Category: Hybrids
Higher tax bill for Cyprus businesses after new law
Cyprus is aiming to better tackle tax avoidance by companies through a new legislation. The latter mainly addresses base erosion and profit shifting. ... - Continue reading
Canada: U.S. Releases Anti-hybrid Regulations
The Internal Revenue Service (IRS) and U.S. Treasury Department have released anti-hybrid laws for offshore transactions. ... - Continue reading
First Look: US IRS publishes final and proposed regulations on hybrid mismatches
On the 8th of April 2020, the Internal Revenue Service (IRS) presented its laws on hybrid arrangements, which would strengthen its efforts against tax avoidance by multinationals. ... - Continue reading
Mexican 2020 Tax Reform: key international tax proposals
Key tax changes to the country’s tax law primarily inspired by the OECD’s base erosion and profit shifting (BEPS) project ... - Continue reading
Portugal: Portuguese Tax Law – New Provisions To Meet The EU Anti-Tax Avoidance Directive (ATAD)
On 3 May 2019, Portugal introduced amendments to Portuguese Taw Law, in accordance with the European Union (EU) Anti-Tax Avoidance Directive (ATAD). ... - Continue reading
Mexico 2020 tax reform: big changes proposed for foreign companies doing business in Mexico
On September 8, the executive branch of the Mexican government introduced Mexico 2020 tax reform, proposing far-reaching changes to the Mexican income tax, value-added tax, and Federal Tax Code. ... - Continue reading
Canada, Switzerland ratify instrument to tackle tax avoidance
Canada and Switzerland on August 8 deposited with the OECD their instruments of ratification for the Multilateral Convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS MLI). The BEPS MLI, negotiated by over 100 countries and jurisdictions, updates the existing network of tax treaties and… – Continue reading
Luxembourg: bill submitted to implement anti-tax avoidance provisions
With effect from 1 January 2019, the Anti-Tax Avoidance Directive (ATAD) I intra-EU hybrid mismatches rules were introduced into Luxembourg’s domestic law. ... - Continue reading
Luxembourg: Luxembourg Starts The Implementation Of ATAD 2
On 8 August, the draft law (the "draft law") implementing the EU Directive 2017/952 of 29 May 2017 ("ATAD 2") amending Directive (EU) 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (the so-called Anti-Tax-Avoidance-Directive, "ATAD") was presented to Parliament. ... - Continue reading
European Union: Dutch Implementation Proposal On EU Anti-Hybrid Measures
On July 2, 2019, the Dutch government published the legislative proposal implementing the EU Anti-Tax Avoidance Directive II (ATAD II) that was adopted on May 29, 2017. The ATAD II mandates EU Member States to implement rules that target hybrid mismatches by January 1, 2020 (specific sections by January 1, 2022). ... - Continue reading
Netherlands draft tax law targeting hybrid mismatches includes new documentation requirement
New laws regarding hybrid mismatches ... - Continue reading
India: Government Of India Ratifies MLI – Bringing India On The Cusp Of A New International Tax Regime
The Government of India (Union Cabinet) has approved the ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and India's final position to the same. ... - Continue reading
Australia Provides Update On International Tax Enforcement
In comments to the TPMinds International Conference in late March, Deputy Commissioner Mark Konza outlined the Australia Taxation Office’s priorities in the area of international tax enforcement, with an especial focus to be placed on the energy and resources sector and pharmaceutical industry. His comments, published by the ATO on… – Continue reading
Dutch Cabinet Approves Anti-Evasion Measures
The Government of the Netherlands has announced a comprehensive package of tax anti-avoidance proposals designed to bring the jurisdiction’s rules into line with new European Union anti-avoidance laws and fulfill its obligations under the international BEPS agenda. The plans were detailed in a parliamentary paper sent by State Secretary for… – Continue reading
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… – Continue reading
Dutch tax treatment of Brazilian ‘interest on equity’ payments as of 2016
On 15 September 2015, the Dutch government released its budget for 2016, containing the Tax Plan 2016, which includes certain amendments to Dutch tax law. One of the proposed amendments was the inclusion of an anti-hybrid rule in the Dutch participation exemption regime (“PER”). On 22 December 2015, the amendments… – Continue reading
BEPS Action Plan 2: Neutralizing the effects of hybrid mismatch arrangements
Hybrid mismatch arrangements are the focus of the 2-part Action Plan 2 of the Organisation for Economic Co-operation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) initiative. Hybrid Mismatch Arrangements abuse differences in the tax treatment of an instrument (i.e., a hybrid instrument) or an entity (i.e., a hybrid… – Continue reading
UK releases Finance Bill clauses and consultation documents
Executive summary On 9 December 2015, the UK released draft clauses for Finance Bill 2016 as well as consultation documents. The key items released include: A new requirement for large businesses to publish their tax strategies as they relate to or affect UK taxation. This sits alongside new ‘special measures’… – Continue reading
Sweden: “Hybrid rule” implications for dividend income, withholding tax
Changes to the tax law in Sweden reflect additions of anti-avoidance provisions to the EU Parent/Subsidiary Directive and are intended to bring Swedish tax law into compliance with the directive. The new anti-avoidance provisions will be effective 1 January 2016—which is also the timeframe for EU implementation of the directive’s… – Continue reading
UK – HMRC publishes a policy paper titled: “Corporation Tax: anti-hybrid rules” (Action 2 of the BEPS Action Plan)
On December 9, 2015 the UK HM Revenue & Customs (HMRC) published a policy paper titled: “Corporation Tax: anti-hybrid rules”. Next to publishing the policy paper the UK Government also announces that on December 22, 2015 a series of examples illustrating the application of the hybrid mismatch rules will be… – Continue reading
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… – Continue reading
Australia Launches Consultation On Anti-Hybrid Rules
The Australian Board of Taxation has released for public comment a discussion paper on the implementation of the anti-hybrid rules developed by the Organisation for Economic Co-operation and Development (OECD). As part of the 2015 Budget, on May 12, 2015, Australian Treasurer Joe Hockey wrote to Michael Andrew, Chair of… – Continue reading
“Digital revolution” to tackle tax avoidance NYSE Post
The planned penalty for arrangements subject to the General Anti-Abuse Rule (GAAR) has now been formally set at 60% (in line with the amount proposed in consultation), and the anticipated introduction of rules addressing hybrid mismatch arrangements has been confirmed for 1 January 2017. Civil penalties for those who enable… – Continue reading
New Zealand Minister Outlines Anti-BEPS Plans
New Zealand will take steps to prevent base erosion and profit shifting (BEPS) while at the same time ensuring that the country continues to be a good place to do business, Todd McClay, Minister of Revenue, has said. McClay was addressing a recent conference organized by the Chartered Accountants Australia… – Continue reading
NETHERLANDS: ADVANCE TAX RULINGS; CHANGES POSSIBLE BEFORE APRIL 2016
A Ministry of Finance decree published on 11 November 2015 provides follow-up guidance concerning advanced tax rulings issued by the Dutch tax administration. BACKGROUND Adopted in July 2014, an amendment to the EU Parent-Subsidiary Directive addresses mismatches resulting from hybrid financing, and involves the inclusion of an anti-hybrid provision. Under… – Continue reading
UK: Consultation Over Fixed Cap On UK Tax Deductibility Of Corporate Interest Expense: Plucking The Feather In The Cap?
The UK Government launched a consultation on 22 October 2015 regarding the UK corporate tax rules for interest deductibility. The consultation seeks views on the design of a general limitation for UK corporation tax deductions for interest and similar finance costs, imposing a capcalculated by reference to a fixed percentage… – Continue reading
Strategic resets under new MAP and APA revenue procedures
Introduction The Internal Revenue Service (IRS) recently replaced Revenue Procedure 2006-54 for requesting assistance under the mutual agreement procedure (MAP) article of US tax treaties, and Revenue Procedure 2006-9 for requesting advance pricing agreements (APAs). New Revenue Procedures 2015-40 and 2015-41 largely track draft procedures issued in 2013 (Notices 2013-78… – Continue reading
Your Taxes: OECD starts the BEPS tax revolution
Israeli importers and exporters, hi-tech and trading groups will all be in the base erosion and profit shifting firing line. On October 5 the Organization for Economic Cooperation and Development published a final comprehensive package of measures aimed at multinational corporations, large and small, that engage in BEPS – base… – Continue reading
Swiss Government Welcomes BEPS Recommendations
The Swiss Government has tasked the Finance Ministry with responding to the OECD’s recommendations on base erosion and profit shifting. Welcoming the OECD’s proposals, the Council said: “In general, the project outcomes will allow for [the] better coordination of international tax law rules and make it possible to close the… – Continue reading
United States: The Final OECD BEPS Tome Has Arrived
Remarkably on schedule, the OECD this week issued a comprehensive and integrated set of measures to attack base erosion and profit shifting (BEPS) on a global basis. Comprising 15 “Actions” on central issues such as transfer pricing, country-by-country reporting and transfer pricing documentation, treaty abuse, preferential tax regimes, permanent establishments,… – Continue reading
Canada: International Tax Reform 2015-BEPS Final Reports
On October 5, 2015, the OECD released its final reports relating to the OECD/G20 base erosion and profit shifting (BEPS) project (the Final Reports). The BEPS project began in 2013 and has received unprecedented attention from governments and the private sector. The Final Reports outline the OECD’s recommendations and the… – Continue reading
OECD poised to release new tax dodge rules
Senior EY partners Andy Archer and David Snell look at some looming changes to international tax rules. In what will be the biggest change to the international tax rule book since it was put in place before World War 2, the OECD will tomorrow (4 am Tuesday 6 October) release… – Continue reading
Luxembourg bill of law introduces EU anti-hybrid and anti-abuse rules and horizontal fiscal unity
In light of the global Base Erosion and Profit Shifting (BEPS) initiative and the European developments against tax evasion and aggressive tax planning, two European Directives were adopted in July 2014 and January 20151 by the European Council, amending the Parent-Subsidiary Directive (2011/96/EU). These two Directives, in a nutshell, aim… – Continue reading
“Delaware LLCs and UK Entity Classification: The Fallout From the Curious Case of George Anson”
Fundamental to any developed tax policy is knowing who the taxpayer is (or should be) with respect to any particular transaction. Although that can be relatively straightforward in purely domestic situations, a cross-border dimension can present different answers to this question in the jurisdictions involved and lead to issues over… – Continue reading
International tax update- August 2015
United Kingdom Budget The Chancellor of the Exchequer delivered his Summer Budget to the United Kingdom (UK) Parliament on 8 July 2015. A number of personal, corporate and indirect tax-related measures were announced in the Budget including a reduced corporate tax rate; introduction of a bank corporation tax surcharge; a… – Continue reading
Canada: Interest Deductibility In Canada: What’s The Fuss?
This article deals with the manner in which Canada has complicated, and rendered controversial, what in most other countries is straightforward — the deductibility of business related interest expense. The reasons to write about it are threefold: the almost-concurrent issuance of the Canada Revenue Agency’s administrative views on the matter… – Continue reading
UK consults to provide insurance Tier 1 tax clarity
The UK’s tax authority has launched a consultation to provide certainty around the tax treatment of new types of insurance capital, reports IFR Asia. The government said as part of the 2014 Budget that it would make regulations to ensure that insurers’ Solvency II instruments, that are issued in the… – Continue reading
Focus on the silver lining
The news that Royal Bank of Canada plans to sell its wealth management services in Barbados no doubt caused some people to question the island’s future as a major centre for this type of business. After all, if the biggest player is leaving the field, what might this say to… – Continue reading
Joe Hockey to move on fraud, identity crime and tax avoidance
Canberra is planning a major assault on high-end financial crime through the establishment of a new Serious Financial Crime Taskforce drawing on the nation’s major law enforcement, business, and taxation regulators, and provided with $127.6 million over four years to secure criminal convictions. The move, which will be outlined in… – Continue reading
BEPS – Historic Reforms
The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project is changing the international tax landscape by building a new international consensus on how to tackle BEPS. In September 2014, the first seven of the deliverables under the 15-point BEPS Action Plan were presented to G20 Finance Ministers when they met… – Continue reading
G20 tax symposium on BEPS set for Istanbul
Turkey is to host a G20 international tax symposium next month to discuss developments to address Base Erosion and Profit Shifting (BEPS) and the exchange of information between tax administrations The event, organised by Turkish Ministry of Finance, also aims to ensure that developing and low-income countries benefit from the… – Continue reading
OECD launches tax avoidance mandatory disclosure plan
AS PART of its Base Erosion and Profit Shifting (BEPS) project, the OECD has launched a public consultation on Action 12 – the mandatory disclosure of tax avoidance strategies by multinational companies. The 83-page draft document provides examples of various disclosure regimes in place in member countries, setting out recommendations… – Continue reading
ANZ under fire for $1 billion trans-Tasman deal
Five years after paying $413.7 million to settle a huge tax avoidance claim, ANZ bank is under fire for a $1 billion deal that appears to “double dip” on trans-Tasman tax benefits. The criticism follows the Australian bank’s issue this month of A$970 million ($995 million) of hybrid securities to… – Continue reading
New Zealand Planning Response To BEPS
On March 13, 2015, New Zealand’s Minister of Revenue, Todd McClay, announced the Government’s tax policy work program for 2015/16, which includes key international tax reforms aimed primarily at countering base erosion and profit shifting (BEPS). In particular, the Government intends to focus on the following areas of reforms: •… – Continue reading
Australian federal opposition proposes $1.9bn targeting multinational tax avoidance
CANBERRA: The federal opposition has proposed a $1.9bn package targeting multinational tax avoidance, with most of the savings slated to come from changes to the amount of debt for which companies can claim deductions in Australia. Bowing to sustained government pressure to start spelling out alternative budget savings, Labor’s leader,… – Continue reading
Opposition calls on Apple to pay its “fair share” of tax
The Federal Opposition has announced plans to crack down on multinational profit shifting and tax avoidance, calling out the likes of Apple for not paying their “fair share” of taxes in Australia. Leader of the Opposition Bill Shorten said the new plan introduced by Labor would bring back at least… – Continue reading
FY 2016 Budget Tax Proposals Target Insurance Companies
On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S. corporations and their controlled foreign corporations (CFCs) and (ii) a one-time 14%… – Continue reading
