Indian tax authority has signed a record number of bilateral advance pricing agreement (APAs) in the 2022-23 financial year.
New Zealand will implement a digital services tax in 2025 if international agreement on the issue fails to pass through, Finance Minister Grant Robertson has said.
India’s tax authority, the Central Board of Direct Tax, has issued a handbook setting out guidance on issuing advance tax rulings under the Indian Income Tax Act.
The Australian Taxation Office will publish, in early November, the income tax information of large companies for the income year 2021–22.
Indonesia’s Minister of Investment has dismissed the global minimum tax proposal as a self-serving ‘trick’ being pulled by developed nations.
Tunisia has deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention).
Taiwan is conducting an international tax training program for tax officials between August 21-September 1.
The Chartered Institute of Taxation (CIOT) has welcomed proposed reforms to the UK legislation on transfer pricing, permanent establishments, and diverted profits tax.
Germany has signed protocols to amend its tax treaties with Austria and Switzerland.
Russian Finance Ministry has rejected UK’s request to withdraw the partial suspension of the Russia-UK tax treaty.
The UK government has asked Russia to revoke the suspension of the 1994 UK-Russia tax treaty.
Finnish government is seeking views on draft Minimum Taxation Act that would implement the EU Directive on global minimum tax into Finnish domestic tax law.
The Cabinet Secretary of the National Treasury of Kenya is seeking public comments on draft tax treaties with Belgium and Egypt.
UAE tax treaties with Gabon, Rwanda, and Zambia have entered into effect.
Czech government has approved a draft tax law that would implement a global minimum tax at the rate of 15 percent.
Taiwan will apply the country’s tax residency rules leniently while granting tax treaty benefits, the Finance Ministry has said.
A majority of UK tax leaders expect their tax planning and business operations to experience moderate to significant change once the global minimum tax is implemented, according to a EY Tax and Finance Operations Survey.
The General Court of the European Union has dismissed a legal challenge to EU Directive 2022/2523 of 14 December 2022, on ensuring a global minimum taxation for multinational enterprise (MNE) groups.
Australia is inviting multinational enterprises (MNEs) to share their views on the implementation of the global minimum tax rules.
The United Nations (UN) Secretary General has published an advance, unedited report highlighting the role of the UN in promoting effective and inclusive international tax cooperation.
The global minimum tax is expected to bring over USD 600 million to Swiss cantons, according to a report by the Swiss Federal Department of Finance.
Bermuda is consulting stakeholders on a new corporate tax regime from 2025 in view of the OECD’s proposed global minimum tax rules.
Russian President Vladimir Putin has suspended several tax treaties with “unfriendly” countries.
The suspension decree was signed on August 8. The decree includes tax treaties signed with the US, the UK, and Canada, and other countries that had imposed unilateral economic sanctions on Russia.
“In view of the need to take urgent measures in connection with the unfriendly actions of a number of foreign states against the Russian Federation, its citizens and legal entities, the President resolved to suspend a number of provisions of tax treaties with the United States of America, European Union countries and other unfriendly states,” an official statement from the President’s office notes.
The suspension was proposed by the Finance Ministry in March 2023.
Australian government has announced a slew of tax reform measures aimed at tackling tax adviser misconduct in the wake of the PwC tax leaks matter.
TP News is announcing its first annual International Tax Law Student Essay Writing Competition 2023.
We are now inviting original submissions from students enrolled in a full-time undergraduate law course around the world. Co-authorship is possible.
The submission must seek to identify and answer a point of law that involves interpretation of one or more provisions of a tax treaty. The essay should not be descriptive in nature and must show outstanding analysis, while adding to the existing tax treaty jurisprudence.
We will not accept submissions over 3,000 words. We do not accept footnotes or endnotes, use hyperlinks instead.
All submissions will go through two rounds of selection process. Based on an initial screening by TP News team, shortlisted submissions will be sent out for blind peer review. We, therefore, encourage students to avoid mentioning their names/affiliations anywhere in their essays. Please note that all submissions will be put through our standard plagiarism detection process.
The top three entries will be published on TP News.
Submissions must be emailed to us as Microsoft Word documents by 11:59 pm UTC on November 7, 2023. We expect to receive a high number of entries and would be unable to respond individually.
Winners will be announced on our website and social media handles in January 2024.
For questions or clarifications, please contact: email@example.com
Canada’s decision to levy a digital services tax despite OECD’s moratorium is shortsighted, Anne Gordon, Vice President for International Tax Policy, National Foreign Trade Council, has said.
Australia’s Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023, which includes thin capitalization measures, is flawed in several respects, Chartered Accountants Australia & New Zealand (CA ANZ) has said.
Canada’s government is seeking public input on draft tax legislation to implement a global minimum corporate tax rate, commonly known as GloBE, approved by the OECD’s Inclusive Framework.
The Dutch tax authority has released an unofficial English translation of the Transfer Pricing Decree 2022, which came into effect in July last year.
West African Tax Administration Forum (WATAF) has issued an advisory asking its members to carry out revenue impact analysis to ensure that the OECD’s proposed Pillar One, Amount A rules deliver positive revenue outcome before committing to its implementation.
A vast majority of tax leaders from multinational enterprises (MNEs) are preparing for the impact of international tax changes resulting from OECD’s Pillar Two project, Deloitte’s 2023 Global Tax Policy Survey has revealed.
The South African Revenue Service is seeking stakeholders’ comments on a draft tax law implementing a new advance pricing agreement (APA) program.
Slovakia’s Finance Ministry is seeking public input on draft tax law aimed at implementing a 15 percent global minimum corporate tax rate.
UK tax authority has published draft tax law aimed at imposing tougher legal consequences on promoters of tax avoidance schemes.
South African Revenue Service has published for stakeholders’ comments draft tax bills incorporating key tax proposals.
Members of the Ways and Means Committee, the chief tax-writing committee of the US House of Representatives, have expressed deep concerns about the Biden Administration’s ongoing negotiations with the OECD on the global minimum tax.
The increase in additional tax revenue from OECD’s international tax reform would be rather ‘moderate’ for Germany, Florian Neumeier, Head of the ifo Research Group Taxation and Fiscal Policy, has said.
On 28 July 2023, the Luxembourg Council of Ministers adopted a bill transposing the EU Directive on global minimum tax into the country’s domestic tax law.
South Korea has published draft 2023 Tax Law Amendment Bill, noting that the UTPR rules would apply from January 1, 2025.
Vietnamese government will submit its policy on global minimum tax to the National Assembly in October this year.
Ireland’s Department of Finance is seeking stakeholders’ views on implementing into Irish legislation the EU tax directive on Pillar Two rules, also known as Global anti-Base Erosion (GloBE) rules.
The OECD has developed three tax instruments to strengthen the fight against base erosion and profit shifting (BEPS) in West Africa.
Business at OECD (BIAC) has said that there is still important work to be done in relation to the OECD’s ongoing tax work on Pillar Two rules, commonly known as GloBE.
International tax policy of the United States should be set by the United States, not by other countries, David Schizer, Dean Emeritus, Columbia Law School, has said.
Gibraltar is seeking to implement a new tax regime for companies within the scope of OECD’s proposed Pillar Two tax rules, and a domestic minimum top-up tax, Chief Minister Fabian Picardo said while delivering the draft Budget for 2023-24.
UK government has published draft legislation to implement the undertaxed profits rule under its domestic law.
Japan is one of the early adopters of the OECD’s 15 percent global minimum tax proposal (also commonly known as GLoBE). In March, the Japanese Diet legislated the 2023 tax reform package setting out the basic framework for a global minimum tax, followed by governmental and ministerial regulations issued by the Cabinet and the Ministry of Finance in June 2023.
The European Commission has decided to refer Luxembourg to the Court of Justice of the European Union for failing to correctly transpose EU anti-tax avoidance rules.
The European Commission has called on Hungary to align its corporate income tax rules with EU anti-tax avoidance rules.
The OECD has published further administrative guidance on the global minimum tax rules under Pillar Two, including two new safe harbors.
The OECD is consulting stakeholders on a vital aspect of its two-pillar solution to address digital economy taxation.
The US Chamber of Commerce has urged the Canadian government to refrain from unilaterally imposing a digital services tax pending international agreement.
Jenny Austin has been named chair of the American Bar Association’s (ABA’s) Transfer Pricing Committee.
According to ABA, the Committee aims to establish itself as the “most important forum for global transfer pricing issues.” It will provide advice to members as well as US and foreign government agencies that administer transfer pricing rules.
Austin concentrates her practice on federal tax controversy and litigation, working across all industries, including medical device, pharmaceutical, health care, retail, and technology companies. Her tax controversy experience spans a diverse array of subject matter areas: transfer pricing, cross-border acquisition issues, debt-equity issues, settlement agreements, withholding, privileges, summons enforcement, and penalties. She also has experience with transfer pricing issues at the state level.
Ireland’s Department of Finance is consulting stakeholders on new tax measures that would prevent double non-taxation arising from outbound payments to low or no tax jurisdictions.
Canada’s Finance Minister Chrystia Freeland has said that the government will implement its domestic digital services tax measures from January 2024 in the absence of any multilateral agreement on Pillar One.
138 tax jurisdictions have agreed an ‘Outcome Statement” on ways to move forward with historic, major reform of the international tax system.
EU digital companies have written to the OECD asking it to extend the standstill agreement on digital services tax.
The OECD has published a toolkit on the implementation of cross‑border assistance in the recovery of tax claims.
The OECD has rubbished media claims that it pressured Australian government into weakening the country’s tax bill aimed at tackling tax avoidance.
Brazil’s Special Secretariat of the Federal Revenue is consulting stakeholders on a draft Normative Instruction that would regulate the country’s new transfer pricing regime.
Netherlands may have been on Obama’s blacklist in 2009, but it now leads the fight against tax avoidance, Marnix van Rij, Dutch State Secretary for Tax Affairs has said.
Japan’s tax treaty with Azerbaijan will enter into force on August 4, 2023.
Norwegian government has terminated tax treaties signed with Barbados, Curacao, Jamaica, Sierra Leone, and Trinidad and Tobago.
Baker McKenzie Luxembourg has promoted Miguel Pinto de Almeida and Nicolas Jeangeorges in the firm’s Tax and Transfer Pricing Practice Group.
The Australian government has deferred the public country-by-country reporting requirements to July 2024.
Alvarez & Marsal Tax LLP has appointed transfer pricing expert Rasmus Steiness as a Senior Director.
Steiness will work with Managing Director Richard Syratt in London to help international clients solve increasingly complex transfer pricing issues.
Steiness brings more than 16 years of experience supporting banking, capital market, and fintech clients. He specializes in the alignment of tax and operating models, IP, and financial transactions.
Law No. 14596/2023 introduced new transfer pricing rules in the Brazilian tax system, in line with the arm’s length standard. The transfer pricing reform is a result of a long project carried out by the Brazilian Federal Revenue Office since 2018, with support from the Organization for Economic Cooperation and Development (OECD) and the United Kingdom (UK), aiming at convergence of Brazil’s transfer pricing rules and the OECD Transfer Pricing Guidelines.
Japan and Turkmenistan are going to negotiate a new tax treaty.
Latvia’s Finance Ministry published an updated list of tax havens on June 27.
The OECD has launched an improved version of the BEPS MLI matching database that will allow tax authorities and other interested parties to make projections on how the MLI modifies a specific tax treaty.
Ireland has signed into law a new public country-by-country tax reporting requirement.
Pakistan has amended its domestic tax law to expand the definition of permanent establishment to include virtual presence.
Federal Decree Law No (47) of 2023 on the Taxation of Corporations and Businesses enforces transfer pricing rules and documentation requirements in the UAE to ensure that the pricing of transactions between related parties and connected persons, such as companies that are part of the same multinational enterprise (MNE) group, are not influenced by their relationships.
Denmark’s Finance Ministry has published for public input a draft bill seeking to implement the EU Directive on Pillar Two into the country’s domestic tax law.
The tax treaty between Hong Kong and Mauritius entered into force on June 23.
The reason for this is simple:
There are 137 countries coloured on that map. Each has signed up to the OECD global minimum tax (sometimes referred to as GLoBE or “Pillar Two”).
Some are already implementing – including such free market stalwarts as Singapore. Others are discussing implementation details. And many others have signed but are yet to kick off implementation – international tax measures are always slow, and there have been distractions. There is an interactive version of our OECD globe here.1
This means GLoBE is likely to have a critical mass of implementing countries. Its design renders that very important.
The OECD has published new results on preferential tax regimes noting that tax jurisdictions continue making progress on implementing the international standard under BEPS Action 5 to address harmful tax practices.
The United States would lose over USD 120 billion in tax under the OECD’s global minimum tax, or Pillar Two, according to an analysis by Joint Committee on Taxation.
UK government has published partial draft technical guidance setting out additional information on administration, chargeability, and scope for multinational top-up tax and domestic top-up tax legislation.
The European Commission has proposed new rules to make withholding tax procedures in the EU more efficient and secure for investors, financial intermediaries, and tax administrations.
UK government is seeking stakeholders’ views on potential reforms to the UK international tax legislation on transfer pricing, permanent establishment, and Diverted Profits Tax.
Canada’s Department of Finance is consulting on reforming the country’s transfer pricing rules.
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.
Japan and Algeria signed a tax treaty on February 7.
Des Hanna has joined leading tax firm Andersen as a director in the firm’s international tax group.
The OECD, on February 2, released technical guidance to assist governments with implementation of the 15 percent global minimum corporate tax rate.
Indian Finance Minister, Nirmala Sitharaman, has released the country’s latest Budget proposing a slew of tax measures.
The 2023 ECOSOC Special Meeting on International Cooperation in Tax Matters will take place on March 31.
Manal Corwin shall be the next Director of the OECD Centre for Tax Policy and Administration from April 3, 2023.
New OECD analysis reveals that revenue from implementation of latest international tax reform measures will be higher than previously expected.
The UK tax authority is consulting on the draft Transfer Pricing Records Regulations, 2023.
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.
US Treasury Secretary, Janet Yellen, has welcomed EU agreement on implementation of a global minimum tax on corporations.
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.
The Platform for Collaboration on Tax (PCT) has released its Progress Report 2022, which provides an update on the world’s four leading multilateral organizations’ collaboration in the area of revenue mobilization since October 2021.
The PCT is a joint initiative of the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), the United Nations (UN), and the World Bank Group (WBG).
The four PCT Partners continued their support to countries seeking to strengthen their tax systems through the development of joint products, dissemination of their toolkits, and exchanges on critical issues.
The PCT remained active throughout the pandemic as the world transitioned into hybrid working modes. The platform will continue to serve as a mechanism for exchange and collaboration among the four Partners in their efforts to support tax system reform, particularly for developing countries, beyond 2024.
This Progress Report is part of PCT’s commitment to operating transparently and to making its workplan and outputs widely available, through its publicly accessible website, to governments, capacity development providers and their donors, civil society organizations, and the general public.
The report gives a snapshot of PCT activities under five workstreams with new priorities identified in light of global challenges: tax and SDGs with a primary focus on tax and environment, international taxation, medium-term revenue strategy (MTRS), resilience to and preparedness for shocks, and stakeholder engagement, information dissemination, and internal exchanges.
EU member states, on December 12, reached agreement to implement a minimum tax rate for large businesses at the EU-level.
The Australian Government is consulting stakeholders on draft legislation to implement a new tax treaty with Iceland.
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.
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.
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.
China’s State Administration of Taxation has published the latest report on advance pricing arrangements (APAs).
The Dutch government has published 15 responses to its public consultation on the draft Minimum Tax Rate Act, 2024.
Registration is open for an OECD webinar on Amount B under the Two-Pillar Solution to tackle digital economy taxation.
Members of the European Parliament (MEPs) have adopted their opinion to the EU Commission’s proposed legislation aimed at clamping down on shell companies used for tax purposes
The Dutch finance ministry has launched a new project to tackle “remarkable tax arrangements.”
UK government has raised more revenue than expected in digital services tax and has increased the amount of UK tax paid by big digital companies, according to a report by the National Audit Office.
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.
The UK government has received 20 written responses from tax and law firms on the proposed mandatory disclosure rules (MDR).
A United Nations committee has approved draft resolution on “Promotion of inclusive and effective international tax cooperation at the United Nations.”
On November 18, 2022, Malta gazetted Transfer Pricing Rules, 2022.
As per the rules, in ascertaining the total income of any company:
- where any amount incurred or due, in the year preceding the year of assessment under any cross-border arrangement to which the transfer pricing rules apply, differs from the arm’s length amount, it shall be deemed that the arm’s length amount was incurred or due as opposed to the actual amount incurred or due; and
- where any amount accrued or derived, in the year preceding the year of assessment under any cross-border arrangement to which the transfer pricing rules apply, differs from the arm’s length amount, it shall be deemed that the arm’s length amount was accrued or derived instead of the actual amount accrued or derived.
The OECD has published the latest annual Corporate Tax Statistics, covering over 160 countries and jurisdictions.
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).
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.
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.
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.”
The update comes into effect for accounting periods beginning on or after January 1, 2023, for corporation tax purposes.
The revision of the code, the first one since 1997, means that member states will broaden the scope of the tax measures under scrutiny when examining harmful tax practices within the EU.
The Court of Justice of the European Commission annuls the European Commission’s 2015 finding that Luxembourg granted selective tax advantages to Fiat through a transfer pricing ruling, in breach of EU state aid rules.
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.
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.
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).
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.
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.
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.
The manual is intended as a guide to tax administrations and taxpayers for streamlining the bilateral APA process.
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.
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.
Engineering, procurement and construction (EPC) contracts and split contract arrangements (involving offshore supply contracts and onshore service contracts) have remained a key focus of Pakistani tax authorities. The tax implications for these transactions are influenced by the design of the transaction in question and the provisions of the applicable Double Tax Treaties (DTTs).
Recently, Pakistan’s Appellate Tribunal Inland Revenue (ATIR – second tier appeal forum) has allowed an appeal against the tax authority’s order for recovery of withholding tax, deductible while making payment for the offshore supply of machinery (ITA 377/KB/2019). As per the facts, the appellant, a Pakistani renewable energy project, imported machinery and equipment from a Chinese manufacturer. The onshore contract (construction, assembly and installation services) was signed separately with an associate of the equipment supplier, also resident in China and executed through a branch office registered in Pakistan, constituting a permanent establishment (PE). The taxpayer was held assessee-in-default due to the following facts:
- The supplier of machinery and the provider of onshore service were associates.
- Both offshore and onshore agreements were similar in language and signed by the same person.
- The contract is essentially in the nature of an EPC contract and the location split of the EPC contract was made to avoid taxes due in Pakistan.
The tax authority inferred that the offshore supplier and onshore service provider, being PE of a separate company of the same group, must be considered a single entity for tax purposes. Lastly, the tax authority maintained that the offshore contract is subject to tax in Pakistan as per DTT between Pakistan and China, which is based on the UN Model Tax Convention (UN MTC) and contains a ‘force of attraction’ rule.
ATIR decided the appeal in favor of the taxpayer and relied on precedents involving DTTs with Germany and Italy to conclude that offshore supply contract/portion of composite contract cannot be subject to tax in Pakistan due to overriding effect of relevant DTTs. Moreover, ATIR held that:
- The requirement to obtain specific withholding tax exemption was inapplicable in case of payments for import of goods where title to goods is transferred outside Pakistan and supply is not made between associates.
- Tax authority was not authorized to discard the associated entity and treat Pakistani PE as the PE of offshore supplier for invoking force of attraction rule.
- The so-called force of attraction rule is not applicable for taxation of EPC contracts in view of the guidance provided under the UN MTC.
- The concept of Cohesive Business Operations (CBO) introduced in domestic tax law, including related amendments in the definition of PE and source rules for business income and restriction on exemption from withholding tax, may affect the tax position prospectively, i.e. from 1 July 2018 onwards.
- In case of any conflict between domestic law and a DTT provision, the latter overrides the former. DTT override is applicable insofar as it provides for tax relief otherwise not available under the domestic law. In the context of attribution of profits to a PE, existing DTT does not contain any specific reference to the concept of CBO in Article 5.
ATIR has addressed a key issue involved in the taxability of EPC/splitting of contracts under the Pakistan-China DTT. The amendments relating to CBO are not tested yet, however, the judgement may still apply insofar as it has been held that the definition of PE as per DTT supersedes the domestic law.
Muzammal Rasheed is Chief Executive Officer of Enfoque Consulting (Private) Limited, Pakistan, a member firm of WTS Global.
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.
The Convention will enter into force on January 1, 2022, for these countries.
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.
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.
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.
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.
The consultation will run until September 10.
DAC6 Schema Version 1.1 is applicable for all exchanges until July 31, 2021.
Comments must be received by August 16, 2021.
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.
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.
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.
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.”
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.
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.
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).
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.
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).
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.
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.
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.
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.
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 firstname.lastname@example.org
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.
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.
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.
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.
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.
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.
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.
The portal includes improved security using myGovID digital identity services, linked to your company’s ABN using Relationship Authorisation Manager (RAM).
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.
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.
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.
Public comments on the draft guidance must be received by June 18, 2021.
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.
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.”
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.
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.
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.
By Błażej Kuźniacki (Attorney-at-Law, Deputy Director for Strategic Tax Advice & Dispute Resolution,PwC Poland) & Katarzyna Kotowska (Senior Associate, Transfer Pricing, PwC Poland) & Piotr Niewiadomski (Tax Advisor, Director in Transfer Pricing, PwC Poland)
The definition of controlled transaction in the light of Polish Corporate Income Tax Act (CIT Act) and explanatory memorandum
According to Article 11a point 6 of the CIT Act, a controlled transaction refers to economic activity identified on the basis of actual behavior of the parties to the transaction, including allocation of income to the foreign permanent establishment (PE), where the conditions are imposed/made as a result of existing relations.
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.
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.
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.
Interpretation Note 115 relates to withholding tax on interest and Interpretation Note 116 relates to withholding tax on royalties.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
For Estonia, the BEPS MLI will enter into force on May 1, 2021.
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.
Access to submit DAC6 reports shall be available in the coming days, the tax authority said.
The meeting will be held virtually and will be open to the public.
In particular, the Presidency will address the challenges of European taxation, including the model for taxation of the digital economy, under the principles of fairness and tax efficiency.
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.
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.
US Trade Representative has published findings on digital service tax in India, Italy, and Turkey calling it discriminatory and burdensome.
The meeting will be held on January 14-15, 2021.
Barbados has ratified the BEPS MLI covering 31 of its tax treaties.
The transfer pricing measures gazetted by Malaysian government on December 31 provide a five percent surcharge in case of transfer pricing adjustments.
Maltese tax authority issues key guidance on DAC6 reportable cross-border arrangements. The guidance explains key concepts with the help of illustrations.
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.
Comments on the draft Circular on DAC6 must be submitted to the Italian tax authority by January 15, 2021.
The Tax and Duty Manual Manual on DAC6 has been updated in a number of respects. The updates are set out in Appendix V.
Greece has dropped Oman and Seychelles from the list of preferential tax regimes for 2019.
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.
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).
The public consultation meeting will be held virtually on January 14-15, 2021.
The information provides with a better understanding of the extent to which the HTVI approach described in Chapter VI of the Transfer Pricing Guidelines has been adopted and is applied in practice by countries around the world.
81 jurisdictions are now fully in line with the BEPS Action 5 minimum standard.
The Australian Taxation Office said that the multinational anti-avoidance law has been successfully implemented, with the restructures resulting in more than AUD 8 billion additional taxable sales being booked in Australia.
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.”
Canada states that Denmark’s reservation “exceeds the scope of cases for which a reservation may be made under that provision.”
DAC6 has been implemented into Maltese legislation by virtue of legal notice L.N. 342 of 2019.
Comments must be received by December 14.
The exact meeting times during this band of dates and the modalities of the meetings will be advised shortly.
The Suggested Approach is aimed at helping African countries that are considering implementing digital service tax to tax transactions of highly digitalized businesses.
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.
For Jordan, the BEPS MLI will enter into force on January 1, 2021.
The BEPS MLI will enter into force for both countries on January 1, 2021.
More than 2,500 bilateral relationships for CbC exchanges are now in place.
The data, released on July 8, is a major output based on the country-by-country reporting requirements for MNEs under the BEPS project.
That decision was unequivocally in Cameco’s favour in its dispute of reassessments issued by CRA for the 2003, 2005, and 2006 tax years.
The rise of global digital economies has introduced uncertainties and exposed many loopholes in our existing tax system, with the most significant issues being the difficulties in collecting tax from those conducting digital activities without a physical presence in a jurisdiction. Thailand has long considered reforming its traditional tax system to better cover the digital economy and digital transactions, believing that foreign companies engaged in the same transactions in Thailand as local companies should also pay tax to the country. This includes value added tax (VAT) on the provision of digital services.
The guidance provides detailed explanations on cross-border arrangement, definitions of intermediaries and relevant taxpayers, and the main benefit test, among others.
The 30-day time period will commence on January 1, 2021.
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.
The deferral is aimed at providing taxpayers and intermediaries dealing with the impacts of the Covid-19 pandemic with additional time to ensure that they can comply with their obligations.
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.
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.
The guidance covers topics such as the purpose of reporting, the kinds of arrangements that must be reported, who should report the information, the list of information that must be submitted, and the reporting timelines.
Companies engaged in undesirable tax planning can apply for individual support if they satisfy two tax-related conditions concerning business location and transactions.
Gurría was responding to recent statements and exchanges regarding the ongoing negotiations to address the tax challenges of the digitalisation of the economy.
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.
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.
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.
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.
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.
The DAC6 reporting requirement was originally intended to take effect from July 1, 2020, postponement has been agreed in view of COVID-19 pandemic.
The DAC6 reporting requirement will come into effect on July 1, 2020.
The amendments generally apply from July 1, 2019.
These ten trading partners are: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom.
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.