The U.K.’s HM Revenue and Customs, on July 24, released a revised guidance note under S1305A CTA 2009, concerning transactions between related companies that are designed to disguise profit distributions . . .
Hong Kong has entered into its first bilateral advance pricing agreement (APA), concluding an agreement with The Netherlands in June, writes EY. Hong Kong’s APA program became operational in March 2012. For more details, see EY (PDF 111 KB)
The Australian Treasury, on June 19, released a discussion draft on a common reporting standard for the automatic . . .
Finance ministers of ten European nations, on May 6, reaffirmed their commitment to press ahead with a coordinated EU financial transaction tax, agreeing to a phased-in introduction of the tax beginning with the taxation of shares and some derivatives. . .
Officials from 86 countries endorsed new OECD guidelines on the application of VAT to international trade during the OECD’s April 18-19 Global Forum on VAT in Tokyo. Through the guidelines, the OECD seeks to ensure that VAT laws have a neutral effect on production and that domestic and foreign businesses are taxed equally in cross-border trade. The standards also seek to ensure that international business-to-business trade in services and intangibles is only taxed in the country of the customer. The OECD also said it is working to extend guidelines to cross-border sales of services to private consumers, to produce anti-abuse rules, and to craft provisions on mutual cooperation and dispute minimization. OECD VAT guidelines (1.5 MB), OECD Press Release, Statement of Outcomes, Speech of OECD Deputy Secretary-General Rintaro Tamaki., BIAC press release.
The Luxembourg government today announced that it will appeal the European Commission’s October 21 decision that an advance pricing agreement (APA) issued by Luxembourg to a Fiat subsidiary amounted to illegal. . .
The OECD will provide effective mechanisms to resolve cross-border double taxation disputes in guidance under the OECD/G20 base erosion profit shifting (BEPS) plan, including mandatory and binding arbitration for those countries willing to adopt it, an OECD official said June 8 during an update of the OECD’s progress . . .
Australia will introduce transfer pricing documentation requirements for multinationals, including country-by-country reporting, consistent with guidance developed under the OECD/G20 base erosion and profit shifting (BEPS) plan, the government announced in 2015 budget papers released May 12. The government also released exposure drafts of legislation for a new targeted antiavoidance rule that is aimed at . . .
The Bombay High Court ruled in favor of an Indian subsidiary of Royal Dutch Shell in a November 18 tax case, striking another blow to the Indian tax department’s theory that the transfer or issuance of undervalued shares by an Indian company to an overseas related party should trigger a transfer pricing assessment . . .
UPDATE (11/27/2014): The Bombay High Court’s decision in Shell is now available: see, Shell India Markets Pvt. Ltd. vs. Union of India and ors
Hong Kong’s Legislative Council on March 19 passed Inland Revenue (Amendment) (No. 3) Bill 2013 to provide a tax concession for captive insurers to enjoy a 50 per cent reduction in the profits tax on their insurance business of offshore risks.
The European Commission on March 18 released a proposal that would require EU states to automatically exchange information about their tax rulings with other EU states. The Commission also announced plans to study the possibility of imposing greater tax transparency requirements on companies operating in the EU. The proposal, first announced by EU Commission President . . .
China’s State Administration of Taxation has instructed tax bureaus across China to survey companies regarding service fees and royalties paid to related parties between 2004 and 2013, to report back to the SAT on their findings, and to initiate audits of companies that have made suspicious payments, KPMG writes in an August tax alert. For details, see, KPMG. See also, EY.
Luxembourg has brought two actions in EU General Court asking the court to annul European Commission decisions that direct Luxembourg to provide information on its intellectual property taxation scheme and to provide the Commission with a list of advance tax rulings issued in 2010, 2011, and 2012 involving cross-border transactions . . .
The Swiss Federal Council, on June 20, announced that Switzerland will initial an agreement with the European Union Economic and Financial Affairs Council outlining principles and intentions concerning Switzerland’s business taxation regime . . .
The U.K.’ s HM Revenue and Customs, on April 17, published draft guidance for proposed additions to the controlled foreign companies (CFC) rules in Part 9A TIOPA 2010, clause 286 of Finance Bill 2014. The guidance concerns new provisions that would switch off the full or partial exemption rules for loan relationship credits of a CFC where there is a main purpose of transferring profits from existing intra-group lending out of the U.K. Draft guidance (PDF 77K)
The European Commission, on December 3, announced its fifth investigation into whether a private tax ruling granted by an EU State to a multinational corporation amounted to illegal State aid. This time, a ruling granted to McDonald’s by Luxembourg . . .
New Zealand’s government on August 18 released a discussion paper requesting feedback on a plan to extend the goods and services tax (GST) to cross-border services and intangibles supplied to its residents, such as e-books, music, videos, and software purchased. . .
Tax officials at a June 6 OECD consultation suggested that draft guidance on cost contribution arrangements (CCAs) will be modified to clarify how to value CCA contributions. Officials also requested stakeholder feedback to help refine aspects of draft guidance on transfer pricing for hard-to-value . . .
The Australian government on May 11 announced plans to beef up antiavoidance rules to tax multinational profits diverted from Australia and to propose laws to ensure that offshore suppliers of digital products and services pay goods and services tax (GST). The proposals will be unveiled in the government’s . . .
India’s budget, released February 28, introduces several tax changes of interest to business, including a deferral of planned general antiavoidance rules (GAAR), clarification of rules on indirect transfers of Indian assets, and the introduction of proposals to cut the corporate tax rate and widen the corporate tax base. In a . . .
The European Commission on Oct 1 announced that it has opened an investigation into whether Gibraltar’s tax authorities selectively favor companies in private tax rulings thereby violating EU state aid rules.
The Commission said it has has assessed 165 tax rulings
. . .
Switzerland and the European Union, on July 1, initialed an agreement outlining principles and intentions concerning Switzerland’s business taxation regime . . .
European Union finance ministers, on June 20, announced an agreement to revise the Parent-Subsidiary Directive to stop multinational entities from using hybrid instruments to achieve double nontaxation.
All 28 member states gave their full backing to the proposal at an Economic and Financial Affairs Council (ECOFIN) meeting in Luxembourg. . . .
A legal challenge to the Kenya-Mauritius Double Taxation Agreement, brought by Tax Justice Network Africa (TJN-A) in the High Court of Kenya at Nairobi, is getting closer to resolution, as a hearing date for the matter will be set on December 9. The lawsuit, filed October 3, 2014, is the first of its kind in Africa and . . .
The OECD’s planned guidance on the profit split method will likely consist of a series of examples that demonstrate when the method is considered the best method for transfer pricing purposes and how it should be . . .
Draft OECD guidance on hard-to-value intangibles released June 4 would permit tax administrations to consider ex post evidence of the actual financial outcome of a transfer of intangibles to determine the appropriateness of the ex ante pricing arrangement, including whether arm’s length parties would have used contingent pricing . . .
China’s State Administration of Taxation (SAT), on June 3, released English-language descriptions of SAT transfer pricing guidance, a circular reporting on the SAT’s efforts to curtail tax avoidance, and a paper outlining the changes required to transform China’s taxation system into one more truly governed by the rule of law. The SAT explained that its decision to release transfer pricing . . .
India’s Central Board of Direct Taxes (CBDT) on May 11 instructed field officers to stop issuing new tax assessments against foreign companies, particularly foreign financial institutions, for minimum alternate tax (MAT), except in cases where the statue of limitations is about to expire. The government also . . .
UPDATE (5/21/2015): India establishes committee to consider imposition of MAT on FFIs prior to April 1. The Indian government on May 20 tasked a committee headed by Justice A.P. Shah, former Chief Justice of Delhi High Court and current Chairman of the Law Commission of India to look . . .
A few changes will be made to the UK’s controversial diverted profits tax in the final version of the legislation, set to be introduced next week, according UK budget documents released March 18. Proposed legislation to add country-by-country reporting requirements for MNEs . . .
OECD and G20 countries have agreed to a framework for country-by-country reporting by multinational corporations, to the criteria to assess whether preferential intellectual property regimes are harmful, and to a plan to create a multilateral instrument to implement tax treaty-related measures, the OECD said February 6. The agreements, which implement OECD/G20 base erosion profit shifting (BEPS) plan, will be . . .
UPDATE (2/10/2015): G20 finance ministers endorse plan for multilateral instrument: G20 finance ministers have agreed to a mandate to create a multilateral instrument to implement tax treaty-related measures under OECD/G20 the base erosion and profit shifting (BEPS) plan, the ministers said in a communique following their February 9-10 meeting in Istanbul . . .
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 . . .
Ireland’s Department of Finance on January 14 published a consultation document on a proposed “knowledge box” tax regime that will provide for a special lower rate of tax on income from intellectual property. The government did not disclose the proposed tax rate. The Irish government also said that it will adhere to OECD and EU . . .
The European Commission intends to analyze leaked Luxembourg private tax rulings for evidence of illegal state aid, the European Union’s new competition chief, Margrethe Vestager, said November 20. “We consider the Lux-Leaks documents as market information. We will examine [them] and also therefore evaluate whether or not this will lead us to . . .
The International Consortium of Investigative Journalists (ICIJ) on November 5 published confidential tax documents of PwC clients on the Internet accompanied by a series of news stories that conclude that Luxembourg has been a long-time partner in multinational corporation tax avoidance. The leaked documents include 548 Luxembourg advance rulings, or comfort letters; corporate tax returns . . .
Luxembourg defends tax rulings: “The rulings in Luxembourg are compatible with the Luxembourg legislation, compatible with the EU-legislation, and compatible with the OECD-conventions, and any other international conventions,” Minister of Finance, Pierre Gramegna, said November 6, at the Ecofin council in Brussels. See speech.
_____________
Jean-Claude Juncker should resign says Bloomberg: Jean-Claude Juncker, the new president of the European Commission, has a “clear conflict of interest” as head of the body investigating the tax practices he oversaw as Luxembourg’s prime minister, says Bloomberg in a November 9 opinion piece. See, Bloomberg.
The European Commission has concluded that public dissemination of country-by-country reporting by banks will not have a negative impact on the economy, paving the way for public release of the data by January 1, 2015. “At this stage, the public country-by-country reporting of information under Article 89 of Directive 2013/36/EU is not expected to have significant negative economic impact, in particular on competitiveness, investment, . . .
The Netherlands Ministry of Finance, on June 12, published five decrees updating guidance on advance pricing agreements (APAs), advance tax rulings (ATRs), and minimum substance requirements to obtain an APA or ATR, according to a report by Loyens & Loeff. Minimum substance requirements are also provided for service companies that do not have an APA that wish to apply the Dutch treaty network or the EU Interest & Royalty Directive. For details and analysis, see a June 12 report by Loyens & Loeff
Aisling Donohue, a tax partner with mgpartners, Dublin, discusses Ireland’s unexpectedly large 2015 corporation tax receipts and the country’s likely response to the OECD/20 base erosion profit shifting (BEPS) recommendations and the EU proposals for a common consolidated corporate tax base (CCCTB) and a financial transactions tax.
Australia’s Federal Court has handed the Australian Taxation Office (ATO) an important victory, concluding that USD 2.5 billion of loans between Chevron’s Australian-resident company and its Delaware subsidiary made between 2004-2008 were not arm’s length and thus generated excessive interest . . .
Copyright © 2021. DISCLAIMER: The information provided herein is general and may not be applicable in all situations. It should not be acted upon without legal advice accounting for a particular situation.
