On July 22 2015, National Treasury released for comment the Draft Taxation Laws Amendment Bill, 2015 (DTLAB 2015), the Draft Tax Administration Laws Amendment Bill, 2015 (DTALAB 2015), and related Explanatory Memoranda. Section 9D currently provides for diversionary income rules which seek to impute into the income of South African… – Continue reading
The U.K. and the U.S. governments will adopt different approaches to implementing the OECD’s final package of measures to tackle base erosion and profit shifting, panelists at a London forum said. The U.K. government considers an inclusive, multilateral instrument to upgrade bilateral tax treatments as the “best way” for countries… – Continue reading
MUMBAI: India’s forthcoming budget may draw from some of the recommendations, especially in the realm of transfer pricing, contained in the final package of ‘Base Erosion and Profit Shifting’ (BEPS) measures, rolled out in October. Certain anti-abuse measures, such as thin capitalization, which for tax purposes disallows interest payments beyond… – Continue reading
Nigeria’s tax authority—the Federal Inland Revenue Service—has incorporated into its tax audit procedures certain of the recommendations included in the OECD’s base erosion and profit shifting (BEPS) project. For instance, the tax authority is scrutinizing transactions between Nigerian subsidiaries and their foreign related parties, especially those related parties located in… – Continue reading
2nd Symposium of CR for transfer pricing The 2nd Symposium Transfer Pricing organized by EY Greece, exactly one year after the successful organization of the 1st Symposium was intended as the developments in transfer pricing in Greece and international tax developments, focusing on the recently finalized OECD Actions tackling Erosion… – Continue reading
Moscow. November 10. The Finance Ministry has prepared proposals aimed to strengthen Amnesty of capital, which is now actually fails, reports the newspaper “Kommersant”. The law on the voluntary Declaration by individuals of assets and accounts, is known as the law on the legalization or Amnesty of capital, earned from… – Continue reading
The Belgian Federal Parliament recently adopted a new controlled foreign corporation provision, known as the “Cayman tax”, that allows Belgian tax authorities to look through low-taxed offshore structures to directly tax their Belgian resident founders and third-party beneficiaries on the structure’s income. Belgium’s introduction of the Cayman tax is in… – Continue reading
South African Tax Legislation: Proposed Amendments in an International Tax Context[1] This article sets out a brief summary of some of the proposed amendments introduced by recent South African draft Tax Bills. The article focuses on amendments in the context of international taxation. The draft Taxation Laws Amendment Bill, 2015… – Continue reading
Taxation of Profits of Controlled Foreign Companies (CFC): Double Taxation Conventions must prevail over domestic rules The Superior Court of Justice (STJ) has recently decided a case involving the applicability of Brazilian CFC rules in cases in which the controlled company is located in a country with which Brazil has… – Continue reading
According to recent estimates, Chinese investors represented the largest group of foreign investors in U.S. real estate in the second quarter of 2015 with $1.9 billion in acquisitions. In the last 12 months, Chinese investors acquired $5.9 billion in commercial U.S. real estate, and Asia was second overall to Europe… – Continue reading
“If we do not achieve growth, revenue will not increase. If revenue does not increase, expenditure cannot be expanded.” It is with this statement that the Minister of Finance set the tone of the Medium Term Budget Policy Statement (MTBPS) which he presented on Wednesday against a fiscal backdrop of… – Continue reading
On 17 September, 2015, China State Administration of Taxation (SAT) released the Discussion Draft for the Implementation Measures for Special Tax Adjustments (“Discussion Draft”), as a complete revamp to the existing trial version of the Implementation Measures, i.e., Circular 2. Circular 2 has been serving as a backbone transfer pricing… – Continue reading
The Swiss Government has tasked the Finance Ministry with responding to the OECD’s recommendations on base erosion and profit shifting. Welcoming the OECD’s proposals, the Council said: “In general, the project outcomes will allow for [the] better coordination of international tax law rules and make it possible to close the… – Continue reading
On October 5, 2015, the OECD released its final reports relating to the OECD/G20 base erosion and profit shifting (BEPS) project (the Final Reports). The BEPS project began in 2013 and has received unprecedented attention from governments and the private sector. The Final Reports outline the OECD’s recommendations and the… – Continue reading
The location of a holding company is a significant consideration in any international corporate structure. Choice of jurisdiction for a group holding company (‘Holdco’) is relevant both from the point of view of tax optimisation (maximising withholding tax free dividend, interest and royalty flow up through the group and minimising… – Continue reading
For many years international tax planning for Russian inbound and outbound investments, and wealth planning for Russian resident individuals, was rather straightforward. That was primarily due to relatively simple domestic tax rules and a degree of inexperience amongst the Russian tax and other interested authorities in relation to international tax… – Continue reading
With the bulk of the OECD’s work on the BEPS project complete, attention will now turn to the implementation of the recommendations by member countries and others. Minister for Finance, Michael Noonan said that he welcomed the Base Erosion and Profit Shifting (Beps) report, and that the OECD’s proposals would… – Continue reading
Pharmaceuticals group defends use of legal avoidance scheme, after paying no UK corporation tax over two years despite global profits of £3bn AstraZeneca, one of Britain’s largest businesses, is using a multimillion-pound tax avoidance scheme in the Netherlands, set up months after the UK relaxed its tax laws for multinationals… – Continue reading
By: Jayesh Sanghvi, Partner & National Leader – International Tax Services, EY India Multinational groups can create non-resident affiliates in low tax jurisdictions to which income is shifted, wholly or partly for tax reasons rather than for non-tax business reasons. Such overseas profits are not subjected to tax in the… – Continue reading
Fundamental to any developed tax policy is knowing who the taxpayer is (or should be) with respect to any particular transaction. Although that can be relatively straightforward in purely domestic situations, a cross-border dimension can present different answers to this question in the jurisdictions involved and lead to issues over… – Continue reading
BHP Billiton has warned any move by Australia to single-handedly combat corporate profit shifting could spark a backlash from other nations that is likely to ultimately harm local companies. Finance director Peter Beaven says while action on so-called base erosion and profit shifting is needed, it must be part of… – Continue reading
With the August recess now well in the rearview mirror, Congress is already deep into grappling with the imminent expiration of the U.S. Government’s funding authority on September 30. Amid the debates over the “Continuing Resolution” and related funding issues, the Iran deal, and other high-profile issues, the work on… – Continue reading
Revenue Minister Todd McClay announced today that Cabinet has given its approval to a set of proposals intended to address the current inequitable situation where debt remission between related parties can, under certain circumstances, result in an incorrect taxation outcome. At present, in cases when such debt is forgiven by… – Continue reading
New de-offshorization and capital amnesty laws could have widespread effects In an attempt to encourage “economic patriotism,” Russia recently adopted two new laws: (1) The De-Offshorization Law, which makes a number of major changes in the existing systems of corporate and personal taxation in Russia, particularly as they pertain to… – Continue reading
According to recent estimates, Estonia, which is situated halfway between Stockholm and St. Petersburg, currently has more than 350 start-up technology companies – one for every 3,700 citizens – and the government expects this number to reach 1,000 by the year 2020. This makes Estonia the number one start-up technology… – Continue reading
Controlled foreign companies (CFCs) that are engaged in offshore short-term insurance will be allowed to deduct reserves related to their “short-term insurance business” conducted outside South Africa, once an amendment to the Insurance Act, 2016 is promulgated. For a CFC to be eligible for this deduction (which is similar to… – Continue reading
United Kingdom Budget The Chancellor of the Exchequer delivered his Summer Budget to the United Kingdom (UK) Parliament on 8 July 2015. A number of personal, corporate and indirect tax-related measures were announced in the Budget including a reduced corporate tax rate; introduction of a bank corporation tax surcharge; a… – Continue reading
The United States finally took its first step toward a more competitive tax position for intellectual property in the United States. Although some might call it a baby step, the release this week of a discussion draft of legislation proposed to lower the tax rate on income from intellectual property… – Continue reading
On July 17, 2015, the Internal Revenue Service (IRS) released three new “practice units,” each examining a particular type of transaction involving a controlled foreign corporation (CFC). The IRS develops practice units internally for use both as training materials and as job aids for examiners. Practice units are not formal… – Continue reading
Consultation on the ATO’s practical guide for offshore marketing hub arrangements is kicking off in August. The guide may also assist taxpayers with offshore intellectual property (IP) hubs. Here is what you need to know if you market Australian produced goods offshore or have centralised your IP offshore. Do you… – Continue reading
Introduction US tax treaty policy can be affected by pressures for tax reform from within the United States and by major developments in international taxation from without. Talk of US tax reform has been widespread for years, although it is sometimes hard to gauge how much of the talk is… – Continue reading
On 8 June 2015, the Law “On optional declaration of assets and bank accounts (deposits) by individuals” (the “Capital or Tax Amnesty Law”) came into force. It was announced as part of the deoffshorisation campaign and opens a window of opportunity for the business community to declare “grey” assets without… – Continue reading
Measures to plug loopholes for tax avoidance will take effect in 2016, aimed at helping raise tax revenue by at least 10% or 200 billion baht a year. Increasing efficiency in tax collection and cracking down on tax dodging are crucial because the country needs a hefty amount of money… – Continue reading
On July 8, 2015, the International Tax Reform Working Group, which is co-chaired by Senators Rob Portman (R-OH) and Chuck Schumer (D-NY), released its long-awaited report that Senate Finance Committee Chairman Orrin Hatch (R-UT) has said is the precursor to comprehensive tax reform in the United States. What does the… – Continue reading
The Australian Taxation Office has warned companies it will be focusing on money attributed to offshore marketing hubs and will use its stronger transfer pricing powers to go after them, reports the Sydney Morning Herald. Australian companies sent more than AU$100 billion to related parties in the low-tax nation of… – Continue reading
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
OECD and G20 Action Plan on Base Erosion and Profit Shifting (BEPS) was adopted in 2013. It consists of 15 actions including transfer pricing, taxation of controlled foreign corporations (CFC), digital commerce, hybrid instruments, international information exchange, tax treaty shopping etc. In 2013, OECD working group prepared draft documents regarding… – Continue reading
Action 3 of the OECD’s Base Erosion and Profit Shifting (BEPS) agenda promised to address how countries could use controlled foreign corporation (CFC) rules to combat BEPS. Unfortunately (or fortunately, depending upon one’s vantage point), as is pretty much universally agreed, the OECD’s draft report on CFC rules (the “draft”)1… – Continue reading
Abstract Over the past 25 years, Cyprus has become the portal of choice for investment into and out of Russia and Central and Eastern Europe. The new Russian de-offshorization law, which took effect on 1 January 2015, will have significant implications for users of overseas structures. This article examines the… – Continue reading
As the financial world continues its march towards a more transparent and open environment, regulations governing private wealth are under scrutiny. The traditional is changing for good while new players emerge. Once was a time, not too long ago, the words “Swiss bank” conjured up evocative imagery: secret deals; bank… – Continue reading
The new law on the taxation of controlled foreign companies (the ‘CFC’ law) and other anti-offshore measures effective as of 1 January 2015 have raised a number of questions for clients and advisers. A number of changes to the new laws were long anticipated and have now been passed by… – Continue reading
The Organization for Economic Co-operation and Development (OECD) published its Base Erosion Profit Sharing (BEPS) action plan in July 2013 to address perceived flaws in international tax rules. The Plan was endorsed by G20 with implementation to be completed by the end of 2015. WRIN.tv spoke with John O’Leary, a… – Continue reading
Uzbekistan has developed a draft law on amendments and additions to the Tax Code regarding the companies established by the country’s residents in offshore zones. This remark was made by Uzbekistan’s Prosecutor-General Ikhtiyor Abdullayev, who was addressing the plenary session of the Eurasian Group on combating Money laundering and financing… – Continue reading
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
The finance ministry will in the near future add Controlled Foreign Corporation (CFC) rules to the Income Tax Act in order to prevent the tax deferral that many Indian multinational companies resort to by not repatriating the profits of their foreign subsidiaries for long periods. The proposed rules will come… – Continue reading
In July 1997, Tyco International (with then Wall St darling Dennis Kozlowski at the helm) was “acquired” by a relatively small provider of home security services, known as ADT Inc. The deal arguably exploited some strategic synergies between the two companies, but far and away the biggest benefit to Tyco… – Continue reading
The OECD plans to have international agreement on new tax rules developed as part of its project to tackle aggressive tax avoidance by multinationals through the Base Erosion and Profiting Shifting (BEPS) project by the next G20 summit in November, with implementation completed before 2020 ‘at the latest’ Pascal Saint-Amans,… – Continue reading
Robert Maas,tax consultant at Carter Backer Winter was struck by April’s economia essay in which Diarmid O’Sullivan – an advisor at ActionAid UK – set out ActionAid’s five-point plan to tackle tax avoidance The article’s first point starts by demanding that “British tax rates do not incentivise tax avoidance by… – Continue reading
President Putin coined a new word in his state of the nation address at the end of 2012, when he called for new measures for the “deoffshorisation of our economy”, reports the International Business Times. This was to become a major addition, not just to the Russian vocabulary but to… – Continue reading
It’s a race against time for governments of the worlds’ largest economies seeking a coordinated plan to make it more difficult for multinational corporations to shield profits overseas. Some countries are preparing to act on their own. International finance leaders from advanced- and developing- economies are set to gather Wednesday… – Continue reading
