Latest

Americas

IRS regs extend section 956 antiabuse rules to partnership transactions, address FPHCI exception for active rents and royalties

September 3, 2015

The US IRS on September 2 released temporary and proposed regulations on the application of the section 956 deemed dividend rules to partnership transactions. Regs were also issued providing that a controlled foreign corporation (CFC) must conduct relevant activities itself to take advantage of the foreign personal holding company income (FPHCI) active rent and royalties exception, including in situations where a cost sharing . . .

Asia-Pacific

China takes tough stance on transfer pricing for royalty and service payments

March 26, 2015

China’s State Administration of Taxation (SAT) on March 18 announced that it will no longer permit deductions for royalty fees paid to an overseas related party that did not contribute to the creation of the intangible asset or allow deductions for fees paid to an overseas related party for services that do not provide economic benefit to the subsidiary, writes Dezan Shira & Associates in the March 25 edition of the China Tax Briefing. In its guidance, . . .

Asia-Pacific

India will not appeal Vodafone ruling, agrees that related-party share transfers not taxed under transfer pricing rules

January 28, 2015

The Indian government will not appeal the Bombay High Court’s decision in Vodafone, accepting the Court’s conclusion that transfer pricing laws can not be used to tax an Indian subsidiary’s issuance of shares at a premium to its overseas parent. The decision was announced by Telecom minister Ravi Shankar Prasad during a January 28 press conference following a Union Cabinet meeting. Prasad noted that the Bombay High Court . . .

<

UPDATE (1/29/2015): India to apply principles in Vodafone transfer pricing ruling to all cases: The Indian government on January 29 explicitly instructed tax officials to apply the rational behind the Bombay High Court’s decision in Vodafone to all tax cases. Tax officials must follow . . .

Philippines

Philippines signs mutual assistance in tax matters convention

September 26, 2014

The Philippines has become the 68th signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The standard calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Convention must be ratified by The Philippines to enter into force. Release

Americas

FATCA challenged in Canadian court and United Nations

August 13, 2014

Two Canadian-U.S. dual citizens, on August 11, filed suit in the Federal Court of Canada challenging the constitutionality of the intergovernmental agreement signed by the U.S. and Canada that implements FATCA.

The lawsuit, funded by the Alliance for the Defense of Canadian Sovereignty (ADCS), alleges that the intergovernmental agreement violates provisions of the Canadian Charter of Rights and Freedoms . . .

Americas

U.S. and Haiti agree in substance on FATCA IGA

July 1, 2014

U.S. Treasury Department has updated its FATCA website, reporting that Haiti has reached an “agreement in substance” on a Model 1 intergovernmental agreement (IGA) with the United States and consented to this status as of June 30.

Europe

Government paper concludes that Irish corporate tax rate is almost 11 percent

April 7, 2014

Ireland’s Department of Finance has released a technical paper which considers eight approaches to determining the effective tax rate on company profits in Ireland. The paper concludes that the best methods were provided by the Central Statistics Office of Ireland, which determined that average tax rates in Ireland since 2003 were 10.9 percent, and Ireland’s Revenue Commissioners, which pegged the rate at 10.7 percent.