Category: Royalties

Tax Alert – recent Belgian tax developments

Here’s our overview of recent Belgian tax developments, including the main new Belgian tax measures adopted by the laws of 18 and 26 December 2015. Speculation tax A ‘speculation tax’ of 33 per cent is introduced on capital gains realised by Belgian resident and non-resident individuals within six months from… – Continue reading

A Tax Agreement is Signed Between Taiwan and Japan

Japan, Taiwan January 4 2016 After many years of discussion and negotiation, Taiwan’s Association of East Asian Relation and Japan’s Interchange Association finally signed 「THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVAION WITH RESPECT TO TAXES ON INCOME」(the “DTA”) in Tokyo on 26 November 2015. For the… – Continue reading

St Kitts’s 2016 Budget Responds To BEPS

The Caribbean territory Saint Kitts and Nevis has set out plans to amend the territory’s international tax rules in its 2016 Budget. The Budget is said to target “the potential for abuse through the use of transfer pricing techniques,” which the Government said “not only affects the withholding tax regime… – Continue reading

Tax regime on royalties from intellectual property to be revised

The Administration of the Ministry of Finance has announced the upcoming amendment of the Intellectual Property tax regime. The said amendment will incorporate the recommendations of Action 5 of the Organisation for Economic Co-operation and Development (OECD), which were issued on 5 October 2015 for the Action Plan against ‘Base… – Continue reading

New Luxembourg-Singapore agreement for the avoidance of double taxation which will stimulate trade and investment flows between both jurisdictions enters into force

On 28 December 2015, the revised Luxembourg-Singapore Agreement for the Avoidance of Double Taxation (the New Treaty) entered into force. The New Treaty (1) allows Luxembourg investment vehicles to invoke benefits under the New Treaty, (2) reduces the withholding tax rates for dividends, interest and royalties, (3) increases thresholds to… – Continue reading

Singaporean – Ecuadorian DTA entered into force

On December 18, 2015 the Inland Revenue Authority of Singapore issued a press release announcing that on that same date the Agreement between the Government of the Republic of Singapore and the Government of the Republic of Ecuador for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion… – Continue reading

Singaporean – San Marinese DTA entered into force

On December 18, 2015 the Inland Revenue Authority of Singapore issued a press release announcing that on that same date the Agreement between the Government of the Republic of Singapore and the Government of the Republic of San Marino for the Avoidance of Double Taxation and the Prevention of Fiscal… – Continue reading

Singaporean – Seychellois DTA entered into force

On December 18, 2015 the Inland Revenue Authority of Singapore issued a press release announcing that on that same date the Agreement between the Government of the Republic of Singapore and the Government of the Republic of Seychelles for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion… – Continue reading

Liechtenstein – Czech Republic: Tax Treaty Enters Into Force

The Income Tax Treaty between Liechtenstein and the Czech Republic entered into force on 22 December 2015. Its provisions will apply from 1 January 2016. The Treaty was signed on 25 September 2014. In accordance with the treaty, the following withholding taxes will apply: Dividends: 0% if the beneficial owner… – Continue reading

UK taxman warns expats that tax evasion penalties will get tougher in 2016

With a new year on the horizon it is often at this time when people start thinking about fulfilling a dream of moving abroad and making plans. Others may be thinking about moving back home. For people paying tax in the UK, the country’s tax man has come up with… – Continue reading

Is It the Real Thing? The IRS Makes $9+ Billion of Transfer Pricing Adjustments Against The Coca-Cola Company

On September 17, 2015, the IRS issued a statutory notice of deficiency to the Coca-Cola Company, increasing its federal income taxes for 2007-2009 by $3.3 billion, based primarily on transfer pricing adjustments exceeding $9 billion. On December 14, 2015, Coca-Cola petitioned the U.S. Tax Court to overturn the adjustments. This… – Continue reading

Developed countries erode BEPS Action Plan on Digital Economy

IT is ironic that what was almost at the centre of the BEPS project has ended up in not having a concrete agreement and with a vague promise of some review by the year 2020. One may recall that it was the big digital companies and their tax affairs that… – Continue reading

BOTSWANA, African tax haven?

About Botswana Botswana, a former British colony in Southern Africa, is one of the most prominent countries in Africa. The country has a strong economy,uses one of the most advanced banking systems in the continent, and maintains a stable tradition of representative democracy. After becoming independent in 1966, Botswana developed… – Continue reading

US Tax Issues: Ownership of Real Property Abroad

When purchasing a real property overseas, there are situations when it may prove advantageous or even necessary to do so through an offshore corporation, rather than owning the property individually. It is crucial to understand that this can also have significant US tax consequences for US persons. Fortunately, “checking the… – Continue reading

India’s Withholding Tax for Non-residents

The Indian government has become progressively more strict about what is considered income under tax law and who must file an income tax return. In particular, companies required to withhold taxes, and individuals or companies in receipt of income, have found themselves subject to increasingly stringent withholding rules. The topic… – Continue reading

Luxembourg – Main New 2016 Tax Measures At A Glance

IP regime  To comply with the OECD’s BEPS reports and more specifically its action plan n° 5 regarding harmful tax practices, the Luxembourg intellectual property (“IP“) regime under article 50bis of the Luxembourg income tax law (“ITL“) will be repealed as from 1 July 2016. As such, the Luxembourg 80%… – Continue reading

Brazil’s Superior Court of Justice issues decision exempting payments of services to Spain from withholding tax in Brazil

In the context of a series of recent developments on the tax treatment of cross border services payments from Brazil, the Superior Court of Justice (STJ) recently ruled that payments for services performed by a Spanish company without permanent establishment in Brazil are not subject to withholding income tax in… – Continue reading

Spain and Finland sign new treaty to avoid double taxation and to fight tax fraud

Given that the latest treaty was signed on 15 November 1967, the two countries felt it was appropriate to revise it in full. The new treaty, signed on Tuesday by the Spanish Ambassador to Finland, María Jesús Figa, and the Finnish Minister for Finance, Alexander Stubb, seeks to enable tax… – 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

Malta: The Tax Challenges Of The Digital Economy – Article 3

Main principles of Direct Taxation – Double Tax Treaties In our third article in a series of articles on the tax challenges of the digital economy, we shall be providing you hereunder with a brief overview of the principles of direct taxation, with a focus primarily on the taxation of… – Continue reading

Ireland regains its swagger in the tax arena

Something unusual is happening with the Irish corporation tax in 2015 — so unusual that Ireland’s top tax man felt obliged to write to the parliament to explain what is going on. But the explanation left a lot to be desired. According to government data, Ireland received 57.7 percent more… – Continue reading

Netherlands: European Commission Puts Netherlands On Notice Regarding Its Tax Treaty With Japan

The European Commission asked the Netherlands on 19 November to amend the limitation on benefits (LOB) provision in the existing Dutch-Japanese tax treaty. The LOB provision may be detrimental to Dutch companies held by residents of certain EU/EEA countries when they receive interest, royalties and dividends from Japan. They may… – Continue reading

Cyprus: Double Tax Treaty Between Cyprus And Swiss Confederation

On 15th October 2015, the Double Tax Treaty between the Republic of Cyprus and Swiss Confederation had entered into force (the “Treaty“). The said Treaty is based on the OECD Model Convention on the Avoidance of Double Taxation on Income and on Capital. Under the Treaty, there is no withholding… – Continue reading

Coca-Cola Fights $9.4 Billion Transfer Pricing Adjustment

Dec. 14 — The Coca-Cola Co. filed a petition in U.S. Tax Court challenging a proposed $9.4 billion income adjustment related to the company’s transfer pricing for tax years 2007-09 (Coca-Cola Co. v. Commissioner, T.C., petition filed, 12/14/15). If the adjustment is sustained, the company could face a tax bill… – Continue reading

Permanently support families, not corporate tax giveaways

Temporary lapses of judgment can be corrected. Permanent mistakes are harder to fix. Congress is poised to offer very costly permanent tax giveaways to powerful corporations. It is also considering renewing more modest tax credits that encourage work and support millions of low-wage workers and their children. This is an… – Continue reading

Nigeria: Pricing Of Intangible Property (“IP”) Rights In Nigeria – Why Commercial, Fiscal And Currency Control Interests Must Align

A review of Nigeria’s present fiscal and currency control regimes as they relate to commercial and industrial IP rights become imperative in order to give impetus to government’s efforts towards reviving and diversifying the country … Prior to the introduction of the Income Tax (Transfer pricing) Regulations on 2 August,… – Continue reading

Russian government approves draft double taxation agreement with Hong Kong

The draft agreement is intended to settle the issue of taxation of business profit, property revenues, sea and air transportation earnings, passive revenues and individual income MOSCOW, December 10. /TASS/. The Russian Government approved the draft intergovernmental agreement with Hong Kong on avoidance of double taxation and prevention of tax… – Continue reading

Does ‘BEPS’ address developing country issues?

In 2013, the 39th G8 summit in Lough Erne committed to reform the international tax system. The G8 Lough Erne Declaration stated that such reforms would benefit developing countries. The G20 declaration in St Petersburg 2013 also stated specifically that “Developing countries should be able to reap the benefits of… – 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

Malta: The Tax Challenges Of The Digital Economy – Article 2

Main principles of direct taxation – Domestic Tax Rules In our second article in a series of articles on the tax challenges of the digital economy, we shall be providing you hereunder with a brief overview of the principles of direct taxation, with a focus primarily on the taxation of… – Continue reading

Cyprus: Tax Incentives For Expatriate And High Net Worth Individuals Relocating To Cyprus (In Russian)

INTRODUCTION In the context of changes in the international system of taxation of the company in the choice of jurisdiction for the implementation of operational activities closely fit to the question of economic feasibility, to protect their interests. The strategic location of Cyprus, the presence of the country’s full membership… – Continue reading

Luxembourg: EC investigation of tax rulings, issued to US multinational

The European Commission today announced its decision to launch a “state aid” investigation into tax rulings granted by the tax authorities in Luxembourg to a company that is a member of a U.S.-based multinational taxpayer group. Background According to a February 2015 report, in 2008-2009, the group transferred its European… – Continue reading

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… – Continue reading

Change in UK Treatment of Dual-Resident Companies May Affect U.S. Tax Planning

On November 30, 2015, the UK tax authorities at HM Revenue and Customs (HMRC) reached an agreement with Jersey about the interpretation of the company residence tie-breaker provision of the Jersey-UK income tax treaty. After reviewing other income tax treaties that contain similar provisions, HMRC will now take the view… – Continue reading

Switzerland – Argentina: Tax Treaty Enters into Force

The new Income and Capital Tax Treaty between Switzerland and Argentina entered into force on 27 November 2015. The new treaty generally applies from 1 January 2015 for withholding taxes and from 1 January 2016 for other taxes and article 25 (Exchange of information). The new agreement will replace the… – Continue reading

CBDT defines ‘charitable purpose’ for benefits under I-T Act

NEW DELHI: With a view to weed out commercial activities under the garb of charity, the tax department has said any general public service that involves trade, commerce or business for a consideration will not be treated as Charity under the Income Tax act. Issuing ‘Explanatory Notes to the Provisions… – Continue reading

East Africa: New Reporting Code for Mncs Could Save Africa $35b

East African countries expect to collect more revenue under a new code drawn, by the world’s richest economies to stop foreign multinationals from dodging taxes in host countries. The new code — Base Erosion and Profit Shifting (BEPS) — adopted by G20 at its meeting in Turkey two weeks ago,… – Continue reading

Overview of transfer pricing in Hong Kong and China

Introduction Transfer pricing is a term used to define the price charged between associated enterprises for the transfer of goods, services and intangible property. Increasing cross-border activities have made transfer pricing a real issue as enterprises seek to use transfer pricing as a tool for tax avoidance. Consequently, HK has… – Continue reading

ITALY: REVISED STANDARD; FOREIGN ENTITY NOT REQUIRED TO FILE RETURN

The Italian Supreme Court overturned decisions of lower courts to conclude that two renowned Italian fashion designers were not guilty of tax evasion. The designers, however, could still be subject to civil penalties of about €343.3 million. BACKGROUND The designers had set up Luxembourg companies, to which they had transferred… – Continue reading

Africa: Designing Flexible Fiscal Regimes to Protect Revenues

Protecting the tax base of extractive industries, moving toward more responsive and flexible fiscal regimes, and improving international cooperation have become priorities in the Andean region, as commodity prices and revenues from extractive industries continue to decline, participants at a recent IMF conference heard. The three-day conference, Determining the Tax… – Continue reading

The English version of the DTA as concluded between Malta and the Kingdom of The Netherlands in respect of Curaçao has been published

Earlier we already reported that Malta and Curaçao had signed a DTA. When we wrote our earlier article we had not yet been able to locate the text of the DTA. Now however, the English version of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal… – Continue reading