Christian Aid on June 9 called the G7 leaders support for mandatory binding arbitration for multinational tax disputes “deeply troubling,” stating that the mechanism could further harm poor countries . . .
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 . . .
Ireland’s Tax and Duty Manual has been updated with expanded information regarding the procedures that migrating companies should use to elect to defer their exit charge under the tax laws, Irish Tax and Customs announced on May 26. See, Revenue eBrief No. 53/15.
Congressional tax writers are getting behind a major new tax break for profits made on patent portfolios as part of their ongoing quest to identify ways to make the U.S. tax code business-friendlier. Source: Lawmakers Embrace Patent Tax Breaks – WSJ
Switzerland’s Federal Council on April 29 initiated a consultation on a federal decree which would implement automatic exchange of information in tax matters with Australia. The consultation follows up on a joint declaration . . .
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. . .
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 US IRS, on February 17, announced updates to the FATCA International Data Exchange Service (IDES) user guide, including a revised data preparation section and more instructions. The IRS also said that an IDES sample test file has been added to the IDES Data File Preparation page and has scheduled a FATCA IDES open testing session for financial institutions and tax . . .
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 EU Council, on January 27, amended the EU parent-subsidiary directive, adding a new antiavoidance rule. The action follows up on a political agreement reached on December 9 to amend the directive. The directive exempts from taxation dividends and other profit distributions received by parent companies from subsidiaries located in different member states. The amended directive provides that tax exemptions for . . .
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 . . .
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 . . .
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 . . .
G20 finance ministers, in a communique released following their Sept. 20-21 meeting in Carins, Australia, have expressed approval of the progress made toward completion of the G20 OECD Base Erosion and Profit Shifting (BEPS) Action Plan and have committed to finalizing all action items by 2015. Further, the ministers endorsed the finalized global Common Reporting Standard for automatic exchange of tax information, committing to exchange of information by 2017 or end-2018, subject to the completion of legislative procedures. Communique. See also, G20 release, prior coverage of BEPS recommendations.
UK formally commits to country-by-country reporting template: The UK has agreed to implement the country-by-country reporting template provided for in the OECD/G20 BEPS recommendations, Financial Secretary to the Treasury David Gauke announced in a Sept. 20 release. See, UK release.
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India disputes binding arbitration proposals in BEPS recommendations: In a Sept. 22 speech before the G20, India’s Minister of State for Finance expressed support for the OECD/G20 BEPS project but said that developing nations had “major concerns” with proposals to introduce binding arbitration into the mutual agreement procedure for tax treaties. See, speech of Smt. Nirmala Sitharaman, India Minister of State for Finance. See, related coverage.
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The OECD and Global Forum announce mandate to assist developing nations with BEPS: The OECD and its Global Forum on Transparency and Exchange of Information announced on Sept. 22 that they have been mandated by the G20 to develop toolkits to support developing countries in addressing BEPS and to launch pilot projects to assist them to move towards automatic exchange of information. The OECD said it will report to the G20 Leaders in November on its plan to deepen the involvement of developing countries in the OECD/G20 BEPS project and ensure that their concerns are addressed. OECD release.
Switzerland’s Federal Council on Sept. 9 adopted report on the tax treatment of fines including fines that arise in an international context. The report concludes that fines, including tax penalties and financial administrate sanctions, are putative in nature and therefore can not be deducted. Profit disgorgement sanctions, on the other hand, which require repayment of taxable profits obtained by illegal acts, can be deducted. For more details, see release, report (in German).
Luxembourg and France on Sept. 5 signed the 4th amendment to their 1958 double tax agreement, providing for source country taxation of gains from the sale of shares of companies that primarily invest in immovable property, such as real estate. Text of the amendment (in French), release (in French). For analysis, see Arendt & Medernach, Loyens & Loeff, Baker & McKenzie
French tax authorities, on August 5, published regulations under new Article 212 1-b of the French tax code, which limits interest deductions when the debtor and creditor are affiliated entities, writes Taxand France, in an August 18 report. For analysis of the new regulations, see Taxand France. See, also KPMG.
EY, on August 8, announced that Jay Nibbe will take over as Global Vice Chair for Tax. Nibbe will lead more than 35,000 tax professionals around the world. Release
An OECD report, released August 1, identifies the main sources of base erosion and profit shifting (BEPS) in developing countries and the extent to which the OECD/G20 Action Plan addresses these concerns.
After interviewing developing nation officials. . .
The Netherlands, on June 14, ratified a tax treaty signed in 2012 between The Netherlands and Ethiopia, according to a July 15 report by Consultants International. For analysis of the treaty provisions, see Consultants International.
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 . . .
The U.S. IRS, on June 13, released the following private letter rulings (PLRs) that involve multinational entities
. . .
The State of Qatar and the Kyrgyz Republic, on June 1, signed an agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to income tax. Release
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)
The OECD has released a discussion draft addressing action 6 of its base erosion and profit shifting initiative. Source: OECD Press Release, OECD Draft on Preventing Treaty Abuse
Analysis: KPMG, Skadden, Arps, Slate, Meagher & Flom LLP , Osler, Hoskin & Harcourt LLP, EY
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 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 . . .
Germany had the greatest number of unresolved mutual agreement procedure (MAP) cases among OECD countries during the 2014 reporting period, according to OECD statistics . . .
The US on October 29 released seven international practice units. . .
Professor Allison Christians of McGill University provides an update of the lawsuit. See: Tax, Society & Culture. Related: MNE Tax.
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 Indian government on September 4 updated the procedures that reporting financial institutions must follow to register and submit the Form 61B or nil statement for purposes of complying . . .
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 . . .
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 . . .
The IRS will not release an updated XML schema for FATCA reporting (Form 8966) for tax year 2015, the agency said August 10. In a new . . .
The US Treasury Department has updated its FATCA website, reporting that Iceland has signed a Model 1 intergovernmental agreement (IGA) with the US as of May 25 and that Romania has signed a Model 1 IGA with the US as of May 28. The text of the agreements are available. See, FATCA IGA with Romania, FATCA IGA with Iceland.
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