerheads over the percentage of profit to be allocated to India subsidiaries of US IT and ITeS companies, with US pushing for a 12 - 13 percent rate and India unwilling to go below 18 percent, according to a an April 9 Financial Express article written by Santosh Tiwari. An unnamed official quoted by Tiwari suggested that "the way forward could be to tackle the existing cases at a higher rate and new cases at the rate closer to what the US wants." Read More: Financial Express
Aisling Donohue, a tax partner with mgpartners, Dublin, analyzes Ireland’s Finance Bill 2015, released October 22, comparing bill's new knowledge development box and county-by-country reporting proposals to similar UK proposals.
The European Court of Justice on July 17 ruled that active holding companies may recover VAT on share acquisition costs and that German courts should determine the appropriateness of a German law that does not allow partnerships to be included in VAT groups . . .
The UK gained £1,137 (USD 1.7 billion) by successfully challenging multinational transfer pricing in fiscal year 2013--14, according to statistics released by HM Revenue and Customs on March 6. The goverment collected twice as much tax from transfer pricing. . .
The Chinese government has finalized administrative measures implementing its general antiabuse rule (GAAR), the State Administration of Taxation (SAT) announced December 12. The guidance implements GAAR rules introduced in 2008, addressing the law's scope, judging criteria, adjustment methods, working procedures, and dispute resolutions, the SAT said in . . .
The UK government will introduce a new "diverted profits tax" to ensure that multinational corporations pay the correct about of tax, British Chancellor of the Exchequer, George Osborne, announced December 3 in his Autumn Statement. The UK also released a consultation on hybrid mismatches, and Osborne reaffirmed the UK's intention to introduce country-by-country reporting for . . .
India's Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) should immediately take steps to jointly handle tax service for large taxpayers and should aim to unify their management structures within five years, concluded a report issued by the Tax Administration Reform Commission (TARC),The comprehensive report to newly...
Countries can legally use a multilateral instrument to amend existing bilateral tax treaties to implement the OECD's base erosion and profit shifting (BEPS) initiative, Pascal Saint-Amans, Director, OECD Center for Tax Policy and Administration, said on May 26, during an update of OECD progress on the BEPS action plan.Saint-Amans said that a team of international lawyers have found legal precedent in areas other than tax . . .
Russia's Ministry of Finance, on March 18, published a bill introducing controlled foreign company (“CFC”) rules to the Russian tax laws. The bill also deems a foreign company as a Russian tax resident when the company's management is in Russia and taxes sales of shares in an entity where the entity's assets consist of indirectly owned Russian real property. For analysis, see CMS Bureau Francis Lefebvre, Laggan & Associates Ltd, Debevoise & Plimpton LLP,EY
HM Treasury and HM Revenue and Customs have released a position paper outlining the UK's priorities for the ongoing work with G20 and OECD taking forward the 15 point Action Plan to counter Base Erosion and Profit Shifting.The paper includes proposals for new international rules to address cross-border business structures or finance transactions, a disclosure scheme for international tax schemes, and the creation of a single Large Business Directorate within HMRC.HM Treasury and HM Revenue and Customs
G20 finance ministers and central bank governors, in a communique released following their September 5 meeting in Ankara, Turkey, called on the OECD to establish a framework by early 2016 on the implementation of OECD/G20 base erosion and profit shifting (BEPS) plan . . .
US Treasury on May 20 released for public comment draft proposals that would significantly modify the US Model Income Tax Convention. Included are proposals to address stateless income, discourage corporate inversions, and permit expanded use of the treaty through a derivatives benefits rule. The next US model would also include a provision requiring dispute resolution . . .
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 . . .