Category: Advance Pricing Agreement

India: Rules To ‘Secondary Adjustment’ Rationalized And Clarified

The concept of 'Secondary Adjustment' was introduced in Finance Act 2017 by introducing new Section 92CE in the Indian Income Tax Act (the Act) to align transfer pricing provisions with international best practices. ... - Continue reading

EU court backs use of arm’s length principle to assess Starbucks, Fiat APAs for state aid violation

The EU General Court today released long-awaited rulings in the Fiat and Starbucks tax state aid cases, concluding in both decisions that it is appropriate for the European Commission to assess whether an advance pricing agreement (APA) confers a selective advantage to a taxpayer for state aid purposes by referring to the arm’s length principle. ... - Continue reading

Colombia: Colombia Publishes Guidelines On Advance Pricing Agreements

Colombia's National Directorate of Taxes and Customs (DIAN) released detailed guidelines (the Guidelines) to clarify the procedure for Advanced Transfer Pricing Agreements (APAs) requests in order to ensure certainty between the parties regarding their transfer pricing arrangements. ... - Continue reading

Australia provides arm’s length debt test guidance

The Australian Tax Office on 28 August, released its awaited draft guidance contained in Practical Compliance Guideline 2019/D3, on applying the arm’s length debt test contained in Division 820 of the Income Tax Assessment Act 1997, Australia’s thin capitalization statutory provisions.   ... - Continue reading

The latest APA and MAP figures in Europe: what are the implications for multinational group taxpayers?

Statistics published earlier this week by the European Commission on member state advance pricing agreement (APA) and mutual agreement procedure (MAP) programs suggest that the OECD/G20 base erosion profit shifting (BEPS) project has increased the scope for differences of opinion between tax authorities of different countries. ... - Continue reading

IRS changes CAP program for large corporate taxpayers

The Internal Revenue Service is making some adjustments to its Compliance Assurance Process, a program aimed at large corporate taxpayers that involves cooperating with the IRS before any audits. As part of the proposed changes, the IRS said Monday it will shift the start of the application period to Oct…. – Continue reading

More Information… More Intense Transfer Pricing Disputes?

The Central Board of Direct Taxes has recently issued guidance on the appropriate use of the ‘Country-by-Country Report’. The CbC filing was introduced as a result of the OECD/G20 Base Erosion and Profit Shifting project. India also introduced the requirement to file CbC reporting recently with the completion of the… – Continue reading

Transfer pricing disputes: Interest payout relief coming for MNCs

CBDT issues draft notification on interest computation NEW DELHI, JUNE 20 The Central Board of Direct Taxes (CBDT) proposes to provide a relief to MNCs on the interest payable by them on the untaxed profits stashed abroad, requiring to be repatriated back to India under the transfer pricing regime. It… – Continue reading

IRS issues new advance pricing agreement template

The Internal Revenue Service has issued a new template that corporate taxpayers need to use when asking for an advance pricing agreement with the IRS. Advance pricing agreements are prior agreements between multinational companies and the IRS on the appropriate transfer pricing method to use for a given set of… – Continue reading

India Concludes First US Bilateral Advance Pricing Agreement

The Indian Central Board of Direct Taxes on February 7 announced that it entered into its first ever bilateral advance pricing agreement with a US firm, in cooperation with authorities in the US. In total, during January 2018, the CBDT entered into five unilateral APAs and two bilateral APAs. CBDT… – Continue reading

Ukraine updates transfer pricing rules for 2018: key takeaways

Ukraine’s Law No. 2245-VIII “On Introduction of Changes to the Tax Code of Ukraine and Some Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenues in 2018,” which came into effect on January 1, 2018, includes important changes to transfer pricing (TP) regulations. These changes are outlined below…. – Continue reading

Malaysia Updates Mutual Agreement Procedure Guidelines

Malaysia’s Inland Revenue Board (IRB) on January 11, 2018, released guidelines on applying for the resolution of double tax cases through the Mutual Agreement Procedure. The MAP Guidelines have been updated to incorporate the recommendations of the OECD BEPS Action 14 report on making dispute resolution mechanisms more effective. The… – Continue reading

India Signs Three Further APAs During December

India entered into three more advance pricing agreements in December, with two unilateral agreements and a bilateral APA concluded with authorities in the United Kingdom. With the signing of these agreements, the total number of APAs entered into by the Central Board of Direct Taxes totals 189, comprising 173 unilateral… – Continue reading

India to accept mutual agreement process in transfer pricing cases

NEW DELHI The Indian Income Tax Department will accept applications for Mutual Agreement Procedure (MAP) in transfer pricing disputes, as well as for bilateral Advance Pricing Agreements (APAs), even for entities resident in countries with which India has double taxation avoidance agreements (DTAA), minus the provision to claim corresponding tax… – Continue reading

Government Collects Rs 3.86 Lakh Crore as Direct Tax Till September

New Delhi, October 11: The Central Board of Direct Taxes (CBDT) on Wednesday revealed that the net direct tax collection up to September 2017 is Rs. 3.86 lakh crore. The amount is 15.8% higher than the net collection for a corresponding period of last year. The CBDT informed that the… – Continue reading

BEPS Actions 8-10 Most Important For Latin American, Caribbean States

The Inter-American Center of Tax Administration (CIAT) has released a new statement summarizing the feedback from Latin American and Caribbean countries from ongoing discussions on countering base erosion and profit shifting. CIAT said it and a number of regional and international organizations have brought together policymakers from countries in the… – Continue reading

CBDT signs 4 more Advance Pricing Agreements

The APA scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. New Delhi: The Central Board of Direct Taxes (CBDT) has entered into four more Advance Pricing Agreements (APAs), pertaining to… – Continue reading

Revised Transfer Pricing Safe Harbour Rules Bring Cheer

India has, for long, been always regarded as the one of the most aggressive transfer pricing jurisdictions. To mend this image and reduce litigation, the government introduced various measures like Advance Pricing Agreements (APA), the safe harbour regime, risk-based selection of transfer pricing audit cases etc. While most of these… – Continue reading

OECD, IMF Reports On Providing Businesses With Tax Certainty

The OECD and the International Monetary Fund have submitted to the Group of Twenty (G-20) nations a report on improving tax certainty for businesses. The report follows a global survey of more than 700 large, multinational businesses and a survey of 25 advanced nation tax administrations. The report highlights several… – Continue reading

Recourse to MAP and bilateral APA rollback available under revised tax treaty: PwC

MUMBAI: The recent changes in the India and South Korea Agreement for Avoidance of Double Taxation provides recourse to taxpayers of both countries to apply for Mutual Agreement Procedure (MAP) in respect of transfer pricing disputes, and also to apply for bilateral Advance Pricing Agreements (APA) for APA period beginning… – Continue reading

India: SKP Transfer Pricing 360˚ – Volume 3 Issue 3 | Oct-Dec 2016

Selection of Foreign Company as a tested party – practical considerations Introduction Transfer pricing regulations adopted by India are based on the arm’s length principle which revolves around the concept that the price or margin determined in a controlled transaction involving two Associated Enterprises (AE) should be commensurate with an… – Continue reading

India-Japan Agree New Advance Pricing Agreement

India has signed a bilateral advance pricing agreement with the Indian subsidiary of a Japanese company, India’s Central Board of Direct Taxes (CBDT) has announced. The APA was signed on January 13. With this, India and Japan have concluded three bilateral APAs, all of which include roll-back provisions. Overall, the… – Continue reading

India, US strike 1st bilateral advance pricing agreement: Government

NEW DELHI: India and the US have reached a deal for the first bilateral advance pricing agreement, a move that will enable American firms to ascertain tax liabilities beforehand, Finance Minister Arun Jaitley said today. The two nations have resolved over 100 cases of tax disputes involving a tax of… – 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 looks to resolve 100 transfer pricing agreements by March next year

MUMBAI: With a hope of improving India’s image on ease of doing business, the government has increased the pace of resolving transfer pricing issues and is looking to sign around 100 advance pricing agreements by the end of March 2017, people in the know said. Central Board of Direct Taxes… – Continue reading

CBDT signs 5 Unilateral APAs with Indian taxpayers

The APA scheme was initiated in 2012 in the IT Act and in 2014, rollback provisions were introduced. The Dollar Business Bureau The Central Board of Direct Taxes (CBDT) on Thursday signed five Unilateral Advance Pricing Agreements (APAs) with Indian taxpayers, making the total number of APAs to 108. “The… – Continue reading

India-Korea DTAA notified, capital gains to be taxed at source

India has notified the revised double tax avoidance agreement with South Korea under which capital gains tax will be levied at the source with effect from April 1, 2017. The existing Double Taxation Avoidance Convention, which has been in vogue for three decades, provides for residence-based taxation of capital gains… – Continue reading

China Issues More Rigorous Advance Pricing Agreement Rules

China is requiring multinational groups to provide more information, including the location-specific advantages of their Chinese entities, when they apply for advance pricing agreements. The State Administration of Taxation’s Public Notice 64, dated Oct. 11 and released Oct. 18, requires companies to provide the additional information to Chinese tax authorities… – Continue reading

IRS, Mexico Reach Tax Deal For Contract Manufacturers

U.S. companies operating contract manufacturers in Mexico can avoid double taxation between the United States and Mexico under a deal struck between their respective tax authorities and unveiled Friday by the IRS. So-called maquiladoras can avoid double taxation through a unilateral advance pricing agreement signed with the Servicio de Administración… – Continue reading

Ethiopia introduces new transfer pricing directive

Ethiopia recently adopted new transfer pricing rules in the form of Directive 43/2015 (“the Directive”) issued by the Ministry of Finance and Economic Development. The Directive provides detailed guidance as to the application of Article 29 of the Income Tax Proclamation (ITP) 286/2002, which requires taxpayers to ensure transactions between… – Continue reading

CBDT signs five unilateral advance pricing agreements

India’s advance pricing agreements (APAs) programme crossed a milestone with the Central Board of Direct Taxes (CBDT) signing five more unilateral APAs. With the latest move, the total number of APAs entered into by the CBDT has reached 103. The five APAs signed on Friday pertained to diverse sector, that… – Continue reading

OECD Pushes For More Certainty In International Tax Rules

OECD Secretary General Angel Gurría has stressed the need for policy makers to provide a certain tax environment for businesses, to maintain trade and investment. Discussing the tax challenges facing EU countries at the informal meeting of EU finance ministers, held in Bratislava, Slovakia, on September 10, 2016, Gurría said:… – Continue reading

CBDT signs 20 Unilateral Advance Pricing Agreements with Indian taxpayers

The Central Board of Direct Taxes (CBDT) entered into twenty (20) Unilateral Advance Pricing Agreements (APAs) with Indian taxpayers. Many of these agreements also have a “Rollback” provision in them, Ministry of Finance said. The 20 APAs signed in these two days pertain to various sectors of the economy like… – Continue reading

CBDT signs 7 advance pricing agreements to cut tax litigation

The latest APAs signed with taxpayers pertain to various sectors like banking, information technology and automotives In a move designed to reduce tax litigation, the Central Board of Direct Taxes (CBDT) on Monday signed seven more unilateral Advance Pricing Agreements (APAs) with Indian taxpayers. “With today’s signing, the total number… – Continue reading

Ireland Details Framework On Exchange Of Tax Rulings

The Irish Revenue has released guidance on how it will exchange information on the tax rulings it grants. Revenue eBrief No.65/16, which was released on July 5, 2016, sets out Revenue’s arrangements for implementing Council Directive (EU) 2015/2376; and the OECD’s framework for the compulsory spontaneous exchange of information in… – Continue reading

Government looks to resolve 100 transfer pricing issues; seeks to sign more advanced agreements

In amove towards a more progressive taxation policy the revenue officials have set an aggressive target of resolving about 100 transfer pricing issues by signing advance pricing agreements (APAs) with multinationals this fiscal, people close to the development said. The government, through the Central Bureau of Direct Taxes (CBDT), had… – Continue reading

APA tax applications at four-year low in 2015-16

Firms waiting for govt to come out with revised safe-harbour rules Although the conclusion of ahead-of-time transfer pricing agreements gained momentum in FY16, applications foradvance pricing agreements (APAs) with the tax authorities fell to the lowest in four years at 130. This could be attributed to companies, especially those in… – Continue reading

India, US to Collaborate on Tackling Offshore Tax Evasion

India and the US have agreed to enhance collaboration on tackling offshore tax evasion and increase cooperation in sharing of cross-border tax information. “We are committed to continued collaboration and sharing of experience in tackling offshore tax evasion and avoidance, including joint tax audits and tax examination abroad,” Finance Minister… – Continue reading

Commission to extend state aid investigation into more transfer pricing agreements

The European Commission is looking into advance pricing agreements (APAs) given to financing companies and other businesses to see if they constitute illegal state aid, the MNE Tax news site has reported EU competition commissioner Margrethe Vestager told the European Parliament’s TAXE 2 committee that her office has reviewed 1,000… – Continue reading

CBDT signs 11 more advance pricing pacts with taxpayers

The Tax Department has signed 11 more Advance Pricing Agreements (APAs) with taxpayers covering overseas transactions within group entities so as to reduce litigations. “Central Board of Direct Taxes (CBDT) has signed 11 unilateral APAs on March 28, 2016. With this signing, India has entered into 59 bilateral and/or unilateral… – Continue reading

New APA regime announced for Ireland

Ireland recently announced it will introduce a formal advance pricing agreement (APA) programme this year. Ireland has accepted and concluded bilateral APAs for many years although there have been no formal procedures to initiate an APA in Ireland. However, in light of comments made by an Irish Revenue official at… – Continue reading

Government signs 5 more advance pricing agreements with MNCs

The government has signed five more advance pricing agreements with multinational firms. Of these, three are new agreements while two were renewals, according to consulting firm EY, which was involved in three of the deals. An Advance Pricing Agreement, or APA, is essentially a negotiated deal between a taxpayer and… – Continue reading

Budget 2016: Foreign investors seek a non-adversarial and stable tax regime

Is India back on the world map as a lucrative investment jurisdiction? Does the world see the Make in India dream becoming a reality? Well, the $222 billion investment pledges received during the Make in India week do resonate the revived positive sentiment! In fact, recent policy measures have clearly… – Continue reading

BEPS Action Plan 14: Making dispute resolution mechanisms more effective

In the first part of this article, we talked about provisions of the Organisation for Economic Co-operation and Development’s (OECD’s) final report on Base Erosion and Profit Shifting (BEPS) Action Plan 14, which reflects the commitment of participating countries to implement substantial changes in their approach to dispute resolution in… – Continue reading

U.S. tax authorities approve signing of bilateral APAs with India

The U.S. Internal Revenue Service on Tuesday announced that, starting February 16, its Advance Pricing and Mutual Agreement office will begin accepting requests for bilateral advance pricing agreements between the U.S. and India. This marks a big step forward to ensure tax certainty between the two countries, according to experts…. – Continue reading