International fast-food giant McDonald’s avoided paying half a billion dollars of tax in Australia over a five-year period by shifting profits through the low-tax nation of Singapore, a new report by a global coalition of trade unions says. The report, which has been funded and commissioned by a coalition of… – 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
May 13 — The hiring of an outside law firm in a sharply contested audit of Microsoft’s transfer pricing “appears to violate federal law and the express will of the Congress,” Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) said in a letter to IRS Commissioner John Koskinen. Hatch, in… – Continue reading
Ireland and Pakistan signed a new Income Tax Treaty on 16 April 2015. Once in force and effective, the new Treaty will replace the existing on of 1973. The new treaty will come into force after the two countries exchange ratification instruments. The provisions of the treaty will have effect… – Continue reading
Ireland and Zambia signed a new Income and Capital Tax Treaty on 31 March 2015. Once in force and effective, the new Treaty will replace the existing one of 1971. The new Treaty will come into force after the two countries exchange ratification instruments. The provisions of the treaty will… – Continue reading
If you are moving or trading goods across borders, this topic should be of primary importance from both a Transfer Pricing and Customs perspective. There is potential for you to have Transfer Pricing and Customs exposures in your supply and value chains as a result of the OECD/G20 initiative on… – Continue reading
On July 29, 2014, the State Administration of Taxation (SAT) of the People’s Republic of China (PRC or China) released The Notice Regarding the Launch of Tax Anti-Avoidance Investigations on Remittance of Substantial Amounts of Service Fees and Royalty Payments (Circular 146), which requires tax authorities at all levels to… – Continue reading
The Income Tax Treaty between Guernsey and Monaco entered into force on 9 May 2015 and its provisions will take effect from 1 January 2016. The Treaty was signed on 7 April 2014. In accordance with the treaty, the following withholding taxes will apply: Dividends: 0%. Interest: 0%. Royalties: 0%.
AUSTRALIANS hoping to gorge on offerings intended to stimulate the economy in Tuesday’s Federal Budget have been warned to prepare for lukewarm but at least digestible fare. Though the electorate’s appetite has been whet by the sizzling entree of another Reserve Bank rate cut this week, economists expect the main… – Continue reading
The Income and Capital Tax Treaty between Ireland and Thailand entered into force on 11 March 2015 and will enter into effect on 1 January 2016. The Treaty was signed on 4 November 2013. In accordance with the treaty, the following withholding taxes will apply: Dividends: 10%. Interest: • 0%… – Continue reading
There are fears the Government’s plans to prevent foreign controlled banks from slipping under the taxman’s radar, could end up hitting their New Zealand customers in the pocket. The Inland Revenue Department (IRD) is proposing to impose a higher tax burden on non-resident investors who get income from interest, dividends… – Continue reading
NEW DELHI: Ahead of Prime Minister Narendra Modi’s visit to South Korea this month, the Cabinet today approved revising the double tax avoidance pact with Seoul to provide tax stability and facilitate flow of investment and technology between the countries. The Cabinet headed by the Prime Minister gave its approval… – Continue reading
Dropbox has become the latest technology firm to skirt local tax rates after confirming it will bill its customers from a company set up in Ireland. In an email sent to users on the weekend, Dropbox confirmed it would bill its international users using the entity Dropbox Ireland from June…. – Continue reading
Choosing the right location for the centralization and management of your IP is a very important strategic business decision. The ideal location to establish an IP structure is one that can serve the organization’s business strategies/model, safeguard and protect its IP and more important to contribute to its tax optimization…. – Continue reading
The Davis Tax Committee (“DTC”) recently addressed the issue of base erosion and profit shifting (“BEPS”) in South Africa. The international importance of transfer pricing was once again emphasized when 4 out of the 15 actions identified in the OECD Action Plan on BEPS related to transfer pricing. The 15… – Continue reading
The parties to licenses of technology should consider tax issues with such licenses. The following is a summary of some of the tax implications that may arise with regard to technology licenses. Withholding Taxes. Where a license crosses an international border, withholding taxes may apply to any royalties payable. Under… – Continue reading
The patent box regime, adopted at the end of 2014 with Italy’s Stability Law, was recently modified by the Investment Compact Decree and implemented into law at the end of March 2015. A distinctive feature of the Italian regime is that the measure now also covers trademarks and designs. A… – Continue reading
There has been a lot of uncertainty with regard to withholding taxes imposed by the South African Revenue Service (SARS) on cross-border payments made by South Africans to offshore recipients, and the ambiguous administrative and compliance procedures relating thereto. Based on the information available directly from SARS, any amounts received… – Continue reading
Ontario’s 2015 Budget, delivered on April 23, overhauled a number of the province’s tax credits and set out plans for a further crackdown on tax avoidance. The Budget made numerous changes to creative tax breaks, effective from April 23, 2015. The Ontario Production Services Tax Credit was reduced from 25… – Continue reading
The Federal Court has found that copyright does not exist in a digital data signal (Seven Network Limited v Commissioner of Taxation [2014] FCA 1411). Clayton Utz acted for Seven in the proceedings. The rights to broadcast the Olympic Games Seven Network Limited held the exclusive rights to broadcast certain… – Continue reading
Finance Minister Joe Oliver faced formidable challenges, both economic and political, in delivering his first Budget. In a time of depressed oil prices, and mere months ahead of the next federal election, it appears he felt it was imperative to follow through with prior commitments to balance the budget, provide… – Continue reading
SEJONG, April 22 (Yonhap) — South Korea and China on Wednesday signed a so-called advance pricing agreement (APA) that can ease tax audit burdens for companies operating in each other’s country. The new accord, signed during a meeting of their tax chiefs, will allow authorities to better check “transfer prices”… – Continue reading
CHINA Tax Free Reorganisations • With circulars 109 and 116 jointly issued in December 2014 by the Ministry of Finance and the State Administration of Taxation, the Chinese authorities have relaxed the conditions for internal reorganisations. • Circular 109 deals with internal reorganisations. Provided the pertinent requirements are met, the… – Continue reading
On 17 March 2015 Cyprus and Bahrain signed a new double taxation agreement. Like all of Cyprus’s recent DTAs it closely follows the 2010 OECD Model Tax Convention. Its main provisions are summarised below. Taxes covered The agreement applies to taxes on income imposed by either country. In Bahrain these… – Continue reading
Dixcart, an international business support services provider, has released a new guide on the UK’s Diverted Profits Tax, which was altered ahead of its introduction on April 1, 2015. The DPT is intended to counter aggressive tax avoidance by multinational companies. It is charged at a rate of 25 percent… – Continue reading
Last week some of Australia’s biggest and richest companies voluntarily fronted up to a senate inquiry on corporate tax avoidance. Bigwigs from big brands, including Apple, Google, Microsoft, Rio Tinto, BHP Billiton and Fortescue Metals, squirmed under the spotlight as they were grilled about how they (legally) shift profits offshore… – Continue reading
Corporate treasury departments will have to start complying with International tax rules and provide documentation for transactions according to recent reports. G20 leaders attempted to reform the international tax system in July 2012 by setting up the Base Erosion and Profit Shifting (BEPS) project. This task was given to the… – 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
This is relevant mainly for (1) Hong Kong companies or investment funds selling securities in Chinese listed companies and (2) ship or aircraft leasing companies resident in Hong Kong who (finance) lease vessels and aircraft to lessees in mainland China. On 1 April 2015, Hong Kong and mainland China signed… – Continue reading
In recent years, the State Administration of Taxes (“SAT”) has paid closer attention to fees resident enterprises pay their overseas related parties, concerned that multinational groups have shifted profits away from China through aggressive tax planning and by paying unreasonable service fees and royalties overseas. Following PRC’s active participation in… – Continue reading
Historically taxpayers have faced difficulty overcoming a presumption against a change in domicile to a foreign jurisdiction. Intellectual property generally will be the most valuable asset held by technology companies and, in fact, many other business entities across all sectors of the economy. A recent analysis of S&P 500 companies… – Continue reading
Pakistan-Japan Business Forum has recommended to the Federal Board of Revenue (FBR) to immediately de-notify Federal Excise Duty (FED) on royalty and technical fee, which is now chargeable under the provincial legislation promulgated in Sindh, Punjab and KP, as sales tax on services. Sources told Business Recorder on Saturday that… – Continue reading
Pakistan-Japan Business Forum has recommended to the Federal Board of Revenue (FBR) to immediately de-notify Federal Excise Duty (FED) on royalty and technical fee, which is now chargeable under the provincial legislation promulgated in Sindh, Punjab and KP, as sales tax on services. Sources told Business Recorder on Saturday that… – Continue reading
SINGAPORE, April 12 (Reuters) – The Singapore trading hubs of the world’s largest commodity companies are coming under scrutiny from the governments of some resource-producing countries who say they suspect they are using units in the Southeast Asian financial centre to avoid tax. Some of the world’s largest oil, mining… – 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
Australia’s biggest miners, BHP Billiton and Rio Tinto, have told the Senate inquiry into corporate tax avoidance that they are under audit by the Australian Taxation Office for allegedly shifting profits through marketing hubs in Singapore. The Singaporean hubs are used by multinationals including the tech giants and miners to… – Continue reading
The present French Tax Update will focus on (i) several noteworthy French and European Union court decisions issued in the last months of 2014 and in the first months of 2015, and (ii) the recent presentation by the European Commission of a package of tax transparency measures. VALIDITY OF TAX… – Continue reading
The Ukrainian government will review the system of taxation of gas production companies irrespective of their form of ownership. This is stipulated in the draft guidelines of Ukraine’s budget policy, or the budget resolution, for 2016, which was tabled by the Cabinet of Ministers in parliament. Among the other priorities… – Continue reading
* Australia pursuing multibillion-dollar claims on BHP, Rio -AFR * Singapore marketing hubs save the two A$750 mln/year -AFR * Rio, BHP say the Singapore hubs not set up to save tax * BHP says uses the hub as it is close to customers and markets (Adds tax office, Rio,… – Continue reading
China has introduced measures to deny income tax deductions for certain service fees and royalties paid by Chinese companies to their overseas affiliates. They appear to stem from China’s initiatives to implement rules it sees as related to the OECD’s Base Erosion and Profit Shifting project (BEPS) They will likely… – Continue reading
Urgent changes are needed to Australian tax laws, say experts, amid claims BHP Billiton and Rio Tinto avoided paying billions of dollars in tax during the mining boom. The Australian Tax Office has the mining giants in its sights over claims they have been saving more than $750 million a… – Continue reading
Law360, New York (April 06, 2015, 3:10 PM ET) — A draft report released Friday by the Organization for Economic Cooperation and Development on strengthening controlled foreign-company rules to crack down on tax evasion said there are substantial disagreements among member states about how to best define CFC income. The… – Continue reading
On April 3, 2015, as part of its Action Plan on Base Erosion and Profit Shifting (BEPS), the OECD released a discussion draft entitled “BEPS Action 3: Strengthening CFC Rules” (the Draft) for comments. The Draft stresses the importance of CFC rules in countering base erosion and profit shifting, and… – Continue reading
An agreement to lower the mainland withholding tax for aircraft and ship leasing is a crucial first step towards realising the Hong Kong government’s ambition of making the city an international centre for financing a global aviation industry that will need US$4.6 trillion worth of planes in the next two… – Continue reading
Hong Kong (HKSAR) – The Secretary for Financial Services and the Treasury, Professor K C Chan, signed the Fourth Protocol to the Arrangement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income with the Mainland (the Fourth Protocol) with the Deputy Commissioner… – Continue reading
Irish economy set to receive financial boost by world number one golfer’s decision to pay tax on earnings. World number one Rory McIlroy is moving his vast business interests to Ireland’s capital city Dublin, according to a report in the Irish Independent. The newspaper says that McIlroy’s decision will boost… – Continue reading
China tax authority, the State Administration of Taxation (SAT) issued an announcement on March 18, in which it outlines a number of transfer pricing transactions which would no longer be eligible for tax deductions. The decision is effective immediately. The move follows an investigation into transfer pricing that first started… – Continue reading
Mainland authorities are targeting tax evasion by multinationals, implementing new regulations aimed at “unreasonable” payments such as for service and royalties to overseas related parties. “The tax administration’s nationwide audit has discovered instances of multinationals in China making unreasonable payments to related parties overseas, causing the erosion of our tax… – Continue reading
It’s been dubbed the ‘Google tax’! Starting April 1st, the UK will levy a new ‘diverted profits tax’. This is the British government’s offensive against multinationals like Google, Amazon, Starbucks and others accused of shifting profits and avoiding tax. In doing so UK will become the first country to implement… – Continue reading
U.S. Court of Appeals Rejects IRS Attempt to Apply Closing Agreement Retroactively to Support an Unrelated Proposed Adjustment to Tax SUMMARY From 2003 to 2006, U.S. corporations were entitled, in certain circumstances, to elect a one-time dividends-received deduction for dividends from controlled foreign corporations. BMC Software, Inc. made this election… – Continue reading
