Category: Base Erosion & Profit Shifting

India ratifies multilateral convention to curb abuse of tax treaties

The union cabinet, chaired by Prime Minister Narendra Modi on Wednesday approved the ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Convention will modify India’s treaties in order to curb revenue loss through treaty abuse and base erosion… – Continue reading

Oman to introduce Common Reporting Standards

Muscat: Oman, in line with its commitment to align itself with international best practices in tackling cross-border tax evasion and meeting the standards set by the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD), is currently in the process of issuing regulations for automatic exchange of… – Continue reading

Luxembourg: Tax Dispute Resolution Mechanism

The Bill of Law 7431 (“Bill”) introduced by the Luxembourg government on 11 April 2019 implements the European Union (“EU”) Directive 2017/1852 dated 17 October 2017 on tax dispute resolution mechanisms in the EU (the “Directive”). The Directive meets the BEPS Action Plan 14 minimum standards and is a subsidiary… – Continue reading

Cyprus: The True Impact Of BEPS On International Business Structures

In the last decade, OECD officials have recommended measures to combat tax avoidance, culminating first in the BEPS (Base Erosion and Profit Shifting) initiative in 2015 and then the MLI (Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS) effective from July 2018 – yet have all their… – Continue reading

Bahamas’ Corporate Tax World’s Most ‘Corrosive’

The Bahamas yesterday received no credit for laws said to have raised compliance costs by 75-80 percent after its corporate tax policies were rated as the world’s most “corrosive”. This nation achieved a “perfect” 100 out of 100, a score matched only by the Isle of Man, Turks & Caicos… – Continue reading

Delving into Hong Kong’s New Transfer Pricing Landscape

On July 4, 2018, Hong Kong’s Inland Revenue Department passed the country’s final Inland Revenue (Amendment) (No. 6) Bill 2017, (the Amendment Bill).  This Amendment Bill (which became law on July 13, 2018) specified the documentary requirements from a transfer pricing perspective and also introduced measures to address various recommendations… – Continue reading

Taxing times for SMEs

Globalisation of the economy has resulted in a shift in the way Singapore corporations operate – from local country-specific business models, to global integrated supply chains which centralise functions at a regional or global level. Singapore, in particular is a popular location to house regional and global operations, due to… – Continue reading

Int’l group to finalize digital tax plan in 2020

Objective is to limit ability of multinational corporations to book taxes in countries with lowest tax rates BERLIN A global effort to revamp international tax rules for the digital economy will be completed by the end of 2020, said the secretary-general of the Organization for Economic Co-operation and Development (OECD)…. – Continue reading

Finance Ministry calls on parliament to adopt laws for cooperation with IMF, EU

The Ukrainian Finance Ministry has called on the Verkhovna Rada to approve a package of bills that will open access to further macro-financial assistance from the EU and help continue cooperation with the IMF, the ministry’s press service has reported on its Facebook page. “This week, the Verkhovna Rada will… – Continue reading

Virgin Islands launch new BEPS measure

In December, the Virgin Islands implemented a new Base Erosion and Profit Shifting (BEPS) measure, according to Government Information Services. The Organisation for Economic Co-operation and Development created a BEPS “action plan” in 2013 to combat “tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift… – Continue reading

OECD pushes for corporate tax rules overhaul

The 36-member state OECD has revealed that there is growing consensus behind a US proposal for an overhaul of global corporate tax rules, which would limit the ability of multinational companies to shift profits to low-tax jurisdictions. Earlier this year, the organisation put forward four different proposals to redesign corporate… – Continue reading

OECD moves toward consensus on taxing multinational tech companies

The Organization for Economic Cooperation and Development is making progress on dealing with the tax challenges of the digital economy with a goal of arriving at a new consensus-based long-term solution in 2020. The OECD announced last week that the countries and jurisdictions participating in the OECD/G20 Inclusive Framework on… – Continue reading

Barbados OECD compliant

Barbados is no longer under threat of a negative listing by the Organisation for Economic Co-operation and Development (OECD). Minister of International Business and Industry, Ronald Toppin, made this disclosure during an international tax conference with stakeholders in New York on Thursday. Minister Toppin said his Ministry had received confirmation… – Continue reading

Ukraine, Switzerland sign protocol on avoidance of double taxation

Ukraine and Switzerland have signed a protocol on the introduction of amendments to the convention on the avoidance of double taxation with respect to taxes on income and capital, and its protocol, concluded in Kyiv on October 30, 2000. Ukrainian Finance Minister Oksana Markarova and newly appointed Swiss President Ueli… – Continue reading

Ministry to mull over measures against profit shifting

The Ministry of Finance will scrutinize amendments to tax law policy in 2019, centred on some measures aimed at preventing base erosion and profit shifting (BEPS) and restructure tax revenue sources. The information was released at a conference reviewing the finance sector’s performance throughout 2018 and setting forth targets for… – Continue reading

Cook Islands joins coalition to fight tax avoidance

The Cook Islands has joined a coalition of countries aimed at fighting tax avoidance and easing cross-border tax dispute resolution. The country has joined 124 other countries in the Inclusive Framework on base erosion and profit shifting (BEPS), the Organisation for Economic Co-operation and Development (OECD) announced earlier this month…. – Continue reading

GOV’T SAYS DUTCH BLACKLIST “UNJUSTIFIED”

Cayman’s leaders return fire on the Dutch government describing its blacklist as “unjustified” and “wholly lacking in fairness and credibility.” In a statement Friday (4 January) the Office of the Premier said the Dutch blacklist does not take into account Cayman’s adherence to international standards for tax transparency nor its… – Continue reading

Bermuda: Economic Substance Legislation Tabled In Bermuda

Continuing its ongoing commitment to the development and maintenance of the very highest standards of economic and financial propriety, the Bermuda Government has tabled legislation that embraces a global initiative to combat base erosion and profit shifting (BEPS). The legislation, which was tabled in the House of Assembly on 7… – Continue reading

IRS gives foreign banks a break in Trump tax law’s new levy

The Internal Revenue Service is giving foreign-based banks with U.S. operations some leeway when calculating a major new international tax aimed at preventing global companies from shifting profits abroad. Multinationals often transfer payments, such as interest or royalties, to their affiliates in low-tax jurisdictions to maximize deductions and minimize tax… – Continue reading

Isle of Man approves law to avoid EU blacklist

The Isle of Man’s parliament has approved tax legislation that will allow the jurisdiction to avoid being put on the European Union’s blacklist. Tynwald gave the green light this week to the Income Tax (Substance Requirements) Order 2018. This means that from January 2019, companies engaging in “relevant activities” will… – Continue reading

Cayman drafts law requiring substance tests for offshore businesses

The Cayman Islands government has published draft tax legislation that will have far-reaching impact for the offshore finance industry operating in the jurisdiction by demanding that certain Cayman-registered companies have an adequate level of economic substance locally. The International Tax Co-operation (Economic Substance) Bill 2018 introduces a substance test for… – Continue reading

Tax reforms will improve UAE’s investment status

Once the UAE fully implements the BEPS minimum standard, it will become a very good location, say tax experts The UAE’s position as an attractive destination for foreign investment will substantially improve once it fully implements minimum standards for base erosion and profit shifting (BEPS), tax analysts said on Saturday…. – Continue reading

Switzerland: Revised Swiss Corporate Tax Reform Will Keep Switzerland A Top Corporate Location

I. The background of the tax reform In connection with the international pressure on the Swiss corporate tax location, especially in relation to the Cantonal exemption of income for holding companies as well as the status privileged companies (“status privilege”) and the need of Switzerland to recover global recognition as… – Continue reading

Is this the end of the road for the EU’s digital services tax?

Ireland, Sweden, Denmark and Germany block digital services tax plan in Brussels. The spectre of a 3pc digital services tax (DST) levied by the EU against multinationals has been vanquished for now after Ireland, Sweden, Denmark and Germany joined forces in what is being heralded as a coup for diplomacy…. – Continue reading

Ireland, Malta Close ‘Single Malt’ Tax Avoidance Structure

Ireland and Malta have agreed to close the “Single Malt” – an aggressive tax planning structure in which some multinational corporations use a company incorporated in Ireland but tax-resident in Malta. The Competent Authority Agreement – entered into as per the provisions of Article 24 (mutual agreement procedure) of the… – Continue reading

Barbados minister foresees OECD compliance by year-end

Barbados is to scrap its international business company (IBC) regime in response to the OECD labeling the policy as “harmful” to competition, and being in breach of rules governing international taxation. Last year the OECD included Barbados on its list of jurisdictions with a “harmful” preferential tax regime, and said… – Continue reading

India-China amends double taxation avoidance treaty

New Delhi, Nov 26 India and China have amended the bilateral tax treaty which will help prevent tax evasion by allowing exchange of information, the Finance Ministry said Monday. The Government of India and the People’s Republic of China have signed a protocol on November 26, 2018, to amend the… – Continue reading

Barbados overhauls corporate tax regime, slashes tax rate on local companies more than 20 per cent

BRIDGETOWN, Barbados, Thursday November 22, 2018 – Barbados will harmonize its domestic and international corporation tax regimes, by December 31, 2018, slashing the tax burden for some local companies by up to 29 per cent. Prime Minister Mia Mottley announced in the Barbados Parliament on Tuesday, November 20, the ambitious… – Continue reading

Switzerland: The Brazil And Switzerland Double Tax Treaty: Why Is It So Significant?

Background The Brazilian and Swiss Governments signed a Double Tax Treaty (DTT) on 3 May 2018. Switzerland is one of the biggest investors in the Brazilian market and Brazil and Switzerland have already signed an Automatic Exchange of Information Agreement, which came into force on 1 January 2018. This new… – Continue reading

PM announces tax ease for businesses

Prime Minister, Mia Mottley has announced a major tax break for local business. In her mini-budget presentation made earlier this year, she had announced that come July 1, corporation tax will increase from 25 per cent to 30 per cent which was expected to raise $57M in a full year…. – Continue reading

Ministers meet with EU, OECD to discuss ending tax watchlist

Deputy Prime Minister and Minister of Finance, K. Peter Turnquest, led a delegation to Brussels and Paris this week, for frank discussions with high-ranking officials within the European Commission and the Organization for Economic Co-operation and Development (OECD) on The Bahamas’ compliance with international standards on tax governance. The meetings… – Continue reading

British Virgin Islands: BVI AEOI Update And Introduction Of Country-By-Country Reporting

As part of the British Virgin Islands’ (“BVI”) ongoing commitment to international tax transparency pursuant to the Common Reporting Standard (“CRS”), the BVI Mutual Legal Assistance (Tax Matters) Act, 2003 has been amended by the BVI Mutual Legal Assistance (Tax Matters) (Amendment) Act, 2018 (the “Amendment Act”). The Amendment Act… – Continue reading

BIBA head confident Barbados can make tax law deadlines

Officials in the international business sector here are in somewhat of a wait and see mode as Barbados continues to make necessary legislative and regime changes governing the sector. This means companies seeking to attract new international business to Barbados have not been as robust in their efforts as they… – Continue reading

OECD comes to PNG’s aid to chase tax dodgers

Internal Revenue Commission is now in partnership with an international auditing organisation to help tackle multinationals that are avoiding paying taxes, Deputy Prime Minister and Treasurer Charles Abel, pictured, says. He said that Organisation for Economic Cooperation and Development (OECD), under its ‘tax inspectors without borders’ programme, would help IRC… – Continue reading

Among wider reforms, Bahamas pledges to enact beneficial ownership bill by year-end

The Bahamas has drafted new legislation to ensure the jurisdiction achieves the right balance of business, economic sustainability, and compliance with international standards. Uppermost among the Bahamas’ priorities include compliance with the OECD and EU criteria on tax governance which has led to the Bahamas implementing sweeping changes to the… – Continue reading

Bahamas ‘Must Address’ Beneficial Owner Access

The deputy prime minister has reiterated that The Bahamas “must address” access to beneficial ownership information for all corporate entities domiciled in this jurisdiction. KP Turnquest said the Government was looking to the Register of Beneficial Owners Bill 2018 as the solution, although beneficial ownership will not be publicly available…. – Continue reading

NBR to set up tax unit for foreign cos

National Board of Revenue has decided to set up a separate unit to handle income tax files of foreign companies operating in Bangladesh. The decision was taken responding to a proposal of the European Union for establishing a separate NBR unit for providing hassle-free services to foreign taxpayers. EU came… – Continue reading

FIRS Publishes Nigeria’s Revised Transfer Pricing Regulations

Federal Inland Revenue Service has published Nigeria’s revised Transfer Pricing Regulations (NTPR). The NTPR is effective for basis periods commencing after 12 March 2018 and incorporates BEPS outcomes and suggestions from The African Tax Administration Forum. The NTPR includes significant penalties for non-compliance (a) failure to file TP declaration =… – Continue reading

Government loses huge tax revenue

Ghana loses significant tax revenue through the deliberate manipulation of the tax system by big corporate entities and multinational companies, the Senior Minister, Mr Yaw Osafo-Maafo, has said. He described the situation as worrying and tasked the Ghana Revenue Authority (GRA) to go after those companies and prosecute them if… – Continue reading

Malaysia To Phase Out ‘Harmful’ Tax Regime

Malaysia has suspended its MSC Malaysia tax regime, pending changes to bring it into line with recommendations from the OECD’s Base Erosion and Profit Shifting initiative. Under the regime, domestic and foreign information and communication technology-related businesses can apply for “MSC Malaysia Status,” which allows them to benefit from tax… – Continue reading

A Caribbean Perspective: Tax Rules We Can’T Meet, Unity We Must Not Avoid

The financial services sector of Caribbean jurisdictions – and other parts of the developing world – have been under continuous assault by the European Union (EU) and the Organization for Economic Cooperation and Development (OECD) since the mid-1990s. This assault will peak again in a month’s time when financial institutions… – Continue reading

BEPS Project Has Triggered Near-Global Tax Reform: OECD

The OECD has committed to providing proposals to fix the taxation of the digital economy by 2020, in an update to G20 leaders on international efforts to mitigate base erosion and profit shifting (BEPS). In the newly released Second Annual Progress Report of the OECD/G20 Inclusive Framework on BEPS, the… – Continue reading

Profit shifting a regional issue: Palaso

Profit shifting by large companies is a regional issue that can be addressed through improved information sharing between tax authorities of economies, says Internal Revenue Commission commissioner-general Betty Palaso. She said this at the opening of the Advancing Base Erosion and Profit Sharing (BEPS) and Automatic Exchange of Information (AEOI)… – Continue reading

OECD to help Pakistan implement world tax standard

ISLAMABAD: The Organisation of Economic Cooperation and Development (OECD) on Friday announced that they launched new programme to support Pakistan in implementing new international tax standards. According to statement issued by the OECD after holding three days talks with Pakistani authorities stated that as part of a mission held from… – Continue reading

National Assembly passes three amendments to strengthen international tax compliance

BASSETERRE, St. Kitts -– The Government of St. Kitts and Nevis took steps on Friday, July 13, to further strengthen its proactive cooperation on tax matters through the passage of three amendments to the Common Reporting Standard (Automatic Exchange of Financial Account Information) (Amendment) Bill, 2018, in the National Assembly…. – Continue reading

FBR obtains information about Pakistanis’ immovable properties in UK

ISLAMABAD: Under a newly-signed agreement, Pakistan will have access to the information about its nationals’ assets abroad, it emerged on Monday. The Federal Board of Revenue (FBR) has obtained information regarding immovable properties owned by Pakistanis in the United Kingdom (UK). The information has been obtained with the assistance of… – Continue reading

Inland Revenue (Convention on Mutual Administrative Assistance in Tax Matters) Order gazetted and commences operation

Hong Kong (HKSAR) –      The Inland Revenue (Convention on Mutual Administrative Assistance in Tax Matters) Order (the Order) was gazetted and came into operation today (July 13). The Convention on Mutual Administrative Assistance in Tax Matters (the Convention) will enter into force in Hong Kong on September 1,… – Continue reading