Singapore will implement the Global Anti-Base Erosion (GloBE) Rules, that is, Income Inclusion Rule and Undertaxed Profits Rule, and Domestic Top-up Tax from January 1, 2025.Continue Reading
Transfer pricing and BEPS news from the OECD
OECD publishes guidance on global minimum corporate tax rules
The OECD, on February 2, released technical guidance to assist governments with implementation of the 15 percent global minimum corporate tax rate.Continue Reading
OECD Centre for Tax Policy and Administration gets new director
Manal Corwin shall be the next Director of the OECD Centre for Tax Policy and Administration from April 3, 2023.Continue Reading
International tax reform to yield significant revenue: OECD
New OECD analysis reveals that revenue from implementation of latest international tax reform measures will be higher than previously expected.Continue Reading
OECD releases key documents on two-pillar international tax reform
The OECD, today, released key documents as part of its two-pillar solution to reform international tax rules to address the tax challenges arising from globalization and digitalization.Continue Reading
Janet Yellen welcomes EU agreement on global minimum tax
US Treasury Secretary, Janet Yellen, has welcomed EU agreement on implementation of a global minimum tax on corporations.Continue Reading
OECD notes progress on tackling harmful tax practices
Almost 50,000 exchanges of tax information have taken place to date in respect of 23,000 tax rulings, as per a new OECD report.
The 2021 Peer Review Reports on the Exchange of Information on Tax Rulings includes the latest peer review assessments for 131 jurisdictions in relation to the compulsory spontaneous exchange of information on tax rulings.
Released on December 14, this is the sixth annual peer review of the implementation of the BEPS Action 5 minimum standard on tax rulings, which aims to provide tax administrations with the necessary information concerning their taxpayers to efficiently tackle tax avoidance and other BEPS risks.
The new peer review results show that 73 jurisdictions are fully in line with the BEPS Action 5 minimum standard, with the remaining 58 jurisdictions receiving a total of 61 recommendations to improve their legal or operational framework to identify the relevant tax rulings and exchange information.
EU Council agrees on minimum corporate tax rate
EU member states, on December 12, reached agreement to implement a minimum tax rate for large businesses at the EU-level.Continue Reading
DAC6 violates lawyer-client confidentiality: CJEU
The Court of Justice of the European Union (CJEU) has held that the EU DAC6 Directive violates the right to respect for communications between a lawyer and his or her client.Continue Reading
OECD consulting on Pillar One transfer pricing rules
The OECD is consulting stakeholders on the main design elements of Amount B under Pillar One as part of its ongoing work on digital economy taxation.Continue Reading
Netherlands opposes UN international tax framework
The Dutch State Secretary of Finance, Marnix van Rij, has expressed the government’s concerns regarding the recent UN resolution to establish an international tax cooperation framework.Continue Reading
Netherlands publishes comments on draft Minimum Tax Rate Act
The Dutch government has published 15 responses to its public consultation on the draft Minimum Tax Rate Act, 2024.Continue Reading
OECD schedules webinar to discuss digital economy taxation
Registration is open for an OECD webinar on Amount B under the Two-Pillar Solution to tackle digital economy taxation.Continue Reading
Netherlands to tackle “remarkable” tax avoidance arrangements
The Dutch finance ministry has launched a new project to tackle “remarkable tax arrangements.”Continue Reading
EU Commissioner underlines corporate tax reform plan
A global minimum corporate tax rate and the reallocation of taxing rights between jurisdictions must be implemented in due time to provide a fairer and more stable global corporate tax system, Paolo Gentiloni, European Commissioner for Economy, has said.Continue Reading
UK shares public input on mandatory tax disclosure rules
The UK government has received 20 written responses from tax and law firms on the proposed mandatory disclosure rules (MDR). Continue Reading
MAP statistics revealed for 127 tax jurisdictions
On November 22, 2022, the OECD released the latest mutual agreement procedure (MAP) statistics covering 127 tax jurisdictions.Continue Reading
UN to bolster international tax cooperation
A United Nations committee has approved draft resolution on “Promotion of inclusive and effective international tax cooperation at the United Nations.”Continue Reading
Spain, Ireland fastest in closing MAP cases under tax treaties
Spain has been awarded for taking the shortest time in closing transfer pricing cases under the mutual agreement procedure (MAP) set out in tax treaties.
The 2021 MAP Statistics were presented during the OECD Tax Certainty Day, where tax officials and stakeholders took stock of the tax certainty agenda and discussed ways to further improve dispute prevention and resolution. The MAP Award is given in recognition of efforts by competent authorities in dealing with MAP cases.Continue Reading
OECD publishes latest corporate tax statistics
The OECD has published the latest annual Corporate Tax Statistics, covering over 160 countries and jurisdictions.Continue Reading
Panama Supreme Court on tax arbitration
By Rafael Rivera Castillo (Managing Partner, BDO, Panama)
In an August 8 decision, the Panama Supreme Court of Justice declared unconstitutional several sections of the Tax Procedure Code (TPC). These provisions granted special adjudicating powers to private arbitration panels to solve tax disputes between the Directorate General of the Revenue (DGI) and taxpayers, including those related to international tax issues (such as the application of tax treaties and transfer pricing issues).Continue Reading
Swiss tax administration appoints next Director
The Swiss Federal Council has appointed Tamara Pfammatter as the new Director of the Federal Tax Administration (FTA) with effect from April 1, 2023.
Pfammatter, who will succeed Adrian Hug, is currently an ambassador and a member of management at the State Secretariat for International Finance (SIF). As the Head of the Tax Division, she is responsible for Switzerland’s international tax dossiers and for the multilateral negotiations in the OECD’s project on taxing the global economy.
For over a year prior to her current post, she was deputy divisional head in the Tax Division and divisional head in the Corporate Taxation Policy Division at SIF. From 2009 to 2020, she worked as a project leader in the Tax Policy Division of the FTA.
Australia expanding tax treaty network
The Australian government is expanding its tax treaty network to provide improved certainty to taxpayers and guard against tax avoidance practices.
New negotiations are planned with Bulgaria, Colombia, Croatia, Cyprus, Estonia, Latvia, and Lithuania. These countries add to the current program which includes Portugal, Slovenia, Greece, and Luxembourg.Continue Reading
Martín Guzmán joins ICRICT as Commissioner
The Independent Commission for the Reform of International Corporate Taxation (ICRICT) is pleased to announce Martín Guzmán as a new Commissioner.
Martín Guzmán served as Argentina’s Minister of Economy between December 2019 and July 2022.
Guzmán advocated for the interests of emerging and developing countries during the OECD/G20 Inclusive Framework negotiations to reform the international tax system that led to the global agreement in October 2021.
White & Case adds Carlos Martinez to global tax practice
Law firm White & Case LLP has roped in Carlos Martinez as a partner in the firm’s Global Tax Practice.
Martinez will be based out of Mexico. Martinez joins White & Case from Creel Abogados, S.C.
Martinez has extensive experience providing tax advice to domestic and multinational companies on corporate transactions. He also provides advice on international taxation, transfer pricing and tax litigation.
White & Case partner Sang I. Ji, Global Head of the Tax Practice, said: “Carlos brings a wealth of experience acting as tax counsel on complex, cross-border deals. Further strengthening our tax capabilities in Mexico through Carlos’s arrival will support the continued growth and development of our corporate practice in this key market.”
UK updates tax provision to reflect latest OECD transfer pricing guidance
The update comes into effect for accounting periods beginning on or after January 1, 2023, for corporation tax purposes.Continue Reading
Australia gets over AUD 68 billion in corporate income tax
This year’s report represents 2,468 corporate entities, who paid a combined AUD 68.6 billion in income tax, AUD 11.4 billion or 19.8 percent more than the previous year and the highest since reporting began.Continue Reading
Biden administration rebuked over Hungary tax treaty termination
The letter calls upon the Biden administration to withdraw its termination of the tax treaty and promptly consult with Congress on a bipartisan basis to address any concerns with the tax treaty or any other of the United States’ current bilateral tax treaties.Continue Reading
Inter IKEA Group paid less corporate income tax in 2022
The amount of corporate income taxes paid by Inter IKEA Group decreased to EUR 322 million (EUR 398 million in the 2021 financial year). However, the total tax contribution increased slightly to EUR 1,996 million (EUR 1,916 million in the 2021 financial year).Continue Reading
Profit shifting continues despite OECD, US tax reform: Research
The paper finds that global corporate profits have grown much faster than global income between 1975 and 2019. “The share of profits in global income has increased by a third over this period, from about 15 percent to close to 20 percent. This increase is due both to the rise of the share of global output originating from corporations and the rise of the capital share of corporate output,” it states.Continue Reading
EU Commission extends inquiry into Gibraltar’s corporate tax regime
The Commission has decided to extend the scope of its original investigation to specify further the measure in favour of MJN GibCo, in line with the Court’s indications, and reassess the information submitted by the UK in relation to MJN GibCo 2012 tax ruling.Continue Reading
Hong Kong bolstering cross-border tax regime
Under the new regime, taxpayers can still be exempted from tax in respect of the specified foreign-sourced passive income received in Hong Kong if they have a substantial economic presence in Hong Kong. Continue Reading
OECD tax forum releases manual on bilateral advance pricing agreements
The manual is intended as a guide to tax administrations and taxpayers for streamlining the bilateral APA process.Continue Reading
EU Council updates tax blacklist
The EU tax blacklist now consists of 12 jurisdictions: American Samoa, Anguilla, Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands, and Vanuatu.Continue Reading
UK releases draft rules on global minimum tax
UK government, on July 20, released draft rules aimed at ensuring multinational enterprises (MNEs) operating within the UK pay a global minimum level of tax.
The draft rules are in line with the agreement on a 2 Pillar solution to reform the international tax framework made by the G20 — Organisation for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting (BEPS) last year.Continue Reading
Implemented modifications to the German Transfer Pricing Legislation
By Dr. Björn Heidecke (Director, Transfer Pricing, Deloitte, Germany) & Neeraj-Kumar Popat (Senior Manager, Transfer Pricing Deloitte, Germany)
On June 8, 2021 Germany implemented modifications to the Transfer Pricing Legislation in both the Foreign Tax Act (Außensteuergesetz) and the Fiscal Code (Abgabenordnung). Most of the modifications were already proposed with a previous initiative in March 2020 (for further information see Link: Proposed modifications to the German Transfer Pricing Legislation), however, this initiative was excluded from the final legislation passing process. In a subsequent initiative, most of the modifications from the previous initiative were included and proposed in January 2021. This proposal was now finally implemented in June 2021.Continue Reading
Namibia signs BEPS tax convention
The Convention will enter into force on January 1, 2022, for these countries.Continue Reading
EU Council adopts position on public country by country reporting of tax info
The reporting will take place within 12 months of the date of the balance sheet for the financial year in question. The directive sets out the conditions under which a company may defer the disclosure of certain information for a maximum of five years. Continue Reading
Anguilla, Dominica, and Seychelles removed from EU tax blacklist
Anguilla, Dominica, and Seychelles are now included in the state of play document (Annex II), which covers jurisdictions that do not yet comply with all international tax standards but that have committed to implementing tax good governance principles.Continue Reading
Overview of Transfer Pricing in India
By CA. Akshay Kenkre (Founder and Practice Lead, TransPrice Tax Advisors LLP, India)
The Indian transfer pricing regulations were enacted via the Indian Finance Act 2001 by introducing a separate code under Sections 92 to 92F of the Income- tax Act , 1961 (‘the Act’) read with Income- tax Rules, 1962 (‘the Rule’s) 10A to 10ETHD. The regulations are largely and principally based on OECD guidelines and describe the various transfer pricing methods, requirement for transfer pricing documentation, and contain penal provisions for non-compliance. The Indian regulations deal with intra-group transactions and is applicable from April 1, 2001.Continue Reading
Global minimum tax solution to declining corporate tax rates
The data underlines the importance of the two-pillar plan being advanced by over 130 members of the OECD/G20 Inclusive Framework on BEPS to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate.Continue Reading
Ireland says no to global minimum corporate tax proposal
The consultation will run until September 10.Continue Reading
Ireland confirms new DAC6 reporting format
DAC6 Schema Version 1.1 is applicable for all exchanges until July 31, 2021.Continue Reading
Australia designing tax policy for patent box
Comments must be received by August 16, 2021.Continue Reading
African Tax Administration Forum responds to ‘historic’ international tax reform
The two-pillar package aims to ensure that large multinational enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system.Continue Reading
Anti-avoidance tax measures introduced through Pakistan Finance Bill 2021
By Muzammal Rasheed (Co-founder, CEO & Head of Practice, WTS Global, Pakistan)
The Federal Government has announced several anti-avoidance tax measures in the Finance Bill 2021, presented as part of its third Budget before the National Assembly. The Government tags this budget as “No New Tax Budget” and emphasizes on the expansion of tax bases. This article outlines some of the anti- avoidance measures of the new tax policy introduced through Finance Bill 2021.Continue Reading
130 tax jurisdictions agree on digital economy taxation
The two-pillar package aims to ensure that large multinational enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system.Continue Reading
European Commission hails G20 agreement on digital tax
The tax reform package will include a reallocation of taxing rights – where companies pay tax wherever they conduct business – and a global minimum effective tax rate of at least 15 percent to tackle aggressive tax planning and stop the corporate tax “race to the bottom.” Continue Reading
Philippines will no longer be a harmful tax regime
The OECD’s Forum on Harmful Tax Practices (FHTP) has granted the Philippines’ appeal to assess its ROHQ regime as “potentially harmful but not actually harmful” until December 3, 2021, and then have the country’s ROHQ regime status declared as “abolished” by January 1, 2022.Continue Reading
Moroccan tax authority publishes MAP guidance
The guidance clarifies the terms and conditions that taxpayers must fulfil to avail MAP, including access to MAP, submitting MAP requests, and the various deadlines, among others.Continue Reading
Glencore’s transfer pricing tax victory: key takeaways
By Carmen McElwain (Partner, Minter Ellison, Melbourne, Australia)
On 21 May 2021 the High Court of Australia (comprised of Chief Justice Kiefel and Justice Gordon) heard and refused an application for special leave sought by the Commissioner of Taxation (Commissioner) in relation to the Full Federal Court’s decision in Commissioner of Taxation v Glencore Investments Pty Ltd (2020)  FCAFC 187; 384 ALR 252 (Glencore). Continue Reading
Corporate Tax Rates of Turkey in 2021
By Kardelen Lule (ADMD / MAVIOGLU & ALKAN, Turkey)
The rate of corporate tax was amended significantly with the Law No.7316 Amending the Law on Collection of Public Receivables and Certain Laws (“Law No.7316”) published in the Official Gazette dated April 22, 2021.
The rate which was earlier determined for 2018, 2019, and 2020 was 22%. Article 11 of the Law No.7316 amended the corporate tax rates by adding Temporary Article 13 to Corporate Tax Law No.5520 (“CTL”) which increased corporate tax rates to 25% for 2021 and to 23% for 2022. For institutions subject to special accounting periods (the regular period is January 1 to December 31), the mentioned rates will be applied to the earnings of these institutions for the accounting periods starting in the relevant year.Continue Reading
Thai Tax Authority Issues Notification on Transfer Pricing Methods
By Varapa Aurat (Consultant, Tilleke & Gibbins, Thailand)
On May 6, 2021, a new transfer pricing notification from Thailand’s Tax Department was officially published in the Government Gazette. The Notification of the Director-General of the Tax Department Re: Income Tax (No. 400), which was first announced earlier in the year, prescribes the criteria, methods, and conditions for Tax Department officials on how to assess income and adjust expenses for transactions between related parties (as defined in Section 71 bis of the Tax Code) that engage in intercompany transactions where conditions between the two parties in their commercial or financial relations differ from those that would be made between independent parties (i.e., where the transaction is not an “arms length” transaction).Continue Reading
Global minimum corporate tax protects national sovereignty: Janet Yellen
Yellen has said that the global minimum corporate tax pairs well with our domestic corporate income tax proposals and has the special virtue of helping level the playing field for US business.Continue Reading
EU Commission asks Bulgaria, Sweden to address tax issues
Under this tax scheme, interest deductibility is denied in relation to loan arrangements between affiliated companies established within the EU, irrespective of whether the terms and conditions of those arrangements remain at arm’s length or not.Continue Reading
Tax administrations discuss transfer pricing issues
The WCO facilitator focused on the Customs valuation treatment of related-party transactions and instruments adopted by the Technical Committee on Customs Valuation. The OECD facilitator elaborated on the arm’s length principle and its application, comparability analysis, and transfer pricing documentation. Continue Reading
International tax reform takes center stage in G7 meeting
The G7 (which includes the UK, the US, Canada, Japan, Germany, France, Italy, plus the EU) agreed the principles of an ambitious two Pillar global solution to tackle the tax challenges arising from an increasingly globalized and digital global economy.Continue Reading
Coca Cola asks US Tax Court to reconsider transfer pricing dispute
The tax ruling was given on November 18, 2020. According to Coca-Cola, the US Tax Court’s ruling raises fundamental questions of tax, administrative, and constitutional law warranting further consideration by a full Tax Court.
The facts of the tax dispute are as follows. Upon examination of the company’s 2007-2009 returns, IRS determined that the company’s methodology did not reflect arm’s length principle because it overcompensated the supply points and undercompensated the company for the use of its intellectual property.
The US tax authority reallocated income between the company and the supply points employing a comparable profits method that used the company’s unrelated bottlers as comparable parties. These adjustments increased the company‘s aggregate taxable income for 2007-2009 by more than USD 9 billion.
In its decision, the Tax Court said that the IRS did not abuse its discretion by reallocating income to the company by employing a comparable profits method that used the supply points as the tested parties and the bottlers as the uncontrolled comparables. The US Tax Court further held that the tax authority did not err by re-computing the company’s losses after the comparable profits method changed the income allocable to the company’s Mexican supply point, a branch of the company.
In a Motion for Reconsideration of findings or opinion filed on June 2, the company said that “the IRS is attempting to impose billions of dollars in additional taxes on Coca-Cola in this case under a different tax calculation method than that on which Coca-Cola justifiably relied and which the IRS audited and approved for over a decade before retroactively requiring Coca-Cola to use a new and different method for tax years long past. The IRS’s attempt is arbitrary, capricious, and unconstitutional.”
The company added that the US Tax Court has the opportunity to correct these fundamental errors now, and with the utmost respect, Coca-Cola asks the Court to reexamine its opinion in this nationally important, precedential tax case.
The US Tax Court enjoys substantial discretion to reconsider findings of fact and conclusions of law under Tax Court Rule 161, the company said.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at email@example.com
Cyprus extends DAC6 penalty relief
On March 18, 2021, the Government approved Law to require taxpayers/ intermediaries to report information on certain tax arrangements.
The Cyprus Tax Department will not impose administrative fines for overdue submission of DAC6 information that will be submitted until the September 30, 2021.
The penalty relief applies to:
- Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021.
- Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 and had to be submitted by 31 January 2021.
- Reportable cross-border arrangements made between 1 January 2021 and 31 August 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occurred first.
- Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021 and 31 August 2021 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice.
On March 18, 2021, the Government approved Law to require taxpayers/ intermediaries to report information on certain tax arrangements.
US tax committee investigating AbbVie’s tax practices
The letter states that AbbVie appears to have shifted profits offshore while reporting a domestic loss in the United States to avoid paying US corporate income tax. The Committee has asked the company to provide answers to specific tax questions no later than June 16, 2021.Continue Reading
Stakeholders engage on changes to OECD Model Tax Convention
The OECD has received comments from 22 stakeholders including the Big 4, Mexican Institute of Public Accountants, International Chamber of Commerce, European Business Initiative on Taxation, Business at OECD (BIAC), and Vienna University of Economics and Business, among others.Continue Reading
Kenyan Finance Bill 2021 includes key international tax measures
By CPA David Ndiritu Mwangi (Principal Consultant, Hisibati Consulting, Nairobi, Kenya)
The Kenyan government tabled the Finance Bill 2021 in Parliament on 11/05/2021. Unlike the prior year, the bill does not introduce new taxes. However the bill proposes significant changes that will indeed have a far reaching effect on multinational organizations operating in Kenya.Continue Reading
US suspends digital services tax retaliatory tariffs
On June 2, 2020, USTR initiated investigations into digital services tax adopted or under consideration in ten jurisdictions: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the UK.Continue Reading
EU governments agree on MNE tax reporting
The reporting will take place within 12 months from the date of the balance sheet of the financial year in question. The directive sets out the conditions under which a company may obtain the deferral of the disclosure of certain elements for a maximum of five years.Continue Reading
EU Commission launches research lab to tackle aggressive tax planning
The Observatory will be fully independent in conducting its research, objectively informing policymakers and suggesting initiatives that could help to better tackle tax avoidance and aggressive tax planning, among other things.Continue Reading
New IMF paper on taxing multinationals in Europe
The paper analyzes corporate tax spillovers in Europe with a focus on the channels and magnitudes of both profit shifting and corporate income tax competition.Continue Reading
Australian tax authority announces launch of R&D portal
The portal includes improved security using myGovID digital identity services, linked to your company’s ABN using Relationship Authorisation Manager (RAM).Continue Reading
Pakistan’s appellate tribunal rules on tax treaty override
By Muzammal Rasheed (Co-founder, CEO & Head of Practice, WTS Global, Pakistan)
The Appellate Tribunal Inland Revenue of Pakistan (ATIR) has disapproved applicability of Section 111 on Non-Residents in the case (2020) 122 TAX 10 (Trib.).
ATIR is the second forum of appeal against the Tax Assessment Orders issued by the Tax Authority. The appeal was filed by a Non-Resident Individual, challenging the best judgment assessment finalized by the Inland Revenue Department under section 121/111 of the Income Tax Ordinance, 2001 on ex parte basis.
Apart from the technical grounds raised before ATIR, the major thrust of the arguments on behalf of appellant involved the contention that the taxpayer was a non-resident person, having no Pakistan source income during the relevant tax year. Continue Reading
Joe Biden’s Budget includes key international tax measures
The Budget proposes to increase the income tax rate for C corporations from the existing rate of 21 percent to 28 percent. The proposal would be effective for taxable years beginning after December 31, 2021. Continue Reading
African Tax Administration Form submits revised Pillar One proposals
The revised proposals respond to both the Inclusive Framework blueprint report released for public consultation in October 2020 and the recent proposals from the US to revise the blueprint proposals.Continue Reading
Australian tax office issues draft guidance on intangibles arrangements
Public comments on the draft guidance must be received by June 18, 2021.Continue Reading
Advance Pricing Agreements to bring tax, transfer pricing certainty in Maldives
By Zaina Zahir (Senior Associate, CTL Strategies, Maldives)
Transfer Pricing Landscape
With the commencement of the Income Tax Act in January 2020, the transfer pricing landscape has significantly changed in the Maldives. Within the past 12-months, the Maldives tax administration – Maldives Inland Revenue Authority – has published the Transfer Pricing Regulation, the Country-by-Country Reporting Regulation and the Advance Pricing Arrangement Regulation.
Through the Transfer Pricing Regulation and the Country-by-Country Reporting Regulation, the Maldives – aligning its practices with the OECD’s Transfer Pricing Guidelines – implements the three tiers of transfer pricing documentation which require qualifying enterprises to prepare the Master File, the Local File, and Country-by-Country Reports.
Hence, the subsequent issuance of the APA Regulation on 16 March 2021 has provided taxpayers with the much-needed certainty in the domain of transfer pricing in the Maldives. Taxpayers now have the option to enter into an ahead of time arrangement with the Maldives tax administration, agreeing on the transfer pricing methodology and the prices to be applied to a set of related party transactions for a period not exceeding 5 consecutive years. Taxpayers can enter into unilateral, bilateral or multilateral APAs. This is expected to provide a more promising, non-adversarial environment for investors.
The APA Regulation sets out the procedure to be followed in entering into an APA and introduces several provisions on the administration of the APA. This includes the imposition of an annual compliance report filing requirement, details on circumstances under which the arrangement can be revoked or cancelled and more significantly, introduction of a roll back provision which would allow taxpayers to enter into APAs retrospectively.
The application process
The Maldives, similar to many other jurisdictions, implements a 3-phase process in entering into an APA. Initially, a pre-filing consultation is required, through which the scope of the arrangement is identified, the controlled transaction in question is understood and discussions are held in relation to the broader terms of the arrangement.
Subsequently, a formal application requesting for an APA can be lodged with detailed information on the elected transfer pricing methodology, comparability analysis, company’s group structure, and other relevant information. From thereon, the application is passed through evaluation and a final decision is made. Once the parties have successfully entered into an APA, an annual compliance report is to be filed along with the income tax return.
The APA process is comprehended to be a lengthy and comprehensive process. While the regulation does not specify a time frame within which the Maldives tax administration is to complete the process, it is still believed to be less time consuming than dealing with hefty transfer pricing audits and the resulting dispute resolution efforts.
Rollback to prior years
The regulation states that having considered certain factors, an APA can give coverage to tax years for which the deadline for submission of the income tax return has already elapsed. Overall, the allowability of such a retrospective coverage can be viewed as a more efficient method to administer and resolve unsettled transfer pricing disputes.
However, the application of the provision is unclear – the Regulation merely states that in permitting a roll back, the tax administration will look into the APA duration of participating jurisdictions; surrounding circumstances of the transaction in question; whether a tax audit or investigation is being carried out; or whether any legal actions are being taken in relation to the transaction in question.
Hence, a complete guideline on the applicability and limitations of the roll back provision is still awaited.
The Regulation comprises provisions on possible revisions or cancellation of an APA in case of a material change in any of the critical assumptions or conditions or changed economic circumstances. On the other hand, in cases of fraud, deliberate misrepresentation of information or non-compliance, the arrangement may even be declared void ab-initio.
The inclusion of the option to enter into an APA with the Maldives tax administration is viewed as a diversion from the customary audit techniques applied to related party transactions which often results in robust assessments – paving the way to reduce the much frequent transfer pricing disputes in the Maldives.
It may be beneficial for multinational enterprises doing business in the Maldives to enter into an APA especially if the underlying set of related party transactions involve complex business restructuring, intercompany financing and intangibles. Though, when entering into an APA, consideration should always be put on whether the surrounding facts will remain constant for the coming years.
US Senator raises questions about Treasury’s international tax strategy
The letter states that “there is bipartisan consensus for ensuring that every country plays by the same rules, including China – as President Joe Biden recently said. No OECD agreement should provide carve-outs or exceptions for our biggest foreign competitors, including China.”Continue Reading
Hungary dismisses 15% global minimum corporate tax rate
Tállai emphasized that Hungary would not relinquish one of the most important elements of its economic sovereignty, the right to set taxes. According to him, the idea of a global minimum tax is in the interests of several high-taxing economic powers, because they were disadvantaged by international tax competition.Continue Reading
European Commission reveals tax agenda for next two years
On the agenda are measures to ensure greater public transparency by proposing that certain large companies operating in the EU publish their effective tax rates.Continue Reading
OECD releases MAP peer review reports for eight tax jurisdictions
These reports evaluate the progress made by these eight tax jurisdictions in implementing any recommendations resulting from their stage 1 peer review. The results from the peer review and peer monitoring process demonstrate positive changes across all eight jurisdictions, although not all show the same level of progress.Continue Reading
Global minimum corporate tax rate should be 15 percent: US Treasury
The US Treasury expressed its belief that the international tax architecture must be stabilized, that the global playing field must be fair, and that we must create an environment in which countries work together to maintain our tax bases and ensure the global tax system is equitable.Continue Reading
Parties to BEPS MLI approve key guiding principles
The Conference has agreed that as with any international agreement, the MLI shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.Continue Reading
Parity for All? Delhi High Court upholds trigger of MFN clause, bats for ‘common interpretation’ of Tax Treaties
By Aditi Sharma (Partner, Khaitan & Co, India) & Krutika Chitre (Principal Associate, Khaitan & Co, India)
The Delhi High Court in its recently pronounced decision in the case of Concentrix Services Netherlands BV WP (C) 9051/2020 and Optum Global Solutions International BV WP (C) 882/2021 invoked the ‘Most Favoured Nation’ (MFN) clause under the India-Netherlands double taxation avoidance agreement (Tax Treaty) and applied a reduced 5% withholding rate on dividend income paid by Indian companies to Dutch shareholders.
New UN transfer pricing manual released
The Manual is focused on transfer pricing in a global environment, while it provides guidance on design principles and policy considerations. It also addresses the practical implementation of a transfer pricing regime in developing countries and shares examples of country practices from developing countries, such as Brazil, China, India, Kenya, Mexico, and South Africa.Continue Reading
Paschal Donohoe discusses international tax reform
Donohoe said that he desired “an outcome that is a fair and balanced compromise by and for all the 139 countries in the OECD Inclusive Framework.”
Ireland’s commitment remains resolute towards reaching an agreement on digital economy taxation, Ireland’s Minister for Finance, Paschal Donohoe, has said.Continue Reading
Ireland consulting on tax treaty policy
The consultation period will run until May 7, 2021.
Ireland’s Finance Minister on April 7 launched a public consultation on Ireland’s future tax treaty policy, particularly in the context of potential outcomes of international tax discussions at the OECD.Continue Reading
Fabrizia Lapecorella to chair OECD’s Committee on Fiscal Affairs from 2022
The OECD’s Committee on Fiscal Affairs has designated Fabrizia Lapecorella as the next Chair of the Committee beginning January 2022.
Lapecorella has served as Italy’s Director General of Finance since June 2008. As Director General of Finance, she is responsible for tax policy, domestic European and international, the governance of the Tax Agencies, the coordination of the IT infrastructure serving the whole Tax Administration, and the administrative services for the Tax Judicial system.Continue Reading
OECD releases new MAP peer review reports
The reports evaluate the progress made by these eight jurisdictions in implementing any recommendations resulting from their stage 1 peer review. They take into account any developments in the period January 2018- August 2019 and build on the MAP statistics for 2016-2018.Continue Reading
OECD releases peer review reports on tax treaty shopping and abuse
The data compiled for this peer review demonstrate that the BEPS Multilateral Instrument has been the tool used by the vast majority of jurisdictions that have begun implementing the Action 6 minimum standard, and that the MLI has started to impact tax treaties of jurisdictions that have ratified it.Continue Reading
OECD releases MAP arbitration profiles of 30 tax jurisdictions
The Arbitration Profiles have been developed to provide taxpayers with additional information on the application of Part VI of the MLI for each jurisdiction choosing to apply that Part. The Arbitration Profiles also allow those jurisdictions to make publicly available clarifications on their position on the MLI Arbitration.
US, Europe discuss digital economy taxation
Janet Yellen, who took oath as the 78th Secretary of the US Department of the Treasury on January 26, held a discussion with counterparts in France, Germany and the UK on digital economy taxation.Continue Reading
OECD updates guidance on COVID-19 pandemic and tax treaties
The update revisits the guidance issued by the OECD Secretariat on the impact of the COVID-19 pandemic on tax treaties in April last year.Continue Reading
Ireland updates corporate tax roadmap
According to the update, Ireland will seek to implement interest limitation rules in accordance with the Anti-Tax Avoidance Directive (ATAD) standard; legislate for new international tax transparency rules for digital platforms; legislate for reverse hybrids aspect of ATAD anti-hybrid rules; adopt the authorized OECD approach for transfer pricing of branches; and consider actions that may be needed in respect of outbound payments from Ireland and our wider withholding tax regime.Continue Reading
Outline and Considerations for the Pillar One Blueprint Proposals for Amount A
By Simon Webber (Managing Director, Duff & Phelps LLC, New York) & Ryan Lange (Director, Duff & Phelps LLC, New York)
On October 12, 2020 the OECD/G20 Inclusive Framework (IF) released the Report on Pillar One Blueprint. This is a working document that presents the IF’s current thinking on the scope and application of changes to the international tax system to address the Tax Challenges Arising from Digitalization. Specifically, the OECD is seeking broader consensus and approval for its proposals before moving forward further into a more detailed design.Continue Reading
Platform for Collaboration on Tax releases toolkit on transfer pricing documentation
The toolkit aims to help countries implement effective transfer pricing documentation requirements so that they can protect their tax bases, reduce profit shifting, and raise much-needed revenues for the recovery phase.Continue Reading
Estonia ratifies BEPS MLI to tackle MNE tax avoidance
For Estonia, the BEPS MLI will enter into force on May 1, 2021. Continue Reading
Digital services taxes of Austria, Spain and UK discriminatory: United States
In a release issued on January 14, the USTR said that the each one of these digital services taxes discriminates against US companies, is inconsistent with prevailing principles of international taxation, and burden or restricts US commerce.Continue Reading
Malta makes available online DAC6 registration process
Access to submit DAC6 reports shall be available in the coming days, the tax authority said.Continue Reading
OECD Inclusive Framework on BEPS to meet on January 27-28
The meeting will be held virtually and will be open to the public.
OECD releases agenda for public consultation on Pillar One, Pillar Two Reports
The Blueprints reflect the convergent views of the Inclusive Framework on many of the key policy features, principles and parameters of both Pillars, and identify remaining technical and administrative issues as well as policy issues where divergent views among Inclusive Framework members remain to be bridged.Continue Reading
US suspends retaliatory tariffs on French digital services tax
The US Trade Representative said that it has decided to suspend the tariffs in light of the ongoing investigation of similar DSTs adopted or under consideration in ten other jurisdictions.Continue Reading
OECD schedules public consultation on the Pillar One, Two Blueprints
The meeting will be held on January 14-15, 2021.Continue Reading
Barbados ratifies BEPS MLI to tackle MNE tax avoidance
Barbados has ratified the BEPS MLI covering 31 of its tax treaties.Continue Reading
Malta publishes detailed DAC6 guidance
Maltese tax authority issues key guidance on DAC6 reportable cross-border arrangements. The guidance explains key concepts with the help of illustrations.Continue Reading
UK to repeal DAC6 in 2021
The UK tax authority, HM Revenue and Customs, has announced that it will repeal the DAC6 reporting requirement in 2021 and replace it with the OECD’s mandatory disclosure rules (MDR).
The announcement was made after completion of the negotiations between the UK and the EU on a Free Trade Agreement (FTA).
In a letter sent to stakeholders on December 31, HMRC said that reporting under DAC6 will still be required for a limited time, but only for arrangements which meet hallmarks under Category D, in line with the UK’s obligations under the FTA.
Category D sets out specific hallmarks concerning automatic exchange of information and beneficial ownership.
The International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations, 2020 – laid before the House of Commons on December 30 – state that “(5) For the purposes of these Regulations, the DAC is to be read as if— (h) in Annex IV, Part 1 [the Main Benefit Test] and hallmark categories A, B, C and E in Part II were omitted.”
In the coming year, the UK will consult on and implement the OECD’s MDR as soon as practicable, to replace DAC6 and transition from European to international rules, HMRC told stakeholders.
Italy publishes draft guidance on DAC6
Comments on the draft Circular on DAC6 must be submitted to the Italian tax authority by January 15, 2021.Continue Reading
Ireland updates DAC6 guidance
The Tax and Duty Manual Manual on DAC6 has been updated in a number of respects. The updates are set out in Appendix V. Continue Reading
OECD issues guidance on transfer pricing implications of COVID-19 pandemic
The guidance on transfer pricing implications of the COVID-19 pandemic represents the consensus view of the 137 members of the OECD Inclusive Framework on BEPS.Continue Reading
Germany, Pakistan ratify BEPS MLI to tackle tax avoidance
Germany and Pakistan have deposited their instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).Continue Reading
200+ organizations respond to OECD reports on Pillar One and Pillar Two blueprints
The public consultation meeting will be held virtually on January 14-15, 2021.Continue Reading
OECD hails transparency on tax rulings
81 jurisdictions are now fully in line with the BEPS Action 5 minimum standard.Continue Reading
Singapore to participate in International Compliance Assurance Programme from 2021
The MNE’s suitability for ICAP will be considered on a case-by-case basis. The MNE may propose for participating tax administrations it wishes to involve in its ICAP risk assessment, which will be subject to the participating tax administrations’ agreement.Continue Reading
Singapore tax authority clarifies deductibility of digital services taxes
The Inland Revenue Authority of Singapore stated that some jurisdictions have implemented unilateral measures to address the tax challenges of digitalization adding that “companies may have incurred additional taxes overseas due to such measures.”Continue Reading
Canada objects to Denmark’s BEPS MLI reservation on arbitration
Canada states that Denmark’s reservation “exceeds the scope of cases for which a reservation may be made under that provision.”Continue Reading
Richard Minor joins USCIB as tax lead
Richard Minor has joined the US Council for International Business (USCIB) as its International Tax Counsel.Continue Reading
MAP cases still taking a long time to be resolved: OECD
Around 85 percent of the MAPs concluded for transfer pricing cases in 2019 fully resolved the issue, which reflects an improvement in the collaborative approach taken by competent authorities.Continue Reading
Malta releases DAC6 XML Schema and User Guide
DAC6 has been implemented into Maltese legislation by virtue of legal notice L.N. 342 of 2019.Continue Reading
OECD releases blueprint on digital tax reform
Comments must be received by December 14.Continue Reading
UN tax committee to hold 21st session from October 20
The exact meeting times during this band of dates and the modalities of the meetings will be advised shortly.Continue Reading
ATAF releases draft law on digital services tax
The Suggested Approach is aimed at helping African countries that are considering implementing digital service tax to tax transactions of highly digitalized businesses.Continue Reading
Brussels to appeal Apple State aid tax case in Ireland
In July 2020, the General Court annulled the Commission’s 2016 decision concluding that Ireland granted illegal State aid to Apple through selective tax breaks.Continue Reading
Jordan ratifies BEPS Multilateral Instrument
For Jordan, the BEPS MLI will enter into force on January 1, 2021.Continue Reading
Albania, Costa Rica ratify BEPS MLI
The BEPS MLI will enter into force for both countries on January 1, 2021.Continue Reading
Over 90 countries have law on country-by-country reporting: OECD
More than 2,500 bilateral relationships for CbC exchanges are now in place.Continue Reading
Swiss Federal Council approves tax treaty with Bahrain
The new tax treaty implements the minimum standards in accordance with the OECD’s project on base erosion and profit shifting. Continue Reading
Proposed modifications to the German Transfer Pricing Legislation
By Dr. Björn Heidecke (Director, Deloitte Germany, Hamburg) & Tatchamon Nanavaratorn (Senior Consultant, Deloitte Germany, Hamburg)
As part of the obligation to implement the European-wide mechanism to counter base erosion and profit shifting, the German Federal Ministry of Finance circulated a draft law on 10 December 2019 (hereafter referred to as “draft law”). Besides conforming to the requirement as directed by the EU Anti-Tax Avoidance Directive, the draft law brings about the modification to the current transfer pricing legislation of both the Foreign Tax Act (Außensteuergesetz) and the Fiscal Code (Abgabenordnung), and it introduces topics not previously codified into the legislation in accordance with the BEPS concepts introduced by the OECD. The draft law takes a strict stance on businesses’ actual conducts rather than their contractual arrangements.Continue Reading
New OECD data provides insight into MNE tax activity
The data, released on July 8, is a major output based on the country-by-country reporting requirements for MNEs under the BEPS project. Continue Reading
Maldives promulgates its first Transfer Pricing Regulation
By Husam Shareef (Partner, CTL Strategies, Maldives)
On June 10, 2020, the Maldives tax administration, Maldives Inland Revenue Authority (MIRA), issued the country’s first transfer pricing regulation. The Regulation is made pursuant to the new Income Tax Act, which came into effect from January 1, 2020. The Regulation sets out the rules to be followed by enterprises that are required to maintain transfer pricing documentation and stipulates the criteria which exempt enterprises from maintaining such documentation. The Maldives has had a corporate tax regime since July 18, 2011, however, this is the first time that taxpayers are required to follow a specific transfer pricing documentation requirement.Continue Reading
Worst of both worlds: A case against digital services tax in Brazil
By Maurício Barros (Partner at Gaia Silva Gaede Advogados in São Paulo, former Taxpayer-Appointed Judge at the São Paulo Taxes and Fees Court – TIT/SP (2014-2019) and a former Visiting Professor at the Getulio Vargas Foundation and at the Mackenzie Presbiteryan University) & Luiz Guilherme de Medeiros Ferreira (Tax lawyer, São Paulo and Member of the Tax Litigation Commission at the Brazilian Bar Association)
Amid the covid-19 pandemic and the imminent financial crisis of companies, Draft Bill (DB) 2358/2020, drafted by Deputy João Maia, is making its way through the Brazilian Congress. If it becomes law, it will institute a digital services tax (DST) in Brazil, like similar taxes levied in other countries.Continue Reading
India-Mauritius Tax Treaty Benefits Denied – Controversy Continues
By Nishit Parikh (Partner, Sudit K Parekh & Co LLP, India)
India-Mauritius Tax Treaty has had its fair share of controversy in India. This saga continues even today, as recently Authority for Advance Ruling (‘AAR’) in India rejected a Foreign Private Equity player’s claim for Tax Treaty benefit considering the entire arrangement to be for tax avoidance.Continue Reading
No COVID support to companies that engage in tax avoidance, says Dutch government
Companies engaged in undesirable tax planning can apply for individual support if they satisfy two tax-related conditions concerning business location and transactions.Continue Reading
Unilateral action on digital economy taxation would heighten trade tensions: OECD
Gurría was responding to recent statements and exchanges regarding the ongoing negotiations to address the tax challenges of the digitalisation of the economy.Continue Reading
Irish tax guidance on transfer pricing correlative adjustments explained
By Catherine O’ Meara (Partner, Matheson, Dublin)
The ability to claim relief from double taxation for transfer pricing adjustments is increasingly important as taxpayers face audits worldwide. The Irish Revenue Commissioners (“Revenue”) have recently issued new guidelines for taxpayers seeking correlative adjustments (“CA Guidance”) in Ireland for transfer pricing adjustments by tax treaty partner jurisdictions. Continue Reading
Digital levy proposed in Brazil amid pressing budget: introducing or increasing digital taxation?
By Luís Eduardo Schoueri (Full Professor of Tax Law at University of São Paulo & Senior partner at Lacaz Martins, Pereira Neto, Gurevich & Schoueri Advogados) & Mateus Calicchio Barbosa (PhD Candidate and M.Sc. at University of São Paulo & Tax partner at Lacaz Martins, Pereira Neto, Gurevich & Schoueri Advogados)
It is said that in every crisis lies an opportunity. If the quote means that possibilities may emerge, in the tax realm taxpayers also have a new momentum to the danger component of the notion. In Brazil, outdated – not to say dangerous – tax alternatives have been put on the table to meet the recent budgetary needs. Certain wealth and capital taxes on both companies and individuals, despite previous and frustrated propositions since mid-90s, have been discussed while the government seeks a way out of an unprecedented public debt in the years to come.Continue Reading
Significant economic presence: Nigerian perspective
By Kelechi Ugbeva (Managing Partner, Blackwood & Stone, Nigeria)
Existing global tax rules such as, the arm’s length principle and principle of physical presence may not be robust enough to accommodate the peculiarity of digital activities and digital taxation. To this end, the OECD has come up with a few proposals on how digital activities may be taxed. Continue Reading
Finland issues tax treaty guidance
The guidance states that the OECD’s Multilateral Instrument on BEPS adopted in Finland on February 13, 2019, must be taken into account when applying tax treaties.Continue Reading
Netherlands mulling withholding tax on dividends paid to low tax jurisdictions
The measure will apply to financial flows to countries with a corporate tax rate of under nine percent and to countries on the EU blacklist, even if the Netherlands has a tax treaty with them.Continue Reading
Australia broadens definition of ‘significant global entity’
The amendments generally apply from July 1, 2019.
US Trade Representative to investigate digital services tax rules in EU, nine others
These ten trading partners are: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom.Continue Reading
Philippines introduces bill to tax digital economy
The Bill seeks to give effect to five key changes to the way the digital economy is currently taxed, to better capture value created into the tax system.Continue Reading
Equalisation Levy in India
By Lokesh Shah (Partner, L&L Partners, New Delhi) & Devashish Poddar (Advocate, L&L Partners, New Delhi)
Technology, considered as a factor of production, has virtually been adopted in all sectors of the economy in order to enhance productivity, enlarge market reach, and reduce operational costs. The adoption of technology is demonstrated by the spread of broadband connectivity in businesses, which in almost all countries of the Organisation for Economic Co-operation and Development (“OECD”) is universal for large enterprises and reaches 90% or more even in smaller businesses.Continue Reading
EU Commission urges Ireland, Netherlands, four others to tackle aggressive tax planning
The six member states are: Cyprus, Hungary, Ireland, Luxembourg, Malta, and the Netherlands.Continue Reading
Draft Bill proposes a Digital Service Tax in Brazil
By Ramon Tomazela Santos (Partner, Mariz de Oliveira e Siqueira Campos Advogados)
The taxation of large technology companies has been at the center of the global debate in recent years, as their disruptive business models allows the exploitation of the market of a country without a physical presence. The underlying assumption surrounding the debate is that the application of current tax rules to companies operating in the digital economy has led to a misalignment between the place where profits are taxed and the place where value is created, due to the growing relevance of interaction and engagement with a user base for digital business.Continue Reading
Amendments regarding documentation in decree on disguised profit distribution through transfer pricing
By Kardelen Lule (ADMD / MAVIOGLU & ALKAN, Turkey) & Zeynep Ozbaran (ADMD / MAVIOGLU & ALKAN, Turkey)Continue Reading
Financial associations call upon EU Commission to defer DAC6 reporting
How international tax landscape changes in India from April 1, 2020
By Ritu Shaktawat (Partner, Khaitan & Co, India) Raghav Kumar Bajaj (Principal Associate, Khaitan & Co, India)
India’s Union Budget for the fiscal 2020-21 was announced in February 2020 and the tax proposals, after undergoing some important changes, were approved by the Indian Parliament and received Presidential assent on March 27, 2020. With this, the annual exercise of amending India’s tax law was completed, and the tax changes are effective from April 1, 2020.
On the tax front, some significant amendments have been made – such as widening the scope of digital tax, abolition of dividend distribution tax, more stringent tax residency rules for non-resident Indians etc.
We have analyzed here the key international tax changes impacting non-residents (MNEs and others having Indian business or nexus).Continue Reading
OECD issues international tax guidance in the wake of COVID-19
The Guidance notes that it is unlikely that the COVID-19 situation will create any changes to an entity’s residence status under a tax treaty.Continue Reading
Augmenting Loan Documentation in light of Chapter X of the OECD Transfer Pricing Guidelines
By Stefanie Perrella (Managing Director, Duff & Phelps’, New York) and Zachary Held (Director, Duff & Phelps’, New York)
On February 11, 2020, the OECD released its Final Report, Transfer Pricing Guidance on Financial Transactions, (Final Guidance), which was simultaneously incorporated into the OECD Transfer Pricing Guidelines. With respect to inter-company loans, the new Chapter X of the Transfer Pricing Guidelines is not limited to considerations for interest rate pricing, but also includes a framework for assessing the instrument’s accurate delineation as debt. Going forward, taxpayers with lenders or borrowers in OECD countries should consider this new guidance and augment their documentation accordingly. Below are some of the items that these taxpayers should consider to offer a proactive defense of potentially scrutinized areas.Continue Reading
Brazilian TP Reform: Can We Have the Full First World Package?
By Luis Schoueri (University of Sao Paulo; Lacaz Martins, Pereira Neto, Gurevich & Schoueri Advogados)
There is no divine truth about what the Arm’s Length Standard (ALS) actually means. Its content can only be determined by a decision, which can be reached by a court or by means of political consensus. There is no international tax court with jurisdiction to promote harmonization among countries on the content of the ALS and all efforts in this direction are made by means of negotiation. Such decisions affect not only the extent to which double (non-)taxation will be avoided, but also concern the country to which income is allocated, which may render the issue controversial where countries present distinct patterns of capital in- and outflow.Continue Reading
UK 2020 Budget retains 19% corporate tax rate
The Government is introducing from April 1, 2020, a new two percent digital services tax on the revenues earned by certain digital businesses.Continue Reading
Belgian Transfer Pricing Circular sets out tax authority’s view on 2017 OECD Guidelines
By Géry Bombeke (Partner, Baker McKenzie, Brussels)
On February 25, 2020, the Belgian Tax Administration published a new transfer pricing Circular (Circular 2020/C/35) (TP Circular) summarizing the post-base erosion and profit shifting (BEPS), OECD Transfer Pricing Guidelines and reflecting the tax authority’s views thereon.Continue Reading
Norway consulting on new withholding tax on interest, royalties
Comments must be received by May 27.Continue Reading
New tax treaty between Ireland, Netherlands enters into force
The new treaty will be effective from January 1, 2021. Continue Reading
South Africa consulting on rule to limit interest expense deduction
The Budget proposes to restrict net interest expense deductions to 30% of earnings for assessment years starting January 1, 2021.
OECD issues MAP peer review reports for further eight jurisdictions
The reports highlight how well these jurisdictions are implementing BEPS Action 14 minimum standard on making tax treaty dispute resolution more timely, effective, and efficient.Continue Reading
BVI to accept country by country report filings from March 2020
International Tax Authority informs BVI Constituent Entities, that are part of Multinational Entity Group, that it will soon be ready to receive filings for CbC reporting.Continue Reading
US Congresswoman introduces public country by country reporting Bill
The report would include CbC financial filings for the information, including profits, taxes, employees, and tangible assets – that these corporations already provide to the IRS on an annual basis.Continue Reading
Australia expanding ‘significant global entity’ definition
The definition of “significant global entity” to include members of large business groups headed by private companies, trusts, partnerships, investment entities, and individuals.Continue Reading
New digital economy tax rules to raise USD 100 billion: OECD
The OECD analysis shows that Pillar Two could raise a significant amount of additional tax revenues.Continue Reading
OECD transfer pricing guidance on financial transactions published
The report contains guidance on how the accurate delineation analysis applies to the capital structure of an MNE within an MNE group. Continue Reading
OECD seeking input on BEPS Action 13 minimum standard
Comments must be received by March 6, 2020.Continue Reading
137 countries commit to designing rules on digital economy taxation by 2020-end
The “safe harbour” issue is included in the list of remaining work, but a final decision on this issue will be deferred until the architecture of Pillar One has been agreed upon.Continue Reading
OECD to hold live webcast on digital economy taxation
The webcast will be held on January 31, 2020, at 14:00-15:00 (CET).Continue Reading
Cyprus, Saudi Arabia ratify BEPS MLI to tackle MNE tax avoidance
The BEPS MLI will enter into force for these two countries on May 1, 2020.Continue Reading
Colombia underlines transfer pricing documentation deadlines
The deadline for filing country-by-country reports and master files is December 10-23, 2020.Continue Reading
Liechtenstein ratifies BEPS MLI to tackle MNE tax avoidance
The BEPS MLI will enter into force for Liechtenstein on April 1, 2020.Continue Reading
OECD issues further guidance on country-by-country reporting
The additional interpretative guidance contains complete set of guidance concerning the interpretation and operation of BEPS Action 13 issued so far.Continue Reading
Tax treaty between Japan, Morocco signed
The tax treaty will become effective after both countries have completed their respective domestic procedures.Continue Reading
“It became necessary to destroy the town to save it:” The US and the OECD’s Unified Approach
By Professor William Byrnes (Texas A&M University School of Law)
185+ organizations respond to OECD’s global anti-base erosion proposal
The OECD will hold a public consultation meeting on December 9. Continue Reading
US responds to French digital tax with USD 2.4 billion tariffs; France calls it ‘unacceptable’
French Finance Minister, Bruno Le Maire, termed the US’ proposed action as unacceptable.Continue Reading
EU Commission warns Austria, Ireland to transpose interest limitation rules
The Commission may bring the cases before the Court of Justice of the EU if Austria and Ireland do not act by February 1, 2020.Continue Reading
Brian Abbey joins Global Tax Management
International tax veteran Brian Abbey has joined Global Tax Management as Managing Director, International Tax.Continue Reading
US report on French digital services tax due next week
Earlier in July 2019, the US Trade Representative opened an investigation into whether the French DST is discriminatory in nature and harms US’ interests.
Estonia, Guernsey sign tax treaty
The tax treaty will enter into force after both countries have completed their respective internal procedures.Continue Reading
OECD seeking input on MAP peer reviews of 13 jurisdictions
Comments must be received by December 16, 2019.Continue Reading
OECD official responds to tax Professor’s views on inclusive international tax policy making
Amazon underlines guiding principles on digital economy taxation
Any proposed tax must be levied on profits and not revenue, Amazon’s Vice President (Global Tax), Kurt Lamp, said.Continue Reading
OECD consulting on global anti-base erosion proposal
Comments must be received by December 2.Continue Reading
Switzerland amending tax treaties with New Zealand, Netherlands, Norway, and Sweden
The protocols contain an anti-abuse clause.Continue Reading
OECD issues new guidance on country-by-country reporting
The additional interpretative guidance will help MNE Groups in avoiding common errors made in preparing CbC reports.Continue Reading
OECD consulting on digital tax proposal
Comments must be received by November 12, 2019. Continue Reading
Denmark ratifies BEPS MLI to tackle MNE tax avoidance
For Denmark the BEPS MLI will enter into force on January 1, 2020.Continue Reading
Mexican 2020 Tax Reform: key international tax proposals
By Ricardo Rendón (Partner, Chevez, Ruiz, Zamarripa y Cía, S.C., Mexico)
On September 8, 2019, the Executive Branch of the Mexican Government submitted to the Congress Tax Reform for 2020, which includes key tax changes to the country’s tax law primarily inspired by the OECD’s base erosion and profit shifting (BEPS) project.Continue Reading
Ireland Transfer Pricing Feedback Statement Explained
By Catherine O’ Meara (Partner, Matheson, Dublin)
The Irish Government recently published a Transfer Pricing Rules Feedback Statement, which confirms that changes to the country’s transfer pricing rules and their implementation are forthcoming.Continue Reading
Hong Kong, Estonia sign tax treaty
Transfer pricing MAP cases on the rise: OECD
According to the statistics, transfer pricing cases continue to take more time with average time being approximately 33 months (30 months in 2017).Continue Reading
OECD preparing for ‘big bang’ reform to address digital economy taxation
Gurría also described the delivery of the OECD’s BEPS package in 2015 as one of the two “big bang” developments that transformed the global tax landscape in recent years.Continue Reading
US, Luxembourg ratify tax treaty protocol
The Protocol will be effective for requests for information made on or after the date of entry into force for tax years on or after January 1, 2009.Continue Reading
Don’t focus only on corporation tax: Amazon
Amazon is a major UK employer and currently employs over 27,500 UK people. The company said that this number would increase to over 29,500 this year.
Glencore wins $92m transfer pricing dispute with ATO
The tax authority is considering whether to appeal the decision.Continue Reading
OECD peer review report notes progress in CbC reporting implementation
The review reveals that countries have largely adopted their domestic CbC reporting rules in line with the BEPS Action 13 minimum standard.Continue Reading
Ireland updating transfer pricing regime
The proposals would be included in Finance Bill, 2019 and, if enacted, would apply for chargeable periods commencing January 1, 2020.Continue Reading
US releases details about tax treaty protocols with Japan, Spain
Mandatory binding arbitration clause is included in the tax treaty protocols to resolve tax treaty disputes.Continue Reading
McDermott’s tax practice wins former US Treasury Counsel
A former US Treasury international tax Counsel, Brian Jenn, has joined McDermott Will & Emery as its partner.
Jenn will be based out of the firm’s Chicago office.Continue Reading
Canada, Switzerland ratify instrument to tackle tax avoidance
The BEPS MLI will enter into force in both countries on December 1, 2019.Continue Reading
Countries agree on proposals to fix digital economy taxation
While members of the Inclusive Framework on BEPS did not yet agree on the conclusions, they committed to work together to deliver a final report in 2020, with an update in 2019.Continue Reading
Delving into Hong Kong’s New Transfer Pricing Landscape
By Maulik Doshi (Partner, Head of Transfer Pricing & International Tax, SKP Group) and Kamlesh Kaltari (Principal, Transfer Pricing Services, SKP Group)
On July 4, 2018, Hong Kong’s Inland Revenue Department passed the country’s final Inland Revenue (Amendment) (No. 6) Bill 2017, (the Amendment Bill).
This Amendment Bill (which became law on July 13, 2018) specified the documentary requirements from a transfer pricing perspective and also introduced measures to address various recommendations under BEPS Action Plans.Continue Reading
Austria mulling 5% digital tax on large businesses
Austria proposes to impose a five percent digital tax to close tax loopholes and ensure that large digital corporations are called to account.Continue Reading
Georgia ratifies tax instrument to tackle BEPS
For Georgia the BEPS MLI will enter into force on July 1, 2019. Continue Reading
OECD seeking input on digital economy taxation
Guernsey ratifies BEPS Instrument to tackle MNE tax avoidance
Armenia joins OECD’s BEPS Inclusive Framework
Armenia has newly joined the OECD’s Inclusive Framework on base erosion and profit shifting.Continue Reading
Ireland deposits BEPS MLI to tackle tax avoidance
For Ireland, the BEPS MLI will enter into force in May 2019.Continue Reading
Hong Kong tax authority notes CbC reporting deadline details
Hong Kong Inland Revenue Department has clarified that starting from April 2019, the Department will not accept voluntary filing of a country-by-country (CbC) report for an accounting period ended on or before March 31, 2018.Continue Reading
Indian tax authority sets new CbC reporting deadline for US subsidiaries
By Maulik Doshi (Partner, Head of Transfer Pricing & International Tax, SKP Group) and Kamlesh Kaltari (Senior Manager, SKP Group)
In India, the 2016 Finance Act introduced a three-tiered transfer pricing documentation regime with a view to aligning the Indian transfer pricing documentation rules with Action 13 of the OECD’s base erosion and profit shifting (BEPS) project.
Accordingly, Indian subsidiaries of multinational groups were required to comply with new “master” and “local” files requirements and a new country-by-country reporting requirement from the 2016-17 financial year.Continue Reading
Hong Kong, Finland tax treaty to take effect in April 2019
The treaty will be effective from April 1, 2019.Continue Reading
Saudi tax authority publishes draft transfer pricing bylaws
By Anas Salhieh (Senior Tax Executive, Al Tamimi & Company, Riyadh, Saudi Arabia)
Saudi Arabia’s General Authority for Zakat and Income Tax has published for public comments draft transfer pricing bylaws as part of the Kingdom of Saudi Arabia’s commitment to the OECD’s base erosion and profit shifting (BEPS) project.Continue Reading
Cook Islands now part of BEPS Inclusive Framework
Cook Islands has newly joined the OECD’s Inclusive Framework on base erosion and profit shifting.Continue Reading
New EU corporate tax avoidance rules enter into force
The new anti-abuse measures entered into force on January 1, 2019.Continue Reading
BEPS MLI to enter into force in Australia in January 2019
Malta ratifies tax instrument to tackle base erosion and profit shifting
Singapore Ratifies BEPS MLI to tackle MNE tax avoidance
The BEPS MLI will enter into force for Singapore on April 1, 2019.Continue Reading
OECD issues second peer review report on BEPS Action 5
The OECD has made 60 jurisdiction-specific recommendations on issues such as improving the timeliness of the exchange of information and ensuring that exchanges of information are made with respect to preferential tax regimes that apply to income from intellectual property.Continue Reading
Indian tax authority undergoing ratification process for BEPS MLI
Important process of ratifying the BEPS MLI is on. In 2019-2020, the provisions will come into effect, says Akhilesh Ranjan.Continue Reading
Denmark publishes draft tax proposal to ratify BEPS MLI
The legislation is intended to enter into force in July 2019. Continue Reading
Countries need a ‘world-wide answer on tax’: IMF chief
According to IMF Chief Christine Lagarde, governments should figure out a world-wide answer on tax.Continue Reading