Category: Research and Development (R&D)

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

EU Research Paper Supports Modified Nexus Approach

The European Commission has released a working paper that looks at how significant the introduction of the modified nexus approach will be for the tax affairs of multinational companies that use patent box regimes Entitled Patent Boxes Design, Patents Location, and Local R&D, the paper suggests “that in the majority… – Continue reading

C’tee recommends tax breaks on IP brought to Israel

Companies registering their intellectual property in Israel will be charged only 5% tax on dividends. The committee considering changes in the Law for the Encouragement of Capital Investments, headed by former Ministry of Finance director general Yael Andorn, is recommending extension of the tax break granted under the law to… – Continue reading

Pharmaceutical companies called on to explain tiny tax contribution

The five biggest suppliers of publicly subsidised medicines in Australia recorded sales of nearly $5 billion last year but paid an average of just $10 million each in company tax. Research by the Parliamentary Library, obtained by Fairfax Media, has disclosed the tax contribution of multinational pharmaceutical companies, including Pfizer… – Continue reading

UK: Patent Box – More Detail On The New Regime

Following our article at the end of last year on the potential changes to the UK patent box regime further details have been released on the new regime, timings and additional work to be done. On 6 February 2015, the Organisation for Economic Co-operation and Development (OECD) published a paper… – Continue reading

Diverted Profits Tax: counterbalancing the UK’s “open for business” agenda?

The UK’s introduction of the diverted profits tax (DPT) has dismayed tax practitioners and their multinational clients. Rushed through parliament (ahead of its dissolution before the general election) and in effect as of April 1, the DPT seemed intended to appease public anger at multinationals failing to pay their ”fair… – Continue reading

Valeant Pharmaceuticals, Concordia Healthcare zoom ahead of U.S. peers

Canada’s health-care stocks are sizzling, as Concordia Healthcare Corp. and Valeant Pharmaceuticals International Inc.’s buy-and-streamline strategy has pushed the industry’s earnings and margins ahead of U.S. peers. The drugmakers are the two top-performing stocks in the Canadian equity benchmark this year, boosting total returns for the members of the Standard… – Continue reading

Commonwealth Bank faces ATO probe over R&D millions

The Australian Taxation Office is probing Commonwealth Bank over a nine-figure sum arising from tax breaks claimed by the nation’s largest company for research and development. In a hostile environment for tax minimisation by large corporates, CBA and the ATO are wrangling over an amount ¬believed to be in excess… – Continue reading

Hong Kong: The Impact Of BEPS On Your Relationship With Customs Authorities

If you are moving or trading goods across borders, this topic should be of primary importance from both a Transfer Pricing and Customs perspective. There is potential for you to have Transfer Pricing and Customs exposures in your supply and value chains as a result of the OECD/G20 initiative on… – Continue reading

Ireland: US business body warns not to box in multinationals

The American Chamber of Commerce has warned that new Irish tax incentives may fail because they do not match the needs of multinationals, reports the Irish News. The chamber, which represents 700 US companies, has said the forthcoming Knowledge Development Box – which will replace the discredited Double Irish structure… – Continue reading

The Italian IP box – an opportunity for the fashion industry

The patent box regime, adopted at the end of 2014 with Italy’s Stability Law, was recently modified by the Investment Compact Decree and implemented into law at the end of March 2015. A distinctive feature of the Italian regime is that the measure now also covers trademarks and designs. A… – Continue reading

Google says give R&D tax breaks to small techies, not big guys

Tax breaks for research and development should be targeted to smaller technology start-ups, rather than big companies that will most likely make the investments regardless of incentives, Google Australia will tell the senate inquiry into corporate tax avoidance. Google Australia’s managing director, Maile Carnegie, will be appearing before the inquiry… – Continue reading

Effectiveness of tax reliefs, improving tax collection: reports published

HMRC’s reporting of tax reliefs does not enable Parliament to scrutinise them effectively to determine whether they are providing value for money and the complexity of tax law and the constraints on HMRC’s resources mean that it is fighting an uphill battle against those who are determined to cheat the… – Continue reading

Ireland outlines international financial services strategy

The recent release of Ireland’s major strategy paper, ‘IFS2020 – A strategy for Ireland’s financial services sector 2015-2020’ addresses Ireland’s five year strategy in further developing the country as a global leader in the financial services sector. Over the past 25 years, Ireland’s international financial services sector has grown dramatically,… – Continue reading

Australia needs a modern and globalised tax system

The Abbott Government will shortly release a discussion paper on the Australian tax system. It will be the first step towards the much anticipated tax white paper. International factors should figure prominently in the white paper — specifically, how to ensure that Australia has a resilient tax system given the… – Continue reading

Cleaning up the transfer pricing mess

Two important developments last week in the transfer pricing domain have the potential of completely transforming the way this critical and controversial tax area has been handled by the income-tax department. One is the Delhi High Court judgment on tackling the AMP (advertisement, marketing and sales promotion) expenses involving a… – Continue reading

UK Budget 2015

Earlier today the UK government delivered its last budget before the UK general election in May. Many of the measures were, as one might expect so close to an election, focused on personal rather than corporate taxation. However, below is a summary of some of the business related announcements: Diverted… – Continue reading

Combatting corporate tax avoidance: Commission presents Tax Transparency

1.GENERAL QUESTIONS 1.1 Why is the Commission presenting a Tax Transparency Package? The Commission has made the fight against tax evasion and corporate tax avoidance a political priority, with a view to creating a socially and economically more efficient Single Market. While much has been done to advance this agenda… – Continue reading

Corporate Tax Rate At Heart Of Ireland’s Offering

Irish Prime Minister Enda Kenny has reiterated his “rock-solid” commitment to the country’s 12.5 percent corporate tax rate. In a speech to the Irish Chamber of Commerce, Atlanta, Kenny said that his Government is “fully committed to pursuing policies that create the ideal conditions for enterprise and investment.” He pointed… – Continue reading

Customs seeks technical support from EDB in tax evasion case against Paramount Corporation

KARACHI: The customs authorities have referred the case of importer Paramount Corporation to the Engineering Development Board (EDB) for seeking technical view point into the case. The sources informed Customs Today that the authorities concerned of Customs Adjudication-II have forwarded the case of Paramount Corporation to the EDB for seeking… – Continue reading

Dutch, German firms urge fair patent box changes

Two business federations from the Netherlands and Germany have urged the Organisation for Economic Co-operation and Development to ensure that there is a level playing field under new international rules proposed for preferential regimes for intellectual property (IP) income, reports Tax News. The two organizations’ statement concerns the development of… – Continue reading

Rwanda: Competing On Corporate Tax

Corporate tax reform has emerged as an area of potential bipartisan action in the United States Congress over the next few months. But fundamental questions about the right approach remain. There is widespread agreement that the US corporate tax system is deeply flawed. The rate is too high; the base… – Continue reading

Pharma companies want tax sops, clarity on transfer pricing

Pharmaceutical companies want the finance minister to increase tax concessions across the board as also bring in more clarity on amendment to the rollback of advance pricing agreements (APA), applicability of roll back benefit, impact on on-going assessment, applicability of roll back provisions on bilateral APAs etc. In a pre-budget… – Continue reading

Cyprus: Cyprus IP Company: The Breathless Conundrum Solved

The breathless conundrum for IP companies is four-fold: not only should royalties be taxed at a low rate in order to maximise profits; but also research and development (R&D) or acquisition costs should be considered as allowable expenses to the maximum possible effect, whilst also the jurisdiction where the IP… – Continue reading

OECD Seeks Change In Global Taxation

Thanks in part to past concerns that globalization could lead to double taxation, corporations have numerous techniques at their disposal to reduce their tax bills, including the placement of subsidiaries and spinoff holding companies in low-tax jurisdictions. The Group of 20 wants to change that. The Organisation for Economic Cooperation… – Continue reading

Tax Policy Update

NUMBER OF THE WEEK: 3,415. The number of people who renounced their citizenship in 2014 according to IRS data. This is one of the five highest totals on record since the U.S. Congress passed the Foreign Account Tax Compliance Act in 2010. In the past five years, more than 10,000… – Continue reading

India, US set to map out way to end transfer pricing cases in court

More than 100 tax disputes involving Indian associates of US companies such as IBM and Microsoft are set to be settled out of court by April this year with the income tax department and the US Internal Revenue Service identifying disputes in the contract research, IT and software sectors for… – Continue reading

EU halts probe of tax breaks for drug and technology patents

THE European Union (EU) will not pursue a probe of national programmes that create tax breaks for research and development, giving a boost to drug and technology companies that generate revenue from patents. The EU’s hands were tied by a 2008 decision to approve a “patent box” tax break in… – Continue reading

UK Patent Box regime – update

On 11 November 2014, the UK and German governments issued a joint statement on proposals for new rules for preferential intellectual property (IP) regimes within the G20/OECD base erosion and profit shifting (BEPS) project. Germany currently does not have a special regime for Patent Boxes, but suffers from structures that… – Continue reading

Transfer pricing – don’t get your digits burned

Both the OECD and the EU are exploring options to change how digital businesses are taxed, while NGOs are stepping up their pressure on tax authorities to challenge large companies’ transfer pricing arrangements. No matter how robust your digital business’s transfer pricing arrangements appear to have been in the past,… – Continue reading

Patent Box still a potent tool – accountants

Midlands businesses can still benefit from the Patent Box, according to international accountancy firm Mazars. It follows plans to amend it – resulting in a narrower focus on UK R&D. That is the verdict from Birmingham professionals Peter Jelfs, senior tax manager at international accountancy firm Mazars, and Nicholas Braddon,… – Continue reading

Finance ‘open-minded’ on knowledge box taxes

The Department of Finance is understood to be “open-minded” over what rate should be applied to its proposed ‘knowledge box’ tax regime for patents and intellectual property assets developed here. The department yesterday formally launched its planned consultation process for the programme, which was announced in October’s Budget. There has… – Continue reading

Government launches public consultation on Knowledge Development Box

The Government has unveiled a three-month public consultation on the proposed Knowledge Development Box, with submissions invited from businesses and the wider public. The proposed scheme, also known as a patent box, was announced in the Budget and is due to come into force next year. It will provide for… – Continue reading

Italy Introduces Patent Box

As a means of encouraging the development of intellectual property (IP) in Italy, rather than elsewhere, a “patent box” preferential tax regime has been introduced with effect from January 1, 2015, at the same time as a restructuring of the country’s research and development (R&D) tax credit system. Following the… – Continue reading

Italy – Budget 2015; R&D tax credit, patent box regime

December 3: Budget bill 2015—which would provide a tax credit for research and development (R&D) and would introduce a patent box regime—was passed by the Italian lower house on 30 November 2014. The budget bill is pending consideration by the Italian Senate. Changes to the legislation are possible during this… – Continue reading

German complaints could result in higher tax bills

Y​ORKSHIRE​ businesses that invest in research and development could ​face higher tax bills if Chancellor George Osborne uses his Autumn Statement to water down tax breaks following complaints by Germany. One of ​Mr Osborne’s flagship policies is set to be reformed ​on Wednesday following the resolution of a dispute with… – Continue reading

France – Tax proposals in pending legislation

Passage by the French assembly on 18 November 2014 of a draft Finance Bill for 2015 (which now will be presented to the Senate) Introduction by the French government on 12 November 2014 of a second draft amended Finance Bill for 2014 In general, the draft Finance Bill for 2015… – Continue reading

Dodwell: BEPS reform is forcing Ireland to reform tax rules

The latest work by the OECD tax policy team to review global tax rules is beginning to have an impact, particularly in Europe where Switzerland and Ireland are reforming their current tax rules, says Bill Dodwell, head of tax policy at Deloitte One unsurprising outcome of the OECD’s Base Erosion… – Continue reading

G20’s tax evasion concern stymies Australia’s patent box scheme before it starts

Meredith McBride in Hong Kong Though base erosion and profit shifting (BEPS) took the front seat during meetings between global leaders on November 15 and 16 at the G20 forum, country leaders also expressed concern over the taxation of intellectual property (IP). Patent box regimes in particular were mentioned as… – Continue reading

Autumn Statement 2014: Could high business growth start to attract tax relief?

George Osborne is not going to want to do anything too controversial given the forthcoming General Election in May 2015, but does need to address some clear issues relating to public finances. According to the Institute for Fiscal Studies, the current budget deficit is estimated at just under £100bn and… – Continue reading

George Osborne’s Patent Box tax break policy is watered down after complaints by Germany

One of George Osborne’s flagship policies is set to be reformed in next week’s Autumn Statement following the resolution of a protracted spat with Germany over the controversial tax break. The so-called Patent Box took effect last year and allowed companies to pay lower tax bills on profits derived from… – Continue reading

Irish Finance Bill 2014- FDI Focus

The Finance Bill 2014 (the “Bill”), which was published 23 October 2014, proposes a package of measures which focuses on Ireland’s tax rate, regime and reputation. The changes seek to reinforce Ireland’s position as a top destination for multinational companies and emphasise the importance of real and substantive foreign direct… – Continue reading

France, a Tax Haven? Yes, for Companies From Microsoft to Huawei

Move over, Ireland. Companies from Microsoft Corp. (MSFT) to China’s Huawei Technologies Co. scouring Europe for fiscally attractive shores are turning to an unlikely country: France. As a base for research and development teams, that is. Tax breaks for R&D, 5.6 billion euros ($7 billion) this year alone, combined with… – Continue reading