Four of the most significant transnational organizations are working together to eliminate transfer pricing schemes and abuses. The four organizations—the International Monetary Fund, the Organization for Economic Co-operation and Development, the United Nations and the World Bank Group—are seeking to achieve global cooperation in tax matters. Transfer pricing is one… – Continue reading
A newly published federal draft law introduces Russia to a three-tiered approach to transfer pricing documentation and brings Russian regulations in this area in line with the OECD minimum standards under Action 13 of the Base Erosion and Profit Shifting (BEPS) Action Plan. The draft law, published by the Ministry… – Continue reading
New transfer pricing regulations issued by the State Administration of Taxation (SAT), the Measures for Administration of Special Tax Investigation Adjustment and Mutual Agreement Procedures (“the Measures”), came into effect on May 1, 2017. The Measures consolidate China’s pre-existing regulations regarding self-adjustment and outbound payments with the new transfer pricing… – Continue reading
It often occurs that a multinational company employs a foreign manager based on an employment contract or secondment. In the first case, the Hungarian company is considered as the legal and economic employer, therefore the salary is payed directly by it. In the second case, the employee maintains the employment… – Continue reading
East Africa tax experts have raised concerns over increasing cases of tax evasion and fraud by some tax payers in the region which is crippling the economies. They made the remarks on Wednesday during the 6th East Africa regional meeting on tax investigation and enforcement in the Rwandan Capital Kigali…. – Continue reading
Deloitte survey highlights tax predictability as key to driving investment growth in Asia Pacific New Zealand well placed against backdrop of increased uncertainty in Asia Pacific’s tax landscape New Zealand’s tax policies are seen as relatively straight forward, consistent and predictable compared to other countries in the region, according to… – Continue reading
The United Nations Committee of Experts on International Cooperation in Tax Matters has released, in digital format, the second edition of the UN Practical Manual on Transfer Pricing for Developing Countries. The 2017 edition of the TP Manual was launched at the UN Economic and Social Council Special Meeting on… – Continue reading
At the end of March 2017, the Ministry of Finance called for public discussion on a draft bill (the “Bill”) amending the Bulgarian Tax and Social Insurance Procedural Code (the “Code”). The Bill seeks to improve administrative cooperation in the Bulgarian tax sector. The first set of amendments relates to… – Continue reading
The German Ministry of Finance has published a progress report on its 10-point plan to combat tax evasion, which was first announced in the wake of last year’s Panama Papers leak. The plan, launched on April 12, 2016, outlines the measures that Germany wants to put in place at domestic… – Continue reading
A parliamentary commission will consider the introduction of a new legal obligation for tax advisers to disclose information about advice on tax mitigation to the Swedish Tax Agency, Skatteverket. Under the proposed rules, tax attorneys would be required to provide details of which clients have received advice on tax reduction… – Continue reading
With a total of 15 action points, the OECD’s Base Erosion and Profit Shifting (BEPS) project aims at fighting the artificial shift of profits from jurisdictions with high taxes to tax havens, often as a part of an entirely legal strategy used by MNEs. The BEPS Action 13 (Transfer Pricing… – Continue reading
As a rule and according to Article 33 of the Cyprus Income Tax Law, which introduces the arm’s length principle (using wording similar to that of article 9 of the OECD Model Tax Convention), all transactions between companies, including loan agreements/transactions by Cyprus companies, must be undertaken at arm’s length… – Continue reading
China’s new transfer pricing rules, effective May 1, endorse the continued use of the arm’s-length standard—the internationally agreed bedrock for pricing transactions within multinational enterprises. The new guidance, Bulletin 6, augurs well for resolving tax disputes between China’s State Administration of Taxation and the U.S. Internal Revenue Service over the… – Continue reading
Move shows that Beijing is joining the global move against diversion of profits to low-tax jurisdictions Beijing on Saturday posted a new rule on scenarios that could trigger tax-avoidance investigations of multinationals, under¬lining its commitment to a global move to combat profit shifting. The new rule, posted on the website… – Continue reading
Multinational firms in South Korea tend to transfer much higher proportions of their revenues to their headquarters overseas in dividends and royalties than their Korean counterparts, an expert said Monday. Payments in royalties and dividends are categorized as expenses, which in turn lowers their reported earnings to the Korean authorities…. – Continue reading
The OECD effort to rebuild the global tax system should focus on practical work that benefits the international tax community rather than trying to get as many countries as possible around the table, a former Treasury official said. The OECD’s so-called inclusive framework for implementing the four minimum standards of… – Continue reading
Part 2: Transfer Pricing documentation requirements From 1 April 2017, BEPS action 13 guidelines on transfer pricing (TP) documentation will be effective in Sweden. Action 13 is an effort to make MNEs global financial situation more transparent. It is a three-tiered based approach including a master file, local files and… – Continue reading
Online giant wins transfer pricing case against US Internal Revenue Service Amazon. com has won a tax dispute with the US Internal Revenue Service (IRS), involving more than $1.5 billion (€1.39 billion), in relation to the transactions of a Luxembourg unit more than a decade ago. Judge Albert Lauber of… – Continue reading
MUMBAI: The recent changes in the India and South Korea Agreement for Avoidance of Double Taxation provides recourse to taxpayers of both countries to apply for Mutual Agreement Procedure (MAP) in respect of transfer pricing disputes, and also to apply for bilateral Advance Pricing Agreements (APA) for APA period beginning… – Continue reading
The Swiss government plans to bolster group financing activities by amending its withholding tax ordinance to exempt interest payments for certain intra-group loans. The goal of the amendment is to encourage Swiss-based multinational companies to pursue targeted financing activities in Switzerland rather than abroad, according to a March 10 news… – Continue reading
Tax reform is widely expected under the Trump administration by the corporate tax executives polled by BDO USA in a new survey. BDO’s 2017 Tax Outlook Survey polled 100 tax executives at public companies across the U.S., and found that 100 percent of the surveyed tax executives believe tax reform… – Continue reading
Luxembourg should seek to widen the tax base while ensuring that its corporate tax regime continues to meet international best standards, says the International Monetary Fund. It said that the country could improve its reputation by “promptly transposing” the EU’s Anti-Tax Avoidance Directive into national law and continuing to implement… – Continue reading
On October 1, 2016, the Indiana Office of Fiscal and Management Analysis of the Indiana Legislative Services Agency released a Combined-Reporting Study and a Transfer Pricing Study. These studies, which address corporate income tax issues, were required by legislation passed in 2016. The Combined-Reporting Study discusses the reduction of state… – Continue reading
South Korea’s tax authorities have been investigating the local importer of Toyota and luxury Lexus vehicles over suspected tax evasions since late 2016, industry sources said Friday. In November, the Seoul office of the National Tax Service (NTS) launched a tax audit into Toyota Korea over suspicions that it paid… – Continue reading
The new Residence Nil Rate Band will allow people to pass on property to their descendants tax free. But some people need to take action now or risk missing out. In April, a major change to inheritance tax (IHT) law comes into effect with the launch of the Residence Nil… – Continue reading
THE ORGANISATION for Economic Cooperation and Development (OECD) initiated the base erosion and profit shifting (BEPS) project in 2013 to address perceived gaps in international tax rules causing a loss of revenues for governments of about US$100 billion to $240 billion (Bt3.5 trillion to Bt8.4 trillion) annually. The OECD’s BEPS… – Continue reading
The Netherlands is slowly but surely steering away from facilitating the use of its corporate income tax system by companies that are set up merely to obtain tax benefits. These companies, which often do not actually carry out activities in the Netherlands, have contributed to the perception among policy makers… – Continue reading
On 22 December 2016 the Luxembourg Parliament passed article 56bis of the Luxembourg Income Tax Law (LITL). This provision gives taxpayers and tax authorities more guidance on how to apply the arm’s-length principle. The new article can be seen as a transposition of OECD BEPS reports (actions 8-9-10) released in… – Continue reading
Transfer pricing—the price charged for intercompany transactions between entities in different tax jurisdictions—can be used to shift funds within a multinational corporation (MNC), and serves as an effective means to manage a firm’s finances. Transfer pricing—the price charged for intercompany transactions between entities in different tax jurisdictions—can be used to… – Continue reading
The CRA has the power to make a transfer pricing adjustment to any amount for a taxation year under s. 247(2) in respect of a non-arm’s length cross-border transaction. A taxpayer is also liable to a 10% penalty under s. 247(3), which penalty is determined with reference to the taxpayer’s… – Continue reading
We are all familiar with the use of offshore intellectual property holding companies to capitalize on international tax gradients. These companies are designed to take advantage of strategic local tax rules to reduce tax burdens on royalty streams generated from licensing. Because of these favorable tax treatments, countries like Luxembourg… – Continue reading
Irish Finance Minister Michael Noonan has criticized the EU’s proposals for a common consolidated corporate tax base (CCCTB) and public country-by-country (CbC) reporting as “against the BEPS consensus.” In a speech to an event on corporation tax, Noonan said that the consensus over the OECD’s BEPS proposals must hold and… – Continue reading
On February 16, 2017, the Presidium of the Supreme Court of the Russian Federation approved the Review of Court Practice in the Consideration of Cases Involving the Application of Certain Provisions of Section V.1 and Article 269 of the Tax Code of the Russian Federation (the “Review”). There is no… – Continue reading
The EU has signalled plans to ramp up its work to tackle harmful tax practices internationally, with the Council working group that oversees implementation of the EU’s code of conduct on business taxation finalising a list of jurisdictions that are considered non-cooperative in tax matters to be published shortly. The… – Continue reading
Selection of Foreign Company as a tested party – practical considerations Introduction Transfer pricing regulations adopted by India are based on the arm’s length principle which revolves around the concept that the price or margin determined in a controlled transaction involving two Associated Enterprises (AE) should be commensurate with an… – Continue reading
The Government has introduced the Diverted Profits Tax Bill 2017 and the 35 page Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 into Parliament to implement the Diverted Profits Tax (DPT), as one of its first Parliamentary items of business in 2017, indicating the priority attached to this measure…. – Continue reading
Italy’s government intends to use value-added tax (VAT) as the fundamental lever to fight evasion estimated at €40 billion annually, double the average of other European Union countries. The measures being studied (which will not concern an increase in VAT rates, Economy Minister Pier Carlo Padoan has assured) will also… – Continue reading
WITH THE PROPOSED transfer-pricing law now under review by the Council of State, the landscape for transfer pricing is expected to undergo a major facelift once the law is enacted. One significant change would be the requirement for taxpayers to disclose their transfer-pricing information when they file their year-end tax… – Continue reading
In a move that will facilitate ease of business, domestic transfer pricing provisions will apply only if one of the parties to a deal is availing of tax benefits. Traditionally, transfer pricing applied to international transactions entered into by a company in India with related parties, such as its foreign… – Continue reading
The OECD made its end-November 2016 deadline to release the text of the multilateral treaty to give effect to the BEPS Actions which involve changes to tax treaties, see here. The 49 page treaty text, which is commonly referred to as the multilateral instrument or MLI, and 85 page explanatory… – Continue reading
Among other things, Union Budget 2017 will be remembered for two firsts – the introduction of secondary adjustment and thin capitalisation rules. Both are transfer pricing provisions which will have a far-reaching impact on corporates. Secondary Adjustment Since the concept of secondary adjustment is introduced for the first time in… – Continue reading
A key outcome of the Organisation for Economic Development and Co-operation’s (OECD’s) final Report on Action Plan 13 (Transfer Pricing Documentation and Country-by-Country reporting) is the commitment of OECD and G20 countries to introduce Country-by-Country (CbC) reporting along with the associated master file and local file documentation for large Multinational… – Continue reading
CROSS-border taxation in current times is poised for significant changes. Tax is key in foreign ventures. Absent tax strategies and foreign tax leakages would erode margins and return of investment. Although international tax-efficient strategies to mitigate capital gains tax (CGT), withholding tax (WHT) and the risk of creating a taxable… – Continue reading
What GAO Found In 2015, the Organization for Economic Co-Operation and Development (OECD) issued revised guidelines, including 15 actions to help reduce base erosion and profit shifting (BEPS) of multinational enterprises (MNEs). One action focuses on transfer pricing guidance with the intent of aligning MNE profits with the location of… – Continue reading
The OECD is seeking feedback on a draft toolkit designed to assist developing countries in work on transfer pricing, which specifically addresses the ways developing countries can overcome a lack of data on ‘comparables’, or the market prices for goods and services transferred between members of multinational corporations The toolkit… – Continue reading
Several countries in Latin America have established new transfer pricing documentation obligations associated with the OECD’s Base Erosion and Profit Shifting (BEPS) initiative. In this new year, Mexico, Colombia and Peru have included in their local legislation new documentation requirements that follow a three-tiered approach: country-by-country (CbC) report, master file,… – Continue reading
The new administration and Congress have signaled their intention to undertake fundamental tax reform in the coming months. Lawmakers will need to weigh the costs and benefits of numerous policy trade-offs as they undertake this effort. Among the most visible debates already underway concerns “border adjustability,” or moving the U.S…. – Continue reading
Country’s reputation being exploited for ‘snow washing’ global money trails, experts warn Far from the palm-fringed beaches of the usual offshore tax havens, Canada has quietly become a go-to destination for international tax cheats eager to exploit the country’s twin benefits of a sterling reputation and rules that allow private… – Continue reading
A new legislative approach of the German tax authorities leaked last December 19 will have a significant impact on the tax deductibility of royalties owed to related persons being subject to a preferential back end tax regime for IP not being in compliance with the Organisation for Economic Co-operation and… – Continue reading
On December 21, 2016, the new Canada–Israel tax treaty entered into force. The new treaty was signed on September 21, 2016 in New York, and replaces the existing treaty that dates from 1975. For most purposes, the provisions of the new treaty took effect as of January 1, 2017. Overall,… – Continue reading
