The Netherlands should consider adopting new tax provisions to counterbalance the increased tax burdens placed on companies from OECD/G20 base erosion and profit shifting (BEPS) plan, State Secretary of Finance Eric Wiebes said. . .
Russian President Vladimir Putin on November 24 signed the “deoffshorization” law, requiring Russian companies and individuals to pay tax on undistributed controlled foreign corporation (CFC) profits. The new law, effective January 1, also contains provisions clarifying the tax residency status of foreign legal entities, adds new rules on indirect transfers of immovable property through share transfers, and requires that a recipient of treaty benefits be the beneficial owner of the income.
UPDATE (11/28/2014): The new law contains a few changes from earlier drafts, writes EY in its Russian Tax Brief, released November 27. For analysis of the changes, see EY.
The OECD’s Working Party 6 (WP6) has decided to not add materiality thresholds to OECD guidance on transfer pricing documentation and country-by-country reporting, WP6 delegates said on May 19, during a day-long consultation on a draft of the guidance.
US delegate, Michael McDonald, said that WP6 decided it can not provide any explicit guidance on materiality other than to say that materiality is a local country issue.
“Quantitative materiality thresholds are very difficult. . .
The Australian Taxation Office (ATO) on November 22 released guidance on a proposed antiavoidance law being considered by Parliament that is designed to combat the use of artificial or contrived arrangements by multinationals to avoid attribution of profits to Australian permanent establishments. Also, Australia’s Board of Taxation . . .
The G-20 finance ministers have endorsed the final reports responding to the OECD/G20 base erosion profit shifting (BEPS) plan . . .
The EU Commission will address the tax bias that favors debt over equity as a part of its proposal for an EU-wide common consolidated corporate. . .
The OECD on May 22 released a revised discussion draft under the OECD /G20 base erosion and profit shifting (BEPS) plan dealing with the prevention of tax treaty abuse. The draft, prepared by Working Party 1 of the OECD’s Committee. . .
Delhi High Court in a March 16 decision said it disagreed with the Indian tax department’s method of analyzing the transfer pricing aspects of payments made by Indian subsidiaries for advertisement, marketing, and sale promotion (AMP). The Court also concluded. . .
The Chinese government has released guidance on the application of its general antiabuse rule (GAAR) to indirect transfers of Chinese assets, the State Administration of Taxation (SAT) announced February 6. The guidance seeks to . . .
The UK’s proposed diverted profits tax has been drafted to withstand legal challenges and will complement, rather than conflict with, ongoing OECD work on base erosion and profit shifting (BEPS), a Treasury official said January 7 during a parliamentary debate on the new tax. The official also said that while some MNE profit shifting involving loans is excepted from the diverted profits tax, Treasury is working on the issue in . . .
The UN Committee of Experts on International Cooperation in Tax Matters has released draft changes to the UN model tax treaty and other documents in advance of its annual meeting to be held October 27–31 in Geneva. Included is a new draft article and commentary on payments for technical services; a proposal for a new article on taxation of fees for cyber-based services; a proposal to clarify the meaning of “the same or a connected project” for purposes of determining a permanent establishment for service providers under Article 5; amendments to treaty rules to address hybrid entities; and the work plan of the Committee of Expert’s Subcommittee on Extractive Industry Taxation for Developing Countries.
The Committee also released proposed amendments to the commentary to Article 9, dealing with transfer pricing. A . . .
Researcher previews UN debate. Martin Hearson, a doctoral researcher at the London School of Economics and Political Science, has previewed the UN debate on changes to the UN Model, including draft amendments to the Article 9 commentary; a proposal to tax indirect transfers of capital assets; and the new draft services article, in an October 27 blog post. See, Martin Hearson
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USCIB contests proposed change to UN Model’s transfer pricing commentary: In an October 24 letter, William J. Sample of the United States Council for International Business states that if adopted, the proposed modification to the commentary to Article 9 of the UN Model will lead to increased disputes and double taxation. Sample condemned the lack of input by stakeholders in the UN process and argues that is inappropriate for non-OECD countries that participated in OECD transfer pricing guideline negotiations and obtained concessions to “undercut” those negotiations by arguing elsewhere for positions that were rejected. USCIB
The European Commission on Sept. 30 published non-confidential versions of its decisions to open state aid investigations into private rulings granted to Apple in Ireland and Fiat in Luxembourg. . .
Starbucks will move its European, Middle East, and African headquarters from Amsterdam to London by the end of 2014, according to a post on the company’s website. The move appears designed to quell public outrage over the Starbucks’ creative tax structures, which were brought into the spotlight last winter, as the U.K. House of Commons Public Accounts Committee investigated why Starbucks, along with Google and Amazon, paid such little tax in the U.K. despite having large sales there. The company states that the move will cause it to pay more tax in the U.K. According to Heather Self, Pinset Masons, however, the move is not likely to make much of a difference in Starbucks’ tax bill.
The EU Commission may propose a mandatory common consolidated corporate tax base (CCCTB) in its action plan to be released next month, Commission Vice-President for the Euro and Social Dialogue, Valdis Dombrovskis, said May 27. Speaking to reporters after a meeting of the EU College of Commissioners, Dombrovskis confirmed that the CCCTB . . .
A Canadian subsidiary of Skechers USA, the footwear company, must add research, design, and development (R&D) payments made to its parent under a cost sharing agreement (CSA) to the customs value of imported footwear supplied by its parent, Canada’s Federal Court of Appeals has ruled in a March 2 decision. In so concluding, the court upheld the Canadian . . .
The Obama administration is open to negotiating the tax rates for its proposed global minimum tax and one-time tax on previously untaxed foreign deferred profits, US Treasury Secretary Jacob Lew said February 5. . .
G20 leaders have endorsed the global common standard for automatic exchange of tax information and approve of progress made on the G20/OECD base erosion and profit shifting (BEPS) action plan, according to a communiqué released November 16, following a summit in Brisbane, Australia. The leaders said they are committed to . . .
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 . . .
The Delhi High Court, in DIT v. Copal Research Mauritius Limited, et al., has concluded that gain arising from a sale between nonresidents of shares in an overseas company is not taxable in India unless the company derives at least 50 percent of its value from assets situated in India. Absent meeting . . .
The OECD, on August 4, requested pubic comment on BEPS Action 11, regarding the establishment of methodologies to collect and analyze data on BEPS and the actions to address it. Comments should be submitted by September 19. Request for input
Corporate lawyer, Shri Arun Jaitley, took over as India’s new Finance Minister on on May 27, stating that his priorities are to “tackle inflation, boost economic growth, and follow the path of fiscal consolidation.” India’s new Minister of laws, telecom, and IT, Ravi Shankar Prasad, also . . .
India’s Finance Minister presented the Interim Budget for 2014-15 to Parliament on February 17. For analysis, see EY
The latest draft of the rewrite of Chapter 1 of the OECD Transfer Pricing Guidelines includes a new framework for analyzing risk that will address cash box companies without resort to any special measures, OECD tax officials said during a July 7 OECD consultation. Officials also provided a detailed update of other transfer pricing work being developed . . .
The OECD, in a discussion draft released December 16, announced that it is working on revising OECD transfer pricing guidelines relating to the use of the transactional profit split method and has requested feedback on issues associated with that project. . .
Israel’s tax authority will soon publish a circular clarifying that internet companies must pay VAT and income tax in Israel, according to a June 15 report by the Matzav Network, reporting on comments made by Tax Authority director, Moshe Asher. See, Matzav Network.
The OECD has released a discussion draft on the Tax Challenges of the Digital Economy. OECD Discussion Draft (PDF 1.40 MB) ; OECD Press Release. Analysis: KPMG
The US government is trying to persuade the EU Commission that it is inappropriate to require EU States to recover “retroactive” tax from multinationals upon a finding that illegal State aid was provided through overly-generous private tax rulings, Robert Stack . . .
The OECD released the final base erosion profit shifting (BEPS) reports this morning. The 13 reports are based on the BEPS action plan, endorsed by the G20 in July 2013, which identified 15 key areas. . .
Ireland’s Department of Finance on July 30 published a paper describing current thinking on the design its planned ‘knowledge development box’ legislation, which will offer a special low rate of tax on income from intellectual property. The release . . .
The European Commission on June 17 said it is readying a proposal for an EU-wide common consolidated corporate tax base (CCCTB) that would be mandatory for multinationals. The Commission also announced plans to publish guidance on intellectual property regimes and transfer pricing; launched a public consultation on whether companies should be required to make . . .
The OECD on April 29 released a discussion draft proposing revisions to the OECD transfer pricing guidelines relating to cost contribution arrangements (CCAs) entered into between related parties. The proposal, which would modify Chapter VIII of the OCED transfer pricing guidelines, was released in response to action 8 of the OECD/G20 base erosion and. . .
India’s Finance Ministry has released long-awaited regulations permitting rollback of an advance pricing agreement’s (APA) method of determining arm’s length prices to earlier tax years, though quick action is required to take advantage of the rules for existing applications and agreements. The provisions. . .
Indian tax officials support several recommendations designed to reduce the large number of tax disputes in the Indian court system proposed by the Tax Administration and Reform Commission (TARC), according to a TARC report released February 20. The report, entitled “Recommendations, Feedback & Way Forward,” accompanies the release of the TARC’s fourth and final report, putting into one document hundreds of recommendations made in . . .
The OECD’s Committee on Fiscal Affairs has approved recommendations for base erosion and profit shifting (BEPS) action plan items due to be presented to G20 finance ministers in September, according to a July 3 press release issued by the New Zealand government. Release
A report, released by the European Commission on May 28, concludes that a special tax regime should not be adopted for the digital economy, rather modification of current VAT, corporate tax, and transfer pricing rules are needed to respond to the digitization of the economy.
The report, drafted by group of seven independent tax experts led by Victor Gaspar, Special Advisor to the Banco de Portugal, responds to
. . .
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