Category: Income Tax

China Introduces Sweeping New Transfer Pricing Rules

China’s State Administration of Taxation (SAT) issued the Announcement on the Administration of Related-party Transactions and Contemporaneous Documentation (SAT Announcement [2016] No. 42), which introduces a three-tiered documentation framework that will replace its current transfer pricing documentation rules. The June 29 announcement followed the publication of the opinion-seeking draft by… – Continue reading

Pakistan can access 15 years data of offshore accounts

The Federal Board of Revenue (FBR) will now be able to obtain the data of offshore bank accounts of Pakistani nationals for the last 15 years under the international tax treaty that it signed with the Organization for Economic Cooperation and Development (OECD), officials said on Saturday. “The signatories of… – Continue reading

Mauritius seeks India’s help, post tax treaty revision

Mauritius, the island nation that accounts for the second-largest FDI, has sought a line of credit and more investments from India as it gets ready for implementation of the revised tax treaty from April 2017. Mauritian Minister of Finance and Economic Development Pravind Kumar Jugnauth yesterday met Finance Minister Arun Jaitley… – Continue reading

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,… – Continue reading

U.S. Citizens Retiring Abroad: “Tax Trigger” Situations and Related Disclosure Forms

The following is a bolded checklist of important situations that may “trigger” a tax review by a skilled United States tax professional. Many of these situations also require a simultaneous review by a foreign tax professional. It is generally best practice for these tax professionals to work together to minimize… – Continue reading

Pakistan’s taxation crisis

Whether they indulged in legal tax avoidance or evaded taxes under the counter, leaked documents of a Panamanian firm revealed quite a lot in April about a number of Pakistani politicians and businessmen. Tax evasion has of late become synonymous with Pakistan because of its failure to overcome its taxation… – Continue reading

Tax Havens Impact Canadians Too

Tax havens have become increasingly formidable players in the global economy. With increased globalization and financialization of the global economy, tax havens have become important players in the world economy. According to a report by Tax Justice Network, $21 to $32 trillion is stashed offshore. According to the World Bank, the GDP… – Continue reading

UK could lose billions by making wealthy non-doms pay more tax, experts claim

Current rules allow over 100,000 wealthy residents to pay a lower rate of tax, even if they have lived in UK for many years. The Government is risking more than £6bn of tax revenue by changing rules governing non-domiciled taxpayers, an international law firm has warned. Pinsent Masons said that… – Continue reading

UAE companies to benefit from transfer pricing as profit-shifting plan comes into force

The international tax landscape has been changing rapidly and the Organisation for Economic Co-operation and Development (OECD) has agreed on a base erosion and profit shifting (Beps) action plan that could affect businesses operating in the UAE. The plan addresses the issue of artificial shifting of profits and its proposals… – Continue reading

Panama Papers: IT Department invokes tax treaties, sends 200 requests for data on Indians implicated

Officials said around 192 requests had been sent to a number of countries, while another dozen were being processed as part of their investigation. The Income Tax Department on Sunday said it had invoked several tax information treaties and made around 200 requests to collect banking- and finance-related evidence on… – Continue reading

Relief for banks, as FinMin relaxes ‘FATCA’ compliance norm

Banks and financial institutions in India have got some breather as regards compliance under the US-enacted Foreign Account Tax Compliance Act (FATCA). The Finance Ministry on Wednesday said that banks and financial institutions need not enforce “closure” of accounts by August 31, 2016 in respect of those cases where “self-certification”… – Continue reading

Dublin and Washington enter talks to update Double Taxation treaty

Talks have begun between the US and Irish governments about updating certain elements of the Double Tax treaty between the two countries. The existing treaty was signed in 1997 and a Protocol to the treaty was signed in 1999. The Department of Finance and the Revenue Commissioners are calling for… – Continue reading

Why Indonesia’s domestic tax haven is a bad idea

In the latest move to revamp the tax system in Indonesia, the government is considering setting up tax haven areas to entice home money that was stashed abroad. The idea was initiated by former finance minister Bambang Brodjonegoro who believed that the distinct region could facilitate the investment of funds… – Continue reading

Switzerland, Italy Seek Progress On Cross-Border Taxation

Switzerland has informed Italy of its desire to sign the bilateral agreement on the taxation of cross-border commuters. The point was made by Didier Burkhalter, the head of Switzerland’s Federal Department of Foreign Affairs, during a meeting with the Italian Foreign Minister, Paolo Gentiloni. They discussed bilateral issues, Switzerland’s policy… – Continue reading

VAT tweaks to help offset income tax cut

THE FINANCE DEPARTMENT will keep value-added tax (VAT) exemptions for three key sectors, but may opt to remove this benefit from senior citizens and others to arrive at a “fair” tax regime. Finance Secretary Carlos G. Dominguez III told reporters late last week that the government is looking to trim… – Continue reading

The U.K.’s Proposed Interest Restriction Rule—Too Much Too Soon?

The U.K. government has been consulting on a proposed “Interest Restriction” rule which will limit the amount of interest expense U.K. companies will be allowed to offset against their income for tax purposes (to 30% of their taxable earnings before interest, tax and amortization). The second consultation phase on the… – Continue reading

Top corporate players sign up for voluntary tax code

Twenty of the nation’s largest companies have voluntarily signed up to a comprehensive new code to disclose more details of their tax affairs in their latest ¬annual accounts following a series of scandals involving local and offshore firms. In the May budget, the federal government announced it was committed to… – Continue reading

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… – Continue reading

Assessing the Hong Kong – Russia Double Taxation Agreement: Another Step Towards Amplifying China’s Eurasian Connection

Assessing the Hong Kong – Russia Double Taxation Agreement: Another Step Towards Amplifying China’s Eurasian Connection   The long-awaited Comprehensive Double Taxation Agreement (CDTA) between Hong Kong and Russia entered into force on July 29, 2016. The agreement will take effect on April 1, 2017 in Hong Kong and January… – Continue reading

What is the future of corporate tax reform?

On June 7, AEI hosted two panels on how the US could reform the corporate tax code, the first focusing on business-level taxation and the second focusing on shareholder-level taxation. Christopher H. Hanna of the Senate Finance Committee delivered the symposium’s opening remarks, with a major focus on how the… – Continue reading

Costa Rica and Germany Sign Agreement to End Double Taxation

Last Wednesday August 10 at Germany’s Federal Foreign Ministry Office, Costa Rica and Germany celebrated the ratification of the establishment of legal instruments as part of an agreement to eliminate double taxation of income and assets, stated Costa Rica’s Ministry of Foreign Relations in a press release Friday. The agreement… – Continue reading

Jokowi to Lower Income Tax Rate

“Maybe lower the income tax from 25 percent to 20 percent first, then 17 percent.” The government will once again provide the public with tax break following its tax amnesty program. It is currently reviewing a plan to lower income tax rates and the possibility of establishing a tax haven,… – Continue reading

Equalisation Levy seeks to cast Indian tax net wider

Budget 2016 introduced a new tax called Equalisation Levy (“EL”), aimed at taxing online transactions. EL was originally mooted by the OECD in Base Erosion and Profit Shifting (BEPS) Project Final Report on Action 1 – Addressing the Tax Challenges of the Digital Economy (the “Report”). We will examine Equalisation… – Continue reading

EU and OECD Transfer Pricing Documentation Procedures after Brexit

Transfer pricing documentation rules have come to the fore with the United Kingdom’s Brexit. The European Union and the Organization for Economic Cooperation and Development appear to apply similar transfer pricing documentation rules to multinational companies, but differences nevertheless abound. Some multinational enterprises may view these differences as nuances, but… – Continue reading

OECD Advises Finland On Growth-Friendly Tax Reforms

A revenue-neutral modification of Finland’s tax structure could boost the nation’s economic growth, the Organisation for Economic Cooperation and Development said in a recently released report. Finland has already adopted some measures to make the tax structure more growth friendly in recent years, the report, Boosting Productivity in Finland, said…. – Continue reading

Undeclared incomes: Tax info-sharing agreements is a step in the right direction

Almost every country and every government now is fighting to detect undeclared Incomes and boost their tax collection. This could potentially help various countries show and collect large taxes from offshore accounts. The renewed thrust on automatic exchange of information (AEOI) between countries could achieve what seemed like a dream… – Continue reading

Nine measures taken by government to curb black money

The government is hell-bent on cracking down on black money and undisclosed income of Indians within the country and safely stowed away abroad. While there is no proper estimation of the actual amount of black money in the economy, the government is actively taking measures to stop it. Recent media… – Continue reading

Macau and China add protocol to the agreement to avoid double taxation

The Macau Special Administrative Region (MSAR) and China’s State Administration of Taxation in Beijing signed an additional protocol to the agreement to avoid double taxation and prevent tax evasion, officials said in Macau. The Additional Protocol, the third, according to the statement released by the Office of the Secretary for… – Continue reading

IMF call for ‘comprehensive reform’ of US tax system

An International Monetary Fund (IMF) review has called for a comprehensive reform of the US tax system, with the aim of removing exemptions, simplifying the system, rebalancing from direct to indirect taxes, and reducing statutory rates for individual and corporate income taxes According to its annual Article IV consultation report… – 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

Monaco signs up to EU’s tax transparency scheme

The EU has signed a fiscal transparency agreement with Monaco in an attempt to stop Europeans hiding undeclared income in the Mediterranean principality. EurActiv Spain reports. Famous for its glamorous casinos and annual Formula One race, Monaco is also known for not levying income tax and for being somewhat of… – Continue reading

US Consumption Taxes Low In Global Comparison

A recent paper from the Tax Foundation (TF) pointed out that, while most Organisation for Economic Co-operation and Development (OECD) countries lean more on tax revenue from consumption taxes, the United States relies more on individual income tax, while raising relatively little from consumption taxes. The TF noted that “this… – Continue reading

Ghana losing tax revenue to extractive sector over lack of data

The absence of adequate data on the operations of businesses in the extractive sector continues to impede the GRA’s ability to fully implement Ghana’s transfer pricing policy. According to the Deputy Commissioner in charge of Policy Programs at the GRA, Edward Gyamerah, the issue makes it difficult to fully assess… – Continue reading

Tax haven route won’t work for post-Brexit UK, OECD says

The United Kingdom is unlikely to try to lure international investment by becoming a tax haven after it leaves the European Union, according to an internal memo prepared by the body responsible for the drafting international tax rules. The head of tax at the Organization for Economic Co-operation and Development,… – Continue reading

Brexit – The UK and International Tax Consequences

The political, economic and constitutional fallout of the UK’s referendum decision to leave the European Union (Brexit) will continue for some time. In addition to considering some of the possible domestic UK tax implications of Brexit, this OnPoint also considers some of the potential tax implications from the perspective of… – Continue reading

India, Cyprus finalise DTAA; capital gains to be taxed at source country

India and Cyprus have reached an in-principle agreement on all pending issues on Double Taxation Avoidance Agreement, including taxation of capital gains, which once implemented would help remove the island-nation from a non-cooperative jurisdiction for income tax purposes. An official level meeting between India and Cyprus in New Delhi last… – Continue reading

Gov’t policies offer incentives for tax dodging

Tax dodgers in Greece enjoy multiple benefits: They pay less tax, they avoid social security contributions, they can protect their main residence from confiscation and have access to a number of social benefits, ranging from free nursery places for their children to various allowances. The temptation to declare an income… – Continue reading

GAAR not to apply on income from investments before April 1

The industry has been demanding that GAAR provisions should apply prospectively To clear the air on retrospective applicability of the stringent anti-avoidance GAAR rule, the I-T department has said the same will not apply to income from transfer of investments before April 1, 2017. General Anti-Avoidance Rule (GAAR), which will… – Continue reading

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… – Continue reading

Taiwan-Italy Tax Treaty Takes Effect from 1 January 2016

With an aim to avoiding double taxation, improving the investment environment for Taiwan, and increasing the attractiveness of foreign investment into Taiwan, the Ministry of Finance in recent years has focused on entering into tax treaties with other jurisdictions. Following tax treaties signed with Italy and Austria, Taiwan entered into… – Continue reading

Putin Endorses Agreement on Double Taxation Avoidance With Singapore

Russian President Vladimir Putin has signed a law on ratifying Russia-Singapore agreement on the avoidance of double taxation and prevention of fiscal evasion with respect to the income taxes, according to the official internet portal of legal information. The accord reached on November 17, 2015 in Moscow is aimed at… – Continue reading

Death and Taxes: IRS Begins Procuring Offshore Client Accounts, Records from UBS

In what could be a significant development moving forward, UBS has provided the IRS with tax records and offshore accounts. UBS Group AG has come to an understanding with the US Internal Revenue Service (IRS), following a disagreement over client accounts in Singapore that had alleged tax evasion. The latest… – Continue reading

Canada willingly makes tax deals with tax havens

The seeds of Canadian corporations hiding billions of dollars in offshore tax havens were sown more than 40 years ago, after the Canadian government pursued a series of tax treaties with tiny Caribbean and European nations. The 92 tax treaties now signed with countries such as Barbados, Jamaica and Malta… – Continue reading

Income tax: Know your taxes and exemptions

CHENNAI: The hardest thing in the world to understand is the income tax, is what Albert Einstein had famously said. Amid the long list of taxation categories, to assimilate what is taxable and what is exempted is hard. Even harder is to pay them, of course. As the June 15… – Continue reading

Legislative committee approves anti-tax evasion bill

The legislature’s Finance Committee yesterday approved an anti-tax evasion bill, which, if passed into law, would subject all companies registered overseas to the 17 percent corporate income tax. While supportive of the legislation, the committee voted 7-5 in favor of allowing the Cabinet to set the implementation date to avoid… – Continue reading