Where a foreign company renders professional services to a South African company in South Africa, it is important that the foreign entity considers whether, as a result of rendering such services, the foreign company will create a permanent establishment in South Africa. The reason why this becomes important is that… – Continue reading
The Republic of Cyprus has once again kept its promise to international investors and introduced on the 9th of July 2015 amendments to its tax legislation making the jurisdiction as attractive as never before. The purpose of these amendments is to clearly establish Cyprus as the leading tax jurisdiction in… – Continue reading
July 27: Japan’s Ministry of Finance announced the exchange of diplomatic notes concerning application of Article 7 (Business profits) under the new income tax treaty between Japan and the United Kingdom. Background Provisions of the amended Japan-UK income tax treaty (signed 17 December 2013) generally were effective 1 January 2015…. – Continue reading
With different tax laws, exemptions, double taxation treaties and free trade zones for services exports affecting outsourcing operations across Latin America, gaining a solid understanding of the distinct tax obligations in each country is imperative. In a bid to attract investment, several Latin American countries have introduced double taxation treaties,… – Continue reading
The evolving tax landscape in the MENA region was discussed at the EY MENA Tax Conference held recently in London. The conference was attended by EY Tax specialists and senior finance and tax executives from major European companies with investments in the MENA region. Sherif El-Kilany, MENA Tax Leader, EY,… – 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
The Commissioner of Taxation has released a new Practice Statement, PS LA 2015/4, setting out “refreshed” practice and procedures for Advance Pricing Arrangements (APAs). The process outlined in PS LA 2015/4 retains many of the features of the old APA process described in PS LA 2011/1, but adopts a new… – Continue reading
As governments around the world establish austerity measures to compensate for decreases in tax receipts, a new catch phrase has emerged: double non-taxation. Double non-taxation is the phrase used by governments to denote untaxed or lightly taxed profits that result from effective, legal tax planning techniques. These techniques include application… – Continue reading
MUMBAI: The government may soon clarify tax rules making it easier for fund managers operating large India-dedicated funds to set up an office in the country, four months after finance minister Arun Jaitley announced in the budget about the government’s intentions to do so. The finance ministry and the central… – Continue reading
Since December 2012, French companies have been liable for a 3 percent tax on distributions to their shareholders (3 Percent Tax), but practitioners have widely questioned whether this tax is compliant with the provisions of the EU treaties and the double tax treaties signed by France. French subsidiaries whose parent… – Continue reading
Special Business News article by Rob Rotherham, KPMG tax division senior manager, on the effects of the UK Budget. With effect from April 1, 2015, the UK Government introduced a new tax: the Diverted Profits Tax. (DPT). The DPT is aimed at countering the use of aggressive tax planning techniques… – Continue reading
On 07th July 2015, the United States and Vietnam signed an income tax treaty with Vietnam, the first ever between the two countries. The Double Taxation Agreement applies to personal income tax and enterprise income tax in the case of Vietnam. What is a permanent establishment? Under the Double Taxation… – 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
Agreement with Mauritius to be renegotiated. National Treasury says the abuse of double tax agreements by multinational companies is the main reason why the agreement with Mauritius has been renegotiated. National Treasury head of tax and financial sector policy Ismail Momoniat says companies have often used dual tax residence structures… – Continue reading
This is a complex question with two parts. In respect of the investors – only UK tax resident investors are eligible to claim EIS or SEIS income tax relief. If your non-UK investors do not suffer any UK income tax, then no relief is available. This may solve the problem… – Continue reading
The present French Tax Update will focus on an overview of several noteworthy French tax court decisions issued during the past few months. BUYBACK AND CANCELLATION OF OWN SHARES The tax treatment of buybacks, from the shareholders’ point of view, has now been simplified through a change of legislation, i.e.,… – 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
Taxes covered The agreement applies to taxes on income imposed by either country. In Bahrain these are currently the income tax payable under Legislative Decree No. 22/1979 (“the Oil Tax”); in Cyprus they are income tax, corporate income tax, Special Contribution for Defence (known as SDC tax) and capital gains… – Continue reading
On 12 June 2015, Insurance Europe published its comments on the permanent establishment (PE) status aspects of the draft Base Erosion and Profit Shifting Action Plan (published by the Organisation for Economic Cooperation and Development (OECD) in May 2015). The draft Action Plan aims to address weakness in the international… – Continue reading
New Delhi, July 1: The government will come out with a road map to eliminate corporate tax exemptions and incentives within 45 days as a prelude to lowering the tax rate to 25 per cent by 2019. “In the next 45 days or so, we will be spelling out the… – Continue reading
Apart from placing full time expatriate employees in China, as an investor you may often need to send staff from the parent company to China to complete temporary projects. Common examples include quality control, engineering projects, training or consultancy. However, what many foreign investors don’t know is that such visits… – Continue reading
Jayant Sinha said that we will make sure all investors get a safe harbour with respect to permanent establishment New Delhi: The government will soon set rules so that private equity and venture capital investors can shift base to India without any adverse tax consequences, junior finance minister Jayant Sinha… – 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
1. Permanent Establishment 1.1. Subjects and activities that generate a PE Article 64 of the LISH provides that a PE is created whenever ever a resident abroad for tax purposes carries on with activities under the LH in Mexican territory or the exclusive economic zone over which Mexico has jurisdiction…. – Continue reading
A common mistake when analyzing the tax implications of a cross border transaction is to jump too quickly to the ramifications of a tax treaty without first having a clear handle on the tax implications under the Income Tax Act (Canada) (“ITA”). A related issue is that even though a… – Continue reading
The biggest hurdle to stopping multinational tax evasion isn’t the companies themselves. It’s the governments behind them. As the OECD works swiftly on its plan to stop multinational tax evasion, the United States has already signalled it’s not happy with what’s being proposed. The US has always been clear on… – Continue reading
The verities of international tax law are no more. The days of strong residence-based rules of corporate taxation are numbered. The age of the Permanent Establishment (“PE”) as the central concept of international tax is drawing to a close. That seems to be the message from the OECD International Tax… – Continue reading
Newcomers to the United States on temporary visas may be unpleasantly surprised at the income tax consequences. A little advance planning with tax and immigration professionals can go a long way towards mitigating income taxes due. Many countries imposes taxes on income earned in that country (i.e., a territorial tax… – Continue reading
Conor Hynes and Ronan Connaughton of Deloitte Ireland explore the impending changes arising from BEPS Action 7 and the Skandia case and provide insight on the potential tax impact for the insurance industry. The Greek philosopher Heraclitus is attributed with the saying, “the only thing that is constant is change”…. – Continue reading
The United States has been criticized on more than one occasion for failing to be a meaningful participant in the OECD’s multi-pronged initiative to address base erosion and profit shifting (BEPS). Some commentators have even gone so far as to accuse the United States of actively working against the BEPS… – Continue reading
Someone once said that a good tax system enables the government to pluck the feathers from the taxpaying goose with the least amount of hissing, says Rod Houng-Lee. The least amount of hissing occurs when the law is simple and clear. The hissing increases exponentially when the law is more… – Continue reading
Accounting and legal professions in Ireland oppose major strands of business tax plan Key strands of the Organisation for Economic Co-operation and Development plan (OECD) to overhaul global business tax rules have run into resistance within the accounting and legal professions in Ireland. A submission this week to the Paris-based… – Continue reading
With less than seven weeks between signature on 13 November 2014 and entry into force on 22 December, the new DTA between Cyprus and Iceland set a new standard for timeliness. Like most of Cyprus’s recent double taxation agreements, the DTA closely follows the form of the 2010 OECD Model… – 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
The U.S. Model Income Tax Treaty (the U.S. Model Treaty) generally represents the United States’ opening position in treaty negotiations. As a result, when changes to the treaty are proposed, international tax practitioners should be aware of the potential impact those changes can have on their existing inbound U.S. structures…. – Continue reading
The United States is through trying to needle the OECD’s base erosion and profit-shifting project with pinpricks. Last week, Robert Stack, U.S. Treasury deputy assistant secretary (international tax affairs), abandoned the subtle digs Treasury had been using to attack BEPS and flat-out said the United States is extremely disappointed in… – Continue reading
Senior Republicans voice concerns over Obama administration’s response to plan Political divisions are opening up in Washington over the US response to the overhaul of international tax rules by the global powers, an initiative with big implications for Ireland’s corporate tax regime. The Republican leaders of the two tax-writing committees… – Continue reading
The Diverted Profits Tax (DPT), known by many as the “Google Tax”, is intended to stop large groups diverting profits from the UK by seeking to avoid creating a UK permanent establishment or using arrangements or entities which lack economic substance to exploit tax mismatches. Tax mismatches occur where intra-group… – Continue reading
Proposed Amendments To Cyprus’s Assessment And Collection Of Taxes Law The Cyprus Government has published a draft law amending the Assessment and Collection of Taxes Law (Law 4 of 1978) in order to facilitate implementation of agreements for automatic exchange of information with other countries. When it is enacted, the… – Continue reading
Where a foreign company renders professional services to a South African company, it is important that the foreign entity considers whether, as a result of rendering such services, the foreign company will create a permanent establishment in South Africa. The reason why this becomes important is that where a foreign… – Continue reading
Companies can face hefty expenses, and many aren’t fully familiar with their rights, says official The State Administration of Taxation will sign and update more tax treaties and step up the implementation of these agreements to help Chinese companies investing in countries that form part of the “Belt and Road… – Continue reading
On May 20, 2015, the U.S. Treasury Department released for public comment draft updates to the U.S. model income tax convention and its accompanying Technical Explanation (collectively, the “Model Treaty”), which was last updated in 2006. The Model Treaty is the template that Treasury uses as its starting point in… – Continue reading
The present French Tax Update will focus on an overview of several noteworthy French tax court decisions issued during the past few months, in particular in relation with double tax treaty conditions to benefit from a tax credit, abuse of law challenges, increased amortization rates, and priority preliminary ruling requests… – Continue reading
Argentina and Chile have signed a new double tax treaty to replace the treaty unilaterally terminated by Argentina in 2012. Ignacio Rodriguez and Andres Edelstein of PwC in Argentina outline the new structuring opportunities that are available for taxpayers. Argentina and Chile signed a new double tax treaty on May… – Continue reading
New Zealand: Budget 2015 The New Zealand Budget was handed down on 21 May 2015 and included a new tax on residential property sold within two years of purchase (with some exceptions). For further information on the New Zealand Budget see PwC New Zealand’s Budget commentary. New Zealand: Issues paper… – Continue reading
On 31 March 2015 amendments were made to the Income Tax (Approved International Agreements) (Implementation) (United Kingdom and United States of America) Regulations, 2014 (the “2014 Regulations”) which brought FATCA-based reporting into force under Guernsey law. FATCA-based reporting is implemented in Guernsey pursuant to the UK-Guernsey IGA, signed on 22… – Continue reading
Muscat: Taxpayers across the globe, including Oman, are facing increased scrutiny of their tax returns and positions taken as the pressure on governments increases to raise revenues from taxes, says an expert at KPMG. Ashok Hariharan, partner and head of tax for KPMG in the Middle East and South Asia… – Continue reading
The countries of the Central American region have incorporated and reformed their legislations to the international regulations of Transfer prices and practically all the applicable legal provisions to related parties have already been expanded in the region, which implies, that the companies with regional presence must visualize, review and engage… – Continue reading
On May 20, 2015, the US Department of the Treasury released for public comment draft updates to the US Model Income Tax Convention, including provisions to deny treaty benefits to companies that change their tax residence via inversion transactions. The Treasury said other changes are intended to ensure that the… – Continue reading
Belgium and the Russian Federation announced in March 2007 that they would negotiate a new double tax treaty (the “Treaty”). Nearly seven years after discussions began on 20 November 2008, the Treaty was finally signed on 19 May 2015 in Brussels. This newsflash is based on an unofficial version of… – Continue reading
