You may have noted there’s an election in the offing Worstall on Wednesday As the tech news outlet of record has told us, UK chancellor George Osborne is preparing to bring in the “Google Tax”. Properly known as the Diverted Profits Tax, it is supposed to be a way of… – Continue reading
NEW DELHI: To encourage offshore fund managers to relocate to India, the government today said it will modify Permanent Establishment norms to ensure that a mere presence in the country does not lead to “adverse tax consequences.” However, the present taxation structure has an in-built incentive for fund managers to… – Continue reading
The long-awaited double tax agreements entered into by Kenya with South Africa and Mauritius respectively did not come into force on 1 January 2015 as expected. The treaty between Kenya and South Africa that was signed in November 2010 was ratified by Kenya in October 2014, following earlier ratification by… – Continue reading
Discuss issues related to applicability of minimum alternate tax and permanent establishment Foreign Investor on Saturday raised several tax-related issues with Finance Minister Arun Jaitley at a meeting organised by the National Stock Exchange (NSE). According to sources, issues regarding applicability of minimum alternate tax (MAT) and permanent establishment (PEs)… – Continue reading
Introduction In the autumn statement the Chancellor of the Exchequer announced the introduction of a new Diverted Profits Tax (DPT). Against the context of international co-operation in the OECD led consultation on ways to ensure profits are taxed where they are generated (the Base Erosion and Profit Shifting project (BEPS),… – 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
Mr. Akhilesh Ranjan, Joint Secretary Ministry of Finance, and also Competent Authority for the Government of India, spoke this past week at the Pacific Rim Tax Institute, February 19-20, reaffirming India’s commitment to a new non-adversarial tax regime to encourage foreign investment and fair treatment of taxpayers. Mr. Ranjan’s appointment,… – Continue reading
PARIS: Singapore and France signed an amended Agreement for the Avoidance of Double Taxation (DTA) to lower withholding tax rates for dividends and new anti-abuse provisions. The most notable changes are the following: Withholding tax rate for dividends is reduced to 5 percent (from 10 percent previously) if the beneficial… – Continue reading
On February 3, 2015, the PRC State Administration of Taxation (“SAT”) released the Announcement of SAT Concerning Several Matters Relating to Corporate Income Tax on Indirect Transfer of Properties by Non-tax Resident Enterprises, Announcement [2015] No. 7 (国家税务总局关于非居民企业间接转让财产企业所得税若干问题的公告, 国家税务总局公告2015年第7号; “Announcement 7”). Below is a brief summary and discussion of the… – 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
This Tax Alert by EY summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (Tribunal) in the case of Swiss Re-Insurance Company Ltd. (Taxpayer). The Tribunal ruled that the Taxpayer’s wholly-owned Indian subsidiary (ICo) engaged in carrying out risk assessment services, marketing insurance and providing administrative support for… – Continue reading
Singapore and France signed a revised Agreement for the Avoidance of Double Taxation (DTA) on 15 January 2015, which is not yet in force. The new DTA provides for lower withholding tax rates for dividends and new anti-abuse provisions. The most notable changes are the following: 1. Withholding Tax Withholding… – Continue reading
The UK Treasury Committee has said that the draft legislation on the diverted profits tax (DPT) is unwieldy and stressed that the Government’s unilateral policy response should not destabilize international tax reform efforts. The Committee’s response to the plans are included in its new report on the Autumn Statement 2014,… – Continue reading
If the Davis tax committee’s recommendations are followed, tax avoidance could be effectively reined in. Zeroing in on the super-wealthy and tax reluctant remains at the top of the global agenda as budgets across the world grow increasingly hungry for extra revenues. Now a draft report from the Davis tax… – Continue reading
In a recent letter to the Committee on Foreign Relations, the American Institute of Certified Public Accountants (AICPA) requested that the US Senate urgently approve all pending bilateral double taxation agreements (DTAs) and protocols. The AICPA pointed out that the full Senate has not approved any DTA or protocol since… – Continue reading
The nation’s largest organization of accounting and tax professionals is urging the Senate to approve income tax treaties between the U.S. and various countries. In a February 3 letter to Senator Bob Corker (R-Tenn.), chairman of the Senate Committee on Foreign Relations and Senator Robert Menendez (D-N.J.), the committee’s ranking… – Continue reading
The Organization for Economic Co-operation and Development’s (OECD) Action Plan 6 on the Base Erosion and Profit Shifting (BEPS) initiative recognizes that countries need to incorporate sufficient safeguards in their tax treaties and domestic rules to protect against practices that take advantage of the differences in national tax systems and… – Continue reading
As middle class flees, Puerto Rico tries luring rich people The towering 38-year-old native of Arkansas is one of at least 250 people who’ve accepted Puerto Rico’s invitation to well-heeled U.S. citizens to move to the island and enjoy life without taxes on capital gains, an enticing offer for those… – Continue reading
A New Tax on doing business in or through the UK The UK is on course to enact a new tax (the “DPT”) with extraterritorial scope which will apply to profits arising on or after 1 April 2015 and will be applied at a rate of 25% (the UK’s main… – Continue reading
Croatia and the UK have signed an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital gains. The Agreement was duly signed on January 15th, 2015 and it shall enter into force when both countries complete their… – Continue reading
The Confederation of British Industry (CBI) has warned the UK Government that significant changes are needed to its proposed diverted profits tax legislation, to ensure that the regime does not capture genuine commercial arrangements. In his 2014 Autumn Statement, Chancellor George Osborne announced plans to levy a 25 percent diverted… – Continue reading
On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S. corporations and their controlled foreign corporations (CFCs) and (ii) a one-time 14%… – Continue reading
In 2014, China continued to develop its taxation system affecting domestic and crossborder transactions. This “Legal Flash – Special Edition 2014” highlights the most significant tax updates of the year. Please see our monthly legal flashes for more information and analysis here. Taking a step-forward on anti-avoidance provisions, the State… – Continue reading
Progress continues to be made in the BEPS project, with the release in September 2014 of the “2014 Deliverables” and a raft of discussion drafts published during the autumn. Here is a summary of all the recent developments. Within the framework of the BEPS (Base Erosion and Profit Shifting) action… – Continue reading
The draft legislation published on 10 December 2014 (see here) devotes almost 30 pages to the new “diverted profits tax” (DPT), which from 1 April 2015 will introduce a new tax at a rate of 25% to profits generated by those multinational corporate groups who, in the eyes of the… – Continue reading
India and US reach common ground on Mutual Agreement Procedure (“MAP)” and break new ground on Advance Pricing Agreements (“APA”) Suchint Majmudar Just ahead of Obama’s momentous R-Day visit to India, the Competent Authorities of India and US reached a landmark breakthrough in cases involving mutual agreement procedure under the… – Continue reading
The present French Tax Update will focus on (i) the most salient features of the new double tax treaty signed by the People’s Republic of China (China) and France on November 26, 2013 (New DTT), (ii) the new double tax treaty signed by Singapore and France on January 15, 2015,… – Continue reading
BENGALURU: US President Barack Obama’s visit to India could help unlock over $10 billion stuck in tax disputes between India and various countries. The move will largely benefit American technology companies as a big chunk of the disputes involve software development and IT-enabled services (ITeS) sectors. India’s competent authority Akhilesh… – Continue reading
BENGALURU: US President Barack Obama’s visit to India could help unlock over $10 billion stuck in tax disputes between India and various countries. The move will largely benefit American technology companies as a big chunk of the disputes involve software development and IT-enabled services (ITeS) sectors. India’s competent authority Akhilesh… – Continue reading
Industry body Assocham has urged the Government to clarify that MAT will not be levied on foreign companies that do not have any branch or a permanent establishment in India. Such a clarification is needed for incomes sourced out of India by such foreign companies, the chamber said in a… – Continue reading
In the first of this two part article, we outlined what businesses must do to comply with India’s transfer pricing laws, while stressing the key reforms introduced by the new government to bring certainty to the domestic tax system. Here, we discuss if and how India should respond to the… – Continue reading
NEW DELHI: India and the US have finalised a framework to resolve transfer pricing cases, some of them pending for five years, in what could end tax trauma for more than 50 American MNCs such as Microsoft, IBM and Oracle by the fiscal year-end and send a strong signal to… – Continue reading
A recent clarification issued to Foreign Portfolio Investors (FPIs) clarified that fund managers of FPIs who are present in India would not be treated as permanent establishments in India, addressing the concern that the FPIs may be taxable in India to the extent attributable to permanent establishments. An extension of… – Continue reading
New Assistant Treasurer Josh Frydenberg has dismissed concerns from business and tax experts that changing the international tax rules could result in Australia losing mining tax revenue to nations like China, describing it as a “furphy”. Mr Frydenberg has also raised Australia’s competitiveness internationally as a concern, saying corporate taxes… – Continue reading
New Assistant Treasurer Josh Frydenberg has dismissed concerns from business and tax experts that changing the international tax rules could result in Australia losing mining tax revenue to nations like China, describing it as a “furphy”. Mr Frydenberg has also raised Australia’s competitiveness internationally as a concern, saying corporate taxes… – Continue reading
The International Chamber of Commerce (ICC) has reaffirmed its active engagement in the second phase of the G20 / Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) project while underscoring the importance of a coordinated and consistent approach to tax law changes. ICC continues to… – Continue reading
It explains how recent amendments to the Singapore-UAE Avoidance of Double Taxation Agreement will translate to more savings for UAE tax residents when they fund Singapore companies. Singapore (PRWEB) January 14, 2015 With the recent signing of the protocol to amend and improve the Singapore-UAE Avoidance of Double Taxation Agreement… – Continue reading
Within the framework of the BEPS (Base Erosion and Profit Shifting) action plan, adopted in July 2013, on last September 16, the OECD published its first recommendations in the form of reports on 7 of the 15 points of the action plan: Address the tax challenges of the digital economy… – Continue reading
Already on the radar of governments and regulatory bodies around the world, recent developments with respect to the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan are raising further the profile of oil and gas companies globally with both tax authorities and the… – Continue reading
British Members of Parliament (MPs) have questioned the Government’s unilateral decision to push for the introduction of a Diverted Profits Tax (DPT) ahead of the completion of the Organisation for Economic Cooperation and Development’s (OECD’s) work on base erosion and profit shifting (BEPS). In a debate held in Parliament on… – Continue reading
The Northern Ireland assembly would be given the power to set its own corporation tax rate from April 2017 if draft legislation published by the UK government is passed.09 Jan 2015 Corporate tax Tax UK Europe The Corporation Tax (Northern Ireland) Bill forms part of last month’s Stormont House Agreement… – Continue reading
The UK is proposing to introduce a unilateral, non-OECD co-ordinated anti-BEPS provision, referred to in the media as the “Google Tax”, with effect from 1 April 2015. The draft provision is very complex, and it will be time consuming to assess its potential impact on many common cross-border business structures…. – Continue reading
TWO noteworthy taxation amendments came into effect on the 1st of January 2015. The first tax amendment relates to the deductibility of interest paid to a person who is not liable to tax in South Africa, for example non-residents. The section in question, section 23M of the Income Tax Act,… – Continue reading
As the Organisation for Economic Co-operation and Development (OECD) passes the halfway point in its joint project with the G20 to address base erosion and profit shifting (BEPS) concerns, it is worth pausing to examine what the consequences of some of the proposed changes may be. Much of the focus… – Continue reading
IN A PREVIOUS column (http://www.bworldonline.com/content.php?section=Economy&title=the-oecd-action-plan-on-base-erosion-and-profit-shifting&id=99561), we wrote about the general framework of the Base Erosion and Profit Shifting (BEPS) initiative, why addressing BEPS is a key priority for many governments across the globe, and the 15-point BEPS Action Plan drafted by the Organization for Economic Co-operation and Development (OECD). The… – Continue reading
The new deoffshorisation legislation that passed with lightning speed through Russia’s Parliament and then hastingly signed by President Putin in the time span of a week and a half, comes into force on January 1, 2015. The new deoffshorisation legislation that passed with lightning speed through Russia’s Parliament and then… – Continue reading
SOUTH Africa’s tax authorities need to beef up the country’s tax laws and regulations to ensure it derives its rightful dues from the digital economy and e-commerce, the Davis committee says. The committee’s interim report on base erosion and profit shifting, released for public comment last week, said gaps in… – Continue reading
The conditions for becoming tax-resident and tax non-resident vary from country to country and depend on such things as length of stay, type of accommodation, location of family, and nationality. In most tax systems, presence of an individual in a country for 183 days or more in any 12-month period… – Continue reading
Nilesh Ashar, partner and head of Tax for KPMG in the UAE, analyses the impact of investment regulations and tax laws on foreign businesses foraying into the Middle East. In the last decade, the Middle East region has witnessed significant economic growth, primarily driven by the surge in oil revenues…. – Continue reading
*Ernst & Young LLP, New York, NY The BEPS beat plays on. Congratulations to the OECD for meeting (mostly) the ambitious goals for release of their reports on seven action items in September 2014 – right on schedule on September 16. The documents released on September 16 relate to Action… – Continue reading
