Category: Transfer pricing

The Finnish Supreme Administrative Court confirms that the business model chosen by parties must be respected in transfer pricing context

The Finnish Supreme Administrative Court published on 13 September 2017 precedent 2017:145 that further clarifies the scope of application of the Finnish transfer pricing adjustment provision (Act on Assessment Procedure (“AAP”) Section 31). In its previous landmark precedent KHO 2014:119 the Supreme Administrative Court stated that the so-called re-characterization of...

Malawi Releases 2018 Budget

Malawi’s recent budget included numerous tax changes and announced updates to the country’s transfer pricing rules. On the indirect tax front, the Budget, released in mid-August, introduced a 10 percent excise tax on television subscriptions and introduced a value added-tax exemption for dairy products, animal or vegetable fats and oils,...

SARS to crack down on multinational companies and subsidiaries’ tax returns

MEDIUM and large businesses with multinational ties will soon have to start supplying the South African Revenue Service (SARS) with more detailed reports of their relationships and transactions with connected entities residing in other countries. SARS has beefed up its Transfer Pricing Division and is now actively involved in the...

Court Rules In Favor Of Taxpayer In Canadian TP Audit Case

The Federal Court of Canada has ruled that the Canadian Revenue Agency may not conduct further in-person interviews with representatives from a multinational corporation concerning its transfer pricing affairs, having already discussed earlier tax years. Cameco Corporation declined to produce approximately 25 personnel for oral interviews in relation to an...

ATO’s finance ruling puts companies the ‘red zone’

The Australian Tax Office is preparing to take several companies to court over abuse of thin capitalisation rules and will start a wave of audits of large multinationals with complex cross-border loans, as it continues to take a hardline approach in the wake of its win against Chevron. The ATO...

Exchange of information about multinational firms will be easier

Slovakia is the first V4 country to sign the agreement on country-by-country reporting. Slovakia’s Financial Administration has obtained easier access to the information of US multinational companies. The representatives of Slovakia and the US signed a bilateral agreement on country-by-country (CbC) reporting on June 21, the TASR newswire reported. The...

Draft modifications to tax provisions applicable to foreign companies with poem in India

Introduction Finance Act 2016 replaced the test for corporate residency of foreign companies from “control and management being situated wholly in India” to “place of effective management (POEM) in India”. POEM has been defined to mean a place where key management and commercial decisions that are necessary for conduct of...

Cyprus: Saying Goodbye To Back To Back Loans And Welcoming Transfer Pricing Regulations

A. Introduction In February 2017 Cyprus Tax Department has announced that the current practice regarding profit margins between related Company loans will be abolished by the 30th June 2017. The announcement indicates that the minimum acceptable margins will apply up to 30th June 2017, and as from 1st July 2017...

Republicans debating remedies for corporate tax avoidance

President Donald Trump and Republican leaders in Congress will soon confront a complex challenge for tax reform: how to limit U.S. corporate tax avoidance schemes that take advantage of low tax rates in foreign countries. Congressional and administration staff have begun to examine options to address profit-shifting schemes that include...

Tax avoidance schemes on the rise – BURS

The Botswana Unified Revenue Service (BURS) says tax avoidance schemes such as transfer pricing, base erosion and profit shifting appear to be on the rise in the country. Transfer pricing is regarded as a tax avoidance scheme in which multinational corporations shift profits to low tax jurisdictions and avoid taxes...

Voices UN seeks a broader transfer pricing role

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...

Russia introduces draft law on country-by-country reporting requirements: implications for multinationals

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...

Transfer Pricing Investigation in China: Understanding the Latest Adjustments

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...

OECD’s BEPS 13 implemented in Croatia

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...

Cyprus: Abolition Of Profit Margins On Intra Group Loans – Upcoming Transfer Pricing Legislation – Transfer Pricing Studies Requirement

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...

China’s New Transfer Pricing Rules Keep Arm’s-Length Approach

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...

New Chinese tax rule to take aim at multinationals’ profit shifting

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...

[News Focus] Multinational firms using royalties to avoid tax: expert

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....

Focus BEPS Work on Practical Results, Not Participation: Stack

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...

Recourse to MAP and bilateral APA rollback available under revised tax treaty: PwC

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...

Switzerland to Exempt Withholding Taxes for Some Group Financing

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...

Tax executives anticipate Trump reforms

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...