The Delhi High Court has adjudicated on a host of transfer pricing adjustment cases, where the adjustment had been made by the taxman for ‘excessive’ spends on advertising, marketing and promotional expenses (AMP). The High Court’s judgment in a high-stakes transfer pricing case lends clarity on many of the questions… – Continue reading
THE ICAEW has yet to discipline any members for advising clients on aggressive tax avoidance schemes, despite setting a strong stance against such behaviour three years ago, the institute has confirmed to Accountancy Age. In 2012, the ICAEW announced members advising on schemes that could be interpreted as aggressive could… – Continue reading
TRANSFER pricing is the most lucrative money generator for the Revenue Department because it largely concerns multinational companies with large sales volumes. A 1-per-cent adjustment to revenue or costs can res This article discusses how new Revenue Department administrative changes will affect many multinational companies from a transfer-pricing perspective. In… – Continue reading
HMRC’s reporting of tax reliefs does not enable Parliament to scrutinise them effectively to determine whether they are providing value for money and the complexity of tax law and the constraints on HMRC’s resources mean that it is fighting an uphill battle against those who are determined to cheat the… – Continue reading
Tackling tax evasion should be a top EU priority. EU countries and the European Commission should play a leading role in discussing how to fight tax fraud and aggressive tax planning in the OECD and other relevant fora, says Parliament in its resolution on tax, voted on Wednesday. The resolution,… – Continue reading
How to ensure landowning clients do not have shortfalls and exposure to penalties Landowners in Queensland should expect increased scrutiny of their affairs for land tax purposes. It is expected the Queensland Office of State Revenue (Queensland OSR) will increase its land tax audit activity in 2015 so landholders and… – 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
The Abbott Government will shortly release a discussion paper on the Australian tax system. It will be the first step towards the much anticipated tax white paper. International factors should figure prominently in the white paper — specifically, how to ensure that Australia has a resilient tax system given the… – Continue reading
Rather than installing a territorial tax system, the federal government should change U.S. securities rules, a law professor contends. Changing to a “territorial” tax system in the United States won’t ultimately stem the exodus of U.S.-based multinationals to lower-tax countries and could come at a significant cost in terms of… – Continue reading
The European Commission has published the first of two tax transparency packages to tackle corporation tax fraud and harmful tax competition in the EU. It is recommending greater co-operation across EU member states and the automatic exchange of information on tax rulings across EU countries, which sounds good on paper… – Continue reading
President Barack Obama’s proposal to impose a minimum tax on the foreign income of US companies would place them at a substantial competitive disadvantage in global markets, Pamela Olson, former assistant secretary for tax policy at the US Department of Treasury, has said. As well as including proposals for a… – Continue reading
MUMBAI: Providing relief to scores of multinational companies locked in transfer pricing disputes with income tax authorities, a tribunal has clarified that a company can claim deduction of expenses paid to a subsidiary if it follows a global cost allocation policy. The Delhi bench of the Income Tax Appellate Tribunal,… – Continue reading
Two important developments last week in the transfer pricing domain have the potential of completely transforming the way this critical and controversial tax area has been handled by the income-tax department. One is the Delhi High Court judgment on tackling the AMP (advertisement, marketing and sales promotion) expenses involving a… – Continue reading
Internationally, Australia has been seeking to take a lead on addressing transfer pricing issues as chair of G20, with a focus on a global and coordinated approach to base erosion and profit shifting (BEPS). Domestically, the focus has been on reform of the transfer pricing regime in light of deficiencies… – Continue reading
Earlier today the UK government delivered its last budget before the UK general election in May. Many of the measures were, as one might expect so close to an election, focused on personal rather than corporate taxation. However, below is a summary of some of the business related announcements: Diverted… – Continue reading
Finance Minister Dr Peter Phillips has hit back at suggestions from Opposition Leader Andrew Holness that an increase in tax compliance would mean harassment of businesses. Holness made the suggestion as he contributed to the Budget Debate last Thursday, but speaking at a meeting at The Gleaner’s North Street offices… – Continue reading
The Investment Association has hit out at Labour plans to widen the tax net for hedge funds, arguing this could harm the economy and increase the costs of UK funds. The Financial Times reports that Labours wants to remove “intermediaries relief” tax which allows investment funds to avoid paying stamp… – Continue reading
Last week, we discussed the revised set of standards for Transfer Pricing (TP) documentation and a template for country-by-country reporting (CBCR) of income, earnings, taxes paid and certain measures of economic activity as contained in Action Plan 13 of the Base Erosion and Profit Shifting (BEPS) Project. The CBCR provides… – 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
Ranking Irish officials expressed concern the “double-Irish” corporate tax mechanism was undermining the State’s “international tax credibility” before the Government moved to scrap the loophole in this year’s budget. Newly released records of the influential Tax Strategy Group show officials also took note US president Barack Obama had criticised other… – Continue reading
This is the time of year when financial advisers really earn their fees. In the run-up to the end of the tax year, advisers must work hard to make sure that their clients have made the best use of their allowances before they lose them as the new tax year… – Continue reading
The Government has introduced the Advance Pricing Agreement (APA) Scheme through Finance Act, 2012 and Income Tax (Tenth Amendment) Rules, 2012 notified vide S.O. 2005(E) with effect from 30th August, 2012. The APA Scheme endeavours to provide certainty to taxpayers in the field of transfer pricing through an agreement in… – Continue reading
On March 18, 2015, the European Commission presented a package of transparency measures aimed at tackling corporate tax avoidance and harmful tax competition within the European Union, reports Tax News. The transparency package is said to be “the first step in the Commission’s ambitious agenda for 2015 to fight tax… – Continue reading
Tough tax disclosure laws introduced by the former Labor Government represent “an invasion of privacy and intrusion for Australian private companies,” Prime Minister Tony Abbott has said. Abbott made the comment during a joint press conference with the Assistant Treasurer Josh Frydenberg. The press conference followed a meeting of the… – Continue reading
In Ruling No. 27296, Italy’s Supreme Court rejected the tax authorities’ appeal against an Italian company’s transfer of goods and services to its German parent. The Supreme Court ruled that if there is no clear economic advantage for a company, simply proving a transaction is not at arm’s-length is insufficient… – 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
Transfer pricing activities have faced increased scrutiny by tax authorities around the world and within the United States. As such, many companies are seeking more guidance on how to best manage their transfer pricing life cycle. The life cycle consists of four phases, which include planning, implementation, documentation and monitoring…. – Continue reading
Advisers could face criminal charges under new powers for HMRC following the Budget if they fail to prevent tax evasion by inherited clients, a lawyer has warned. HMRC is consulting on a new corporate criminal offence for firms failing to prevent tax evasion, which will implicate advisers who have clients… – Continue reading
The OECD’s base erosion and profit-shifting project has dominated the international tax scene for over a year. Ever since the G-20 tasked the organization with finding solutions to the perceived problem of multinationals paying low effective tax rates, the international tax community has talked about little else. The OECD hoped… – Continue reading
New Delhi : The Delhi High Court has held that money spent by Indian subsidiaries of foreign companies on advertising, marketing and promotion (AMP) of their global brand here are international transactions and fall under the purview of transfer pricing rules, reports PTI. A bench of justices Sanjiv Khanna and… – Continue reading
European states including Ireland and Luxembourg will be compelled to share information on private tax deals they have granted to multinational businesses under proposals from Brussels to clamp down on corporate tax avoidance. The European Commission was due today to publish reforms aimed at bringing into line rogue member states… – Continue reading
1.GENERAL QUESTIONS 1.1 Why is the Commission presenting a Tax Transparency Package? The Commission has made the fight against tax evasion and corporate tax avoidance a political priority, with a view to creating a socially and economically more efficient Single Market. While much has been done to advance this agenda… – Continue reading
NEW YORK — Faced with the prospect of letting another deal slip through its fingers, Valeant Pharmaceuticals International substantially increased its bid for Salix Pharmaceuticals on Monday, putting a quick end to a bidding war with Endo International. Valeant said it would now pay about $11bn, or $173 a share,… – Continue reading
In the recent case of Herefordshire Property Company Ltd v HMRC1, the First-tier Tribunal (Tax Chamber) (“FTT”) allowed the taxpayer’s appeal against the imposition by HMRC of a penalty, which was based on an allegation of negligent implementation of a tax planning scheme by the taxpayer. Regular readers of our… – Continue reading
Delhi HC noted while treating advertising, marketing & promotional expenses by Indian arm of an MNC as int’l transactions, ‘the exercise undertaken should not result in over- or double-taxation In a reprieve to multinational companies (MNCs) and their subsidiaries operating out of India, the Delhi High Court has laid out… – Continue reading
Irish eyes are smiling in corporate America. The Emerald Isle has emerged as the world’s top recipient of U.S. foreign direct investment, according to a report from the American Chamber of Commerce Ireland. In the first nine months of 2014, Ireland beat the likes of Canada, Mexico, the U.K. and… – Continue reading
LG, Sony, Daikin, Haier, Reebok, Canon and many such MNCs lost an important tax case in the Delhi High Court today. It’s transfer pricing dispute about the money spent by the subsidiaries of these MNCs in India in promoting and maintaining the international brand. Payaswini Upadhyay reports on this landmark… – Continue reading
In a development that will usher in relief to multinational companies and reduce litigation, the central board of direct taxes (CBDT) on Monday notified rules for implementation of roll back provisions of advance pricing agreements (APAs). The provisions for roll back of APAs were announced by finance minister Arun Jaitley… – Continue reading
FOCUS: As charity trustees, university governing bodies have an overriding duty to act in the best interests of their institution. However, the HMRC’s hardening stance on tax planning and the current political climate could leave them treading a fine line between their desire to maximise revenue for the university’s purposes… – Continue reading
(Reuters) – The European Commission will lay out plans on Wednesday designed to limit tax avoidance in the wake of recent revelations that major corporations were paying minimal state contributions across the European Union. EU members will be required to share information on cross-border tax rulings, according to a draft… – Continue reading
New Zealand has a broad-based tax system consisting principally of: income tax fringe benefit tax resident and non-resident withholding tax (RWT and NRWT) goods and services tax (GST) Accident Compensation levies import tariffs and miscellaneous excise duties, and local authority rates on property. Stamp duty, gift duty and death duties… – Continue reading
When the Obama administration changed the rules to make it harder for US companies to move their headquarters—and their taxable profits—overseas through the reverse mergers called tax inversions, it put the kibosh on at least one such deal. But now critics of the move say rules have made it easier… – Continue reading
Rules are tangled and dispute resolution is excruciatingly slow. The government’s trying but it’s a long haul As Asia’s third-largest economy, India is a major investment destination. However, in recent years, the unpredictable tax regime has has been a major stumbling block to its potential. According to a recent World… – Continue reading
Court ruled in favour of the tax dept and held that market intangibles are international transactions and hence come under the transfer pricing ambit New Delhi: The Delhi high court on Monday brought clarity on application of transfer-pricing rules on marketing intangibles in a long-awaited judgement that will reduce disputes… – Continue reading
The U.S. government’s efforts to collect taxes on American corporations’ overseas earnings that have been shielded by so-called tax inversions may have backfired, triggering a wave of foreign takeovers of American firms, according to a report published Sunday in the Financial Times. To reduce taxes on foreign earnings, corporations based… – Continue reading
The Finance Ministry on Monday notified the Advance Pricing Agreement (APA) rules governing rollback provisions in transfer pricing cases. Though the provisions were announced in Finance Minister Arun Jaitley’s maiden Budget in July 2014, they could not be activated because the rules were not codified. Consultants said the move could… – Continue reading
THIS article continues our series on Base Erosion and Profit Shifting (BEPS), specifically looking at Action Plan 13, which prescribes a revised set of standards for transfer pricing (TP) documentation and a template for country-by-country reporting (CBCR) of income, earnings, taxes paid and certain measures of economic activity. Chapter V… – Continue reading
Subsidiaries of Israel’s Delek Group and the Houston-based Noble Energy are suing the state for some $15 million, claiming the government has collected more royalties than permissible on natural gas sales. Accusing the National Infrastructures, Energy and Water Ministry of calculating royalty revenues based on the higher Tamar reservoir gas… – Continue reading
Ras Al Khaimah, close to Dubai, is one of the fastest growing emirates in the United Arab Emirates. The emirate has also gained a reputation for being a transparent, tax free, corruption free, no red tape and inexpensive to do business jurisdiction. Ras Al Khaimah is the most popular offshore… – Continue reading
The UK’s HM Revenue & Customs (HMRC) is increasingly unwilling to believe that any error in a tax return can be the result of an ‘innocent error’, said Fiona Fernie, a tax investigations expert at Pinsent Masons, the law firm behind Out-law.com. New powers introduced in recent years to allow… – Continue reading
