French tax authorities have opened a consultation on a draft transfer pricing information return which would implement transfer pricing requirements adopted November 2013, writes KPMG in a June 5 report. For details, see KPMG
“The Hong Kong Inland Revenue Department (IRD) has investigated service fee payments by taxpayers to their overseas head office or affiliated companies before. The difference now is the IRD expects explicit transfer pricing (TP) support,” writes KPMG in a July 31 tax alert. See: KPMG
Malaysia’s Ministry of International Trade and Industry on April 6 issued guidelines for setting up a Malaysian Principal Hub, which offers tax incentives such as low tax rates and customs-free imports to MNEs that create high paying jobs and meet other criteria, writes PwC in an April 6 alert. See, PwC.
The UK on December 23 released a consultation on draft regulations for double taxation relief for groups and entities within the charge to the UK bank levy and the Netherlands bank tax, where the Netherlands is the home state of the entity or group. See, consultation.
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).
The UK’s financial secretary to the Treasury, David Gauke, told German MEP Michael Theurer on June 18 that the UK will oppose an EU-wide common consolidated corporate tax base (CCCTB) because the UK prefers tax competition, The Guardian reports. See. The Guardian.
The Australian government on May 27 introduced into Parliament legislation enhancing the Australian Investment Manager Regime, providing some widely-held foreign funds and funds that use an Australian fund manager with a exemption from tax on Australian source income and gain, writes Deloitte in a May 28 tax alert. See, Deloitte.
The OECD has announced that it will hold a January 21, 2015, consultation on its discussion draft concerning preventing the artificial avoidance of permanent establishment (PE) status. The draft was released on October 31 in response to action 7 . . .
New on SSRN website: “Financial Derivatives in Corporate Tax Avoidance: A Conceptual Perspective,” by Michael P. Donohoe, University of Illinois at Urbana-Champaign – SSRN
EY has published the transcript an interview with Pascal Saint-Amans, director of the OECD’s Center of Tax Policy and Administration, addressing the OECD’s Base Erosion Profit Shifting (BEPS) project, conducted by Alf Capito, EY’s Asia-Pacific tax policy leader. See, EY.
India’s Central Board of Direct Taxes on October 8 announced in Circular 14/2014 that a new software or IT service unit established by a taxpayer in the special economic zone will qualify for the section 10A/10AA profit-linked deduction as long no more than 50 percent the new unit’s manpower was transferred from the taxpayer’s existing business. The previous threshold was 20 percent. See, India Income Tax Department.
The Brazilian Revenue Service, in Declaratory Interpretative Act 07 (ADI 07/2014) released August 15, has modified its position concerning the tax treatment of amounts paid by a Brazilian residents to foreign legal entities for the provision of infrastructure for data processing and storage with remote access, deeming such payments to be payments for the provision of services, writes EY in an August 20 tax alert. For a discussion of the new guidance, see EY.
India is working on establishing new dedicated transfer pricing dispute resolution panels which, unlike other tax units, will not need to meet revenue targets, a tax official said December 17, according to a report by the Economic Times. For more, see Economic Times.
The Bombay High Court has released its decision in Shell India Markets Pvt. Ltd. vs. Union of India on its website. In the November 18 tax case, the court ruled in favor of an Indian subsidiary of Royal Dutch Shell . . .
The Philippines will join the OECD Committee on Fiscal Affairs to work on a global response to base erosion and profit shifting (BEPS) beginning January 2015, the Philippines Department of Finance announced November 14. The Philippines will use its position to present developing country perspectives and shape strategies, tools, and other outputs to curb BEPS. See, Philippines release.
Australia’s Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill 2014 received Royal Assent on October 16. The law includes provisions tightening Australia’s thin capitalization rules and reforming the tax exemption for foreign non-portfolio dividends paid to Australian corporations. See, Parliament of Australia.
See: The Three Causes of Inversions: Reflections on Pfizer/Allergan and Notice 2015-79, by Reuven S. Avi-Yonah, University of Michigan Law School: SSRN
The Swiss government is working with business groups to craft rules to replace its cantonal corporate tax system, writes SWI swissinfo.ch, the international service of the Swiss Broadcasting Corporation, in a August 20 article. See: SWI swissinfo.ch
The Ecuadorian Internal Revenue Service has set up a new system to provide advance rulings on a company’s transfer pricing methodology, writes EY in a December 17 report. For discussion, see EY.
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.
Major Chilean tax reform legislation was published in the Official Gazette on September 29, introducing new measures for computing shareholder-level income taxation, amendments to thin capitalization rules, rate increases, and the introduction of general antiavoidance rules, among many other changes, writes PwC in an October 3 report. For analysis of some of the most important tax changes, see PwC.
Philippines tax authorities have accelerated work on advance pricing agreement (APA) guidelines and are working on transfer pricing documentation and audit guidelines, writes Quantera Global, in a June 3 post to its website. For details, see Quantera Global.
The company said the dispute is over income received from licensing its products to related parties located in foreign markets from 2007–2009. See: Wall Street Journal. More: Forbes, Business Insider, Market Watch.
Five US senators have urged the IRS to take action to stop MNEs from establishing holding partnership structures to avoid paying taxes on recognized gain in an inversion, like the partnership structure used in the Burger King and Tim Hortons merger. . .
The US IRS, in a private letter ruling released December 12, granted a corporation prospective consent to change to the elective method for measurement and timing of employee stock options, restricted shares, and restricted share units pursuant . . .
The Belgian government entered into a coalition agreement October 9, agreeing to limit the notional interest deduction regime for financial institutions and insurance companies and to modify the stock exchange tax, among other tax measures, writes Alain Huyghe, Philippe Lion, Luc Meeus, and Géry Bombeke of Baker & McKenzie in an October 10 report. For details, see Baker & McKenzie.
The US IRS on October 10 released Chief Counsel Advice 201441015, concluding that no portion of a controlled foreign corporation’s pre-1987 foreign income taxes are eligible to be deemed paid, including additional amounts paid in 2007 as a result of a redetermination of foreign tax. Chief Counsel Advice 201441015
The OECD on Oct 1 released a revised timetable for stakeholder consultation in its base erosion profit shifting (BEPS) project. Revised timeline, release
The Slovak Ministry of Finance on August 20 released new guidance specifying minimum transfer pricing documentation requirements, writes EY in a Sept. 16 Global Tax Alert. For discussion, see EY.
See: The Effect of Profit Shifting on the Corporate Tax Base in the United States and Beyond, by Kimberly Clausing: SSRN
Christian Aid has received a mixed feedback from its survey of the 100 largest companies on the London Stock Exchange regarding whether to the UK should adopt public CbC reporting. See: Christian Aid.
Indonesia’s finance minister on August 18 issued tax regulations offering a tax holiday to businesses in nine strategic sectors for up to 20 years, writes The Jakarta Post. See: The Jakarta Post. See also: Ministry of Finance release, World Finance, Bloomberg, The Business Times.
The Society of Indian Law Firms has filed complaints with the Bar Council of Delhi alleging that PwC, Deloitte, KPMG, EY, and their executives have engaged in unauthorized . . .
The European Commission will be giving up its state aid investigation into EU patent box regimes because its 2008 decision to approve Spain’s patent box created the expectation that the programs are legal, writes Victoria Slind-Flor of Boomberg, in a February 3 article, quoting a Commission official. See, Bloomberg.
India will never agree to mandatory arbitration and will make its view known at the G-20 leaders summit, reports Shruti Srivastava of the Financial Express in a November 13 article, quoting an unnamed senior official. Srivastva also quotes the official as stating that India “will raise the issue of defining ‘significant digital presence,’ which may include the number of bytes used, number of users, or the value addition done in a country.” The summit begins November 15 in Brisbane, Australia. For more, see Financial Express.
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