Category: Base Erosion & Profit Shifting

Tax man mulls new transfer pricing law

THE South African Revenue Service (SARS) is investigating possible changes to the law to make it easier for it to audit transfer pricing by multinational companies to ensure that they pay their rightful tax dues to the government. The need to maximise tax revenue has become particularly acute in the… – Continue reading

Action 5 – Countering Harmful Tax Practices

Action Item 5 of the BEPS Action Plan commits the Forum on Harmful Tax Practices (“FHTP”) to: “revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It… – Continue reading

Crackdown on celebrity tax avoidance branded a failure

MPs have attacked the taxman for being too slow to crack down on controversial avoidance schemes used by celebrities and other high earners, resulting in millions of pounds being lost to the public purse. As much as £10 million may never be ­recoverable because of delays by Her Majesty’s Revenue… – Continue reading

IP tax regimes to be abolished and replaced by new “nexus”- based regimes

On 11 November 2014, the UK and Germany made a joint announcement about a proposal they had developed to address some of the concerns raised over the OECD’s suggested approach to dealing with preferential IP tax regimes. These regimes will close to new entrants from June 2016, and will be… – Continue reading

G20 tax reform plan should prevent another Lux leaks

The G20 Communique is good news on the international tax reform front. As part of the G20 commitment to boost economic resilience the Communique commits G20 nations to taking action to ensure fairness in the international tax system. This means they are looking at ways to ensure profits are taxed… – Continue reading

G20 tax avoidance pledge ‘still leaves poor countries vulnerable’

Oxfam director Winnie Byanyima says what is on the table is not enough to stop poor countries being ‘bled dry’ Moves by G20 nations to tackle corporate tax avoidance are welcome but will only begin to uncover the full problem while leaving poor countries still vulnerable to exploitation, tax justice… – Continue reading

New Zealand To Get Tough With International Tax Evaders: To Work With OECD To Enforce Transparency And Compliance

New Zealand is planning to crackdown on tax evaders and combat the menace of avoidance by international firms. As part of the exercise, New Zealand will work with an international action plan being spearheaded by the OECD.  This was stated by Finance Minister Mr. Bill English. He told media persons… – Continue reading

Taxman’s new take on transfer pricing will attract foreign investments

In today’s global economy, where multinational companies do business in different geographical and tax jurisdictions, the need for arm’s length pricing of related party transactions is a growing concern for revenue authorities. Tax bodies are increasingly requiring multinationals to document their related party transactions. Where these transactions are not well… – Continue reading

G20 endorses OECD tax avoidance timetable

The latest G20 leaders’ summit in Australia, which ended yesterday, has endorsed the various strands of international tax work being undertaken by the European Commission and by OECD, including work on the Base Erosion Profit Shifting (BEPS) project Prime Minister David Cameron said there had been ‘important breakthroughs’ in making… – Continue reading

South Africa: President Zuma Wraps Up Brisbane Visit

Pretoria — President Jacob Zuma has concluded his visit to Brisbane, Australia, where he led the South African delegation to the G20 Leaders’ Summit, says the Presidency. The main outcome of the Leaders’ Summit was a commitment to lift the G20’s Gross Domestic Product (GDP) by at least an additional… – Continue reading

BEPS: G20 leaders mark ‘significant progress’

G20 leaders have made “real progress” towards ensuring that “big companies pay the tax they owe”, David Cameron said at the end of the G20 summit in Brisbane yesterday. “There are now over 92 different countries and tax authorities properly sharing information and, as the OECD set out at this… – Continue reading

G-20 leaders agree on $2 trillion boost to growth

BRISBANE, Australia — Under pressure to jolt the lethargic world economy back to life, leaders of G-20 nations on Sunday finalized a plan to boost global GDP by more than $2 trillion over five years. The fanfare, however, was overshadowed by tensions between Russian President Vladimir Putin and Western leaders…. – Continue reading

Chevron’s multi-billion tax dodging: We don’t agree

You know those annoying “We Agree” television ads by the fossil fuel corporate giant Chevron? The ones where an actor playing a student or a concerned member of a community “agrees” with supposedly noble objectives of this multinational? Those ads make me feel like puking. The objective of this campaign… – Continue reading

G-20 set for ‘very aggressive’ crackdown on tax avoidance

BRISBANE: Australia has vowed a “very aggressive” crackdown on tax avoidance at weekend G-20 talks, as a row rages over Luxembourg’s sweetheart arrangements with multinationals. Closing corporate tax loopholes and endorsing a common reporting standard to increase transparency are set to be a primary focus of the G-20 summit in… – Continue reading

Cost-benefit analysis puts corporate tax avoidance in perspective

The growing crackdown on tax avoidance risks ushering in a broader suppression of international tax competition, harming the interests of all taxpayers. An inevitable consequence of economic globalisation is that supply chains and financial linkages have become dispersed across geographic space, and producers now strive to provide customers with quality… – Continue reading

OECD outlines strategy to engage emerging markets in fight against tax base erosion

The Organisation for Economic Co-operation and Development (OECD) released this week a strategy for deepening developing-country engagement in its work to stop the erosion of national tax bases and the shifting of profits to jurisdictions solely to avoid paying tax. The emerging-market strategy, designed to strengthen developing-country involvement in decision-making… – Continue reading

OECD sees competition heating up once tax havens shut down

(AFP) The OECD Friday forecast competition heating up among countries wanting to attract revenue from big digital companies like Apple and Google, even as a row rages over Luxembourg’s arrangements with multinationals. Closing corporate tax loopholes and endorsing a common reporting standard to increase transparency are set to be a… – Continue reading

Multinational tax details to be kept secret

The OECD’s head of tax has rejected calls to publicly release country-by-country breakdowns of taxes paid by multinationals, despite growing pressure from community and transparency groups. Agencies such as Transparency International and a host of community groups are putting pressure on the OECD and G20 leaders at the summit in… – Continue reading

German Federal Fiscal Court decides on treatment of hybrid entities under the German-US double taxation treaty 14 November 2014

Hybrid entities have long been a tool for corporate tax planning. While tax authorities have fought the use of such hybrid mismatches for tax planning purposes, national efforts to prevent the use of hybrid mismatches have not proven to be very efficient, explain Michael Graf and Timothy Santoli, of Dentons… – Continue reading

Multinational tax avoidance risks losing citizens’ trust, says Joe Hockey

Multinational tax avoidance risks losing citizens’ trust, says Joe Hockey G20 working on ‘important reforms which will significantly improve the integrity of the tax system’, Australian treasurer says The Australian treasurer, Joe Hockey, has warned that citizens will lose trust in the legitimacy of their governments if multinationals are allowed… – Continue reading

Brisbane G20 2014: tax deal aims for even playing field

Y20 head on youth unemployment mission Countries may have to battle for revenue from digital companies once the global plan to stop tax avoidance succeeds, says the OECD’s head of tax Pascal Saint-Amans, but at least they now have something to fight for. In an exclusive interview with Fairfax Media… – Continue reading

Ukraine and Russia take center stage as leaders gather for G20

(Reuters) – A showdown between Western leaders and Russian President Vladimir Putin is likely at the G20 summit in Australia starting on Saturday, following fresh reports of Russian troops pouring into eastern Ukraine. Ukraine has accused Russia of sending soldiers and weapons to help separatist rebels in eastern Ukraine launch… – Continue reading

OECD sees competition heating up once tax havens shut down

Brisbane (Australia) (AFP) – The Organisation for Economic Co-operation and Development on Friday forecast competition heating up among countries wanting to attract revenue from big digital companies like Apple and Google, even as a row rages over Luxembourg’s arrangements with multinationals. Closing corporate tax loopholes and endorsing a common reporting… – Continue reading

Tax avoidance: three things G20 governments can do

The ability of multinational companies to shift profits into low-tax jurisdictions is undermining governments’ ability to raise revenue. But the cross-border policy solutions are complex. Curbing international tax avoidance has become a focus of G20 discussion this week, after last week’s revelation that major companies including Ikea, AMP and Pepsi… – Continue reading

Developing countries to play greater role in OECD/G20 efforts to curb corporate tax avoidance

12/11/2014 – The OECD released today its new Strategy for Deepening Developing Country Engagement in the Base Erosion and Profit Shifting (BEPS) Project, which will strengthen their involvement in the decision-making processes and bring them to the heart of the technical work. The BEPS Project aims to create a coherent… – Continue reading

Minter Ellison tax partner Bill Thompson says BEPS will be key focus at G20 Summit

According to Bill Thompson, tax partner at Minter Ellison, Base Erosion and Profit Shifting (BEPS) — the base erosion referred to as the tax base and its implications for future tax structures — will be a key focus at the G20 Summit in Brisbane, with possible rapid changes to the… – Continue reading

UK proposes ending its patent box scheme after agreement with Germany

The UK has agreed to put forward a proposal to  close its patent box tax break, which allows income from the commercial exploitation of intellectual property (IP) to be taxed at 10%, in a concession to German concerns about artificial shifting of profits between European countries.12 Nov 2014 Intellectual Property… – Continue reading

George Osborne waters down flagship controversial tax break

Patent boxes allow firms to pay much lower taxes on profits from patented inventions, but critics say it gives UK too much of a fiscal advantage George Osborne’s move removes one of the potential flash points between the UK and Germany before this week’s G20 summit in Brisbane. Photograph: Pa… – Continue reading

Apple to Fiat EU Tax Cases Should Be Finished Ahead of New Ones

The European Union should complete its four tax probes before it can “decide what to do next,” EU Competition Commissioner Margrethe Vestager said. “Maybe in the beginning of the second quarter of next year we will have results on at least some of those open cases,” Vestager told reporters after… – Continue reading

Automatic exchange of tax info, balanced growth on G-20 agenda

Prime Minister Narendra Modi would attend the G-20 summit later this week where world leaders would come together for discussing issues including automatic exchange of tax information, taxation of large companies operating digitally, and a comprehensive strategy for strong, sustainable and balanced growth. Official sources said that the leaders will… – Continue reading

OECD – Transfer pricing and BEPS Action 10 discussion draft

ovember 10: The Organisation for Economic Co-operation and Development (OECD) last week published a discussion draft on Action 10 (Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services) as an additional deliverable under the OECD’s base erosion and profit shifting (BEPS) action plan…. – Continue reading

Luxembourg’s laxity needs to be addressed in context of major reform of international tax avoidance schemes

Those who live in glass houses do well not to throw stones, and Ireland’s predilection for such tax schemes as the “double Irish” probably makes it the last place to cast aspersions at Luxembourg’s creative approach to assisting what is now euphemistically called “tax planning”, once “tax avoidance”. Having sensibly… – Continue reading

OECD’s Action Plan On ‘Base Eroding’ Payments

On November 3, 2014, the Organisation for Economic Co-operation and Development (OECD) published its discussion draft on the proposed modifications to Chapter VII of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. These proposed modifications have been developed in connection with Action Point 10 of the Action… – Continue reading

I-T officials strive to get rid of ‘tax terrorists’ tag

Vivek Prasad, chief commissioner of Income-Tax – III, Mumbai said they were striving to rid themselves of the unwarranted epithet of ‘tax terrorists,’ and said with regards to tax morality, base erosion, profit shifting and GAAR (general anti-avoidance rules) they were on a learning curve and are evolving beyond the… – Continue reading

Nations may come together to stop abuse of tax pacts

NEW DELHI: India’s attempts to amend tax treaties with countries such as Mauritius may have drawn a blank so far, but its efforts are about to get a huge boost with several nations getting together to ramp up work on a global convention to plug treaty abuse. “Multilateral convention will… – Continue reading

G20 leaders in the mood to act on tax avoidance after Luxembourg leaks

Ahead of next weekend’s G20 summit, the release of leaked documents showing Luxembourg’s facilitation of industrial scale tax avoidance by multinational corporations could not have been better timed. A cache of documents obtained by the International Consortium of Investigative Journalists, and released on Thursday, found hundreds of companies – including… – Continue reading

Luxembourg leaks: G20 alone can’t stamp out tax avoidance

The hollowing out of tax collected for public purposes by rich and poor nations is not confined to technology and mining companies, according to a major leak of secret tax agreements covering more than 340 companies around the world. The documents, published by the International Consortium of Investigative Journalists, include… – Continue reading

Global base erosion rules likely to be finalised by end 2015NEW DELHI:

The global base erosion and profit shifting (BEPS) rules, aimed at collecting a fair share of taxes from multinationals operating in different tax jurisdictions, are likely to be finalised by December 2015, a senior finance ministry official today said. “Work on BEPS is moving very fast. If things go on… – Continue reading

Tax Office goes hard in pursuit of tax lost to ‘aggressive planning’

Tax Commissioner Chris Jordan has rapidly abandoned several agreements with multinationals aimed at giving companies certainty about the tax they are required to pay in Australia in future years, after deeming they had misled and engaged in “aggressive tax planning”. Taxpayers can enter into a deal to lock in the… – Continue reading

Medical supplies group used Irish firm in tax deal

Covidien transferred right to $6.9bn loan to new entity Multinational medical supplies group, Covidien, transferred the right to loans totalling $6.9 billion from Luxembourg to a new Irish company as part of an elaborate inter-group tax planning arrangement agreed with the Luxembourg tax authorities in 2009. Under the deal, the… – Continue reading

CAPITAL FLIGHT IN LATIN AMERICA

From 1970 to 2011, US$2 trillion from Latin America and the Caribbean have been funneled to offshore tax havens. It’s money that moves behind the scenes, in illicit financial flows (IFF). These transnational transfers come from three sources of illegal funds: corruption (bribery), money laundering (contraband, trafficking of drugs, weapons,… – Continue reading

G20 committed to global response to deal with cross border tax evasion: India

New Delhi: As it attempts to unearth black money stashed abroad, India today said the Grouping of 20 major economies(G20) of which it is a member is committed to a global response to deal with cross border tax avoidance and evasion. Tax evasion will be a key issue at G20’s… – Continue reading

Dutch tax regime similar to Luxembourg’s, auditors find

BRUSSELS – Dividend, interest and royalty payments that companies let pass through the Netherlands to avoid taxation have increased substantially in the past decade, the Netherlands Court of Audit has found. In a report published on Thursday (6 November), the court writes that tax laws and treaties that originally were… – Continue reading