Category: Gaar
Higher tax bill for Cyprus businesses after new law
Cyprus is aiming to better tackle tax avoidance by companies through a new legislation. The latter mainly addresses base erosion and profit shifting. ... - Continue reading
Canada: Alta Energy: FCA Confirms That Treaty Shopping Is Not Abusive (For Now …)
The Federal Court of Appeal of Canada concluded tax investigations case in favour of Alta Energy. ... - Continue reading
SoftBank’s billions-saving tax route to be shut by Tokyo
Finance Ministry targets deliberate losses designed to slash bill ... - Continue reading
Panel to hear taxpayer before invoking GAAR under new set of rules
New rules mandate officials to refer a suspected case of tax avoidance to a panel of senior officials ... - Continue reading
Anti-tax avoidance measures come into force
A new raft of anti-tax avoidance measures came into force across the EU yesterday, as part of an ongoing effort to combat corporate abuse of tax systems. The Anti-Tax Avoidance Directive, first proposed in 2016, features rules based on global standards laid out by the Organisation for Economic Co-operation and… – Continue reading
Worldwide: UK Tax Round Up – November 2018
General UK Tax Developments Finance Bill The Finance (No 3) Bill 2018-19 (which will become the Finance Act 2019) was published on 7 November and includes legislation to enact the changes highlighted in our UK Budget blog post ( UK Budget Blog). Another key area covered by the Finance Bill… – Continue reading
China’s IIT Reform: Seven Key Points from the Draft Implementation Rules
Many taxpayers in China have had questions about how the government would change the individual income tax (IIT) law since the amendment was passed earlier this year. Recently, however, the tax authorities released a draft of the amendment’s implementation rules and measures for comment. While the draft implementation rules and… – Continue reading
Walmart-Flipkart Deal: Income Tax Dept Rejects Plea For Capital Gains Exemption
Income Tax department is also inquiring into some alleged suspicious transactions and investment flow into Flipkart Authorities have demanded a valuation report from Flipkart The international taxation division of the I-T department is currently studying the valuation of Indian assets of Flipkart Singapore At the time when ecommerce company Flipkart… – Continue reading
CBDT defers till March 2019 GAAR, GST reporting under the new tax audit form
NEW DELHI, AUGUST 19 The Central Board of Direct Taxes (CBDT) has put off till March 31, 2019, the proposed GST and GAAR reporting under the amended tax audit form. This dispensation would be available for tax audit reports to be furnished on or after August 20 but before April… – Continue reading
New PPT rule in the OECD’s Multilateral Instrument to displace Canadian GAAR?
In this Update On June 7, 2017, Canada signed the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) The MLI will modify up to 75 of Canada’s bilateral tax treaties, including adding a broad anti-avoidance rule to these treaties (the… – Continue reading
CRA Provides Update On Tax Avoidance Crackdown
Canada’s Revenue Minister has provided an update on the progress made by the Government in addressing tax evasion and aggressive tax avoidance. The update concerns the recommendations on tackling tax avoidance and evasion made by the House of Commons Standing Committee on Finance (FINA) in October 2016, and the actions… – Continue reading
I-T Department open to reducing withholding tax for foreign companies: Official
NEW DELHI: The Income Tax department is open to lowering the withholding tax rate for foreign companies which have income in India, a senior official said today. Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra also urged firms and MNCs operating in India to pay their due share of… – Continue reading
HMRC invokes GAAR to clamp down on gold bullion tax avoidance schemes
Paying employees in gold bullions to avoid tax will not be permitted under the first use of the general anti-abuse rule (GAAR). The GAAR advisory panel stated that the use of gold as payments for employees is “abnormal and contrived” and “not a reasonable course of action”. “We can see… – Continue reading
FPI custodians, tax consultants in deadlock over GAAR liabilities
MUMBAI: Custodians for foreign portfolio investors and tax consultants are in a deadlock with both parties refusing to take the onus of potential liabilities of their clients in the new tax regime. The custodians, mainly foreign banks, want a certificate from consultants such as the big four firms stating that… – Continue reading
GAAR & POEM- Combating Tax Avoidance
The Central Board of Direct Taxes (CBDT) has on 24th January 2017 issued final guidelines for determination of “Place of effective management”(POEM). On 27th of January, again CBDT released clarifications on “General Anti Avoidance Regulations” (GAAR). POEM is effective April 01,2016 whereas GAAR is effective from April 01,2017.POEM can be… – Continue reading
Multilateral Instrument: The new dilemma of foreign investors
MUMBAI: The Multilateral Instrument (MLI), a new global tax avoidance agreement, that is in the process of being signed by 100 countries, is now causing a lot of anxiety among foreign portfolio investors (FPIs). MLI is an agreement put out by OECD, the intergovernmental economic organisation, to stop Base Erosion… – Continue reading
International tax-avoidance rules may override GAAR, other tax treaties
There is a possibility that the General Anti-Avoidance Rules (GAAR, on taxes) and the tax treaties signed by the government with those of Mauritius, Singapore and Cyprus, and even other nations such as Netherlands, could be overtaken by another event. These could, say experts, be partially or fully overridden by… – Continue reading
Moving towards a simplified tax regime
As per the Economic Survey 2016, the ratio of Indian taxpayers to voters is 4%; ideally it should be roughly 23% at existing levels of economic and political development. The tax to GDP ratio at 16.6% is well below the emerging market economy norm of 21% and OECD average of 34%…. – Continue reading
Anti-avoidance tax rule GAAR to kick in from April 2017
Tax anti-avoidance rule GAAR will kick in from April 1, 2017, the tax department said today. In its 2016 year-end review, the Central Board of Direct Taxes, which is the apex policy making body of the I-T department, listed its major achievements. “Major achievements of CBDT in the current financial… – Continue reading
Retain benefits for FPIs in Indo-Singapore tax treaty: ASIFMA
With India re-working taxation treaty with Singapore, an influential grouping of overseas investors has said capital gains tax exemption should be retained in the pact for FPIs in listed securities as that would “greatly ease” concerns of foreign investors. Seeking elimination of capital gains tax on portfolio investments in listed… – Continue reading
Wales to switch to Land Transaction Tax
Wales is to replace stamp duty with a land transaction tax as it moves towards devolved tax collection. The new tax on land transactions will be introduced from April 2018 alongside measures to tackle devolved tax avoidance, the Welsh government said. Land transaction tax is paid on the purchase or… – Continue reading
Foreign portfolio investors approach government to iron out Singapore Treaty, GAAR issues
MUMBAI: Foreign portfolio investors (FPIs) are lobbying the government to resolve problems related to the India-Singapore tax treaty and general anti-avoidance rules (GAAR), worried about their investment in equities. FPIs fear after April 1, 2017, when both the renegotiated India-Singapore treaty and GAAR come into force, they will face challenges…. – Continue reading
Singapore Release General Anti-Avoidance Rule Guide
The Inland Revenue Authority of Singapore has issued an e-Tax Guide on the territory’s general anti-avoidance rule in Section 33 of the Income Tax Act. The guide, issued on July 11, 2016, explains the three tests to determine whether the GAAR should apply. It includes examples on actionable avoidance arrangements,… – Continue reading
Revolutionary changes in Polish Tax Law: Introducing a General Anti-Avoidance Rule
Starting from 15 July 2016, a new GAAR (General Anti-Avoidance Rule) clause will be introduced into the tax system in Poland. The new clause may have a significant impact not only on future transactions, but also on the transactions, restructurings and optimisations made in the past years if they result… – Continue reading
Cyprus agrees to amend tax treaty ahead of GAAR with caveat
Ahead of India’s rolling out of anti-tax avoidance regulations, Cyprus has shown eagerness to amend the bilateral tax treaty allowing New Delhi to tax capital gains. In turn, has pitched to be taken off the blacklist or being considered a “notified jurisdiction” for not sharing tax information, which implies increased… – Continue reading
India-Mauritius tax treaty: An end and a new beginning
Recent news of India and Mauritius signing a Protocol to amend their 33 year old tax treaty caused seismic changes in the tax world. Though not completely unanticipated, the change is significant for foreign investors to go back to the drawing board and reassess their structures. The tax treaty between… – Continue reading
EU finance ministers fail to agree on anti tax avoidance directive
The EU’s Economic and Financial Affairs Council (ECOFIN) has been unable to reach agreement on the European Commission’s proposed anti tax avoidance directive. The issue has therefore been postponed until the next ECOFIN meeting in June. The European Commission announced its proposed anti-tax avoidance directive (ATAD) in January. The proposed… – Continue reading
India gearing up to apply Mauritius tax treaty fix to double taxation avoidance accord with Cyprus
NEW DELHI: Now that loopholes in the tax treaty with Mauritius have been plugged, the Indian government is gearing up to apply the same fix to its accord with Cyprus. Talks to amend the double taxation avoidance treaty are at an advanced stage and the two sides will soon exchange… – Continue reading
GAAR to override bilateral tax treaty provisions: Official
New Delhi, May 11 (IANS) Following the revision of India’s bilateral tax treaty with Mauritius, the government on Wednesday said the General Anti-Avoidance Rule (GAAR ) provisions, with effect from April next year, will override the Double TaxationAvoidance Agreement (DTAA) in case of abuse. “GAAR being anti-abuse provision can prevail… – Continue reading
GAAR still remains an irritant for FIIs, doubts persist over FII structure
MUMBAI: Anxiety still prevails among foreign institutional investors (FIIs) with regard to General Anti Avoidance Rule (GAAR), which will come into effect from April 1, 2017. While the draft rules in GAAR may have cleared the air over retrospective taxation and treatment of Participatory Notes ( P-notes), experts say doubts… – Continue reading
Put the onus on tax authority to demonstrate tax benefit
The GAAR guidelines should make it clear that it should be only used as a deterrent against tax avoidance schemes, and not a revenue gathering weapon in the hands of the tax officer. Accordingly, the guidelines should make it explicit that GAAR will be applicable only to artificial, abusive and… – Continue reading
Further clarity on GAAR for FIIs
The industry was hoping GAAR might be postponed again, especially in the light of slowing down of the world economy In a signal to foreign institutional investors, the Union Budget has made a commitment to implement General Anti Avoidance Rules (GAAR) on taxes only from April 1, 2017. “The investment… – Continue reading
A shake-up in tax law
A general anti-avoidance rule will most likely return to the Polish tax system in 2016. At the end of 2015 the Ministry of Finance published a draft of changes to the Tax Ordinance which would introduce a general anti-avoidance rule (GAAR) into the Polish tax system, to prevent creation and… – Continue reading
Tony Wickenden: What the Finance Bill 2016 means for tax avoidance
In this final instalment considering the draft clauses from the Finance Bill 2016 most relevant to financial planners, I am going to turn my attention to the ever-popular subject of tax avoidance and evasion. Every Budget and Finance Bill has plenty to say on this subject. As in the previous… – Continue reading
Budget 2016: Will the govt amend domestic tax laws to help the bleeding infrastructure sector
If January is a month of New Year resolutions, February can be said to be a month of New Financial Year expectations with Indian Government announcing its fiscal policy strategy, including taxation regime for the next financial year. The Union Budget of 2015-16 was the first full budget presented by… – Continue reading
Internet sales tax Bill could land state in high court
South Dakota could be on the road to a U.S. Supreme Court challenge with a bill that allows the state to collect sales taxes from out-of-state Internet retailers. The bill in question requires those businesses to remit sales taxes if they sell more than $100,000 in the state or have… – Continue reading
Getting to the crux of Ncell buyout deal
CAN NEPAL IMPOSE CAPITAL GAINS TAX ON NCELL BUYOUT DEAL? This question has been making rounds ever since TeliaSonera, the largest shareholder in Nepali telecom operator, Ncell, announced its decision to sell 60.4 per cent of its stake in the telecom company to Malaysian giant, Axiata, for $1.03 billion. Divergent… – Continue reading
Irish Revenue Launches New Anti-Avoidance Website
The Irish Revenue has launched a new webpage that contains guidance on what it considers to be tax avoidance and information on the legislative tools available to detect and tackle avoidance arrangements. Revenue said its policy is “to challenge tax avoidance schemes and [the] unintended use of the legislation which… – Continue reading
Ghana To Review Tax Expenditures
The International Monetary Fund (IMF) has welcomed the Ghanaian Government’s fiscal consolidation efforts, including its various revenue-raising initiatives. The Government is seeking to implement an adjustment of two percent of gross domestic product (GDP). This would bring the country’s deficit to about 5.3 percent of GDP in 2016. Over the… – Continue reading
The hidden wealth of nations
India’s biggest source of FDI is India itself, money departing on a short holiday to a tax haven and then routed back as FDI. Will the government muster up the political will to clamp down on the tax-allergic business elite? This could be a bumper year for the ever-lucrative tax… – Continue reading
The Netherlands implements OECD BEPS Country-by-Country Reporting as well as the amendments to the EU Parent-Subsidiary Directive
As from 1 January 2016, new rules have become effective in the Netherlands that require multinational enterprises (“MNEs“) to comply with new transfer pricing documentation requirements, including the obligation to prepare a Country-by-Country Report (“CbC Report“), a Master File and a Local File. These rules essentially implement Action 13 of… – Continue reading
Budget 2016 may introduce BEPS to make tax evasion difficult for MNCs
MUMBAI: In what could lead to an increase in domestic tax liabilities of many Indian conglomerates and multinationals, the government is set to introduce a framework for Base Erosion and Profit Shifting (BEPS), a global agreement to check tax avoidance by multinationals, in the upcoming Budget. Industry sources expect the… – Continue reading
PoEM not the only solution
The change in definition of an Indian resident company under the Income-Tax Act—from one whose affairs are wholly controlled and managed in India to one whose Place of Effective Management (PoEM) is in India—and the subsequent draft guidelines are giving anxious moments to votaries of simplifying the investment climate in… – Continue reading
India: Swiss Apex Court Denies Treaty Benefits For Dividend On Securities Acquired For Hedging Derivative Contracts
Federal Supreme Court of Switzerland denies treaty benefits in case of dividend paid on shares acquired for hedging derivative contracts. Court stated that due to the fully hedged nature of ownership, there was economic nexus and interdependency between two independent transactions and therefore, the “intermediary” bank did not have beneficial… – Continue reading
Outlook for Direct Taxes – flash back 2015 and envision for 2016
The focus has been on increasing global participation in India through liberalisation of foreign direct investment (FDI) laws. It covered easing FDI sectorial caps and conditions in diverse sectors ranging from highly regulated sectors like defence, construction& development, civil aviation to single brand retailing, automatic route for FDI in Limited… – Continue reading
Luxembourg Tax Alert 2016-02
January 2016 You will find below a summary of some of the most important tax developments that have happened since the release of our last newsletter, at OECD, EU or country level, in the area of tax transparency and the fight against tax avoidance. EU – Tax transparency and anti-BEPS… – Continue reading
Tax body welcomes collaborative approach to improving the tax practice of large companies
The Chartered Institute of Taxation (CIOT) has welcomed a change to the Government’s approach1 to improve tax compliance by large companies but remains sceptical about the effectiveness of a ‘special measures’ regime to target tax abuse. John Cullinane, Tax Policy Director, said: “We are pleased that the framework for improving… – Continue reading
Editorial: Backing down on black
Why raise the limit for quoting PAN in cash deals? Though the government’s one-time black money compliance window for money stashed overseas garnered a mere Rs 3,770 crore, getting rid of black money remains a focus area. While it is understandable that industry’s protests over the General Anti-Avoidance Rules (GAAR)… – Continue reading
