India’s Supreme Court has asked Vodafone to pay $302 million to the Indian government as part of its plans to merge four of its operating businesses ahead of a public listing in India. Vodafone is contesting charges of around $1.1 billion that the government is seeking to allow the merger… – Continue reading
Hong Kong is tipped to become the world’s largest offshore corporate services centre by 2020, helped ironically, by the industry’s own struggles against reform demands coming from western governments and pressure groups. On notice after high profile money laundering and tax avoidance scandals, traditional offshore havens like the British Virgin… – Continue reading
Transfer pricing adjustment cannot be made in a case where the tax rate in the country of the Associated Enterprise is higher than the Indian rate and where, accordingly, establishment of tax avoidance or manipulation of prices or establishment of shifting of profits is not possible. Only after proper application… – Continue reading
Protecting the tax base of extractive industries, moving toward more responsive and flexible fiscal regimes, and improving international cooperation have become priorities in the Andean region, as commodity prices and revenues from extractive industries continue to decline, participants at a recent IMF conference heard. The three-day conference, Determining the Tax… – Continue reading
Of these, one advance pricing agreement has a ‘rollback provision’ The government has concluded 11 agreements to tax multi-national companies via the transfer-pricing mode. Of these, one advance pricing agreement (APA) has a ‘rollback provision’, which means those relating to previous years. The government has signed 22 APAs so far… – Continue reading
NEW DELHI: India proposes a major clean-up of decade-and-a-halfold rules that govern the prices of imports by related parties – such as arms of multinationals from their parent – in an attempt to reduce delays and disputes and make it easier to do business. The finance ministry is not just… – Continue reading
On July 22 2015, National Treasury released for comment the Draft Taxation Laws Amendment Bill, 2015 (DTLAB 2015), the Draft Tax Administration Laws Amendment Bill, 2015 (DTALAB 2015), and related Explanatory Memoranda. Section 9D currently provides for diversionary income rules which seek to impute into the income of South African… – Continue reading
On 10 November 2015, the Danish Ministry of Taxation introduced a draft bill (bill no. L46) including an amendment to section 3B of the Danish Tax Control Act (skattekontrolloven). The purpose of the proposed amendment is to implement Action Point 13 of the BEPS Initiative (Guidance on Transfer Pricing Documentation… – Continue reading
Through tweaks to the Model Tax Convention, the OECD believes its work on profit shifting will stem elaborate structures, such as commissionaire arrangements, used by large multinationals to avoid the creation of a permanent establishment. The Organization for Economic Cooperation and Development, however, responded to concerns from taxpayers by narrowing… – Continue reading
The U.K. and the U.S. governments will adopt different approaches to implementing the OECD’s final package of measures to tackle base erosion and profit shifting, panelists at a London forum said. The U.K. government considers an inclusive, multilateral instrument to upgrade bilateral tax treatments as the “best way” for countries… – Continue reading
The OECD’s final report on Action 13 under the base erosion and profit shifting project—which calls for countries to adopt a country-by-country reporting template, master file and local file—has the potential to be one of its “greatest legacies.” Marlies de Ruiter, head of the Organization for Economic Cooperation and Development’s… – Continue reading
Under the judge’s order, Microsoft must hand over more documents and make some former and current executives available for interviews in a long-running tax audit of the company’s books. Microsoft must comply with Internal Revenue Service requests for documents and interviews with current and former executives as part of a… – Continue reading
HA NOI (VNS) — The Ministry of Finance has instructed commercial banks to completely stop over-the-counter tax payments and work with tax agencies to implement online tax payments by the beginning of December. Accordingly, it can be made via the general department’s e-portal and other online banking services such as… – Continue reading
MUMBAI: India’s forthcoming budget may draw from some of the recommendations, especially in the realm of transfer pricing, contained in the final package of ‘Base Erosion and Profit Shifting’ (BEPS) measures, rolled out in October. Certain anti-abuse measures, such as thin capitalization, which for tax purposes disallows interest payments beyond… – Continue reading
Introduction Tax exemptions Eligibility Trademarks Calculating tax benefits Eligible costs Introduction At the end of 2014, the government presented the 2015 budget, which introduced a ‘Patent Box’ tax regime in line with similar schemes adopted in other European countries. It applies to corporate income tax and regional tax on productive… – Continue reading
Nigeria’s tax authority—the Federal Inland Revenue Service—has incorporated into its tax audit procedures certain of the recommendations included in the OECD’s base erosion and profit shifting (BEPS) project. For instance, the tax authority is scrutinizing transactions between Nigerian subsidiaries and their foreign related parties, especially those related parties located in… – Continue reading
Earlier this week the heads of state of the 20 largest global economies have agreed to adopt the 15 BEPS action points in their respective countries. Ample reason to take a closer look at the details and implications of one of the most far-reaching upcoming tax adjustments. Action 4 of… – Continue reading
Measures Will Impact Financial Services, Investment Fund, Aviation Leasing and Other Sectors G20 finance ministers last week finally approved the wide-ranging “BEPS” reforms to the international tax system. The measures include a proposed new OECD treaty definition of “Permanent Establishment” under which the mere negotiation of contracts could create a… – Continue reading
From FDI relaxations to gas pricing and now disinvestment and Vodafone talks, it is refreshing that the NDA government has gone on an overdrive to push measures to attain a high growth trajectory. The pace at which the NDA government is taking decisions after Bihar assembly election results is commendable… – Continue reading
Hong Kong is tipped to become the world’s largest offshore corporate services centre by 2020, helped ironically, by the industry’s own struggles against reform demands coming from western governments and pressure groups. On notice after high profile money laundering and tax avoidance scandals, traditional offshore havens like the British Virgin… – Continue reading
Latest developments under the Base Erosion and Profit Shifting (BEPS) initiative of the Organisation for Economic Co-operation and Development (OECD) was one of the key points of a recent four-day visit by KPMG’s global leader for Transfer Pricing Services Sean Foley to Vietnam. He shared the issue with Vietnam’s General… – Continue reading
If statistics are anything to go by, today India is the world’s fastest growing economy at 7.3% in 2015, outstripping the global average of 3.1%. With a new government in the centre, we do seem to be riding high on the growth trajectory. The Modi government has certainly done its… – Continue reading
MUMBAI: In an order that may benefit multinational and Indian companies that are tied down in transfer pricing disputes with the revenue department, the Income Tax Appellate Tribunal has held that officers must “apply their mind” before firing off tax demands. Assessment officers (AOs) as well as commissioners of the… – Continue reading
The new tax treaty signed between Australia and Germany on 12 November 2015 is the first tax treaty Australia has signed that comprehensively incorporates the proposals in the OECD base erosion and profit shifting (BEPS) final recommendations. Some notable BEPS-related changes in the new Australia and Germany treaty include: The… – Continue reading
Policies on perks, more bilateral pacts can help generate funds for growth: Accounting firm Singapore’s tax system can be improved to ensure the country can generate the funds needed for long-term growth and development, according to a white paper from accounting giant PwC yesterday. It called for policies that ensure… – Continue reading
MEPs grilled eleven multinational companies on their corporate tax practices in a five-hour debate with the Special Committee on Tax Rulings on Monday. These companies had declined the committee’s first invitation to appear before it, but later changed their minds and accepted its last chance invitation. Of the 13 original… – Continue reading
Notwithstanding the NDA’s election promise to end tax terrorism the dynamics on the ground belie easy fixes The National Democratic Alliance (NDA) government is seeking to prepare a road map to reduce existing tax litigation and look into increasing pecuniary threshold limits to discourage tax departments from launching new cases…. – Continue reading
MELAKA, Nov 17 (Bernama) — The Inland Revenue Board (IRB) has highlighted the transfer pricing (TP) and abuse of treaties in base erosion and profit shifting (BEPS) issues at the 36th Commonwealth Association of Tax Administrators Conference (CATA) here today. IRB, in a statement today, said CATA members were serious… – Continue reading
Foreign investors are still concerned about the retrospective taxation in India, but the concerns have alleviated a little due to assurances by the government, says John Hobster, global head (transfer pricing), EY. He tells Dilasha Seth that in terms of transfer pricing, things are changing in India not only at… – Continue reading
The need for robust, well-informed intangible asset valuations for the purpose of transfer pricing is becoming ever more invaluable for MNEs TRANSFER pricing has been the buzz-word of the moment with extensive media coverage in recent years of multinational enterprises (MNEs) repositioning profits to more favourable tax jurisdictions. This movement… – Continue reading
2nd Symposium of CR for transfer pricing The 2nd Symposium Transfer Pricing organized by EY Greece, exactly one year after the successful organization of the 1st Symposium was intended as the developments in transfer pricing in Greece and international tax developments, focusing on the recently finalized OECD Actions tackling Erosion… – Continue reading
The Organisation for Economic Co-operation and Development (OECD) has described its newly unveiled Base Erosion and Profit Shifting (BEPS) Action Plan as a “change of paradigm.”1 A few very large global groups aside, a more apt description may be a minefield for the unwary. BEPS has received considerable air time… – Continue reading
The UK Government launched a consultation on 22 October 2015 regarding the UK corporate tax rules for interest deductibility. The consultation seeks views on the design of a general limitation for UK corporation tax deductions for interest and similar finance costs, imposing a capcalculated by reference to a fixed percentage… – Continue reading
The fundamental contradiction between IndAS and taxation is that the latter is based on real income theory while the former is based on economic substance of transactions The country is undergoing an overhaul under the present government at the Centre, and so are its corporate laws. The country’s tax regime… – Continue reading
Across the globe, base erosion and profit shifting (BEPS) is making headlines and drawing the attention of not only governments and tax authorities but also non-government organizations, activists, lobbyists and the general public. As the public debate has spread to the Gulf Cooperation Council (GCC) countries, the focus now centers… – Continue reading
Currently 15,980 foreign companies are operating in Korea. While hiring workers and producing goods and services, foreign investors encounter numerous difficulties and experience a variety of grievances. One particular grievance brought to our attention is that they suffer from a discrepancy between the value of imported goods assessed by the… – Continue reading
Amazon, Facebook and Google in line of fire after committee backs proposals to force multinational corporations to pay tax where they make their sales MEPs have launched a scathing attack on Facebook, Google and Amazon in the European parliament, accusing them of diverting profits worth billions of pounds to low… – Continue reading
A number of multinational companies have been in the news recently for alleged tax malpractices. Various countries which are facing budget deficits are convinced that additional tax revenues can be collected, especially from multinational companies. What is it all about? A business typically faces many risks. A risk is the… – Continue reading
Normative Instruction no. 1.474, of June 20, 2014, excluded Switzerland from the list of Jurisdictions with Favoured Tax Treatment (JTF) and included it in certain cases within the concept of privileged tax regime (RFP). The matter is now governed by Law no. 11.727 which, as well as widening the concept… – Continue reading
It has been a matter of dispute between income tax authorities and tax payers that whether regular assessing officer is required to analyse returns before referring a case to a transfer pricing officer (TPO). Various judicial and quasi-judicial bodies have passed several orders on this issue. Some verdicts may conflict… – Continue reading
As at least the first phase of the OECD’s BEPS project1 wound down with the October release of the “final” BEPS deliverables, questions remained regarding how much of the recommended changes would be implemented in the United States in the near term. Because many of the recommendations require legislative changes… – Continue reading
The Mumbai Bench of the Income-tax Appellate Tribunal held that an Assessing Officer cannot “mechanically” refer a taxpayer’s international transactions to a Transfer Pricing Officer for a determination of the arm’s length price, but must first independently conclude that the taxpayer did not determine the arm’s length price or did… – Continue reading
The final reports on the G20/OECD Base Erosion and Profit Shifting (BEPS) project were issued on 5 October (the “Reports”) after a two-year consultation period during which 62 countries and many other stakeholders (such as the World Bank, the IMF, and many trade associations) participated. These Reports, split into 15… – Continue reading
On September 16, 2015, the Australian government introduced into Parliament Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, which contains, among other items (including the implementation of country-by-country reporting), the proposed legislative language to implement Australia’s version of the United Kingdom’s diverted profits tax. The bill was accompanied by… – Continue reading
THE world appears to be getting much smaller. Rapid technological advances, increased people mobility, and changes in the international political climate have all helped to break down many of the traditional barriers to global and regional trade. For dynamic, fast-growing businesses, this increased globalisation represents an excellent opportunity for businesses… – Continue reading
Following the October 2015 release of the OECD’s base erosion and profit shifting (BEPS) deliverables, some consultations in the UK have already been opened—including one on the UK’s rules concerning the deductibility of corporate interest expense and how this treatment would be affected by BEPS Action 4 (which seeks to… – Continue reading
MUMBAI: In a bid to tackle high-pitched and unreasonable tax assessment orders, which result in heavy income tax (I-T) demands, the Central Board of Direct Taxes (CBDT) issued a notification on Monday requiring setting up of local grievance committees across I-T offices in India. The CBDT, in its notification, acknowledges… – Continue reading
‘Special purpose’ approach by accountants hides corporate secrets Amid the maelstrom over the GST, the Senate last night passed what may be the most useful piece of legislation yet to combat multinational tax avoidance. The new law was not carried by the government, whose track record on tackling big tax… – Continue reading
Key Points: The rejection of the Commissioner’s position on the relevance of credit rating agencies and the relevance of implicit support will give rise to uncertainty going forward, as it is unclear how an arm’s length interest rate can be practically determined. The Federal Court’s recent decision in Chevron Australia… – Continue reading
A paradigm shift in the way business is conducted is taking place as new base erosion of profit shifting (BEPS) rules are aligned with tax systems, but more tax certainty and rules that suit specific African circumstances are needed, a Deloitte OECD Transfer Pricing Guidelines seminar heard on Wednesday, 04… – Continue reading
