Latest

A practice unit published by the US Internal Revenue Service on July 26 describes the rules applicable to US multinational enterprises that enter into foreign currency transactions through . . .

Americas

US bill would create tax credit for US companies investing in Puerto Rico and other US territories to offset impact of global intangible low-taxed income (GILTI) provisions: Laura Weiss / Roll Call→

Europe

Ireland and Kenya signed double tax treaty on July 21: Irish Department of Foreign Affairs→

Americas

Global minimum tax could create confusion with current CFC rules

Thomas Locher, Tax Foundation’s Center for Global Tax Policy, discusses how the implementation of a global minimum tax could create confusion with current CFC rules, raising questions about . . .

Asia-Pacific

South Korean tax reform proposal includes enhanced R&D incentives

July 27, 2021

A tax reform bill introduced by the South Korean government on July 26 includes research and development (R&D) measures aimed at promoting . . .

Europe

Iceland adopts administrative fines for transfer pricing documentation

July 27, 2021

Ólafur Evert Úlfsson, Skatturinn – Iceland Revenue and Customs, discusses the Icelandic parliament’s May 31 passage of new rules that allow Iceland Revenue and Customs to impose administrative fines on taxpayers that fail to fulfill their transfer pricing . . .

Africa

Tax dispute peer reviews find Argentine, South African APA programs wanting, Indian MAP issues

July 27, 2021

The latest peer review assessments of countries’ efforts to meet the minimum standard for tax dispute resolution, released by the OECD on July 26, report that both Argentina and South Africa fail the first prong regarding preventing . . .

Americas

EU continues to wrangle over global minimum tax’s carve-outs, rate

July 26, 2021

A July 21 study from the EU Tax Observatory predicts that a substance carve-out under the agreement for a proposed global minimum tax could exacerbate tax competition and would reduce by 15% to 30% the tax revenues that the EU would otherwise . . .

Accounting

FASB updates accounting standard for leases

July 23, 2021

A July 19 US accounting standards update from the Financial Accounting Standards Board (FASB) revises guidance related to a lessor’s accounting for certain leases with . . .

Asia-Pacific

Singapore–Indonesia updated tax treaty enters into force

July 23, 2021

An updated tax treaty between Singapore and Indonesia entered into force on July 23, replacing . . .

Europe

Germany introduces new administrative principles for transfer pricing

July 23, 2021

Oliver Treidler, TP&C GmbH, discusses Germany’s July 14 release of new administrative principles for transfer pricing that are effective immediately and will constitute a focal point of the German transfer pricing . . .

Europe

UK draft bill would require uncertain tax treatment reporting, amend hybrid rules

July 22, 2021

The UK on July 20 published draft legislation for Finance Bill 2021-22 to create an uncertain tax treatment notification requirement for large businesses and amend the tax rules for hybrids and other mismatches, among . . .

United States

US bill introduced to establish border carbon adjustment that would impose fee on carbon-intensive imports to account for costs US businesses incur in complying with environmental standards: Senator Chris Coons (D-Del.)→

July 22, 2021

Europe

Germany adopts ATAD rules on exit taxation, CFCs, hybrids

July 22, 2021

Timo Turek, partner at Ypsilon International GmbH, discusses Germany’s June 30 implementation of the Anti-Tax Avoidance Directive (ATAD) into law, affecting exit taxation, controlled foreign corporation (CFC) taxation reform, intra-EU anti-hybrid rules, as well as . . .

Europe

European R&D tax incentive study proposes harmonizing EU approach

A July 1 study from The European Law Institute reviews diverging trends in Europe in the definition of “research and development” (R&D) and “R&D expenditures” for tax purposes and suggests . . .

Americas

US IRS advises on transfer pricing adjustments for Altera-related ‘reverse claw-backs’

A US Internal Revenue Service Office of Chief Counsel memorandum published on July 16 offers taxpayer advice with respect to transfer pricing issues related to cost sharing agreements containing “reverse claw-back” provisions, which operate . . .

Asia-Pacific

Oman suspends local filing transfer pricing reporting requirement

Nour Ali, regional tax consultant at DNV, discusses Oman’s July 7 announcement suspending the country-by-country local filing requirement until . . .

Asia-Pacific

United Arab Emirates publishes MAP guidance for resolving tax and transfer pricing disputes

Nour Ali, regional tax consultant at DNV, discusses the United Arab Emirates’ July 1 release of mutual agreement procedure (MAP) guidance for resolving tax and transfer pricing disputes through. . .

Americas

Ireland seeks input on OECD tax proposals’ impact on Irish tax policy

The Irish Department of Finance on July 20 opened a consultation on implications for Ireland’s corporate tax policy arising from the two-pillar proposal for overhauling the international tax framework recently . . .

Europe

Gibraltar announces increase in corporate tax rate from 10% to 12.5% to ease transition to anticipated 15% rate under proposed global minimum tax agreement: Gibraltar Chief Minister’s Budget Address 2021→

Americas

Chilean guidance addresses enhanced foreign tax credit rules under 2020 tax reform

Tomás Kovacevic, Barros y Errázuriz Abogados, discusses the Chilean tax agency’s May 19 clarification of the amended foreign tax credit rules enacted in Chile’s 2020 tax reform through guidance issued . . .

Americas

Brazilian tax reform’s second phase includes corporate, investment proposals

Carolina Becman and Kassia Paulo, Gaia Silva Gaede Advogados, discuss the Brazilian government’s June 25 presentation of the second phase of its proposed tax reform, which aims to change the income tax legislation for individuals and legal entities, as well as establish . . .

Ireland

Global minimum tax negotiations could land at ‘a bit higher’ rate than 15%, OECD tax director Pascal Saint-Amans says, adding that agreement will proceed with or without Ireland: Irish Times→

Americas

Nike’s transfer pricing state aid dispute: the underlying issues

New York City Economist Dr. J. Harold McClure analyzes the issues underlying the transfer pricing dispute involving Nike, following the General Court of the European Union’s July 14 ruling declining to annul the European Commission’s state aid investigation regarding . . .

Multinational

Multinational companies could manipulate financial statements to dodge taxes under OECD proposed tax rules unless issues addressed by accounting reform: Richard Murphy / Tax Research UK→

Asia-Pacific

Philippines and Brunei signed tax treaty on July 16: Philippines Department of Finance→

Denmark

Denmark finally implements ATAD amendments to CFC regime

Susi Baerentzen, Carlsberg Foundation Postdoctoral Fellow, discusses the Danish parliament’s June 3 passage of a bill to adopt changes to the controlled foreign corporation (CFC) regime necessary for the implementation of the EU Anti-Tax Avoidance Directive (ATAD) . . .

Americas

Mexico’s outsourcing schemes’ demise and its tax and transfer pricing effects

Jesús Aldrin Rojas, Managing Partner at QCG Transfer Pricing Practice, discusses tax and transfer pricing considerations for business groups in Mexico following the country’s reform to various tax and labor laws to prohibit outsourcing of personnel, published in the official gazette on April 23 . . .

Africa

Kenya’s Finance Act 2021 amends tax policy approach to global market

Samuel Okumu, Tax Consultant at Rödl & Partner Limited, discusses the Kenyan Finance Act 2021, enacted on June 29, which includes numerous amendments to the Income Tax Act, VAT Act and Tax Procedures Act that focus on taxation of cross-border transactions by . . .

Asia-Pacific

Japan and Switzerland sign tax treaty protocol

July 16, 2021

Japan and Switzerland on July 16 signed an amending protocol to the tax treaty between the countries that would revise the treatment of taxes on investment income, among . . .

OECD

US nonpartisan agency’s review of Pillars 1 & 2 reports US companies may prefer Pillar 1 adoption to alternative of digital services taxes, while Pillar 2 would allow for more government tax revenues: Congressional Research Service→

July 16, 2021

Accounting

European accounting group advises on deferred tax changes, seeks comments

July 15, 2021

The European Financial Reporting Advisory Group (EFRAG) on July 14 issued a draft letter to the European Commission recommending endorsing the amendments to international accounting standard (IAS) 12 regarding . . .

Multinational

Global minimum tax agreement’s terms – including optional adoption, a substance carve-out, and a rate as low as 15% – mean it may not be robust, strict, and widely-enough adopted to be effective: Michael P. Devereux & John Vella / Oxford University Centre for Business→

July 15, 2021

Europe

Ireland will likely give up its 12.5% corporate tax rate later this year in response to OECD tax agreement impetus, Irish government officials reportedly suggest: Daniel McConnell / Irish Examiner→

July 15, 2021

OECD

Yellen predicts US businesses will press Congress to approve global corporate tax overhaul plans because of the tax certainty such an agreement would offer: Christopher Condon / Accounting Today→

Asia-Pacific

Hong Kong will implement international consensus on BEPS 2.0 while striving to maintain tax advantages in terms of simplicity, certainty, and fairness: Hong Kong Inland Revenue Department→

Europe

EU court rejects Nike’s challenge of transfer pricing state aid investigation

The General Court of the EU on July 14 dismissed an action by Nike to annul a decision by the European Commission to investigate whether advance pricing agreements (APAs) concluded by the Netherlands with Nike constituted . . .

No global minimum tax holdouts have left negotiations, OECD official notes

Speaking virtually at a July 13 Tax Policy Center event, Grace Perez-Navarro, Deputy Director of the OECD’s Centre for Tax Policy and Administration, said the seven countries that have yet to sign onto the statement endorsing the adoption of a global minimum tax have their reasons for holding off, but . . .

Carbon Tax

EU ‘Green Deal’ includes energy tax changes, carbon border adjustment mechanism