Asia-Pacific
Japan and Germany agree to terms of new tax treaty
Japan and Germany have reached an agreement in principle on a new tax treaty, Japan’s Ministry of Finance announced July 16. The new treaty will include an arbitration clause . . .
Germany
Europe
German guidance defines transfer pricing terms
Germany’s Federal Ministry of Finance, in guidance released June 4, has provided definitions of terms used in transfer pricing, including the arm’s length principle, transfer prices, and business relationships, according to a July 2 KPMG article. See, KPMG.
Europe
Amazon stops routing some European profits through low-tax Luxembourg
Amazon has confirmed that as of May 1 it began booking profits from sales in the UK, Italy, Spain, and Germany in the country where the sale actually took place rather than in low-tax Luxembourg. See, New York Times, Wall Street Journal, Financial Times, The Independent, International Business Times, The Guardian, Tim Scott – Tax is an Accrual Business, Out-Law.com
Europe
German firm Roever Broenner Susat merges with Mazars
German firm Roever Broenner Susat has joined Mazars’ international integrated partnership, Mazars announced April 21. As a result of the merger, Mazars will have 12 offices in Germany with 1,000 staff members, including 68 partners. The firm . . .
Europe
Germany considers new rules on hybrid financing, intra-group transfers, capital gains exemption
The Finance Committee of the German Bundesrat on October 24 proposed tax amendments that would limit cross-border hybrid financing arrangements, amend the rules for intra-group transfers, and revise the rules for the participation exemption for capital gains on portfolio shareholding, notes KPMG in a November 4 report. For discussion, see KPMG.
Asia-Pacific
India seeks treaty revisions to make bilateral APAs possible with Germany, France, Singapore, Italy and South Korea
India is attempting to renegotiate tax treaties with Germany, France, Singapore, Italy, and South Korea to add corresponding adjustment provisions so that India can sign bilateral advance pricing agreements (APAs) involving these nations, writes Vrishti Beniwal in an August 26 Business Standard article, quoting unnamed Finance Ministry officials. See, Business Standard
Europe
Germany and Netherlands to exchange information on APAs and innovation box tax rulings
Germany and The Netherlands have agreed to immediately begin spontaneous exchange of tax information on some advance pricing agreements (APAs) and on Dutch innovation and patent box rulings, Germany’s . . .
Europe
Germany’s exit tax on asset transfers does not violate EU law says ECJ advocate general
European Court of Justice Advocate General, Niilo Jääskinen, issued his opinion February 26 that freedom of establishment principles do not prevent Germany from imposing tax on unrealized gains inherent in assets located in Germany upon the transfer . . .
Europe
Europe
Germany, UK agree to limits on patent box
The UK and Germany have agreed to a joint proposal on harmful tax practices which limits the patent box tax break, writes Reuters, quoting unnamed German government officials. The countries will present the proposal to the OECD Forum on Harmful Tax Practices. For details, see Reuters.
Asia-Pacific
Hong Kong and Germany complete second round of tax treaty negotiations
Hong Kong and Germany completed their second round of tax treaty negotiations on March 6, according to Hong Kong’s Inland Revenue Department. This would be the first comprehensive double . . .
Austria
New plan for EU financial transaction tax would widen its base and lower rates
EU finance ministers have renewed their push to enact a financial transaction tax among the EU states, with some agreeing to a phased timetable for the introduction of the tax, and others expressing support for a new plan to widen the tax base, particularly with respect to derivative products. In a statement released January 22, Austrian finance minister Hans Jörg Schelling . . .
Europe
Germany’s upper house of parliament approves draft bill which includes strict anti-hybrid proposal, rules easing intragroup restructurings
The German Bundesrat on November 7 approved a draft tax bill that contains a number of important proposals, including anti-hybrid and anti-double dip rules that are more strict than OECD recommendations, writes Deloitte. A welcome proposal would broaden the intragroup restructuring exception. . .
Asia-Pacific
Germany and Israel sign revised tax treaty
Germany and Israel, on August 21, signed a revised and modernized double taxation convention, updating their agreement which was last modified in 1977.
The agreement reduces withholding tax on interest and . . .
Africa
Fifty-one countries sign agreement for automatic exchange of information under global standard
Tax authorities from 51 jurisdictions have signed a multilateral competent authority agreement, laying the groundwork for automatic exchange of financial account information under the OECD/G-20 Common Reporting Standard beginning 2017 . . .
Europe
ECJ Advocate General approves German law denying parent-level deduction for loss carryforwards of Austrian PE upon the PE’s sale to a group member – EY
If the ECJ follows the opinion of the AG in the case, Timac Agro Deutschland, “the possibility to obtain cross-border loss relief would be significantly narrowed in cases where the PE country allows foreign taxpayers to pick up losses incurred by a sold or wound up PE,” EY writes in a September 8 tax alert. See: EY. See, also: Timac Agro Deutschland GmbH v. Finanzamt Sankt Augustin (in German).
Europe
EU court concludes German law on deferral of capital gains violates freedom of establishment
The European Court of Justice on April 16 ruled, in European Commission v. Federal Republic of Germany, that Germany violated freedom of establishment principles through its tax scheme which allows deferral of taxation of the capital gains realized on the sale of a capital asset forming part of the assets of a permanent establishment . . .
Americas
G7 finance ministers agree on international tax priorities
G7 finance ministers and central bank governors agreed at a meeting in Dresden held May 27–29 that the mechanisms used to settle tax disputes between nations need to be improved, German Finance Minister Wolfgang Schaeuble said. Schaeuble told a press conference following . . .
Europe
Germany publishes regulations on profit attribution to permanent establishments
New German regulations on allocation of profit between head office and permanent establishments were published in the Federal Law Gazette on October 17, 2014, and are now applicable to tax years beginning after December 31, reports PwC. The regulations provide detailed rules on the application of the Authorized OECD Approach (AOA), which became effective in Germany in 2013. For analysis of the new regulations, see PwC.
Americas
Irish finance minister says German/UK patent box proposal may disadvantage small countries, worries BEPS will target US MNEs
Ireland may not support a proposal advanced by the UK and Germany to use a modified nexus approach to put limits on preferential intellectual property tax regimes under the OECD/G-20 base erosion profit shifting (BEPS) plan, Finance Minister Michael Noonan said December 2. The joint UK/German proposal, announced by the . . .
Africa
OECD statistics show many unresolved MAP cases in Germany, US, Belgium, and France
Germany had the greatest number of unresolved mutual agreement procedure (MAP) cases among OECD countries during the 2014 reporting period, according to OECD statistics . . .
Europe
Europe
UK/German proposal for IP regimes supported by OECD Forum on Harmful Tax Practices, says UK official
A joint proposal advanced by the UK and Germany that put limits on preferential intellectual property regimes has been adopted by the OECD Forum on Harmful Tax Practices (FHTP) as a new starting point for drafting guidance under Action 5 the base erosion profit shifting (BEPS) plan, UK Financial Secretary to the Treasury, David Gauke said December 2. Gauke said the UK/German proposal . . .
Europe
Germany, France, and Italy say EU Commission must take stronger action to address tax avoidance
German, French, and Italian finance ministers have asked the EU Commission to take immediate steps to more aggressively tackle corporate tax avoidance in the EU. In a letter addressed to European economy, finance and tax commissioner Pierre Moscovici . . .
Americas
ECJ rejects US company’s assertion that Germany’s differing treatment of foreign and domestic dividends violates free movement of capital
The European Court of Justice, in Kronos International Inc. released Sept 11, has ruled that a US registered company resident in Germany may assert that German tax rules violate free movement of capital, but the company may not claim freedom of establishment rights. The ECJ went on to reject the company’s contention that Germany’s tax rules in effect at the time, which permitted a set off for . . .
Europe
UK, France, Germany, Italy and Spain agree on automatic exchange of information
Finance ministers from the UK, France, Germany, Italy and Spain, on 28 April, agreed to sign new global standards of automatic exchange of tax information at the October Global Forum meeting in Berlin. The countries will begin to automatically exchange information in 2017, with respect to data collected from 31 December 31, 2015. UK Press Release, German Press Release, French Press Release
Europe
Germany and UK agree to modified nexus approach for IP regimes, existing arrangements grandfathered until 2021
Germany and the UK have agreed to a proposal that would put limits on preferential intellectual property regimes, including the UK’s patent box regime, for purposes of drafting uniform rules responding to Action 5 of the OECD/G-20 base erosion profit shifting (BEPS) plan. The compromise proposal breaks . . .
Asia-Pacific
Australia and Germany to commence tax treaty negotiations
Australia and Germany will soon begin negotiations to update their 1972 tax treaty, Australian Treasury announced June 16. The Australian government has requested stakeholder . . .
Europe
German exit tax on asset transfer to foreign permanent establishment compatible with EU law, says ECJ
The European Court of Justice on May 21 ruled that freedom of establishment principles do not prevent Germany from imposing tax on the unrealized gain inherent in a German partnership’s assets upon the transfer of the assets to the taxpayer’s foreign permanent establishment. The German law provides . . .
Americas
G7 leaders agree to arbitration for double tax disputes, say OECD should monitor BEPS implementation
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 . . .
