Americas
Isle of Man removed from Colombia blacklist
The Isle of Man has been removed from Republic of Colombia’s blacklist as of October 7 pursuant to Decree 1966/2014, according. . .
What’s New
Europe
Switzerland proposes to end cantonal tax arrangements, introduce royalty box and interest-adjusted profit tax
Citing OECD pressure to reform its tax system, Switzerland is considering abolishing existing tax arrangements that no longer meet international tax standards, primarily the cantonal tax statuses for holding, domiciliary, and mixed companies. New rules would be added, however, to enhance the country’s “appeal as a tax location,” including a royalty box and. . .
Americas
Former US IRS APMA program director joins Ernst & Young LLP
Ernst & Young LLP announced July 17 that Richard McAlonan, Jr. has joined the firm as director of national tax transfer pricing controversy in Washington, DC. McAlonan will also act as the Americas director of advance pricing agreements (APAs). McAlonan previously. . .
Multinational
OECD issues revised release dates for BEPS discussion drafts and public consultations
The OECD has revised the dates when discussion drafts will be published and public consultations held in relation to the September 2014 BEPS outputs. OECD
Asia-Pacific
Hong Kong extends profits tax exemption to offshore private equity funds
Hong Kong on July 17 published in its official gazette Inland Revenue (Amendment) (No.2) Ordinance 2015, which extends the profits tax exemption for offshore funds to private equity funds. To qualify for the profits tax exemption, offshore private equity . . .
Americas
US should adopt territorial tax system and patent box, say bipartisan Senate working group chairmen
It is “imperative” that the US change its international tax system to a dividend exemption regime coupled with “robust and appropriate” base erosion rules, concluded the co-chairs of a US Senate bipartisan working group in a July 8 report. Senator Rob Portman (R-Ohio) and Senator Chuck Schumer (D-NY) said in the. . .
Multinational
OECD releases public comments on third BEPS draft dealing with tax treaty abuse
The OECD on June 18 released 65 public comments on a discussion draft under the OECD/G20 base erosion profit shifting (BEPS) plan dealing with tax treaty abuse. The draft, prepared by Working Party 1 of the OECD’s Committee on Fiscal . . .
Americas
US IRS sticks with 25 percent bright line test for inversion regs’ substantial business activities test
Final US anti-inversion regulations published June 4 retain the 25 percent bright-line test of temporary and proposed versions of the regulations for determining if an expanded affiliated group (EAG) is considered to have substantial business activities in a foreign country. The regulations . . .
Europe
Ireland issues guidance on spontaneous exchange of tax rulings with EU nations
Irish Revenue on March 12 released guidance on how it will implement spontaneous exchange of tax ruling information with EU Member States. The directive applies with immediate effect. As a member of the EU, Ireland is subject to . . .
Americas
Influential US senator calls for territorial tax system, says US should consider patent box
US Senator, Orrin Hatch, expected to be the next Chairman of the Senate Finance Committee, released a report December 11 which calls for the US to adopt a territorial tax system and suggests that the US consider adopting a patent or innovation box. The report . . .
Americas
India appealing High Court’s ruling in e-Funds
Indian tax authorities have lodged an appeal in the Supreme Court contesting the February 5 decision of the Delhi High Court in e-Funds IT Solutions/e-Funds Corp v. DIT, reports the Financial Express in a November 5 article. In e-Funds, the Delhi High Court concluded . . .
Europe
Draft UK regs exclude some in-house and outside tax advisers from tax promoter legislation
Draft UK regulations released on October 3 under the Promoters of Tax Avoidance legislation in Finance Act 2014 exclude from the definition of “promoter” the . . .
Asia-Pacific
China SAT notes new guidance on overseas investment reporting
China’s General Office of the State Administration of Taxation (SAT) in a Sept 15 English-language news release described the contents of a recently issued SAT Announcement “Reporting of Information on Overseas Investments and Income by Tax-resident Enterprises.”
The Announcement . . .
Chile
Chilean government releases revised tax reform bill
The government of Chile, on August 9, released a revised Tax Reform Bill, which incorporates 278 modifications to the bill originally submitted to Congress on April 2, writes KPMG Chile in an August tax alert. Included are significant changes to the corporate tax regime and rates, to thin capitalization rules, revisions to the treatment of goodwill amortization, and anti avoidance rules. For an analysis of the revisions, see KPMG (PDF 80 KB)
Multinational
OECD to air webcasts on October 5 after public release of BEPS reports
The OECD has announced that it will present webcasts on October 5 on the contents of the final reports under the . . .
Multinational
Public comments released on BEPS discussion draft on hard-to-value intangibles
The OECD on June 19 released 42 public comments on a discussion draft on action 8 of the OECD/G20 base erosion profit shifting (BEPS) plan dealing with hard-to-value intangibles for purposes. . .
Europe
France’s tax regime for foreign dividends violates EU law, says ECJ advocate general
European Court of Justice Advocate General Juliane Kokott, in an opinion issued June 11, concluded that France has violated freedom of establishment principles through a law that only gives domestic companies the opportunity to join a French group and . . .
Multinational
Tax experts advocate sweeping reform of international tax system
Nine tax policy experts, including former government officials, tax professors, and a Nobel Prize winner in economics, in a report published June 2, recommended far-reaching reforms to the system of taxing multinational corporations, arguing that the current system is “broken” and must be changed. The group, headed by José Antonio Ocampo, former United Nations . . .
Europe
UK government releases Finance Bill 2015 including final text of diverted profits tax
As expected, the UK government on March 24 published Finance Bill 2015, including the final version of its controversial new diverted profits tax. Provisions granting HMRC power to issue regulations to introduce country-by-country reporting requirements for MNEs consistent with OECD guidance were also included in the. . .
Americas
Irish finance minister says German/UK patent box proposal may disadvantage small countries, worries BEPS will target US MNEs
Ireland may not support a proposal advanced by the UK and Germany to use a modified nexus approach to put limits on preferential intellectual property tax regimes under the OECD/G-20 base erosion profit shifting (BEPS) plan, Finance Minister Michael Noonan said December 2. The joint UK/German proposal, announced by the . . .
Asia-Pacific
ATO releases guidance on transfer pricing reconstruction provisions
The Australian Taxation Office (ATO) on November 12 released a final taxation ruling which sets out the circumstances under which a taxpayer must disregard actual transactions with a related party and instead use hypothetical arm’s length conditions to determine income and withholding tax. The ruling interprets section 815-130 of the Income Tax Assessment . . .
Multinational
OECD publishes 24 comments on transfer pricing comparability and developing countries
The OECD on October 28 published comments received in response to its discussion draft, “Transfer Pricing Comparability Data and Developing Countries,” including an appeal by the World Bank Group to the OECD to develop guidance on the use of foreign comparables . . .
Asia-Pacific
Vietnam cracks down on transfer pricing abuse
Vietnam’s campaign against transfer pricing abuse has yielded positive results, the Ministry of Finance said on Sept. 23.
At least 870 Vietnamese enterprises with foreign direct investment have been placed on a “black list” by tax inspectors . . .
Europe
Ireland permits carryback of foreign tax credit
Guidance released by Ireland’s Office of the Revenue Commissioners on July 1 enhances double tax relief for foreign tax paid by foreign branches of Irish companies, permitting companies to carryback the foreign tax credit in . . .
Multinational
OECD publishes comments to discussion draft on hybrid mismatches
The OECD has published 68 comments to its discussion draft on neutralizing the effect of hybrid mismatch arrangements. The draft is the OECD’s response to Action 2 of its base erosion and profit shifting plan. Commentators include large multinationals, banks, insurance companies, accounting and law firms, and NGOs. The OECD will hold a hearing on the discussion draft on May 15, which will be broadcast live over the internet. Press Release, Public Comments (10.17MB)
Africa
UK changes interpretation of corporate tie-breaker clause for residency in existing tax treaties
The UK’s HM Revenue and Customs (HMRC) on November 30 announced that it has changed its interpretation of the company residence tie breaker clause in the Jersey-UK tax treaty and in 15 other tax treaties that . . .
Africa
OECD statistics show many unresolved MAP cases in Germany, US, Belgium, and France
Germany had the greatest number of unresolved mutual agreement procedure (MAP) cases among OECD countries during the 2014 reporting period, according to OECD statistics . . .
Africa
Indian court confirms that Mauritian tax residency certificate is sufficient to access tax treaty benefits
India’s Punjab and Haryana High Court on August 26 ruled that Blackstone Mauritius and Barclays Mauritius are residents of Mauritius, and thus may take advantage of the India-Mauritius tax treaty, even though the companies’ only tie to Mauritius was . . .
Americas
Canadian budget provides withholding tax relief for some non-resident employers, plugs captive insurance loophole
International tax provisions in the Canadian government’s budget 2015, released April 21, provide withholding tax relief to non-resident employers whose employees work in Canada for short periods of time and tighten an antiavoidance rule applicable to captive insurance . . .
Africa
South Africa budget includes plan to rewrite rules on transfer pricing documentation, digital businesses
South Africa’s government intends to propose new transfer pricing documentation and reporting rules and to revise controlled foreign company (CFC) rules relating to the digital economy, according to 2015 budget documents released February 25. The proposals will be “in line with” the OECD work . . .
Multinational
OECD releases comments on proposed rules for low value-adding intra-group services
The OECD on January 20 published 65 comment letters on proposed amendments to the OECD transfer pricing guidelines that would provide for elective, simplified, rules for determining the amount of low value-adding intra-group services to be charged to and paid for by individual members of an MNE group. The draft, released November 3, 2014, responds . . .
Europe
ECJ rules that UK law attributing gain to participators of close companies violates the TFEU
The European Court of Justice on November 13 ruled that UK legislation that immediately attributes gains made by non-resident closely held companies to participators of the companies that are UK residents is a restriction on the free movement of capital as defined . . .
Americas
US Tax Court permits deductions for premiums in captive insurance arrangement
The US Tax Court in Securitas Holdings Inc. v. Comm., released October 29, has ruled that payments made under a brother-sister captive insurance arrangement were deductible insurance premiums because . . .
Europe
Switzerland adopts negotiation mandates for automatic information exchange
Switzerland’s Federal Council on October 8 released final negotiation mandates for introducing automatic exchange of information in tax matters with the EU, the United States, and other countries . . .
Americas
U.S. Joint Committee report analyzes international tax proposals
The U.S. Joint Committee on Taxation released a report on July 21 entitled “Present Law And Background Related To Proposals To Reform The Taxation Of Income Of Multinational Enterprises.” The report was prepared in connection with a Senate Finance Committee public hearing scheduled for July 22 on the taxation of cross-border income. Report, Prior coverage
Europe
EU Commission seeking new members for VAT expert group
The European Commission, in a June 5 announcement, has requested applications from value added tax (VAT) specialists to serve on the Commission’s VAT Expert Group . . .
What's New
Switzerland adopts draft negotiation mandates for automatic information exchange
Switzerland’s Federal Council, on May 21, announced draft negotiation mandates for introducing automatic exchange of information in tax matters with partner states. The announcement follows Switzerland’s endorsement of the OECD’s Declaration on Automatic Exchange of Information in Tax Matters on May 6. See, release.
Americas
U.S. extends PFIC notice on government bonds
The IRS, in Notice 2014-31 released April 24, extended until 2016 Notice 2012-45, dealing with the treatment of government bonds under the passive foreign investment company (PFIC) rules. Notice 2014-31 (PDF 10K)
Europe
Ireland resolves 9 MAP cases in 2014, expands competent authority staff
Ireland resolved 9 mutual agreement procedure (MAP) cases with other nations in 2014, leaving inventory of 22 unresolved MAP cases by the end of that year, Irish Revenue said in a report, released on November 9. The report . . .
