India’s Ministry of Finance, on June 25, announced that the government will extend excise duty concessions for cars and other vehicles until December 31. The concessions were originally
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The OECD on May 15 released a revised discussion draft under action 7 of the OECD/G20 base erosion profit shifting (BEPS) action plan concerning artificial avoidance of permanent establishment (PE) status. The draft, prepared by Working Party No. 1 (WP1) of the. . .
Hong Kong’s Inland Revenue Department (IRD) on March 3 advised that it will accept 2014-15 profits tax returns in which assessable profits are computed on a fair value basis while the government continues to consider its response to the decision in Nice Cheer Investment Limited v CIR. . . .
The Australian Taxation Office (ATO) has been scrutinizing the tax affairs of more than 200 multinational corporations for the past 18 months, and expects to litigate tax disputes arising from this activity beginning the second half of 2015, Andrew Mills . . .
The European Commission has enlarged its state aid investigation into private tax ruling practices to cover all 28 European Union states. “The Commission will ask Member States to provide information about their tax ruling practice, in particular to confirm whether they provide tax rulings, and, if they do, to request a list of all companies that have received a tax ruling from 2010 to 2013,” the Commission said December 17 in a press release . . .
The EU Council on December 9 announced an agreement to add an antiabuse provision to the parent-subsidiary directive to stop multinational tax avoidance. The antiabuse rule will be a minimum standard; countries may adopt stricter national laws if they choose . . .
The Irish government on October 23 published Finance Bill 2014, which gives effect to the taxation-related measures previously announced in the government’s 2015 budget.
Included are changes to Ireland’s company residence rules which slowly close the “double Irish” corporate tax loophole. Beginning January 1, 2015, all . . .
Irish tax proposal will not eliminate “double Irish,” say attorneys: Even if Ireland eliminates the Irish incorporated non-resident company, the tax benefits of the “double Irish Dutch sandwich,” can still be achieved by setting up a Irish company managed and controlled in Malta or the UAE instead of a Caribbean nation under Ireland’s existing tax treaties with those nations, write Jeffrey L. Rubinger and Summer Ayers LePree of Bilzin Sumberg Baena Price & Axelrod LLP in an October 23 website post. See, Bilzin Sumberg.
The OECD, on July 21, released the full version of its standard for automatic exchange of tax information. Included is an overview of the standard, the full text of the Model Competent Authority Agreement and the Common Reporting and Due Diligence Standard, commentaries on the model agreements, and seven annexes, including model multilateral and nonreciprocal competent . . .
The European Commission’s inquiry into whether Ireland granted illegal state aid to Apple by granting the company favorable tax rulings could turn into a long-running court battle, said Finance Minister Michael Noonan on July 3.
“We will provide a detailed, technical, legal rebuttal to the Commission’s position and, if necessary, defend our position in the European courts,” said Noonan, in comments before the Dáil. He added that if the matter goes to court, it could remain unresolved for three to five years . . .
The international tax practices of countries spill over national boundaries and negatively effect other nations, particularly developing nations, concludes a International Monetary Fund (IMF) staff report.
The 85-page report, “Spillovers in International Corporate Taxation,” dated May 9 but released publicly on June 25, analyzes tax spillovers and suggests . . .
-NEW: Analysis by Dr. Constantin Gurdgiev, at true economics
Caterpillar and its auditor and tax adviser, PwC, at an April 1 Senate hearing, defended against allegations that Caterpillar improperly shifted U.S. profits from the sale of replacement parts to a Switzerland subsidiary. The Permanent Subcommittee on Investigations hearing followed up on the subcommittee’s March 31 report, which alleged that Caterpillar improperly avoided or deferred $2.4 billion in U.S. tax from 2000 to 2012
See also: Reuters ,USA Today, CNN Money, The New York Times
The US is disappointed with much of the OECD/G20 base erosion profit shifting (BEPS) plan output, particularly work on permanent establishments (PEs), though it supports efforts on country-by-county reporting, dispute resolution, hybrids, and interest stripping, US Treasury officials said June 10–11 in Washington at the 2015 OECD International . . .
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
In comment letters released February 11, business representatives argued that the OECD should not adopt a proposal to limit MNE interest deductions using a group-wide test, as proposed in a discussion draft released under OECD base erosion and profit shifting (BEPS) plan. Just over 100 comment letters were released in response to the discussion draft, issued December 18 . . .
European Court of Justice Advocate General Juliane Kokott in an October 23 opinion advised the ECJ to abandon the Marks & Spencer exception for loss relief for foreign group members and sanction UK legislation that restricts such loss relief.
Kokott said the . . .
In a July 2 report, Deloitte analyzes significant corporate tax proposals in a tax reform package released by the Spanish government on June 20. The corporate tax reforms include a reduction in corporate tax rates for 2015 and 2016; new anti-hybrid rules; changes to controlled foreign company rules; loss of deductions for intragroup profit participating loan interest; modifications to net operating loss carryforward rules, and changes to transfer pricing definitions, documentation, and valuation method hierarchies, writes Deloitte. For more details, see Deloitte.
India’s tax income tax department is considering requiring taxpayers to report indirect transfers abroad of assets located in India and may extend the reporting requirement to prior tax years, writes Gireesh Chandra Prasad of the Financial Express, quoting an unnamed tax official. For more details, see Financial Express.
India’s Bombay High Court on October 10 ruled in favor of Vodafone in a transfer pricing dispute, potentially resolving about two dozen other Indian tax disputes involving whether the transfer or issuance of undervalued shares by an Indian company to an overseas related party . . .
Update: For the Bombay High Court decision, see Vodafone
The European Commission, on July 11, launched a public consultation on the potential economic consequences of going forward with a requirement that financial intuitions publicly report, on a country-by-country basis, their profit and loss before tax, their tax on profit or loss, and public subsidies received. The country-by-country reporting requirement is slated to take effect January 1, 2015. . .
Brazil’s tax authorities, in guidance released June 20, have made a “landmark change” to the withholding tax treatment of outbound payments for technical services and technical assistance in cases covered by a tax treaty, writes Deloitte in a June 27 report. For analysis of the new guidance, Interpretative Act No. 5/2014 (ADI RFB 5/2014), which can be applied retroactively, see report by Deloitte.
The cabinet of Prime Minister Shinzo Abe of Japan, on June 24, endorsed economic reforms, including a phased-in cut to Japan’s corporate tax rate. The rate would drop from 35.64 percent to below 30 percent beginning in 2015. Read more, at The Japan Times, The New York Times.
The OECD has released two discussion drafts on BEPS action item 2, which calls for development of model treaty provisions and recommendations regarding the design of domestic rules to neutralize the effects (double non-taxation, double deduction, and long term deferral) of hybrid mismatch arrangements.
Comments are requested by May 2014, Press Release; Discussion Draft on Treaty Issues; Discussion Draft on Recommendations for Domestic Laws; Analysis: EY, Deloitte
EU lawmakers have nothing to fear from Google’s “double Irish” tax scheme because the purpose of the structure is to avoid current inclusion of US tax, not avoid EU tax, Google’s director of public policy & government affairs, Nicklas Lundblad, told a European Parliament committee investigating the tax affairs of multinationals on November 16. Lundblad was joined by representatives of Amazon, Barclays Bank, The Coca-Cola Company
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India’s Central Board of Direct Taxes announced September 24 that it will not impose minimum alternative tax (MAT) on companies that do not have have a permanent establishment or . . .
The US Treasury’s 2015–2016 priority guidance plan, released July 31, reveals that the US government intends to develop regulations implementing OECD/G20 base erosion profit shifting (BEPS) plan rules requiring country-by-country reporting by multinational enterprises for transfer pricing risk. . .
The final version of the rewrite of Chapter 1 of the OECD Transfer Pricing Guidelines concerning delineation of transactions, risk, recharacterization, and special measures will be “quite different” from draft guidance on the topic released last December, Joe Andrus, consultant and former head of the transfer pricing unit at the OECD, said . . .
Australia and the UK have asked G20 nations to join them in an effort to stop the diversion of profits by multinational enterprises, in an initiative designed to go “further and faster” than the OECD’s base erosion and profit shifting (BEPS) plan, Australia’s . . .
The OECD on April 3 released a discussion draft that provides recommendations on how countries can design effective controlled foreign companies (CFC) rules to combat base erosion and profit shifting (BEPS). Released in response to action 3 of . . .
The “Lux Leaks” documents confirm that PwC marketed tax avoidance schemes and reveal that statements made by PwC’s UK head of tax at a parliamentary hearing were “lies,” UK lawmakers charged at a House of Commons Public Accounts Committee (PAC) hearing on the role of accounting firms in multinational tax avoidance. PwC’s Kevin Nicholson was recalled before PAC MPs on December 8 to explain . . .
The VietNamNet Bridge, in a June 24 report, quotes Bui Van Nam, General Director of Vietnam’s General Department of Taxation (GDT), as stating that the GDT intends to investigate the transfer pricing practices of automobile manufacturers as well as the behavior of international accounting firms . . .
The Obama administration on November 19 issued another package of tax measures designed to make it more difficult and less profitable for US companies to invert. The guidance, Notice 2015-79 supplements measures . . .
The G20 leaders at their summit in Antalya on November 15-16 endorsed the 13 final reports developed under the G20/OECD base erosion and profit shifting (BEPS) project and . . .
Consensus is emerging among EU finance ministers that the EU Commission’s proposal for automatic exchange of private tax ruling information should be adopted with modifications providing for more limited disclosures and a shorter period of retroactive. . .
The US IRS has published proposed section 367 regulations that eliminate rules that allowed intangibles, including foreign goodwill and going concern value, to be transferred by a US person to a foreign corporation without gain recognition. The Service also released related . . .
The Spanish government on January 20 announced that it will issue regulations, expected to become effective January 1, 2016, that will require country-by-country reporting for multinationals, writes EY in a January 23 Global Tax Alert. For details, see EY.
The UK’s HM Treasury announced on October 6 that the UK government intends to propose rules to address hybrid mismatch arrangements consistent OCED/G20 base erosion profit shifting (BEPS) plan guidance on the topic.
The government will publish a consultation on . . .
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