This article deals with the manner in which Canada has complicated, and rendered controversial, what in most other countries is straightforward — the deductibility of business related interest expense. The reasons to write about it are threefold: the almost-concurrent issuance of the Canada Revenue Agency’s administrative views on the matter… – Continue reading
Following the trends of countries such as Spain and Mexico, among others, Brazil has begun to amend and introduce new legislation to reflect BEPS recommendations in its internal legislation. Provisional Measure (PM) 685 was issued this month, determining a disclosure procedure as a result of BEPS Action Plan 12 (Mandatory… – Continue reading
HM Revenue and Customs (HMRC) has published details of proposals to strengthen sanctions against serial promoters and users of tax avoidance schemes, and introduce specific penalties where the General Anti-Abuse Rule (GAAR) applies. The plans are set out in a new HMRC consultation, which explains how each of the measures… – Continue reading
India and Mauritius are set to limit the benefits of their double tax avoidance agreement (DTAA) to only genuine businesses bringing foreign direct investment to India by inserting a new clause in the treaty straight from New Delhi’s yet to be implemented General Anti-Avoidance Rules (GAAR). The revised treaty, however,… – Continue reading
DEVELOPED countries throughout the world are stepping up efforts to curb base erosion and profit shifting (BEPS), a scheme used by multinational companies to avoid paying taxes estimated as high as $200 billion globally, especially when doing business across different jurisdictions. At the 2015 Asia Pacific Tax Symposium hosted last… – Continue reading
MUMBAI: Mauritius, which serves as the gateway to Dalal Street for most foreigners, will be back in news soon. India and the tax haven are believed to be close to finalising a revised tax treaty that would lower tax on interest income of overseas investors betting on Indian debt papers…. – Continue reading
The UK’s chancellor of the exchequer has said serial users of tax avoidance schemes will be ‘named and shamed’ as he promised to introduce further measures to tackle evasion, avoidance and aggressive tax planning in his Summer Budget. This move is part of a plethora of changes which chancellor George… – Continue reading
With a new government at India’s center and positive macroeconomic fundamentals working in its favor, the private equity industry is expected to invest more actively into India over the short to medium term. In the past year, inflation has steadily tapered, the fiscal deficit has been reduced, domestic demand has… – Continue reading
Mauritius and India have reached consensus in the conclusion of the Double Taxation Avoidance Agreement (DTAA) which has been long awaited between the two countries following fruitful discussions yesterday between joint working groups of Mauritius and India, reports All Africa. The positive conclusion of the negotiations will open a new… – Continue reading
The Full Court of the Federal Court has recently removed previous doubts concerning whether Part IVA could be applied to a scheme involving the formation of a tax consolidated group. In the case that was before the Full Court, a company (Subco) joined a tax consolidated group and as a… – Continue reading
The Irish Revenue has again reminded taxpayers that the Tax Avoidance Settlement Opportunity deadline is June 30. Revenue said over EUR33m (USD36.9m) has either been paid, or commitments to pay have been received, in respect of more than 90 cases. The settlement opportunity was contained in the 2014 Finance Act…. – Continue reading
The General Anti-Avoidance Rules (GAAR) are of no use to India, and may work against the country by hurting foreign inflows is the word coming in from Vishnu Lutchmeenaraidoo, the Finance Minister of Mauritius, reports Money Control. He told CNBC-TV18 that lower taxation is the need of the hour for… – Continue reading
Lutchmeenaraidoo, who met foreign minister Sushma Swaraj, played down the issue of misuse of the India- Mauritius Double Taxation Avoidance Convention (DTAC). Mauritius will make it difficult for shell companies using a liberal and controversial bilateral tax treaty with New Delhi to evade taxes in India, said the island nation’s… – Continue reading
Part I of this series of articles reviewed some of the basic tax requirements for using trusts to split income, Part II discussed a number of tax planning opportunities that can be accessible through the use of trusts, and Part III reviewed traditional testamentary trust income splitting planning and the… – Continue reading
The Argentine Supreme Court ruling on Toepfer International, a commodity exporting firm, has finally been published, tw o months after the decision, providing lessons for BEPS action 10 (cross border commodity transactions). This case, AFIP v Alfred C Toepfer Internacional, belongs to the first group of three controversies, related to… – Continue reading
FOCUS: Now that the first devolved Scottish taxes have come into force, the rest of the UK will be watching with interest to see how new tax authority Revenue Scotland manages and deals with avoidance risks. Much of this interest will be on how the new Scottish General Anti-Avoidance Rule… – Continue reading
NEW DELHI: Mauritius has regained the position as top source of foreign direct investment (FDI) into India by pushing Singapore to the second slot in 2014-15. Mauritius accounted for about 29 per cent of the country’s total FDI inflows last fiscal. In 2013-14, Singapore had replaced Mauritius as the top… – Continue reading
Tax analysis: Catherine Richardson, associate at Cadwalader, Wickersham & Taft LLP, examines the aspects of the Finance Act 2015 (FA 2015) which concern targeting avoidance using carried-forward losses. What is the target for the new rule countering tax avoidance involving carried-forward losses? Where losses for tax purposes arise within a… – Continue reading
The Standing Committee’s recommendation comes after the finance minister announced in the Budget that DTC would not be pursued as most provisions of the code have been incorporated in the existing Act. Even as finance minister Arun Jaitley scrapped the proposed direct taxes code (DTC) in Budget 2015-16, the standing… – Continue reading
On 21 April 2015, the Danish Parliament adopted a bill, which sets out to deal with certain potential abuses recently encountered by the tax authorities as well as the Danish enactment of the general international anti-abuse initiatives currently considered at EU and OECD level. The new Danish GAAR will take… – Continue reading
Big hue and cry from the rich and the powerful against modification of tax return forms has again pushed the govt on back foot John Maynard Keynes famously said the avoidance of tax is the only intellectual pursuit that carries a reward. Historically, tax ‘avoidance’ is understood as an intellectual… – Continue reading
While the government has stood its ground on the applicability of minimum alternate tax (MAT), saying that foreign institutional investors (FPIs) ought to consider judicial appeal for the retrospective tax demand, increasing number of foreign brokerages are red flagging the issue as a risk for the Indian equity market. Even… – Continue reading
MUMBAI/NEW DELHI: Markets fell 500 points on Monday. Punters’ worries about current tax disputes between Modi Sarkar and foreign portfolio investors (FPIs) being one reason why the Sensex dived. There has been a battle of phrases between FPIs and North Block. And it looks as if this will be a… – Continue reading
Get three tax advisers in the same room and they will come up with at least four definitions of tax avoidance: put in a couple of members of the public and the total will double. There are a few purists who dispute that tax avoidance exists – either something is… – Continue reading
New Delhi: With overseas investors pumping in over Rs 2,000 crore in the Indian capital markets so far this month, total foreign fund inflows have crossed the Rs 81,000 crore mark since the beginning of the year. Analysts expect the inflows to accelerate further going ahead, helped by clearance of… – Continue reading
1. NON-TAX ISSUES 1.1 Domestic law 1.1.1 Briefly describe your legal system and its origins Canada is a federal state, with legislative powers divided between the federal and provincial governments. The federal government has legislative jurisdiction over issues concerning Canada as a whole, including foreign affairs, international trade, banking, telecommunications,… – Continue reading
New Delhi: With overseas investors pumping in over Rs 2,000 crore in the Indian capital markets so far this month, total foreign fund inflows have crossed the Rs 81,000 crore mark since the beginning of the year. Analysts expect the inflows to accelerate further going ahead, helped by clearance of… – Continue reading
The key is to arrive at a Goldilocks mean — rolling out tax-friendly policies while being firm with incorrigible offenders A phrase first used by Prime Minister Narendra Modi while addressing a group of businessmen in the run-up to the elections last year has now come back to haunt his… – Continue reading
Michael Wilson rants that a long-cherished distinction between avoidance (OK) and evasion (not OK) is being eroded by political doublespeak. And that the demise of the 1936 ‘Duke of Westminster’ legal principle has gone sadly unnoticed. Where will it end? You hardly need telling that there’s an election on the… – Continue reading
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
The Abbott government is pushing ahead with a Labor budget measure to close a loophole that will stop giving offshore-based multinationals “systemic tax advantages” that are not available to Australian-owned companies. The loopholes in current law mean that multinationals can, with the use of subsidiaries, structure their affairs to avoid… – Continue reading
THE LAW SOCIETY has “denounced” HM Revenue & Customs’ plans to curb tax avoidance activity as “premature”. HMRC and the government are proposing to introduce new penalties for serial users of tax avoidance schemes and those whose planning is counteracted by the general anti-abuse rule (GAAR). In particular, the society… – Continue reading
Proposals for tougher penalties against serial users of disallowed tax avoidance schemes are premature and could threaten fundamental rights such as that of appeal, the Law Society has said. In a hard-hitting response to a consultation on strengthening sanctions for tax avoidance, the Society’s tax law committee says it has… – Continue reading
Rules are tangled and dispute resolution is excruciatingly slow. The government’s trying but it’s a long haul As Asia’s third-largest economy, India is a major investment destination. However, in recent years, the unpredictable tax regime has has been a major stumbling block to its potential. According to a recent World… – Continue reading
The UK’s HM Revenue & Customs (HMRC) is increasingly unwilling to believe that any error in a tax return can be the result of an ‘innocent error’, said Fiona Fernie, a tax investigations expert at Pinsent Masons, the law firm behind Out-law.com. New powers introduced in recent years to allow… – Continue reading
Accountancy firms predict that a new offence of aiding and abetting tax evasion and aggressive tax avoidance will be announced in next week’s Budget It is expected that George Osborne will outline proposals to introduce special measures, aimed at professional service firms, to deter serial avoiders and scheme promoters. The… – Continue reading
Port Louis: India offered US dollar 500 million concessional line of credit to Mauritius for key infrastructure projects even as the two countries agreed to continue negotiations on hammering out a revised double tax treaty to prevent its “abuse”. The two countries also signed five agreements, including one on developing… – Continue reading
On December 2, 2014, the State Administration of Taxation (SAT), China’s highest tax authority, issued the Administrative Measures for the General Anti-Avoidance Rules (Trial) (GAAR), which went into effect on February 1, 2015. Prior to this legislation, China had no specific GAAR, only a few general anti-avoidance principles in various… – Continue reading
Politicians love to promise “tax breaks” for married couples, savers and small businesses, but what if they instead said “we want to promote tax avoidance, starting with married couples, savers and small businesses?” It’s the same thing, but it doesn’t sound as good. Tax avoidance can be good or bad…. – Continue reading
THIRUVANANTHAPURAM, MARCH 4: The taxman has taken a headlong plunge into an alphabetic soup to comply/align with emerging tax and jurisdictional requirements, domestic and foreign, of which is GST is only one. Advance Pricing Agreements (APAs); General Anti-Avoidance Rules (GAAR); BEPS (Base Erosion and Profit Sharing); and POEM (Place… – Continue reading
Government proposes to come out with a modified General Anti-Avoidance Rules by incorporating provisions of the OECD’s BEPS project so as to effectively deal with the problem of tax avoidance by MNCs. The BEPS initiative aims to ensure that taxes are paid where profits are made. Multinational companies use a… – Continue reading
After several rounds of revisions and consultations in the past few years, the State Administration of Taxation (“SAT”) has recently promulgated the Bulletin on Several Issues concerning the Enterprise Income Tax (“EIT”) on Indirect Asset Transfer by Non-Resident Enterprises (“Bulletin 7”)[1]. Tax matters occurred but have not been settled before… – Continue reading
As recommended by Tax Administration Reforms Commission (TARC) under Parthasarathi Shome, for taxation, the appellate functions must be housed separately from the field functions, in order to have fair and judicious orders passed. Indian Revenue should be divided into two distinct sets—the operational side and the technical/adjudication side. The quasi-judicial… – Continue reading
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
KPMG in India through its survey, has tried to understand the expectations of India Inc. on various parameters such as policy reforms, clarity on indirect transfer tax provisions, applicability of MAT on foreign companies, amendment in the tax regime for REITs/ InvITs, deductions allowed to individuals, etc. Over 200 senior… – Continue reading
The differentiation between tax avoidance, tax evasion and the moral duty to pay tax for the betterment of society has been intentionally screwed by politicians and bureaucrats. This is nothing new. I wrote an couple of articles several years ago questioning the terminology of ‘morally repugnant’ tax avoidance when it… – Continue reading
The economic downturn across the world and rising public debt seems to have led various governments, globally, to focus on curbing erosion of the tax base by shifting profits to overseas jurisdictions. Several revenue authorities, globally, were of the view that companies have structured their intra-group contractual arrangements in a… – Continue reading
WHEN the GAAR rule was launched it was one of the government’s first and biggest moves in its battle against tax avoidance, but since its introduction in 2013 the body tasked with enforcing the rule has been distinctly quiet despite claims that companies and their accountants are perpetrating tax avoidance… – Continue reading
CHINA China Releases GAAR Administrative Measures Courtesy of Mr Glen Wei, an attorney at law, certified tax adviser, and CPA based in China.China’s State Administration of Taxation (SAT) on December 12 issued Decree 32 (dated December 2) introducing administrative measures for applying the domestic general anti-avoidance rule to special tax… – Continue reading
NEW DELHI: The government plans to defer implementation of the General Anti Avoidance Rules (GAAR) until the time the tax administration is able to rebuild trust with companies on the controversial issue. “Given the low level of confidence in tax authorities, investors fear that the provisions may result in harassment…. – Continue reading
