Category: Permanent establishment

Ukraine: Ukraine Ratifies Protocol Amending Double Taxation Treaty Between Ukraine And Switzerland

On 18 September 2019, the Parliament of Ukraine ratified a protocol (the Protocol) of amendments to the double tax treaty between Ukraine and Switzerland (the DTT) which had been signed by the states on 24 January 2019.  ... - 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

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

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

Cyprus: The Cyprus ‘Non-Dom’ Rules

Introduction In July 2015, a number of bills relating to the Cyprus taxation system were approved by the Council of Ministers and subsequently enacted into legislation by the Parliament1. The key highlight of these new bills is the introduction for the very first time of the “non-dom” status for Cyprus… – Continue reading

Central Bank Official: Oecd Tried To ‘Hobble’ Permanent Residency

A top Central Bank official has accused the OECD of trying to “hobble” the competitiveness of The Bahamas’ economic permanent residency regime by including it in an arbitrary “quasi-blacklist”. Charles Littrell, the regulator’s inspector of banks and trust companies, in a speech to a Turks & Caicos financial services conference,… – Continue reading

Ireland Implements New Exit Tax Regime

Ireland’s 2018 Finance Bill legislates for a new exit tax regime compliant with the EU’s Anti-Tax Avoidance Directive. The exit tax charge was introduced via financial resolution on Budget night, October 9, 2018, and applies to certain events occurring on or after October 10. Finance Bill 2018 formally legislates for… – Continue reading

Has the New Inland Revenue Act paralysed the Double Tax Treaty Network of Sri Lanka? Part 2

7.What are Mutual Administrative Assistance Agreement (MAAAs) The new IRA defines the “Mutual Administrative Assistance Agreement” to mean a tax information exchange agreement or other international agreement for mutual administrative assistance in relation to taxation matters. Section 75 (5) of new IRA “Mutual administrative assistance agreement” means a tax information… – Continue reading

TAX MATTERS | THE TAXATION OF COMPANIES IN MACAU – WORLDWIDE OR TERRITORIAL BASIS? (CONT.)

Our previous article about the taxable basis for the taxation of companies in the Macau territory made reference to the fact that the courts in Macau, notably the Court of Second Instance (TSI) and the Tax Administration, do not seem to share the same view regarding income considered as the… – Continue reading

Receipts from Web Hosting Services to Indian Entities can’t be treated as FTS under Indo-US Tax Treaty: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the income earned from the web hosting services cannot be treated as fee within the meaning of Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and US. In the instant case, the… – Continue reading

Slovakia is pushing on digital platforms, including booking.com, to pay taxes here

One digital platform has registered on its own and others are being registered ex officio. Foreign digital platforms, which mediate services in transport and accommodation in Slovakia, are obliged to launch so-called permanent establishments in Slovakia. The Finance Ministry wants to force them to pay corporate tax. So far only… – 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

Inland Revenue (Amendment) (No. 6) Ordinance 2018 gazetted

Hong Kong (HKSAR) – The Inland Revenue (Amendment) (No. 6) Ordinance 2018, which primarily implements the minimum standards of the Base Erosion and Profit Shifting (BEPS) package promulgated by the Organisation for Economic Co-operation and Development (OECD) and codifies the transfer pricing principles into the Inland Revenue Ordinance (Cap. 112)… – Continue reading

Tech Groups Raise Concerns About EU Digital Tax

The European Commission’s proposal for a digital services tax would be “deeply harmful” to the EU business environment and may lead to double taxation, a coalition of business and technology groups has warned EU leaders. An open letter published by the Information Technology Industry Council (ITI) ahead of the European… – Continue reading

Norway’s Parliament Rejects ‘Google Tax’ Proposal

Norway’s parliament, the Storting, has rejected a legislative proposal for the introduction of a tax on digital business models, labeled the “Google tax,” recommending instead that the Government explore the issue of digital taxation in partnership with the OECD. In rejecting the proposal, introduced by parliamentary commissioner Une Bastholm of… – Continue reading

Jubilant Food Works Limited is not a PE of Domino’s Pizza International Franchising Inc: ITAT [Read Order]

In DCIT vs. M/s. Dominos Pizza International Franchising Inc., the Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) held that Jubilant Food Works Limited, who holds the Master Franchise for Domino’s Pizza in India is not a Permanent Establishment of the Domino’s Pizza International Franchising Inc. In… – Continue reading

Malta Ratifies BEPS Convention

Malta has become the latest country to ratify the OECD’s multilateral convention to counter base erosion and profit shifting (BEPS). A notice was published in Legal Notice 142 of 2018 in the territory’s Official Gazette. The Convention, negotiated by more than 100 countries and jurisdictions under a mandate from G20… – Continue reading

UK Revisits Proposed BEPS Changes To Its Double Tax Treaties

The UK tax agency, HM Revenue and Customs, on April 16, 2018, released proposed changes to the list of amendments it intends to make to its bilateral double tax avoidance agreements through the OECD’s base erosion and profit shifting multilateral instrument. The new document – Proposed changes to the provisional… – Continue reading

CBDT releases Draft Notification to Amend Income Tax Rules, 1962 [Read Draft Notification]

The Central Board of Direct Taxes ( CBDT ) yesterday released a draft notification which proposes to amend Rule 44E, Form 34C, 34D and 34DA of Income Tax Rules, 1962 as per Base Erosion and Profit Shifting (BEPS) Action Item 5. The proposal has been made with a view to… – Continue reading

Professional Fee paid by Deloitte India to Its US and Singapore Entities Not Taxable in India, No TDS: ITAT [Read Order]

Granting tax relief to Deloitte India, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the provisions relating to Tax deduction at Source (TDS) are not applicable to the professional fee paid by them to its Group Entities in US and Singapore. The division bench of the… – Continue reading

Singapore Updates Guidance On Transfer Pricing Regime

The Inland Revenue Authority of Singapore (IRAS) on February 23, 2018, released the fifth edition of its Transfer Pricing Guidelines for income tax. During a public consultation held in June 2017, stakeholders asked the Ministry of Finance to provide more clarity and guidance on transfer pricing documentation (TPD) requirements, specifically… – Continue reading

Digital firms with ‘big presence’ in India will have to pay taxes here

Finance Ministry’s move under BEPS treaty will impact Google, Facebook, Amazon MUMBAI, FEBRUARY 5 Digital players such as Google, Facebook and mobile application services providers must pay taxes in India on income generated from Indian consumers even if the companies’ infrastructure is physically located abroad. According to a new proposal… – Continue reading

Ukraine updates transfer pricing rules for 2018: key takeaways

Ukraine’s Law No. 2245-VIII “On Introduction of Changes to the Tax Code of Ukraine and Some Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenues in 2018,” which came into effect on January 1, 2018, includes important changes to transfer pricing (TP) regulations. These changes are outlined below…. – Continue reading

Hong Kong BEPS Bill: New Transfer Pricing Regime to Regulate Documentation

On December 29, 2017, the Inland Revenue (Amendment) (No. 6) Bill 2017 (BEPS bill) was gazetted in Hong Kong. The BEPS bill introduces a transfer pricing regulatory regime and mandatory transfer pricing documentation requirement in Hong Kong as well as a variety of other anti-BEPS changes. The BEPS bill marks… – Continue reading

Singapore Urged To Enhance Tax Offering

Ernst and Young Solutions LLP, Singapore, has released its wish list for the Singapore Budget 2018, calling for reforms to sharpen the territory’s competitiveness. The firm said that Singapore should maintain its 17 percent corporate income tax (CIT) rate, which is one of the lowest in the world, but recommended… – Continue reading

Thousand billions in lost tax from foreign enterprises

Vietnam has lost thousands of billions of dong in taxes as foreign enterprises, especially large-scale ones, refuse to pay based on the Double Taxation Avoidance Agreement. Massive revenue without having to pay taxes The Ho Chi Minh City Department of Taxation has recently issued an ultimatum for Uber B.V Netherlands… – Continue reading

OECD Releases First Peer Reviews On Tax Ruling Info Exchange

On December 2, the OECD released the first analysis of individual countries’ progress in spontaneously exchanging information on tax rulings in accordance with Action 5 of the BEPS package of measures released in October 2015. The first annual report on the exchange of information on rulings evaluates how 44 countries,… – Continue reading

Proposed new UK royalty withholding tax will apply from April 2019

A new royalty withholding tax will apply from April 2019 where a non-UK resident entity making sales in the UK pays a royalty to a connected party in a low tax jurisdiction, according to a consultation document which sets out further details of the proposal, which was first announced in… – Continue reading

OECD approves the 2017 update to the OECD Model Tax Convention

On November 21, 2017, the OECD Council approved the contents of the 2017 Update to the OECD Model Tax Convention. The 2017 Update primarily comprises changes to the OECD Model Tax Convention and related commentary that were developed through the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project including changes… – Continue reading

The Italian “temporary web tax”

The Italian government has introduced a “temporary web tax” which will be in force until the long-awaited OECD/EU strategy for the reshaping of traditional taxation systems based on the residence of companies (or on the location of permanent establishments) has been defined. Said reshaping is aimed at introducing taxation principles… – Continue reading

Including consultancy under Construction PE to impact realty: PwC report

NEW DELHI: Inclusion of consultancy services under Construction PEs, foreign firms engaged in construction activities in the country, is likely to impact the real estate sector, says a PwC report. PE (Permanent Establishment) is a fixed place of business which generally gives rise to income or value-added tax liability in… – Continue reading

Russia and Japan sign Double Taxation Avoidance Convention

The Russian President and the Japanese Prime Minister signed the Convention for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (the “Convention”) on 7 September 2017. The Convention will replace the existing treaty signed in 1986 by the Soviet… – Continue reading

EU eyes corporate rules shake-up with law on seat transfer

The European Commission is preparing a new directive on the cross-border transfer of company headquarters, a move that could have far-reaching implications for other areas of corporate governance, including tax planning and cross-border mergers, EURACTIV has learned. With Brexit on the horizon, UK companies are busy weighing their options for… – Continue reading

Business Europe Rejects EU Digital Turnover Tax Proposal

Markus J Beyrer, Director General of Business Europe, has expressed concerns about the proposed introduction of a European Union turnover tax on digital businesses. On September 21, the European Commission launched a new agenda to ensure that the digital economy is taxed “in a fair and growth-friendly way.” This could… – Continue reading

BEPS Actions 8-10 Most Important For Latin American, Caribbean States

The Inter-American Center of Tax Administration (CIAT) has released a new statement summarizing the feedback from Latin American and Caribbean countries from ongoing discussions on countering base erosion and profit shifting. CIAT said it and a number of regional and international organizations have brought together policymakers from countries in the… – Continue reading

Google, Facebook, And Others May Have To Pay More For EU Operations

Operations in the European Union haven’t been easy going for tech companies for quite a long time. While many European countries earlier called for strict privacy regulations and large fines on tech companies for violating them, they have now called for increased taxation for these companies for their operations in… – Continue reading

UK: The UK Company: A Tax-Efficient Business Vehicle For International Investors

This article is the third of a series of articles that examines tax aspects of the UK company which make it an attractive international business company, or “IBC”. This generic label, and its acronym, are normally associated with the BVI company, and its international competitors in other offshore financial centres…. – Continue reading