Category: Research and Development (R&D)

Countries Looking To Tax Incentives To Stay Competitive: Survey

Governments are expanding their use of tax incentives to maintain their country’s international appeal to businesses, alongside the adoption of anti-base erosion and profit shifting measures, according to a survey from EY. EY’s survey of tax policy professionals in 50 countries found that, “While the long-term trend for countries to… – Continue reading

Intellectual property taxation in post BEPS era

On 5th October 2015, the OECD released its final reports setting out the action plan on Base Erosion and Profit Shifting (BEPS) project, thus concluding the two year project which started at the behest of G20 countries in 2013. The reports are aimed at suggesting the measures to reform the… – Continue reading

The Rules: Patent Box changes will create increased red tape for UK businesses

Changes to patent box rukes will mean that businesses must now track and trace all of their research and development (R&D) expenditure AFTER the recent government consultation on the UK’s Patent Box scheme, businesses will find it a challenge to comply with the proposed new rules. The changes will mean… – Continue reading

Gear up for modifications in tax legal guidelines, treaties

The international community led by the had initiated the (BEPS) project a few years ago with the aim of ensuring that profits are taxed where economic activities are performed and where value is created. Governments, and social groups have been voicing their concern over the past decade that multinational enterprises… – Continue reading

Switzerland: Tax News: Corporate Tax Reform III Approved By Swiss Council Of States

On 14 December 2015, the Swiss Council of States discussed the legislative draft of the Corporate Tax Reform III and in principle approved the reform package. In deviation from the revised draft legislation issued by the Swiss Federal Council on 5 June 2015, the Council of States voted against the… – Continue reading

IP BOX: Italian and European Legal Framework

On 22 December 2014, the Italian Parliament approved the Budget for 2015.40 Among other measures, the Law introduces the possibility of an exemption from corporate income tax (IRES, generally levied at 27,5%) and local tax (IRAP, generally levied at 3,9%) on income derived from qualifying intangible assets (such as patents,… – 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

___uk to modify patent box in line with oecd recommendations__

Its approach includes a new “nexus principle”, as agreed by the multinational Organisation for Economic Cooperation and Development (OECD). This is designed to ensure that the benefits of the UK tax regime are only available where the research and development (R&D) expenditure required to develop that innovation also took place… – Continue reading

The Changing Landscape for IP Regimes Around the World

Patent Boxes, Innovation Boxes, Intangible Property Boxes, Knowledge Development Boxes (IP Regimes) – countries may use different names, but all of these regimes are designed to allow a preferential rate of tax to be applied to income generated from intangible property (IP). There are a number of these regimes in… – Continue reading

Patent box brought into line with international rules

Companies will to scrutinise their R&D activity more closely under proposed changes to patent box regime BUSINESSES will to scrutinise their R&D activity more closely under proposed changes to the design of the UK Patent Box regime outlined by the government The government is making the changes in order to… – Continue reading

Pfizer and Allergan chiefs say merger is good for America

Employees at Allergan have been told a proposed merger with Pfizer is about changing healthcare – not skirting tax law. Allergan’s global chief executive Brent Saunders has written directly to the company’s employees – including around 1,000 in Ireland, telling them the controversial deal is not just about tax savings…. – Continue reading

Italy Issues Patent Box Guidance

On December 1, the Italian Revenue Agency issued a guide delineating how companies can take advantage of Italy’s “patent box,” together with a circular containing the answers to questions arising out of the new regime’s operation. With effect from the present 2015 fiscal year, the patent box offers an optional… – Continue reading

CBDT signs 11 more unilateral advance pricing agreements

NEW DELHI, NOVEMBER 27: The Central Board of Direct Taxes (CBDT) has entered into 11 more unilateral advance pricing agreements (APAs). These APAs were signed with Indian subsidiaries of foreign companies operating in various segments of the economy like investment advisory services, engineering design services, marine products, contract Research & Development,… – Continue reading

LEGISLATIVE UPDATE: CONGRESSIONAL HEARINGS ON BEPS

The Senate Finance Committee and the House Ways and Means Committee’s Subcommittee on Tax Policy today both announced hearings relating to the OECD’s base erosion and profit shifting (BEPS) project. Both hearings are scheduled for Tuesday, December 1, 2015. SENATE FINANCE HEARING According to today’s release, the Senate Finance Committee’s… – Continue reading

The Amendment to the France-Luxembourg tax treaty will still not be applicable in 2016!

The new provisions of the 4th Amendment to the France/Luxembourg double tax treaty on profits deriving from sale of real estate assets signed on September 5, 2014 will not be applicable in 2016. Currently, the right to tax the capital gains realized by a Luxembourg company upon the transfer of… – Continue reading

Time for US to lead on international tax policy

In recent days, the new Speaker of the House Paul Ryan (R-Wis.) signaled a priority for international tax reform in 2016. And if the newest recommendations from the Organization of Economic Cooperation and Development (OECD) are any indication of what’s ahead on the global tax scene for American businesses, it… – Continue reading

Corporate Coalition Pushes For US Patent Box

American Innovation Matters (AIM), a coalition of companies that includes Cisco, Boeing, Intel, Oracle and Facebook, has released a statement pushing for the introduction of a US patent box, or an “innovation box” as it is known in the United States. The statement looks at the endorsement on November 16… – Continue reading

After Outcry, Ireland Adjusts Its Corporate Tax Draw

CORK, Ireland — As lord mayor of this quiet seaside city in southern Ireland, Chris O’Leary seems to have a situation most other local politicians can only dream about. Blue-chip international companies like Apple, Dell and IBM have all set up shop in and around this city, filling newly built… – Continue reading

Opening Bell: Ireland told not to rely on low taxes to grow, NAMA’s dispute with Dunnes, Draghi’s statement on Ireland

The Organisation for Economic Co-operation and Development’s (OECD) chief economist has warned that Ireland cannot rely on low corporation taxes to fuel growth. “Ireland is going to have to seek real investment based on comparative advantages other than tax,” Prof Catherine Mann told a conference hosted by the Irish Department… – Continue reading

Low taxes alone not enough for growth, says OECD

Chief economist says clampdown on tax avoidance will be ‘negative for Ireland’ Ireland will have to sell itself as more than just a low-tax destination in the new era of global tax transparency, OECD chief economist Catherine Mann has said. She said moves to better align taxable profits with real… – Continue reading

Knowledge Development Box – to encourage more innovation

Since Minister Noonan announced in October 2014 that Ireland would introduce a “best-in-class” Knowledge Development Box (“KDB” ), there has been a lot of speculation about ‘how low would he go’. Budget 2016 announced that the rate of tax which will apply for income qualifying under the new KDB will… – Continue reading

How U.S. multinationals are responding to a post-‘Double Irish’ world

One year after the announced closing off of the Double Irish tax arrangement, U.S. multinationals once again turned their attention to Dublin as Ireland announced details of the Knowledge Development Box, or KDB. This new component to its corporate tax regime will allow companies to pay a reduced corporate tax… – Continue reading

Ireland’s Finance Bill 2015 – key changes for international companies and financial institutions

Following the recent Irish budget statement (the “Budget”), the Finance Bill 2015 (the “Bill”) has been published and it implements the changes announced by the Irish Minister for Finance (the “Minister”). The Bill includes additional detail on: the new knowledge development box (“KDB”); and Ireland’s implementation of country by country… – Continue reading

Ireland cuts tax for IP profits

Ireland has announced a new 6.25 per cent corporate tax rate for intellectual property research Ireland’s 12.5 per cent corporate tax rate is already one of the lowest in Europe, Economia reports. Now, companies investing in research and development (R&D) will be able to avail of the even lower rate… – Continue reading

Ireland: Finance Bill shows signs of scrutiny of corporate tax regime

The key corporate tax measures in the Finance Bill show clear signs of the international scrutiny now surrounding multinational tax. The main new measure, the knowledge development box offering a lower tax rate on profits earned as a result of research and development, has been strictly drawn up to comply… – Continue reading

Shell companies’ patents to come under domestic tax net on adoption of BEPS

MUMBAI: Technologies that are developed in India but their patents registered in tax havens may come under the domestic tax net from the next financial year, when the country is expected to adopt a new world standard aimed at preventing abuse of double taxation avoidance agreements. Many multinational and local… – Continue reading

Ireland reveals Budget and international tax strategy

Ireland’s budget statement for 2016 (Budget) was delivered by the Minister for Finance last week. The Budget’s primary focus was on personal tax matters, which is somewhat unsurprising given the general election early next year. However, the Budget also contained two key announcements on Ireland’s corporation tax system.  In line… – Continue reading

Ireland: International Aspects Of Ireland’s Budget: 6.25% Knowledge Development Box And Country-By-Country Reporting

Following last week’s publication of the various OECD/G20 reports on the Base Erosion and Profit Shifting (“BEPS”) project, the Irish Budget delivered on 13 October 2015 contains the first Government initiative on implementing some of the recommendations. Key features are the introduction of the first of its kind knowledge development… – Continue reading

Could Medtronic Move R&D To Ireland For Tax Purposes?

With Medtronic being one of Ireland’s largest employers, analysts say there is a new incentive for the medical device maker to prioritize its Dublin headquarters for R&D. In the eyes of developed nations, Ireland has become notorious for baiting multinational firms to its land with the offer of friendly tax… – Continue reading

Joe Tynan: International tax changes on the horizon

As Noonan moves to stimulate domestic growth we need to think about the global debate The Irish economy is now in better shape than at any time since the beginning of the financial crisis. After many years of tough austerity measures, last year’s budget marked a turning point where Minister… – Continue reading

Report: AstraZeneca funnels billions into Dutch tax-avoidance scheme

AstraZeneca ($AZN) is not the first company to employ questionable tax-planning strategies, and it certainly won’t be the last. But the U.K.-based drugmaker is the latest poster child for tax avoidance. As The Guardian reports, AstraZeneca funneled billions of dollars into the Netherlands to get out of paying corporate taxes… – Continue reading

Budget 2016 – Revealed: Government to introduce new lower corporation tax rate for companies that spend more on innovation

THE Government will introduce a new lower corporation tax rate in today’s budget in a bid to increase R&D investment and innovation. It is understood the new lower rate will only apply if a company agrees to a certain level of investment in research and development as part of the… – Continue reading

IRELAND: KNOWLEDGE DEVELOPMENT BOX; DETAILS EXPECTED IN 2016 BUDGET

Ireland’s budget 2016 will be announced tomorrow, 13 October 2015, and it is expected that additional detail on the research and development (R&D) tax incentive known as the “knowledge development box” would be provided in the budget 2016 statement. The “knowledge development box” is a tax rate for income generated… – Continue reading

UK: BEPS IMPLICATIONS FOR UK TAXPAYERS; COUNTRY-BY-COUNTRY REPORTING, PATENT BOX

The UK government released draft regulations for country-by-country (CbC) reporting, to implement Action 13 of the OECD’s base erosion and profit shifting (BEPS) project. The draft UK regulations broadly reflect the OECD reports, released 5 October 2015, and specifically make reference to the model legislation. Key points of the CbC… – 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

Foreign governments ready cash grab on U.S. earnings

Opposition to foreign taxes on American investment and hard work has been coded into our national DNA for almost 240 years. Yet almost two and a half centuries after resolving that we would not stand idle while others decide how to tax us, Americans once again must take decisive action… – Continue reading

U.S. Tax Reform update: amid looming budget showdown, drafting of U.S. International Tax Reform Legislation continues

With the August recess now well in the rearview mirror, Congress is already deep into grappling with the imminent expiration of the U.S. Government’s funding authority on September 30. Amid the debates over the “Continuing Resolution” and related funding issues, the Iran deal, and other high-profile issues, the work on… – Continue reading

Dutch Tax Plan 2016

Speed read On 15 September 2015 the Dutch government published its Tax Plan 2016. In this e-alert we discuss the legislative proposals in the Tax Plan which are of interest for companies. 1 INTRODUCTION Today, the Dutch Ministry of Finance published its Tax Plan 2016. In fact, the government sent… – Continue reading

Netherlands Confirms CbC Reporting From 2016

Through Wetsvoorstel Overige Fiscale Maatregelen 2016, released on September 15, the Netherlands has confirmed the introduction of a new country-by-country (CbC) reporting obligation for multinational corporations. These regulations provide for the implementation of the recommendations of the Organisation for Economic Co-operation and Development (OECD) on transfer pricing documentation under Action… – Continue reading

The Advantages of Enacting a Patent Box Regime

Many countries have enacted a patent box regime in order to spur innovation and create domestic manufacturing jobs. Simply stated, a patent box regime provides a lower tax rate on income from the exploitation of patented goods than for other income. Among the countries that have patent box regimes are… – Continue reading

Managing the transfer pricing of intangibles in the oil and gas sector

Intangible assets in the oil and gas industry have become incredibly valuable. Taxpayers need to understand how to manage compliance to mitigate their transfer pricing risks What do recent Western economic sanctions against Russia; the US’ growing energy independence; and ultra-deepwater oil and gas (O&G) discoveries off the coast of… – Continue reading

Multinationals ‘exaggerated’ research activity to lower tax bills

Depeartmental review indicates contentious tax credit plays vital role in supporting jobs Several multinational firms have been found to be aggressively and improperly claiming tax credits for research and development to lower their corporation tax bills. A Government scheme gives firms up to 25 per cent of their expenditure on… – Continue reading

Taxing multinationals: Patently problematic

Proposals for consistent global rules on company tax cause worries all round CLARITY or chaos? Supporters of the Base Erosion and Profit-Shifting (BEPS) project, being worked on by the OECD, argue that it will bind multinationals to a consistent set of global tax rules, providing them with less licence than… – Continue reading

Switzerland: Innovation tax breaks “key to attracting companies”

Industry lobby groups are calling on lawmakers to bolster business innovation as they debate corporate tax reforms aimed at retaining Switzerland’s status as a location for multinationals, reports Swiss Info. Parliament is currently looking at a government recommendation to replace Switzerland’s current, and controversial, cantonal corporate tax system – that… – Continue reading

Cyprus: The Cyprus Intellectual Property Rights ‘Box’ – A Limited Time Opportunity

In May 2012, Cyprus introduced a package of incentives and tax exemptions relating to investment in intellectual property rights, commonly known as an “IP box.” Intellectual property projects are particularly susceptible to cross-border planning by reason of the mobility of intellectual property rights, which do not consist of physical assets… – Continue reading

United Kingdom: Overview of Tax Regime

The UK Government’s goal is to make the UK the best place in the world to locate an international business; it has one of the most open economies globally, a highly skilled workforce, access to capital markets, a first-class infrastructure, and a highly competitive corporate tax system. UK tax policy… – Continue reading