Category: Germany

Global transfer pricing standards with local impacts

THE ORGANISATION for Economic Cooperation and Development (OECD) initiated the base erosion and profit shifting (BEPS) project in 2013 to address perceived gaps in international tax rules causing a loss of revenues for governments of about US$100 billion to $240 billion (Bt3.5 trillion to Bt8.4 trillion) annually. The OECD’s BEPS...

BEPS big bang complexity for income tax treaties – on a delayed fuse

The OECD made its end-November 2016 deadline to release the text of the multilateral treaty to give effect to the BEPS Actions which involve changes to tax treaties, see here. The 49 page treaty text, which is commonly referred to as the multilateral instrument or MLI, and 85 page explanatory...

President Trump eyes border tax on Mexico, China and Germany

The Trump White House favours a “flexible” border adjustment tax targeting countries with which the United States runs big trade deficits, including Mexico, China and Germany, the President’s top trade and industry adviser said. Peter Navarro, a sceptic of free trade, wants the US to entice advanced manufacturing production onshore...

BDI lobby group opposes end of ‘patent box’ tax breaks

Germany’s BDI industry group has come out against a government plan to unilaterally close so-called ‘patent box’ tax loopholes used by foreign companies to avoid paying full taxes on profits earned in Germany. The Association of German Industrialists, BDI, said Tuesday that the government’s unilateral move would send a negative...

BEPS – Germany on the way to limit the tax deductibility of royalties

A new legislative approach of the German tax authorities leaked last December 19 will have a significant impact on the tax deductibility of royalties owed to related persons being subject to a preferential back end tax regime for IP not being in compliance with the Organisation for Economic Co-operation and...

German Multinationals Fear Disclosure of Global Tax Reports

Multinational companies headquartered in Germany worry that when they report their global tax and profits for 2016, some countries will leak their country-by-country reports to the press. German parents of multinational groups with annual consolidated group revenue of at least 750 million euros ($797 million) are required to file, with...

Austria: Ministry Of Finance Issues Guidance On The Alienation Of A Partnership Stake In A Trilateral Setting

On 29 October 2016, the Austrian Ministry of Finance provided interesting guidance on the tax consequences of an alienation of a participation in a Hungarian partner- ship by an Austrian partnership consisting of German partners. The case revolved around an operative Austrian partnership (GmbH & Co KG) with German resident...

Juncker accused of blocking EU efforts against tax avoidance

Jean-Claude Juncker deliberately blocked the EU’s efforts to fight tax avoidance while in office as prime minister of Luxembourg, according to documents revealed by The Guardian and the International Consortium of Journalists. EurActiv France reports. Member states have supposedly spent the last two decades cooperating in the committee on business...

German Government Targets Offshore Tax Avoidance

The German Government has adopted draft anti-avoidance legislation intended to make it more difficult for domestic taxpayers to avoid tax through the use of “mailbox companies in tax havens.” The draft bill, approved by the Cabinet on December 21, contains more stringent reporting obligations for German taxpayers with foreign financial...

UK opposes planned US dividend tax for offshore investors

The US government is facing calls to delay the introduction of a new tax on foreign investors in US equity-linked derivative transactions, after the G5 group of countries signalled their opposition and the US Securities Industry and Financial Markets Association (SIFMA) indicated its members would not be ready for the...

Mauritius: Joint Statement By The FSC & The FSPA

The Mauritius IFC: Driving Growth in Africa As a jurisdiction of substance, the Mauritius International Financial Centre (Mauritius IFC) has been instrumental in driving quality investments in Africa, leading to sustained growth and prosperity across the continent. It is therefore with deep regret that we take note of the misperceptions...

Richards accuses Oxfam of ‘serial errors’

Finance minister Bob Richards has expressed dismay at Oxfam’s claim that Bermuda is the world’s worst corporate tax haven. And the Progressive Labour Party joined him to condemn the report as “extremely disappointing”. Mr Richards pointed to “serial errors” in the global charity’s report on offshore centres, which found that...

Bermuda is world’s worst corporate tax haven, says Oxfam

Four UK territories in list ‘undermine Britain’s efforts to be responsible member of the international community’ Bermuda is the world’s worst corporate tax haven, according to a list by Oxfam, which includes three other UK territories among those it names and shames. The charity’s list of the “world’s worst” 15...

Call for probe into Jose Mourinho ‘offshore tax haven’

Calls have been made for an investigation into Manchester United manager Jose Mourinho’s financial affairs after claims millions of pounds was moved offshore to avoid tax. It is alleged Mourinho’s advisers may have helped him avoid paying tax on earnings from the use of his image rights for product endorsement...

Germany Prepares Crackdown on Letterboxes

Nov. 15 — The German Cabinet is preparing to address a bill Dec. 21 to combat tax evasion by cracking down on letterbox companies and banking secrecy as a response to the Panama Papers and other scandals involving sophisticated forms of tax planning. The bill, prepared by the Federal Ministry...

Common Base Could End EU Patent Box, Transfer Pricing Disputes

Adoption of legislation for a common consolidated corporate tax base by 27 EU member states would resolve current patent box conflicts and end transfer pricing disputes that cost multinational companies hundreds of millions of dollars in double taxation, according to EU and industry officials. Speaking at a Nov. 15 conference...

German chemicals firm BASF avoided nearly €1bn in tax, says report

Network of foreign subsidiaries reported key to €923 million windfall over five years German chemicals manufacturer BASF has been accused of avoiding close to €1 billion of tax. In a report published on Monday, the company is alleged to have used aggressive tax-planning strategies in the Netherlands, Belgium, Switzerland and...

EU Countries Block Use of Rates as Tax Haven Criteria

A “number” of European Union countries are blocking a push to include zero corporate tax rates as criteria for the bloc’s tax haven blacklist, according to Slovakia, which holds the rotating EU presidency. EU members have been unable to reach an agreement on cracking down on offshore structures aimed at...

Country-by-Country Confusion: Narrow BEPS Queries Abound

Global governments battling tax avoidance increasingly are pushing multinational corporations for a bigger picture of how and where they pay taxes, leading to increasingly narrow questions from company tax officers. “We have a number of entities that are disregarded for U.S. tax purposes. When I fill out the country-by-country form,...

German finance minister plans to clamp down on offshore firms with new draft law

German Finance Minister Wolfgang Schaeuble wants to force Germans to disclose their dealings with offshore firms in tax havens and make banks liable for lost tax income if they conceal their clients’ business with such firms, a draft law shows. Tax havens were thrown into the limelight in April when...

Official hails program to track secret Swiss bank funds

A Justice Department official on Friday hailed a U.S. government program that’s helping tax authorities finally track criminal activity around the world. At issue is the Swiss Bank program, which has helped authorities follow funds moved from Swiss accounts to around the world. “A lot of the U.S. account holders...

Germany and Panama move closer towards information-sharing agreement

Talks on a data exchange agreement have progressed following Panama President Varela’s state visit to Berlin. Panama is looking to clean up its reputation in the aftermath of the “Panama Papers” leak earlier this year. Germany and Panama moved a step closer towards signing an information-sharing agreement, German Chancellor Angela...

German taxman goes after foreign banks

German state prosecutors are investigating nearly 60 foreign banks for “abetting tax evasion,” a newspaper report has said. Self-declaring former tax-evaders are proving a particularly valuable source of information. Prosecutors in Germany’s most populous state are investigating 57 foreign banks on charges of abetting tax evasion, according to the “Süddeutsche...

OECD official says EU Apple ruling not precedent for future tax cases

A multi-billion euro back tax bill handed to Apple by the European Commission should not be seen as a precedent for future tax cases as it was based on state aid rather than tax law, the OECD official spearheading global tax reform said on Monday. European Union antitrust regulators last...

Apple May Face Double Tax on Profits If France Adds to Tab

Apple Inc. may face double taxation on some of its profits if the European Commission’s Aug. 30 ruling inspires France to slap its own tax adjustment on the company, practitioners said. Apple could even face “triple taxation” if it repatriates profits from the European Union to the U.S., Laurent Leclercq,...

How Amazon Values Its Tech Assets for Tax Purposes

Regulators in Europe and the US say that the value Amazon places on the technology behind user experience varies radically depending on which appraisal will lower its tax bill. Jeff Bezos’s relentless focus on user experience has helped him make Amazon the most valuable e-commerce company in the world. But...

Republicans Take New Tack on Taxing Companies’ Overseas Profits

Democrats are likely to object to the House GOP’s and Donald Trump’s plans for sharply lower rates President Ronald Reagan once chided government’s approach to the economy as following this mantra: “If it moves, tax it.” Today’s Republicans are following Mr. Reagan’s ideas by trying the exact opposite approach. The...

Disingenuous Statements About Tax From Apple’s Tim Cook

Apple is a major part of why the United States is the world’s leading innovator on new technologies, particularly those involving telecommunications and computers. The company has over 66,000 domestic employees, and a large percentage of its customers are here — at least 40 percent, according to its latest annual...

G20 ministers urge tighter tax rules for multinationals

The world’s major economies need to deepen cooperation on tax collection as companies seek to minimise the amount they pay to governments, finance ministers said Saturday. The issue has become controversial in many countries, with multinational firms from Google to Starbucks facing accusations of not contributing appropriately to the economies...

Germany Adopts Law On CbC Reporting And Tax Rulings

The German Federal Cabinet has adopted a bill to implement key aspects of the OECD’s base erosion and profit shifting (BEPS) recommendations and the European Union’s administrative cooperation directive. The Act Concerning the Implementation of Changes to the EU Administrative Cooperation Directive and of Additional Measures against Base Erosion and...

How to get ready for BEPS tax reporting rule changes

Multinational companies are making strides in preparing for radically changed cross-border tax and transfer-pricing reporting rules as compliance deadlines near, research by Thomson Reuters suggests, but uneasiness remains amongst tax executives about their readiness. The new rules will require multinational enterprises with annual revenues of €750 million ($830 million) or...

UBS ordered to provide France with tax information

UBS (UBSG.S) has been ordered by Switzerland’s tax agency to provide France with tax information, the Swiss bank said on Tuesday, adding that it expected other countries to file similar requests. Since the financial crisis, cash-strapped governments around the world have clamped down on tax evasion, with authorities probing Swiss...

What Brexit is Likely to Mean for Taxes, Trade and More

Regardless of whether you were surprised, overjoyed, dismayed or showed any other emotion (perhaps anger as you saw world markets tank), Brexit is here. Yes, we’re talking about the British exit from the European Union. We are not sure why the media coined the term “Brexit,” when it’s not only...

Brexit Risks Losing Corporate Tax Break Worth Billions in U.K.

British multinational companies face new withholding taxes that may cost hundreds of billions of euros a year if U.K. voters decide to leave the European Union, international tax specialists say. A so-called Brexit “would have a major impact” on British corporations that have subsidiaries in the EU, said Daniel Gutmann,...

Washington ALJ Upholds Business and Occupation Tax Assessment on German Company’s Royalty Income

On May 31, 2016, the Washington Department of Revenue (DOR) Appeals Division released a Determination (No. 15-0251, 35 WTD 230) denying a German pharmaceutical company’s business and occupation tax (B&O) protest. The administrative law judge (ALJ) ruled that while the nondiscrimination provisions contained in Article 24 of the US-Germany Income...

Global Tax Update – June 2016

Asia Pacific The January – March edition of tax highlights for the Asia Pacific region highlights industry developments from Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia and Singapore including: Australia’s new tax system for Managed Investment Trusts The final stage of China’s B2V reform to be rolled out from...

Brazil, Jamaica and Uruguay expand their capacity to fight international tax avoidance and evasion

Jamaica and Uruguay today signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and Brazil deposited its instrument of ratification of the Convention on the occasion of the launch of the OECD’s Latin American and Caribbean Regional Programme and the OECD Ministerial Council Meeting. Jamaica and Uruguay became...

After Mauritius, now government wants to amend Dutch tax treaty; asks Netherlands to resume talks

India has asked the Netherlands to resume negotiations on amending their bilateral tax treaty as the government extends its efforts to plug loopholes in such accords to curb misuse. The Dutch tax treaty , which allows exemption from capital gains and a lower rate of tax on dividends, has led...

EU finance ministers fail to agree on anti tax avoidance directive

The EU’s Economic and Financial Affairs Council (ECOFIN) has been unable to reach agreement on the European Commission’s proposed anti tax avoidance directive. The issue has therefore been postponed until the next ECOFIN meeting in June. The European Commission announced its proposed anti-tax avoidance directive (ATAD) in January. The proposed...