The India expects to sign an agreement with the US on Sunday that sets out a framework to resolve mutual agreement procedure disputes concerning the appropriate markup to apply to related-party transactions, and hopes to sign similar agreements with the UK, France, and other European nations, writes Jayshree P. Upadhyay of Business Standard in a January 24 article, quoting an unnamed tax official. See, Business Standard.
South Africa’s minister of finance on December 23 released for public comment a draft report that provides a detailed analysis of how South Africa should react to OECD/G-20 base erosion and profit shifting (BEPS) plan output . . .
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
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 European Parliament’s special committee on tax rulings on Monday approved its final report, which will be released to the public sometime . . .
“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
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 . . .
Mike Danilack, former IRS Deputy Commissioner (International) of the Large Business and International (LB&I) division, has joined PwC, the firm has announced. Danilack will serve as a principal in PwC’s Washington National Tax Services’ transfer pricing . . .
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 . . .
Justice Patrick Boyle has recused himself from deciding all remaining issues in McKesson Canada Corporation’s transfer pricing proceedings in the Tax Court of Canada, including costs and confidentiality issues . . .
Steve Labrum has joined KPMG’s Canary Wharf office in London as a financial services transfer pricing partner. Labrum is former Global Head of Transfer Pricing at Alvarez and Marsal. Release
Microsoft and the Indian tax authority are again fighting over transfer pricing profit margins, with Microsoft claiming that its Indian unit earned 16.4% profit in FY10, and the government claiming that a 61.5% profit is appropriate, according to report by Santosh Tiwari of The Financial Express.
The US IRS in Notice 2015-54 released August 6 announced that the government will issue regulations overriding section 721(c) nonrecognition treatment in cases where property is transferred by a US person to a partnership that has foreign partners related . . .
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 Australian Tax Office’s (ATO) tax compliance efforts targeting international business and public groups focuses on specific tax risks, such as losses and profit shifting, and on specific events in the business life cycle, such as private equity investments and mergers and acquisitions, the agency said in a March 2. . .
The European Commission on February 6 invited interested parties to comment on its state aid investigation into whether an advance pricing agreement (APA) granted by Luxembourg to Amazon that set the price of intra-group royalties. . .
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. . .
The U.S. Tax Court, in Amazon.com, Inc. & Subsidiaries v. Commissioner, has denied Amazon’s motion for partial summary judgement, concluding that there are genuine disputes of material fact necessary to determine to whether IRS abused its discretion in adjusting amounts under a cost sharing agreement . . .
Australia’s Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 received Royal Assent on December 11, giving effect to measures announced . . .
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 . . .
Ken Brewer has joined Alvarez & Marsal Taxand’s international tax team in Miami as a senior advisor, the firm announced . . .
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. . .
The UK government on July 15 published the Summer Finance Bill 2015 to tax implement tax changes announced in last week’s budget and earlier proposals. The bill implements a proposed . . .
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 . . .
US Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Ways and Means Chairman Paul Ryan (R-WI) today sent a letter to Treasury Secretary Jack Lew raising concerns about transfer pricing documentation requirements in the OECD/G20 base erosion and profit shifting (BEPS) plan and calling on the administration to consult . . .
The UN has released a draft, designed to serve as the basis of discussion at the UN’s Third Annual Conference on Financing for Development, which recommends that the UN Committee of Experts on International Cooperation on Tax Matters be upgraded to an intergovernmental committee. The Committee of Experts, currently a subsidiary body . . .
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. . .
The US IRS in private letter ruling 201514006 released April 3 has granted a taxpayer consent to change to the elective method and period-by-period identification for purposes of including stock based compensation as an intangible development cost that taxpayer must share for purposes of its cost sharing agreement. See, PLR 201514006.
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. . .
A coalition of European and American trade unions, joined by the anti-poverty campaign group War on Want, released a report February 24 claiming that McDonald’s avoided over €1 billion (USD 1.1 billion) in European corporate taxes from 2009-2013 by shifting income from its European franchises to a Luxembourg subsidiary through use of royalty payments.The group said that McDonald’s restructured . . .
European Parliament leaders on February 5 failed to endorse the establishment of a committee of inquiry to investigate EU states’ private tax ruling practices, announcing instead that a vote will be taken in the next full house to set up a more limited special committee to handle the . . .
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 . . .
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.
The International Centre for Tax and Development (ICTD) has announced that it has established a research project to assist developing nations with OECD and IMF international tax reform initiatives.
The project will produce a series of briefing papers that will evaluate OECD and IMF proposals and devise specific recommendations for tax laws, regulations, and administrative practices. Project leaders are . . .
The Australian government, on May 8, announced a consultation on proposals to tighten the country’s thin capitalization rules. On November 6, 2013, the government said it would proceed with the reforms, which were included in the May 2013 Australian budget. The proposed amendments include a tightening the debt limit settings of Australia’s thin capitalization regime. Consultation, New For analysis see, Pitcher Partners
The Australian Taxation Office on November 10 published a general overview if Australia’s advance pricing arrangement (APA) program. See: Australian Taxation Office.
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