Category: OECD

IP BOX: Italian and European Legal Framework

On 22 December 2014, the Italian Parliament approved the Budget for 2015.40 Among other measures, the Law introduces the possibility of an exemption from corporate income tax (IRES, generally levied at 27,5%) and local tax (IRAP, generally levied at 3,9%) on income derived from qualifying intangible assets (such as patents,… – Continue reading

EP votes in favour of stopping corporate tax avoidance; Malta could lose competitive edge

A vote taken in the European Parliament could effectively rob Malta of its ability to attract multinational companies and their millions of Euros in taxation revenue. A vast majority of MEPs, spanning across all political groups showed their support for a resolution, prepared in Parliament’s Economic and Monetary Affairs Committee…. – Continue reading

Latvian president calls for double taxation treaty with Japan

Latvian President Raimonds Vejonis on December 15th accepted the credentials of the Japanese Ambassador to Latvia, Mariko Fujii, and noted an increase in Latvia-Japan trade recently but said there was still room for growth in economic cooperation, the Latvian president’s press service reported LETA. He said that a treaty for… – Continue reading

Belgian Minister of Finance sheds light on implementation of BEPS related measures

The Belgian Minister of Finance has just shared new insights on how Belgium will be addressing the outcome of the OECD/G20 project in relation to Base Erosion and Profit Shifting (“BEPS”). He opted to do so via the “Plan to combat tax fraud”. The title of his policy note is… – Continue reading

Mexico: Reminder of expanded transfer pricing disclosures for 2016

Provisions under new article 76A of Mexico’s tax law reflect certain items of the OECD’s base erosion and profit shifting (BEPS) project—in particular expanded transfer pricing disclosure requirements that will apply for the 2016 tax year. Background The Mexican government’s 2016 federal budget, presented 8 September 2015, included proposals for… – Continue reading

UK releases Finance Bill clauses and consultation documents

Executive summary On 9 December 2015, the UK released draft clauses for Finance Bill 2016 as well as consultation documents. The key items released include: A new requirement for large businesses to publish their tax strategies as they relate to or affect UK taxation. This sits alongside new ‘special measures’… – Continue reading

BEPS Action Point 7 – Amendments to article 5 of the OECD Model Tax Convention

On 5 October 2015, the OECD published its final report on Action Point 7 of the BEPS initiative (Preventing the Artificial Avoidance of Permanent Establishment Status), which entails a significant change to the current definition of permanent establishment (PE) in article 5 of the OECD Model Tax Convention. The purpose… – Continue reading

St Kitts And Nevis To Improve Tax Info Exchange

Caribbean territory Saint Kitts and Nevis has proposed legislative changes to improve its ability to exchange information with treaty partners in tax matters. The territory’s Prime Minister, Timothy Harris, explained that the changes have been prompted by an increasing number of requests from treaty partners, which he attributed to a… – Continue reading

European Commission adopts new rules to help EU tax authorities exchange information

On December 15, 2015 the European Commission issued a media release announcing that on that same date it adopted new rules to make it easier for EU Member States’ tax authorities to exchange financial information so that they can ensure full tax transparency and cooperation. According to the media release… – Continue reading

British Virgin Islands: Proposed Amendments To BVI Business Companies Legislation

The BVI Business Companies Act 2004 (“BCA“) is shortly due to be amended by the BVI Business Companies (Amendment) Act 2015 (the “Amendment Act”). As well as keeping the British Virgin Islands (“BVI“) corporate regime at the forefront of compliance with international standards, the Amendment Act is intended to provide… – Continue reading

Nokian Tyres received EUR 87 million additional payable tax in Finland regarding years 2007-2010

the company will make a complaint against the decision Nokian Tyres plc (HEX:NRE1V) has received a renewed reassessment decision from the Tax Administration, according to which the Company is obliged to pay EUR 87 million additional taxes with punitive tax increases and interests concerning tax years 2007-2010. Payment must be… – Continue reading

Malta: The Tax Challenges Of The Digital Economy – Article 3

Main principles of Direct Taxation – Double Tax Treaties In our third article in a series of articles on the tax challenges of the digital economy, we shall be providing you hereunder with a brief overview of the principles of direct taxation, with a focus primarily on the taxation of… – Continue reading

Transfer pricing findings from the court house

Dear clients and cooperation partners, This newsflash will tell you about findings reflected in court judgements with regard to application of resale price method, and in particular – contradictions in calculation of arm’s length profit level. Recent transfer pricing judgements in Latvia lead to increased controversy in application of resale… – Continue reading

BEPS also applies to medium-sized businesses

Stricter Tax and documentation requirements for foreign transactions “Amazon, Facebook, Google and Starbucks pay little taxes …” or “Luxembourg attracts international corporations” – headlines like these have 62 states and the OECD called into action. The result was “base erosion and profit shifting” BEPS shortly. Even the German SME sector… – Continue reading

Ireland regains its swagger in the tax arena

Something unusual is happening with the Irish corporation tax in 2015 — so unusual that Ireland’s top tax man felt obliged to write to the parliament to explain what is going on. But the explanation left a lot to be desired. According to government data, Ireland received 57.7 percent more… – Continue reading

Common Reporting Standard Enters Into Effect for Investment Funds in Early Adopter Jurisdictions

Many jurisdictions have agreed to implement the Organisation for Economic Co-operation and Development’s multilateral system of automatic exchange of information called the “Common Reporting Standard” (CRS).  In furtherance of its objectives, the CRS imposes a variety of diligence and reporting requirements on “financial institutions,” which includes many master funds, offshore… – Continue reading

European Union: EU Combats International Tax Planning: The Amended Parent Subsidiary Directive

You have probably read about the OECD’s comprehensive base erosion and profit shifting (or BEPS) action plan aimed at tackling undesirable international tax planning by corporates. In recent years, the EU, particularly the European Commission, has put substantial effort into accelerating BEPS-like measures in an EU context. A striking example… – Continue reading

Cyprus: Double Tax Treaty Between Cyprus And Swiss Confederation

On 15th October 2015, the Double Tax Treaty between the Republic of Cyprus and Swiss Confederation had entered into force (the “Treaty“). The said Treaty is based on the OECD Model Convention on the Avoidance of Double Taxation on Income and on Capital. Under the Treaty, there is no withholding… – Continue reading

___uk to modify patent box in line with oecd recommendations__

Its approach includes a new “nexus principle”, as agreed by the multinational Organisation for Economic Cooperation and Development (OECD). This is designed to ensure that the benefits of the UK tax regime are only available where the research and development (R&D) expenditure required to develop that innovation also took place… – Continue reading

An Overview of Transfer Pricing in Vietnam

Transfer pricing is a tax planning method where related companies enter into transactions among each other to shift funds, and thereby profits. For instance, a parent company can extract funds from a subsidiary by having the issue a dividend, but the parent can also provide a service to subsidiary and… – Continue reading

Tax Risk on Permanent Establishment: BEPS Action Plan 7

Companies operating cross border through presence of Branch offices, Liaison and representative offices, appointed distributors and agents should closely watch the changes coming through in international tax norms. OECD and G20 countries adopted a 15 point action plan to address Base Erosion and Profit Shifting (BEPS) and Action Point 7… – Continue reading

Isle of Man to be removed from Spain’s ‘tax haven blacklist’

The Isle of Man has signed a tax information exchange agreement with Spain, reports the Isle of Man Today. It’s part of what the Manx government calls its ‘continuing commitment to meet international standards in tax co-operation and transparency’. The agreement was signed by Mr José Manuel Gutiérrez Delgado, Financial… – Continue reading

TAXE: Have We Taken the Right Path To Ensure Fairer and More Efficient Taxation in the European Union?

After the LuxLeaks affair in November 2014, the European Parliament established a special committee “on tax rulings and other measures similar in nature or effect” (TAXE) in February 2015. The committee’s report was adopted in a plenary session of the European Parliament on 25 November 2015. The Conference of Presidents… – Continue reading

A new concept of intangible assets in the coming of BEPS?

Under Action 8 of the BEPS project (Base Erosion and Profit Shifting) – Aligning Transfer Pricing Outcomes with Value Creation – work was carried out which resulted in certain changes to the OECD guidelines on transfer pricing (Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations), with special emphasis on… – Continue reading

Exchange of Tax Information to Promote International Standards

Basseterre, St. Kitts, December 11, 2015 (SKNIS): The proposed amendments to the Saint Christopher and Nevis Mutual Exchange of Information on Taxation Matters (Amendment) Bill, 2015 would greatly assist in minimizing the challenges that St. Kitts and Nevis faces when executing obligations under Agreements with treaty partners, said Prime Minister,… – Continue reading

Panama thumbs its nose at transparency – again

We have on several occasions fingered Panama as a particularly recalcitrant secrecy jurisdiction: our recent Panama Narrative Report spills a fair number of beans in that respect. Its recalcitrance is perhaps hardly surprising, given the quantity of Colombian and Mexican drugs money believed to be sheltered there – to name… – Continue reading

The Changing Landscape for IP Regimes Around the World

Patent Boxes, Innovation Boxes, Intangible Property Boxes, Knowledge Development Boxes (IP Regimes) – countries may use different names, but all of these regimes are designed to allow a preferential rate of tax to be applied to income generated from intangible property (IP). There are a number of these regimes in… – Continue reading

Worldwide: A Guide To The Top 20 Offshore Fund Locations

There are a variety of benefits to moving offshore, yet few would argue the assertion that tax neutrality is paramount among them. As anyone familiar with the phrase “tax haven” would surely recognize, many countries offer strongly favorable tax terms as an incentive to draw new business. Written by CT… – Continue reading

Coming soon: More disclosures for MNCs in India

Firms over a certain threshold group turnover may be required to give detailed info of financials. MULTINATIONAL companies in India over a certain threshold group turnover may be required to make comprehensive disclosures relating to their revenues, taxes paid, staff strength and assets in different countries where they operate from… – Continue reading

Cayman Islands Automatic Exchange of Information Update

The Cayman Islands Tax Information Authority (“TIA“) has issued an advisory addressing several points of note regarding the Common Reporting Standard (“CRS“) in the Cayman Islands. Updated Self-Certification Forms The TIA has published new entity and individual self-certification forms which address the account holder disclosure requirements under each of CRS,… – Continue reading

Global Financial Integrity released the Global Illicit Financial Flows Report 2015

Global Financial IntegrityGlobal Financial Integrity (GFI) on 8 December 2015 released the Global Illicit Financial Flows Report 2015 entitled Illicit Financial Flows from the Developing Countries: 2004-2013. This study is GFI’s 2015 annual global update on illicit financial flows from developing economies. It is the sixth annual update of GFI’s… – Continue reading

Companies must gear up for Europe’s new tax reporting requirements

As the EU prepares for country-by-country tax reporting requirements, businesses would do well to understand the minutiae of the upcoming regulations October 2015 was a busy month for announcements regarding base erosion profit shifting (BEPS) and country-by-country reporting. The OECD issued the last of the guidelines on BEPS, the various… – Continue reading

Patent box brought into line with international rules

Companies will to scrutinise their R&D activity more closely under proposed changes to patent box regime BUSINESSES will to scrutinise their R&D activity more closely under proposed changes to the design of the UK Patent Box regime outlined by the government The government is making the changes in order to… – Continue reading

Cayman Islands: OECD CRS – Exemption Secured For ‘Old And Cold’ Cayman CDO/CLO Issuers

The Cayman Islands Tax Information Authority (“TIA“) has issued an advisory to confirm that the limited life debt investment entity (“LLDIE“) exemption established under FATCA has been extended in the Cayman Islands to the OECD Common Reporting Standard (“CRS“).1 As such, a Cayman Islands LLDIE has been designated as a… – Continue reading

Guernsey: regulations on Common Reporting Standard entered into operation

On 1 December 2015, the Income Tax (Approved International Agreements) (Implementation) (Common Reporting Standard) Regulations 2015 came into operation. The regulations implement the Council of Europe–OECD Mutual Assistance Treaty (1988) (as amended through 2010), under which, in order to improve international tax compliance, information will be automatically exchanged in accordance… – Continue reading

13 States Sign Up To OECD’s New Tax Info Exchange Standard

Thirteen jurisdictions signed the OECD Multilateral Competent Authority Agreement (MCAA) at a meeting on October 29-30, 2015, in Barbados. In joining the MCAA, the territories commit to automatically exchange tax information with other nations’ tax authorities under the OECD’s new tax information exchange standard, the Common Reporting Standard. A total… – Continue reading

Does ‘BEPS’ address developing country issues?

In 2013, the 39th G8 summit in Lough Erne committed to reform the international tax system. The G8 Lough Erne Declaration stated that such reforms would benefit developing countries. The G20 declaration in St Petersburg 2013 also stated specifically that “Developing countries should be able to reap the benefits of… – Continue reading

Germany: Tax treaty with Australia, other countries; stock-for-stock transactions

Germany and Australia signed a new income tax treaty that follows, in some instances, the OECD Model Tax Convention, but not in other instances. For example, the treaty includes definitions for installation permanent establishments (PEs) and agency PEs, with the latter defined with a view to the OECD’s base erosion… – Continue reading

‘India examining how to tax in a digital eco’

Akhilesh Ranjan, joint secretary (foreign tax), who led India’s initiative in the BEPS project, candidly shared his views on India’s plans for its implementation and what lies in the future. The fundamental principle of the BEPS project, is that income of MNCs should be taxed in that country where economic… – Continue reading

Cayman issues self-certification templates and participating jurisdiction list

The Cayman Islands Ministry of Financial Services’ Department for International Tax Cooperation (DITC) on 8 December 2015 issued an industry advisory regarding the ongoing implementation of the Common Reporting Standard (CRS) in the Cayman Islands. The advisory issued two new templates; the entity self-certification form and the individual self-certification form… – Continue reading

Call for comment: Proposed draft amendments to the Common Reporting Standards in RSA

Legislative amendments to the Tax Administration Act were affected in the Tax Administration Laws Amendment Bill, 2015, in order to implement a scheme under which SARS may require South African financial institutions to collect information under the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters, which… – Continue reading

UK – HMRC publishes a policy paper titled: “Corporation Tax: anti-hybrid rules” (Action 2 of the BEPS Action Plan)

On December 9, 2015 the UK HM Revenue & Customs (HMRC) published a policy paper titled: “Corporation Tax: anti-hybrid rules”. Next to publishing the policy paper the UK Government also announces that on December 22, 2015 a series of examples illustrating the application of the hybrid mismatch rules will be… – Continue reading

UK – HMRC publishes a policy paper titled: “Corporation Tax: Patent Box – compliance with new international rules”

On December 9, 2015 the UK HM Revenue & Customs (HMRC) published a policy paper titled: “Corporation Tax: Patent Box – compliance with new international rules”. The policy paper gives the following general description of the measure: “The government is proposing changes to the design of the UK Patent Box… – Continue reading