Category: Controlled Foreign Companies

Transfer Pricing Investigation in China: Understanding the Latest Adjustments

New transfer pricing regulations issued by the State Administration of Taxation (SAT), the Measures for Administration of Special Tax Investigation Adjustment and Mutual Agreement Procedures (“the Measures”), came into effect on May 1, 2017. The Measures consolidate China’s pre-existing regulations regarding self-adjustment and outbound payments with the new transfer pricing...

Combatting Foreign Tax Evasion With New Filing Requirements for Foreign-Owned Disregarded Entities: Tax Update, Volume 2017, Issue 2

The new regulations expand the filing requirements for Form 5472 to include disregarded entities with foreign owners when there are certain reportable transactions. If a non-U.S. person (individual or corporation) owns 100 percent of the stock of a U.S. corporate subsidiary, the subsidiary needs to obtain an employer identification number...

EU Mulls Tax Sanctions for Countries Branded Tax Havens

Countries that end up on the European Union’s list of tax havens could subject companies operating within their borders to tax sanctions—such as withholding taxes and denied deductions for royalty payments—damaging the businesses’ ability to offset losses in the jurisdictions. Following a March 1 meeting, politicians identified a range of...

Netherlands: Trends I Netherlands Moves Away From Fiscal Offshore Industry

The Netherlands is slowly but surely steering away from facilitating the use of its corporate income tax system by companies that are set up merely to obtain tax benefits. These companies, which often do not actually carry out activities in the Netherlands, have contributed to the perception among policy makers...

Govt seeks to lift focus on nominee directors & bring anti-money laundering into the picture in attempt to clean up Financial Service Providers Register

The Government is considering making companies include detail of who their supervisor is under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act) as it strives to clean up the Financial Service Providers Register (FSPR). This suggestion is included in a consultation paper on a Financial Services Legislation...

Cayman may find itself on EU’s ‘non-cooperative jurisdictions’ list

Cayman could find itself on a new EU list of “non-cooperative jurisdictions” in tax matters after the European Council of finance ministers published the criteria for including third countries in the blacklist last week. The provisions emphasize that a jurisdiction “should not facilitate offshore structures or arrangements aimed at attracting...

Ireland: Holding Companies In Ireland – August 2016

Ireland has become a destination of choice for holding companies due to its capital gains participation exemption, generous foreign tax credit system, membership of the EU, ever expanding double tax treaty (“DTT“) network (72 signed, with 70 in effect), lack of controlled foreign companies legislation, thin capitalisation rules and the...

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...

How new EU tax laws impact Thai firms

THAI MULTINATIONAL companies will be impacted on their cross-border business activities due to rapidly evolving tax laws in Europe and Asia-Pacific. For instance, the European Union (EU) achieved a groundbreaking result on June 20 by agreeing to a package of tax measures to combat corporate tax avoidance, which will be...

BUDGET2016 – IS THERE ROOM TO PAY MORE TAXES?

Anthea Scholtz calls for a careful balance between ‘spending’ and ‘revenue-generating’ activities. All eyes will be on Parliament on 24 February 2016 when South Africa’s annual national Budget will be presented by the newly re-appointed Minister of Finance Pravin Gordhan. The Budget speech has over the years given South Africans...

Ding ding, seconds out on Malta’s fight to stop Brussels’s tax plans

Malta has always insisted it is no tax haven, but it employs a system which allows foreign shareholders to claim a six-sevenths’ refund on their taxed dividends, taxed at the maximum 35%. There’s a new battle lining up for the Maltese government inside Brussels: an aggressive fight against tax avoidance...

A New Set of Amendments to the Russian CFC and Beneficial Ownership Rules

On February 15, 2016, the President of the Russian Federation signed Federal Law No. 32-FZ “On Amendments to the First and Second Parts of the Russian Tax Code (with Respect to the Taxation of Controlled Foreign Companies and the Income of Foreign Organizations)”, introducing a new set of amendments to...

Ikea avoiding tax liability, report claims

EU countries may have lost out on more than €1 billion in tax revenues between 2009 and 2014 due to aggressive tax strategies by furniture giantIkea, a new report has claimed. The report, commissioned by the Green/EFA group in the European Parliament into the tax affairs of the private company,...

EU targets reinsurance arrangements

The EU’s anti-base erosion and profit shifting (BEPS) proposals could have consequences for captives in Europe, as politicians pinpoint reinsurance arrangements as a means of unfair tax avoidance. The European Commission introduced a range of anti-tax avoidance proposals on 28 January, following the release of the Organisation for Economic Co-operation...

BEPS rules to be made compulsory from 1 April

India to change laws in Union Budget to make country-by-country reporting mandatory for Indian multinationals New Delhi: India will change laws in the upcoming budget to make country-by-country reporting mandatory for Indian multinationals to ensure they follow so-called base erosion and profit shifting (BEPS) guidelines. The norms were announced in...

Implementation of POEM rules may hit investments

The implementation of place of effective management (POEM) rules in the current scenario in India could not only hurt the nation’s outbound investments, but also discourage overseas multinational companies from setting up their regional hubs here, feel industry watchers. The draft guidelines for implementing POEM, which was released on December...

PoEM not the only solution

The change in definition of an Indian resident company under the Income-Tax Act—from one whose affairs are wholly controlled and managed in India to one whose Place of Effective Management (PoEM) is in India—and the subsequent draft guidelines are giving anxious moments to votaries of simplifying the investment climate in...

Italy’s ‘white listing’ of Channel Islands important step in attracting European business, says Ogier partner

Ogier partner Marcus Leese has welcomed news from Italy that Guernsey and Jersey are no longer on any Italian ‘black lists’ and will be included on Italy’s ‘white lists’ from early 2016, reports Isle News. Among other benefits, it is anticipated that this will enable Italian resident investors to invest...

Transfer pricing rules with wider ambit soon

Changes in I-T Act likely to curb tax evasion by multinational companies The government might change transfer pricing provisions in Budget 2016-17 to ensure companies with overseas presence and consolidated revenue of more than Rs 5,000 crore comply with extensive data reporting and documentation. Legislative changes in the Income Tax...

Brazil: Tax Treaty Series: The Bilateral Income Tax Treaty Between Brazil And Canada

This is the first of our series of posts on Brazilian tax treaties. In each post we will provide an overview of a specific tax treaty between Brazil and a particular foreign country, as well as comments on any Brazilian administrative or judicial precedents applying the treaty, and highlights on...

Luxembourg Tax Alert 2016-02

January 2016 You will find below a summary of some of the most important tax developments that have happened since the release of our last newsletter, at OECD, EU or country level, in the area of tax transparency and the fight against tax avoidance. EU – Tax transparency and anti-BEPS...

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Case law Chevron appeal to the Full Federal Court Chevron Australia Holdings Pty Ltd has appealed the decision of the Federal Court in Chevron Australia Holdings Pty Ltd v Commissioner of Taxation (No 4) [2015] FCA 1092 to the Full Federal Court. For details of the Federal Court decision, please...

The Australian Taxation Office releases a TaxPayer Alert on arrangements involving offshore procurement hubs

The Australian Taxation Office (ATO) has released a Taxpayer alert on arrangements involving the use of offshore entities which source goods (procurement hub) on behalf of Australian resident multi-national enterprises (MNEs) (TA 2015/5). In the alert the ATO announces that it is currently reviewing arrangements involving the use of offshore...

Tax Amendments 2015

INTRODUCTION The Taxation Laws Amendment Act, 2015 and the Tax Administration Laws Amendment Act, 2015 have now both been passed by Parliament, but await signature by the President. Once again, and for the second year running, the number and scope of the changes to the various fiscal Acts (mainly the...

‘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...

EU Ministers Agree Initial EU BEPS Response

The European Union’s Economic and Financial Affairs Council agreed a work plan in response to the OECD’s base erosion and profit shifting recommendations at its meeting on December 8. Following the meeting, ECOFIN – comprised of finance and economy ministers from all member states – released a list of agreed...

Tax amendments – 2015

INTRODUCTION The Taxation Laws Amendment Act, 2015 and the Tax Administration Laws Amendment Act, 2015 have both now been passed by Parliament, but await signature by the President. Once again, and now for the second year running, the number and scope of the changes to the various fiscal Acts (mainly...

The ABC of BEPS project to avoid double taxation

The plan seeks to limit the fiscal erosion through interest deduction explains Alma Gutierrez; also seeks to prevent abuses in treaties and strengthening of controlled foreign companies rules. MEXICO CITY (CNNExpansión) – The Organisation for Economic Co-operation and Development (OECD) is a forum where the governments of different countries, including...

What CFOs Need to Know About BEPS

The Base Erosion and Profit Shifting (BEPS) project is an initiative being pursued by the Organization of Economic Cooperation and Development (OECD) to curtail perceived exploitation of international tax rules and loopholes by multinational enterprises (MNEs). The OECD’s BEPS project was initiated in 2013 at the request of the Group...

China’s new transfer pricing guidelines and BEPS

The highly significant changes to transfer pricing guidance planned for under the SAT’s public discussion draft on ‘Special Tax Adjustments’ (yet to be finalised at the time of writing), and the impact of these changes in the light of evolving Chinese transfer pricing enforcement practice is the focus of this...

EAC STATES ADOPT NEW MEASURES TO CURB TAX LOSS

Multinationals operating in Kenya, Tanzania and Uganda will be among the first in Africa to feel the impact of new measures to be adopted in January to curb tax losses caused by manipulation of contracts between related companies. The three countries together with Nigeria, Ghana, Burkina Faso, Senegal, Botswana and...

Worldwide: Final BEPS Reports Issued By OECD

The OECD published 13 final reports along with an explanatory statement under its base erosion and profit shifting (BEPS) project on the 5th October 2015. This was endorsed three days later on the 8th October 2015 by the G20 Finance Ministers’ meeting in Peru’. The BEPS project outlines 15 action...

Amendments to CFC diversionary income rules

On July 22 2015, National Treasury released for comment the Draft Taxation Laws Amendment Bill, 2015 (DTLAB 2015), the Draft Tax Administration Laws Amendment Bill, 2015 (DTALAB 2015), and related Explanatory Memoranda. Section 9D currently provides for diversionary income rules which seek to impute into the income of South African...

U.K., U.S. Differ on Approaches to Implement BEPS

The U.K. and the U.S. governments will adopt different approaches to implementing the OECD’s final package of measures to tackle base erosion and profit shifting, panelists at a London forum said. The U.K. government considers an inclusive, multilateral instrument to upgrade bilateral tax treatments as the “best way” for countries...

Stricter norms likely for transfer pricing

MUMBAI: India’s forthcoming budget may draw from some of the recommendations, especially in the realm of transfer pricing, contained in the final package of ‘Base Erosion and Profit Shifting’ (BEPS) measures, rolled out in October. Certain anti-abuse measures, such as thin capitalization, which for tax purposes disallows interest payments beyond...

NIGERIA: IMPLICATIONS OF BEPS PROPOSALS

Nigeria’s tax authority—the Federal Inland Revenue Service—has incorporated into its tax audit procedures certain of the recommendations included in the OECD’s base erosion and profit shifting (BEPS) project. For instance, the tax authority is scrutinizing transactions between Nigerian subsidiaries and their foreign related parties, especially those related parties located in...

Developments in Transfer pricing and the impact of actions of OECD BEPS

2nd Symposium of CR for transfer pricing The 2nd Symposium Transfer Pricing organized by EY Greece, exactly one year after the successful organization of the 1st Symposium was intended as the developments in transfer pricing in Greece and international tax developments, focusing on the recently finalized OECD Actions tackling Erosion...

The Ministry of Finance proposed to soften the terms of the Amnesty

Moscow. November 10. The Finance Ministry has prepared proposals aimed to strengthen Amnesty of capital, which is now actually fails, reports the newspaper “Kommersant”. The law on the voluntary Declaration by individuals of assets and accounts, is known as the law on the legalization or Amnesty of capital, earned from...