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Asia-Pacific

OECD review of tax ruling exchange standard finds 36 countries could improve

December 14, 2021

Out of 131 countries the OECD reviewed in a 2020 peer review report released on December 14, 95 received no flags for improvement with respect to implementing the OECD minimum standard on exchange of information on tax rulings; however, 36 countries fell short, including . . .

Americas

Panama adapts laws on exchange of information for tax purposes to international standards

December 14, 2021

Lilia Isabel Lee, BDO Panama, discusses Panama’s November 11 approval of Law 254, amending legislation on international tax transparency and adapting the exchange of information for tax purposes to international . . .

Accounting

US Senate draft of budget bill tweaks corporate tax provisions

December 13, 2021

US Senate Finance Committee Chairman Ron Wyden (D-Ore.) on December 11 unveiled his version of the House’s approved budget bill for consideration in the Senate, revising some corporate tax provisions adopted in the House version, including the corporate minimum tax and . . .

Belgium

Belgium and France sign new tax treaty

December 13, 2021

Moïse Gnakouri, Catholic University of Louvain, discusses the new tax treaty Belgium and France signed on November 9, which complies with new international standards, and includes several changes, including the taxation of capital gains on the sale of shares of companies with assets consisting . . .

Asia-Pacific

Australian corporate tax compliance improves under agency efforts, ATO claims

December 10, 2021

The Australian Taxation Office states that its latest annual corporate tax transparency report, published December 10, demonstrates that voluntary tax compliance by large corporations is improving; the percentage of large corporations with a “high assurance” rating has increased from just . . .

Asia-Pacific

Azerbaijan amends tax laws relating to CFCs, tax havens, transfer pricing

December 10, 2021

Leyla Safarova, BM Morrison Partners, discusses Azerbaijan’s significant tax code changes, which will become effective on January 1, 2022, including new controlled foreign corporation (CFC) rules and transfer pricing amendments, as well as measures focused on . . .

Europe

Italy tax agency issues circular on transfer pricing documentation rules

December 9, 2021

Luca Tortorella and Michele Targa, Gatti Pavesi Bianchi Ludovici, discuss the Italian revenue agency’s November 26 release of Circular No. 15/E clarifying new instructions relating to amended transfer pricing documentation requirements issued last year that increase the administrative burden on . . .

Accounting

Seychelles to amend business tax rates, expand transfer pricing capacity

December 9, 2021

The government of Seychelles plans to reduce its business tax rates beginning in January 2022, according to the national budget delivered November 12, and is working on other business and international tax reforms, including expanding transfer pricing . . .

Europe

EU VAT rate rules to be relaxed, modernized under Council agreement

December 8, 2021

The European Council on December 7 reached an agreement on a proposed directive to update the EU’s rules on value-added tax (VAT) rates, allowing EU member states to have more options to apply reduced and zero VAT rates on certain goods and services in line with . . .

Americas

US beneficial ownership reporting rules target shell companies, tax evasion

December 8, 2021

The US Treasury Financial Crimes Enforcement Network (FinCEN) on December 7 issued proposed rules to implement beneficial ownership reporting requirements to “impede malign actors from abusing legal entities, like shell companies, to conceal . . .

Asia-Pacific

Israeli transfer pricing case addresses reclassification of trademark transaction, arm’s-length R&D pricing

December 8, 2021

Assaf Hasson, Assaf Hasson & Co., discusses the Israeli Jerusalem District Court’s recent ruling in favor of the Israel Tax Authority in a transfer pricing case, Sephira & Offek Ltd. and Israel Daniel Amram, involving the reclassification of a trademark transaction between . . .

Americas

Whirlpool profits routed through foreign subsidiary subject to US tax, court holds

December 7, 2021

The US Court of Appeals for the Sixth Circuit in a December 6 decision held that Whirlpool must pay taxes on more than USD 45 million in profits for which the appliance manufacturer had evaded paying taxes by shuffling the income through a Luxembourg subsidiary with a . . .

Americas

Canadian company not liable for tax for foreign affiliate bank, Supreme Court holds

December 6, 2021

The Supreme Court of Canada ruled in a December 3 decision that Canadian corporation Loblaw Financial Holdings qualified for an exception from Canadian taxation with respect to its foreign subsidiary Glenhuron, a Barbados-based bank; while Canadian companies generally must . . .

Americas

OECD countries’ tax revenues fell in 2020, but less than their GDPs

December 6, 2021

The ratio of tax revenues to GDP in OECD countries rose slightly in 2020 amid the Covid-19 pandemic, as nominal tax revenues generally fell but did so at a lower rate than countries’ GDPs, according to the OECD’s 2021 annual revenue statistics released December 6; corporate income tax revenues . . .

Americas

Coca-Cola denied reconsideration in transfer pricing dispute due to ‘futile’ arguments

December 2, 2021

The US Tax Court will not reconsider its 2020 transfer pricing decision that increased Coca-Cola’s US taxable income by about USD 9 billion in a case involving the pricing of cross-border intercompany royalties; in an order dated October 26, the court denied Coca-Cola’s motion, stating it would be “futile” . . .

Africa

Kenya trial to bridge transfer pricing and customs in landmark customs audit case

December 2, 2021

Mourad Chatar and Sarah Bahous, Value Square, discuss the Kenya Tax Appeal Tribunal’s landmark October 29 ruling in favor of the taxpayer against the Commissioner of Customs and Border Control in yet another case that sheds light on the interplay between transfer pricing and customs . . .

Carbon Tax

EU’s ‘number one priority’ in tax is implementing OECD deal, Gentiloni says

December 1, 2021

Making the recent OECD Inclusive Framework agreement operational “is now crucial,” European Commissioner for Economy Paolo Gentiloni said in November 30 remarks to the European Parliament’s subcommittee on tax matters; however, it’s not the only ambitious tax initiative in the . . .

Europe

Dutch committee presents report on conduit companies and associated tax policy options

December 1, 2021

Jian-Cheng Ku, Gabriël van Gelder and Rhys Bane, DLA Piper Nederland N.V., discuss a Dutch government committee’s November 22 findings on the presence of conduit companies in the Netherlands and what tax and non-tax measures should be taken against . . .

Europe

UK updates slew of tax initiatives, including R&D, transfer pricing, MDR

November 30, 2021

The UK government on November 30, in a planned “Tax Administration and Maintenance Day,” outlined updates to numerous tax policy plans, including measures relating to research and development (R&D) tax reliefs, transfer pricing documentation, mandatory disclosure rules (MDR) . . .

Americas

Canada and Alta Energy tax dispute: treaty shopping or valuation under restructuring

November 30, 2021

New York City Economist Dr. J. Harold McClure analyzes the Supreme Court of Canada’s November 26 decision upholding a taxpayer-favorable ruling in The Queen v. Alta Energy Luxembourg S.A.R.L., in which the legal issue revolved around charges of treaty shopping, but the appropriate valuation of . . .

Europe

Polish Deal introduces further domestic measures to limit profit shifting

November 29, 2021

Dr. Monika Laskowska, Warsaw School of Economics, discusses newly proposed amendments to the corporate income tax law set out in the “Polish Deal,” signed into law November 15, introducing several domestic measures that impact intragroup transactions beyond transfer pricing . . .

Morocco finance bill 2022 on track to be adopted with corporate tax changes

November 29, 2021

Mourad Chatar, Value Square, and Ismail El Koundi, Prokonect Consulting, discuss the November 13 approval by Morocco’s upper chamber of parliament of finance bill 2022, including a plan to replace the progressive corporate income tax with . . .

Americas

Tax dispute resolution via mutual agreement procedure works, mostly, but is still slow

November 23, 2021

Around 75% of mutual agreement procedure (MAP) cases concluded worldwide in 2020 – both for transfer pricing and other tax cases – resulted in full resolution of the issue, according to the OECD’s 2020 MAP statistics released November 22, with only . . .

Europe

Swiss federal act on implementation of international tax agreements: ready for January 2022

November 23, 2021

Francesca Amaddeo, Tax Law Competence Centre (SUPSI), discusses the Swiss Federal Council’s November 10 introduction of the federal act on the implementation of international tax agreements (ITAIA), applicable from 1 January 2022, that aims to update . . .

Europe

EU tax competition driven by R&D and other incentives, not just rates

November 22, 2021

Tax incentives for research and development (R&D) have narrowed corporate tax bases in EU countries and could be considered “a novel corporate tax competition driver,” according to a November 22 EU Tax Observatory report on new forms of . . .

Europe

Dutch 2022 budget approved by House of Representatives, moves to Senate

November 22, 2021

Jian-Cheng Ku and Rhys Bane, DLA Piper Nederland N.V., discuss the November 11 Dutch House of Representatives’ approval of the government’s 2022 tax plan, including proposals to limit unilateral downward transfer pricing adjustments, implement the last leg of hybrid mismatch rules prescribed by . . .

Belgium

Belgian tax authority clarifies new rule on deduction of foreign business losses

November 22, 2021

Moïse Gnakouri, Catholic University of Louvain, discusses the Belgian tax authority’s November 3 circular that provides a detailed commentary on new provisions in the Belgian income tax code regarding the deductibility of foreign business losses, which entered into force on . . .

Asia-Pacific

Turkey’s new law amends taxation system: change is the only constant

November 22, 2021

Oytun Canyas and Bengisu İncikli, CETINKAYA, discuss a new Turkish law that took effect October 26 and includes numerous amendments to the country’s corporate income tax, tax procedure, VAT, stamp tax, and special consumption tax, among other . . .

Americas

US corporate and global minimum tax measures clear House, debate moves to Senate

November 19, 2021

The US House of Representatives today approved a modified version of President Biden’s Build Back Better bill – including corporate and international tax changes – following protracted debates on the revenue and economic impacts of the provisions; the Senate will take up the bill sometime after . . .

Europe

CJEU confirms Spanish tax measure for goodwill is unlawful state aid

November 19, 2021

Ana Garutti, Orange Spain, discusses the October 6 decision of the Court of Justice of the European Union (CJEU) holding that Spain’s aid for investments in foreign entities, through a measure allowing amortization of goodwill, is discriminatory, because the aid . . .

Asia-Pacific

Indian court extends tax exemption of Abu Dhabi Investment Authority to its Jersey trust

November 19, 2021

Ritu Shaktawat and Milind Hasrajani, Khaitan & Co, discuss the October 28 landmark decision by the High Court of Bombay holding that income from debt securities earned by a Jersey trust settled by the Abu Dhabi Investment Authority (ADIA), and of which ADIA is the sole beneficiary, is exempt . . .

Accounting

OECD must engage business advisory group on tax deal implementation, BIAC asserts

November 18, 2021

Continued lack of engagement by the OECD with the business stakeholders represented by “Business at OECD” (BIAC) with respect to implementing rules for the OECD’s global tax deal will result in outcomes that are not administrable, according to a November 16 letter to OECD tax leaders from . . .

Africa

International tax-related information exchange generates billions in revenue, Global Forum reports

November 17, 2021

The automatic exchange of financial account information between countries is linked directly to at least EUR 3 billion in additional tax revenues; it also has contributed, through voluntary disclosure and other programs, to more than EUR 112 billion in additional tax revenues, according to a November 17 . . .

Africa

Egypt slowly adopting tax changes on base erosion and profit shifting

November 16, 2021

Sherif Sabakhawy, TAXONOMY, discusses Egypt’s slow-moving steps towards attaining international tax norms outlined in the OECD’s base erosion and profit shifting (BEPS) project . . .

Europe

Finnish government proposal implements tax rule against reverse hybrid mismatches

November 16, 2021

Heikki Vesikansa, Jenni Parviainen, and Stefan Stellato, Hannes Snellman Attorneys Ltd., discuss the Finnish government’s October 28 proposal to implement the reverse hybrid mismatch rule of the EU’s Anti-Tax Avoidance Directive, which will apply as of . . .

Europe

Ukraine adopts new procedure on advance pricing agreements for transfer pricing purposes

November 15, 2021

Ivan Shynkarenko, KM Partners, WTS Global, discusses a new procedure applicable to advance pricing agreements for transfer pricing purposes, adopted by Ukraine’s Cabinet of Ministers on October 28, which will become effective on . . .

Europe

Spain introduces minimum tax of 15% for companies

November 15, 2021

Ramon Bonell, EURTAX.com, discusses Spain’s 2022 budget that establishes a minimum corporate income tax rate of 15% of the tax base for certain taxpayers effective in 2022; the tax applies regardless of whether . . .

Asia-Pacific

Australian Taxation Office’s transfer pricing audit of ResMed: an illustrative model

November 12, 2021

New York City Economist Dr. J. Harold McClure discusses medical equipment company ResMed’s settlement with the Australian Tax Office (ATO) for USD 381.7 million in additional taxes in connection with an ATO audit over certain transfer pricing issues between . . .

Accounting

EU adopts public country-by-country reporting to deter corporate tax avoidance

November 11, 2021

The EU’s new requirement for multinationals to publicly disclose the amount of tax they pay in each EU country will become law following the approval by the European Parliament on November 11; multinationals will have to begin complying with . . .

Khaled Al Zaabi on Spanish government proposes digital services tax: “We are seeking assistance with Digital Assets and International Tax Consulting to help Abu Dhabi UAE Oil Company navigate the…” October 24 ,2024

Emma Hinson Sims on The Pillar One blueprint — the potential future of international taxation and transfer pricing: “HAPPY BIRTHDAY TO A VERY SMART, BEAUTIFUL, YOUNG LADY ON JANUARY 13TH.” January 6 ,2024

David Valdez on US Tax Court resolves Whirlpool tax dispute involving Mexican maquiladora structure: “Greetings Whirlpool Mexico, I’m trying to contact someone involved with the decision making for transportation from all of your Mexican…” October 20 ,2023

Jose Dominguez on The new US international tax rules: what you need to know about GILTI, FDII, BEAT etc.: “Very informative article. Question. Do you have a software to compute these US International Calcs to make them in house?” April 12 ,2023

Ciro César Soriano de Oliveira on Danish High Court rules on beneficial ownership of dividends for tax purposes: “Dear Ms Susi, This article is immensely clarifying. I’d like to know whether Danish Supreme Court has already granted its…” March 24 ,2023

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