The annual meetings of the UN Committee of Experts on International Cooperation in Tax Matters should be moved from Geneva to New York to allow greater stakeholder input and better coordination of UN operations, the UN Secretary-General. . .
Ecuador has adopted new tax measures curtailing tax deductions for transactions between related parties, including limits on expenses for royalties, technical services, and advisory services, writes EY in a February 27 report. The new law also eliminates a tax exemption for income derived from the sale of stock in Ecuadorian entities. See, EY.
The European Commission on February 3 opened a state aid investigation into the private ruling practices of the Belgian tax administration. The rulings allow multinational entities in Belgium to reduce their corporate tax liability by “excess profits” that allegedly result from the advantage of being part . . .
The OECD on December 19 released a discussion draft proposing significant revisions to the OECD transfer pricing guidelines to address base erosion and profit shifting (BEPS). The draft seeks to provide a more accurate delineation of related party transactions, provides guidance on the relevance and allocation of risk, and provides for the recharacterization of transactions in some cases. The draft also sets out five “special measures,” including . . .
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 . . .
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 . . .
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 . . .
The US IRS has released its Transfer Pricing Audit Roadmap, which provides recommended audit procedures, links to reference materials, and insight into what to expect during a transfer pricing examination. See, Roadmap, release. For analysis, see KPMG, PwC
The legislation, released September 11 and 15 also includes provisions that reduce withholding tax on dividends that follow a cross-border merger into a Dutch company. See: Loyens & Loeff. For just the transfer pricing aspects of the bill, See: Otterspeer Haasnoot & Partners.
The US IRS on August 12 released guidance specifying new procedures to request assistance from the US competent authority under income tax treaties and to obtain an advance pricing agreement . . .
Thailand’s Cabinet on May 7 approved a draft act introducing new transfer pricing provisions, including documentation requirements, writes PwC in a May 18 report. For details, see PwC.
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 . . .
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 . . .
India signed its first bilateral advance pricing agreement (APA) on December 19, agreeing with Japan and a Japanese company to aspects of the company’s transfer pricing for five year term, according to a Central Board of Direct Taxes release. The CBDT said that the APA was finalized in about 18 months, and noted that this is a shorter period than most governments take to finalize an APA. See, release.
An OECD discussion draft scheduled to be released this week includes a proposal to put limits on an MNE’s net interest deductions based on worldwide net third party interest expenses, OECD officials said December 15 during a webcast updating work on the OECD/G20 base erosion and profit shifting (BEPS) project. Officials also said that the OECD intends . . .
The OECD’s Base Erosion and Profit Shifting (BEPS) initiative has increased tax controversies between nations and is likely to continue to do so in the future, Samuel Maruca, U.S. IRS Director of Transfer Pricing Operations said April 30.
“My fear is that some of our treaty partners view this as a license [and are] reaching out and helping [themselves] to the tax base,” said Maruca, who spoke during a webinar sponsored by EY. Maruca . . .
The US and India remain at loggerheads over the percentage of profit to be allocated to India subsidiaries of US IT and ITeS companies, with US pushing for a 12 – 13 percent rate and India unwilling to go below 18 percent, according to a an April 9 Financial Express article written by Santosh Tiwari. An unnamed official quoted by Tiwari suggested that “the way forward could be to tackle the existing cases at a higher rate and new cases at the rate closer to what the US wants.” Read More: Financial Express
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 . . .
The World Customs Organization (WCO) has a published a guide for customs officials designed to move the debate forward on the issue of the harmonization of customs valuation and transfer pricing valuation.The guide . . .
The UK gained £1,137 (USD 1.7 billion) by successfully challenging multinational transfer pricing in fiscal year 2013–14, according to statistics released by HM Revenue and Customs on March 6. The goverment collected twice as much tax from transfer pricing . . .
Tax officials from 21 Asia Pacific countries and organizations attended an OECD regional network meeting on base erosion and profit shifting (BEPS) designed to give more nations a voice in the development of OECD/G20 base erosion profiting shifting (BEPS) plan output. The meeting, held February 12–13 in Seoul, also . . .
The Chinese government has finalized administrative measures implementing its general antiabuse rule (GAAR), the State Administration of Taxation (SAT) announced December 12. The guidance implements GAAR rules introduced in 2008, addressing the law’s scope, judging criteria, adjustment methods, working procedures, and dispute resolutions, the SAT said in . . .
Advancing the common consolidated corporate tax base (CCCTB) proposal in Europe is a “high priority,” for new Commissioner for Economic Affairs, Pierre Moscovici. The CCCTB would shut off major channels of tax avoidance, ensuring a closer . . .
The Czech Tax Administration has announced new reporting obligations applicable to companies that engage in transactions with related parties located in foreign countries, reports PwC in an August 11 newsletter. For details, see PwC.
Countries can legally use a multilateral instrument to amend existing bilateral tax treaties to implement the OECD’s base erosion and profit shifting (BEPS) initiative, Pascal Saint-Amans, Director, OECD Center for Tax Policy and Administration, said on May 26, during an update of OECD progress on the BEPS action plan.
Saint-Amans said that a team of international lawyers have found legal precedent in areas other than tax . . .
HM Treasury and HM Revenue and Customs have released a position paper outlining the UK’s priorities for the ongoing work with G20 and OECD taking forward the 15 point Action Plan to counter Base Erosion and Profit Shifting.
The paper includes proposals for new international rules to address cross-border business structures or finance transactions, a disclosure scheme for international tax schemes, and the creation of a single Large Business Directorate within HMRC.
G20 finance ministers and central bank governors, in a communique released following their September 5 meeting in Ankara, Turkey, called on the OECD to establish a framework by early 2016 on the implementation of OECD/G20 base erosion and profit shifting (BEPS) plan . . .
Update: See also: OECD Secretary-General Report To G20 Finance Ministers
The UK’s conservative party on July 8 unveiled its first budget of new the new term, proposing to reduce the 20 percent UK corporate income tax rate to 19 percent beginning April 2017 and to 18 percent . . .
Senior OECD officials defended draft changes to the OECD transfer pricing guidelines on risk, recharacterization, and special measures February 12, arguing that revisions to the guidelines are needed to strengthen the arm’s length principle and to properly align a transaction’s form with its substance. The discussion draft, released December 19, proposes significant . . .
The Obama administration, in its FY 2016 Budget, has proposed a minimum tax on US multinational corporation foreign income and a one-time14 percent tax on previously untaxed foreign deferred profits. Inversion transactions and earnings stripping were also among the targets of the $4 trillion FY 2016 budget . . .
Luxembourg’s draft budget 2015, presented to Parliament on October 15, includes provisions that formalize and charge a fee for advance tax rulings, that modify transfer pricing provisions to make an explicit reference to the arm’s length standard, and that extend documentation requirements to related party transactions, writes KPMG’s member firm in Luxembourg. For details, see KPMG.
The UN Subcommittee on Base Erosion and Profit Shifting (BEPS), on July 8, extended the deadline for developing countries to respond to a questionnaire on BEPS.
The subcommittee, established by the UN Committee of Experts . . .
The Dominican Republic will soon modify its transfer pricing regulations through publication of Executive Decree 78-14, reports EY. Read More: EY.
The OECD’s Working Party 6 has tentatively decided on a number of modifications to the OECD’s discussion draft on transfer pricing documentation and country-by-country reporting, including the elimination of entity-by-entity reporting in favor of country-level reporting, said Joseph Andrus, head of OECD transfer pricing , on April 2 during a webcast updating the base erosion and profit shifting (BEPS) initiative. Pascal Saint Amans, the OECD’s director of tax work, said that BEPS deliverables were “on track” for 2014 and that work has already begun on 2015 deliverables. . .
The EU Parliament on November 25 overwhelmingly approved wide-ranging proposals to overhaul Europe’s international tax system offered by a special Parliament committee investigating multinational . . .
UPDATE (11/26/2015): EU Parliament to establish new committee on tax rulings: The EU Conference of Presidents on November 26 decided to set up a six-month committee to follow up on the tax rulings committee’s work; the precise mandate of the new committee will be decided on Wednesday. See: Release.
UPDATE (12/02/2015): New EU Parliament tax committee will have same mandate as its predecessor: The European Parliament on December 2 voted to create a new committee to investigate tax rulings, specifying that the new committee will have the . . .
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