Category: OECD

Transfer Pricing Behind Jump In UK Tax In Dispute

The amount of tax potentially underpaid by big businesses by shifting profits to other jurisdictions has increased by 60 percent in the last year, to GBP3.8bn (USD4.8bn), according to figures obtained by international law firm Pinsent Masons. The figure is the “tax under consideration” by HMRC’s Large Business Directorate, being… – Continue reading

Kenya to lend its tax expertise to Botswana after historic deal

The Kenya Revenue Authority has signed an international memorandum of understanding on tax collaboration with Botswana, to provide administration assistance from next year. Tax officials from Kenya and Botswana on Thursday agreed to the assistance project that marks the first South-South cooperation pact under the Tax Inspectors Without Borders programme… – Continue reading

Andorra to renounce banking secrecy as it sheds tax haven status

Pyrenees principality approves automatic sharing of information on accounts held by non-residents from EU countries Andorran lawmakers have agreed to end banking secrecy in the Pyrenees mountains principality, approving automatic sharing of information on accounts held by non-residents. The General Council, Andorra’s unicameral parliament, approved a measure that will come… – Continue reading

Implementation of Common Reporting Standard in Hong Kong – Implications for Family Trust with a Private Trust Company as Trustee

The Organization for Economic Co-operation and Development (OECD) issued the Standard for Automatic Exchange of Financial Information in Tax Matters (Standard for AEOI) in July 2014, which aims to prevent offshore tax evasion and maintain the integrity of tax systems. Over 100 jurisdictions have committed to comply with the Standard… – Continue reading

EU Mulls ‘Substance Test’ to Determine Zero-Rate Tax Havens

European Union member countries are considering a “substance test” to determine whether a country or jurisdiction with a zero corporate tax rate qualifies as a tax haven that doesn’t reflect “real economic activity.” After a host of EU member countries rejected in early November the use of a zero corporate… – Continue reading

Australia’s Google Tax may be the second in the world but it’s too early to tell if it’s the ‘toughest’

When introducing the draft legislation for the Diverted Profits or so-called “Google Tax”, Federal Treasurer Scott Morrison claimed it would: …reinforce Australia’s position as having amongst the toughest laws in the world to combat corporate tax avoidance. Australia is the second country to introduce this type of tax, after the… – Continue reading

Google, Facebook Targeted by Indonesia in Push for More Tax

Indonesia is widening its tax net to target global technology giants like Google and Facebook Inc., a strategy that’s raising red flags for fear it may deter foreign investment. Finance Minister Sri Mulyani Indrawati is seeking to squeeze more revenue out of an economy that’s been hit by weak commodity… – Continue reading

Multilateral Treaty Not Simple, But Clear: OECD’s Saint-Amans

The OECD’s ground-breaking multilateral tax treaty, which will potentially amend thousands of bilateral tax treaties, will add “another layer” to treaty administration—but actual changes to bilateral agreements will be clear to both tax administrations and multinational companies, the organization’s tax chief said. Taxpayers and tax administrations “will know what the… – Continue reading

OECD Says Trump Tax and Spending Plans Will Boost Global Economy

A resurgent U.S. economy would help offset softness elsewhere in the world. Global growth will pick up faster than previously expected in the coming months as the Trump administration’s planned tax cuts and public spending fire up the U.S. economy, the OECD said on Monday, revising up its forecasts. In… – Continue reading

UAE to begin implementing G20 and OECD procedures

94 countries have committed to implement the joint disclosure system by 2017 and 2018 Abu Dhabi: The Ministry of Finance (MoF) has announced that the UAE will begin implementing the standards of joint disclosures and the exchange of information for tax purposes set out by the G20 and Organisation for… – Continue reading

Switzerland Adopts Ordinance On International AEOI

Switzerland’s Ordinance on the International Automatic Exchange of Information (AEOI) in Tax Matters will enter into force on January 1, 2017. The Swiss Federal Council adopted the ordinance on November 23. The ordinance contains the Federal Council’s implementing provisions for the Federal Act on the International Automatic Exchange of Information… – Continue reading

Switzerland and South Africa sign joint declaration on introduction of AEOI

On 24 November 2016, Switzerland and South Africa signed a joint declaration on the introduction of the automatic exchange of information (AEOI) in tax matters on a reciprocal basis. Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from… – Continue reading

Ukraine officially joins BEPS project

On November 22, 2016, the Minister of Finance of Ukraine handed an official letter on Ukraine’s accession to the BEPS (Base Erosion and Profit Shifting) plan to the Secretary-General of OECD. Being the final stage in the process of joining the project, Ukraine is to become a member of the… – Continue reading

Automatic exchanges signed with three countries

Switzerland has signed declarations to exchange tax information automatically with Brasil, Mexico and Uruguay and Mexico in coming years, but the deals must still go before Swiss parliament for approval. Under the declarations, banking information would be collected from 2018 and exchanged by 2019, the State Secretariat for International Financial… – Continue reading

French Panel Adopts ‘Google Tax’ on Diverted Profits

Big U.S. internet companies in France could get hit by a new BEPS-inspired penalty on “diverted profits” under a so-called Google tax measure that France’s National Assembly is set to consider next week. The amendment, proposed by Socialist Deputy Yann Galut and adopted by the Assembly’s finance committee, targets foreign… – Continue reading

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… – Continue reading

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… – Continue reading

Bermuda dodges EU tax-haven blacklist bullet

Bermuda has reportedly avoided being placed on an European Union blacklist after Britain blocked a French-led proposal that would have automatically branded the island a tax haven. Territories with a zero per cent corporate tax rate, such as Bermuda and the Cayman Islands, would have been denounced as potentially “non-co-operative”… – Continue reading

Dispute resolution under the Nigerian transfer pricing regime

Background The Federal Inland Revenue Service [FIRS] has begun Transfer Pricing [TP] audits and has been requesting TP documentation and other documents from taxpayers relating to their related party transactions. These actions are in line with its powers under the Income Tax (Transfer Pricing) Regulations No. 1 of 2012 [Regulations]… – Continue reading

Govt poised to regulate offshore investments

ISLAMABAD: The government has stepped up to check corruption and regulate offshore investments in a bid to promote transparency and good governance, finance minister said on Tuesday. “New measures, such as the companies’ global register of beneficial ownership, will curb corruption, help (government) address challenges related to offshore investments and… – Continue reading

Cayman may find itself on EU’s ‘non-cooperative jurisdictions’ list

Cayman could find itself on a new EU list of “non-cooperative jurisdictions” in tax matters after the European Council of finance ministers published the criteria for including third countries in the blacklist last week. The provisions emphasize that a jurisdiction “should not facilitate offshore structures or arrangements aimed at attracting… – Continue reading

EU Parliament May Lose Right to Veto Public Tax Reporting

The European Parliament risks losing the right to veto plans to make multinational companies publish tax and profit details for the countries in which they operate, according to the European Union’s legal advisers. The Council of Ministers’ legal service insisted in its opinion, seen by Bloomberg BNA, that the European… – Continue reading

CRA investigating 85 Canadians for tax evasion tied to Panama Papers

Eighty-five Canadians identified in the Panama Papers leak are now being investigated for tax evasion, the Canada Revenue Agency has revealed. Details of Canada’s enforcement effort were provided to the Star the same week the U.K., which is a major hub of the offshore finance world, said it has launched… – Continue reading

EU To Crack Down On Promotion Of Aggressive Tax Planning

The European Commission has launched a public consultation on how best to deter promoters of aggressive tax planning schemes. The Commission said it is particularly interested in gathering views on how a mandatory disclosure scheme for tax advisers could be put in place. If implemented, this would require intermediaries to… – Continue reading

EU Agrees Criteria For ‘Tax Haven’ Blacklist

The European Council has reached an agreement on the criteria and the process for the establishment of an EU list of non-cooperative jurisdictions in taxation matters. On November 8, the Council resolved that an EU list of non-cooperative jurisdictions “will be determined by the Council in 2017.” The “screening” of… – Continue reading

Finnish Expats In Portugal Face Higher Taxes

Finland will have “more possibilities” to tax Finnish pensioners living in Portugal under a recently revised bilateral double taxation avoidance treaty, the Finnish Government has said. The new agreement was signed on November 7 by Portuguese Finance minister Mario Centano and his Finnish counterpart Petteri Orpo, who declared himself “very… – Continue reading

New Zealand Planning More BEPS Measures

New Zealand’s tax agency has set out the international tax initiatives it intends to pursue, in particular in response to the OECD’s base erosion and profit shifting plan. It said it will undertake further work on a package of BEPS initiatives, which will include hybrid mismatch rules to prevent companies… – Continue reading

IRD delayed multinational tax crackdown

New Zealand has delayed cracking down on multinational tax avoidance due to private sector concerns over timing and concerns about “scaring away” foreign investment, the Inland Revenue Department says. Wide-ranging reforms to corporate tax rules proposed by the Organisation for Economic Cooperation and Development (OECD), known as the base erosion… – Continue reading

Nearly 100 Countries Poised to Adopt Multilateral Treaty

Ninety-eight countries are poised to formally adopt the OECD’s innovative multilateral tax treaty, which will place recommendations from the BEPS project into more than 3,000 bilateral accords, when the ad-hoc group meets later this month. The “Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting”… – Continue reading

Global fight against tax-evaders sets eyes on UAE

The United Arab Emirates’ tax-free perks could soon come to an end as the OECD group of wealthy nations lays down the pressure to tackle global tax-evaders. The Gulf state’s hesitation to sign up to a world treaty to assist in the exchange of information on tax evaders is a… – Continue reading

Tax transparency tops OECD agenda in Tbilisi

The OECD is calling on all jurisdictions to conform to the latest tax transparency standards under exchange of information rules at the same time as they develop their own tax transparency initiatives The majority of OECD members have committed to implement the automatic exchange of information (AEOI) standard, with a… – Continue reading

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… – Continue reading

Watchdog: IRS faces barriers in tax avoidance reviews

The Internal Revenue Service lacks a strong operation to audit a critical international tax compliance area, according to a watchdog report released Thursday. At issue is transfer pricing, a cost structure used by multinational companies to price goods and services they sell to subsidiaries in foreign locations. The IRS requires… – Continue reading

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… – Continue reading

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,… – Continue reading

It will promote greater economic cooperation between Latvia and Switzerland

Wednesday, 2 November, Finance Minister Dana Reizniece-oak and Swiss Ambassador Latvian Marcus Niklauss Paul Dutli ( Markus Niklaus Paul Dutly ) signed the Latvian Republic and the Government of the Swiss Federal Council Protocol amending the two parties on 31 January 2002 concluded the Convention for the Avoidance double taxation… – Continue reading

Australian Goods And Services Tax Guidance For Offshore Suppliers

The Australian Tax Office (ATO) has updated its guidance for those non-resident businesses that make supplies of goods, services, or digital products to consumers or GST-registered businesses in Australia, with a couple of changes due to occur next year and a change last month. Since October 1, 2016, certain transactions… – Continue reading

MENA Transfer Pricing in a Post BEPS World

Historically, the Middle East and North Africa (MENA) region has been perceived as a region where taxation and transfer pricing initiatives are not high up on government agendas. Although this has been the case for a significant period of time, recent changes in the region such as decreases in global… – Continue reading

Romania plans to join project for fighting big companies’ tax avoidance

Romania plans to join the Base erosion and profit shifting (BEPS) program as an associate member. The program equips governments with domestic and international instruments to address tax avoidance. The program’s objective is to have profits taxed where economic activities generating the profits are performed. The Finance Ministry has published… – Continue reading

PH eyes tax treaties with Asean peers

The Philippines is eyeing to seal tax treaties with all nine other Asean member-states, according to the Bureau of Internal Revenue (BIR). The country already has effective double taxation agreements (DTAs) with Indonesia, Malaysia, Singapore, Thailand and Vietnam, BIR Assistant Commissioner Marissa O. Cabreros noted in a presentation at last… – Continue reading

OECD Reviewing U.S. Handling of Double-Tax Cases

The OECD has started to review how effectively the U.S. and five other countries handle cases in which multinational companies assert double taxation under the mutual agreement procedure of bilateral tax treaties. As part of the review, the Organization for Economic Cooperation and Development is inviting multinationals to answer a… – Continue reading

FBR okays team to execute AEOI project

After getting approval from Finance Minister Ishaq Dar on the pilot project of automatic exchange of information (AEOI), the Federal Board of Revenue (FBR) has approved a team to execute the project with the Organisation for Economic Cooperation and Development OECD Member countries. According to a notification issued by the… – Continue reading

McDonald’s UK pays £123m in royalties to Luxembourg

The British arm of McDonald’s paid £123m for “franchise rights” last year, as part of a controversial structure that is under investigation for enabling unfair tax avoidance. The European Commission launched a probe last year into whether Luxembourg’s tax arrangements for McDonald’s amounted to illegal state aid, as part of… – Continue reading

Hong Kong Consults On BEPS Implementation

On October 26, Hong Kong’s Government launched a public consultation on the implementation of base erosion and profit shifting (BEPS) measures proposed by the OECD. “Hong Kong is supportive of international efforts to promote tax transparency and combat tax evasion,” said Secretary for Financial Services and the Treasury K C… – Continue reading

With 42% increase in trade, India-NZ agree to amend Double Taxation Agreement

India and New Zealand also vowed to press for successful negotiations of the Regional Comprehensive Economic Partnership (RCEP). India and New Zealand decided to amend the bilateral tax treaty and expressed commitment to work towards a comprehensive free trade agreement with a view to boost economic ties on Wednesday. The… – Continue reading

Panama to join international tax convention on Thursday: OECD

Panama will take a big step towards ending its status as an offshore tax haven on Thursday by signing a multilateral convention to share foreign taxpayer details with other governments, the OECD‘s head of tax said. Panama’s role as a major offshore tax haven came into the public spotlight earlier… – Continue reading

Hong Kong to commence automatic exchange of financial account information in tax matters with Japan and UK in 2018

Hong Kong has signed agreements with Japan and the United Kingdom with a view to commencing automatic exchange of financial account information in tax matters (AEOI) with these two tax jurisdictions in 2018, a Government spokesman said today (October 26). In September 2014, Hong Kong indicated its support for the… – Continue reading

UN, IFIs Introduce Platform for Tax Collaboration

The International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the UN Department of Economic and Social Affairs (DESA), and the World Bank Group introduced a joint initiative, the Platform for Collaboration on Tax, to UN Member States. Marijn Verhoeven, World Bank Group, expressed excitement that the… – Continue reading

Time for U.K. to Get Tough on Offshore Transparency?

With the exception of British Antarctica, the U.K.’s overseas territories and offshore dependencies are all surrounded by sun-winking ocean water. But that’s not their only common feature—they are all under increasing political pressure to become more transparent with their financial information. In a parliamentary report on tackling overseas corruption, the… – Continue reading