Int'l Tax News

Posted on

Brazil's Rejection of VAT on Web Ads a Boost for Google, Facebook

Internet giants Google and Facebook havewon important court victories in Brazil, reversing the taxation of their advertising revenue by Brazilian states.

In separate cases, the tax court of Sao PauloÔøΩBrazil's business center and its key financial stateÔøΩruled that the internet advertising revenue of both Alphabet Inc.'s Google and Facebook Inc. aren't subject to value-added tax (ICMS), the main source of revenue for Brazil's states.
To read more go Subscription Required

Posted on

France and Germany Revive Discussions About Tax Harmonization, FTT

Although the years-long efforts by the governments of France and Germany to persuade other EU member states to adopt a common corporate tax base and a financial transaction tax (FTT) appeared recently to be going nowhere, high-level officials in both countries have started talking up the two proposals again in recentweeks.
To read more go Subscription Required

Posted on

EU Takes Legal Action Against Portugal, Two Others on Tax Deals

The European Commission launched legal proceedings against Portugal, Bulgaria, and Cyprus for not adopting, in their national laws, European Union legislation requiring all EU countries to exchange tax rulings granted to multilateral companies.

The legislationwas adopted in thewake of the 2014 LuxLeaks scandal that revealed more than 100 individualized tax rulings the Luxembourg government secretly signedwith multinational companies such as McDonald's Corp. and Amazon.com Inc. The measure (EEC/2015/2376)was required to be on the books of each EU country by the end of 2016; the first exchange among EU country tax authorities is due to take place in September.
To read more go here

Posted on

Malaysia Releases Updated Transfer Pricing Guidelines

Malaysian tax authorities on July 11 released updated transfer pricing guidelines covering, in particular, the arm's-length principle, intangibles, commodity transactions, and documentation. This article highlights the main developments in the chapter on the arm's-length principle.
To read more go Subscription Required

Posted on

OECD Releases Updated Transfer Pricing Guidelines

The OECD has published a 2017 version of its transfer pricing guidelines that incorporates revisions made during the base erosion and profit-shifting project.

The OECD's July 10 release of its Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2017) marks the first full update of the guidelines since 2010. The revisions incorporate the substantive changes made by the 2015 final BEPS report on actions 8-10 and the documentation and country-by-country reporting requirements of the action 13 report. The changes provide up-to-date guidance on the application of the arm's-length principle,which "remains the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises," according to an OECD press release.
To read more go Subscription Required

Posted on

OECD releases the draft contents of the 2017 update to the OECD Model Tax Convention

  • By OECD
The OECD Committee on Fiscal Affairs has just released the draft contents of the 2017 update to the OECD Model Tax Convention prepared by the Committee'sworking Party 1. The update has not yet been approved by the Committee on Fiscal Affairs or by the OECD Council, although, as noted below, significant parts of the 2017 updatewere previously approved as part of the BEPS Package. Itwill be submitted for the approval of the Committee on Fiscal Affairs and of the OECD Council later in 2017. This draft therefore does not necessarily reflect the final views of the OECD and its member countries.
To read more go here

Posted on

IDFC Bank: A Bank In A Hurry

IDFC Ltd, among the more successful infrastructure lenders in the country,was one of 26 entities that applied for a banking licence in 2013. Itwas one of only two (Bandhan Financial being the second) that managed to pass the many rounds of scrutiny that each licence-aspirantwas subjected to by the Reserve Bank of India (RBI). The fact that IDFC got the nod to launch a universal bankwas partly due to its diversified ownership, but itwas as much a testament to the track record established by the organisation since its inception in 1997.
To read more go here

Posted on

EU Financial Transactions Tax Talks Kicked to End 2017

A pivotal meeting of 10 European Union finance ministers on a financial transactions tax, due to take place July 10, has been postponed until the end of 2017 at the earliest.

The 10 EU countries officially pursuing the financial transactions tax are Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain.
To read more go here

Posted on

Russia Clarifies PE Determinations Under Tax Treaty With U.K.

The Russian Ministry of Finance has released Guidance Letter 03-08-05/36799 (dated June 14),which clarifies the permanent establishment determinations under Russia's tax treatywith the United Kingdom.

Under article 7 of Russia's Tax Code, the corporate tax liabilities of a taxpayer in Russia (whether resident or nonresident) must be determined in light of the provisions of any applicable tax treaty (or treaty protocol). The treaty provisions prevail over any conflicting Russian tax laws and regulations.
To read more go Subscription Required

Posted on

OECD releases latest updates to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations

The OECD Transfer Pricing Guidelines provide guidance on the application of the "arm's length principle",which represents the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises. In today's economywhere multinational enterprises play an increasingly prominent role, transfer pricing continues to be high on the agenda of tax administrations and taxpayers alike. Governments need to ensure that the taxable profits of MNEs are not artificially shifted out of their jurisdiction and that the tax base reported by MNEs in their country reflects the economic activity undertaken therein and taxpayers need clear guidance on the proper application of the arm's length principle.
To read more go here

Posted on

Indias set to roll out its biggest tax reform in 70 years. Heres what it means

One of India's most ambitious economic reform plans in 70 yearswill ultimately boost tax receipts and provide simplicity for businesses, but the true impact may not be felt for at least a decade due to implementation challenges, experts said.
To read more go here

Posted on

Liechtenstein, Monaco Sign Tax Treaty

Officials from Liechtenstein and Monaco signed an income and capital tax treaty in Bern on June 28, the Liechtenstein government has announced.

The treaty reportedly conforms to the OECD standard on information exchange and transparency and takes into account the October 2015 final reports of the OECD's base erosion and profit-shifting project, designed to combat tax avoidance in the cross-border context. Negotiations began in May 2015 and a treatywas initialed last November.
To read more go Subscription Required

Posted on

UN must defend target to curtail multinational companies tax abuse

  • By Tax Justice Network
The Tax Justice Network, ICRICT and the Global Alliance for Tax Justice havewritten to the new UN Secretary General António Guterres urging him to make sure that the commitment to tackle multinational tax abuse is not eliminated from the UN Sustainable Development Goals (SDGs).
To read more go here

Posted on

At Your Service! The Role of Tax Havens in International Trade with Services

This paper provides the first comprehensive study of profit shifting through mispriced service trade inside multinational firms. The analysis employs a unique firm-level datasetwith detailed information about service trade and foreign affiliates for virtually all multinational firms in Germany.
To read more go here

Posted on

Corporate Taxation and Location of Intangible Assets: Patents vs. Trademarks

Numerous empirical studies have analysed the influence of corporate taxation on the location of intangible assetswithin a company group. However, the previous literature has rather focused on studying the impact of taxation on patent location choices assuming that these assets represent the rest of intangibles aswell. This paper complements previous studies by estimating and comparing the tax elasticities of two different types of intangibles – patents and trademarks.we employ data on European and US patent and trademark applications in the period of 1996-2012 and estimate a multinomial logit model that incorporates various observed and unobserved factors of the intangible's location choice. According to our main findings, trademarks are more sensitive to changes in taxation as compared to patents. This implies that firms use trademarks more eagerly for tax planning purposes than patents.
To read more go here

Posted on

Effectiveness of Fiscal Incentives for R&D: Quasi-Experimental Evidence

With growing academic and policy interest in research and development (R&D) tax incentives, the question about their effectiveness has become ever more relevant. In the absence of an exogenous policy reform, the simultaneous determination of companies' tax positions and their R&D spending causes an identification problem in evaluating tax incentives. To overcome this identification challenge,we exploit a U.K. policy reform and use the population of corporation tax records that provide precise information on the amount of firm-level R&D expenditure. Using difference-in-differences and other panel regression approaches,we find a positive and significant impact of tax incentives on R&D spending, and an implied user cost elasticity estimate of around -1.6. This translates to more than a pound in additional private R&D for each pound foregone in corporation tax revenue.
To read more go here

Posted on

Bonus Taxes and International Competition for Bank Managers

We analyze the competition in bonus taxationwhen banks compensate their managers by means of fixed and incentive pay and bankers are internationally mobile. Banks choose bonus payments that induce excessive managerial risk-taking to maximize their private benefits of existing government bailout guarantees. In this setting the international competition in bonus taxes may feature a 'race to the bottom' or a 'race to the top', depending onwhether bankers are a source of net positive tax revenue or inflict net fiscal losses on taxpayers as a result of incentive pay. A 'race to the top' becomes more likelywhen governments' impose only lax capital requirements on banks,whereas a 'race to the bottom' is more likelywhen bank losses are partly collectivized in a banking union.
To read more go here

Posted on

Accounting for Business Income in Measuring Top Income Shares: Integrated Accrual Approach Using Individual and Firm Data from Norway

Business income is important in the upper tail of the personal income distribution, but the extent towhich it is captured by measures of personal income varies substantially across tax regimes. Using linked individual and firm data from Norway,we are able to attribute business income to personal owners as it accrues rather thanwhen it is realized. This adjustment leads to an increase in top income shares, and the size of this effect varies dramatically depending on the tax regime in place.
To read more go here

Posted on

IRS Attention

We study how public and private disclosure requirements interact to influence both tax regulator enforcement and firm disclosure. To capture IRS enforcement activities,we introduce a novel data set of IRS acquisition of firms' public financial disclosures,whichwe label IRS attention.we examine the implementation of two new disclosure requirements that potentially alter IRS attention: FIN 48,which increased public tax disclosure requirements, and Schedule UTP,which increased private tax disclosure.we find that IRS attention increased following FIN 48 but subsequently decreased following Schedule UTP, consistentwith public and private disclosure interacting to influence tax enforcement.
To read more go here

Posted on

Bank of China Settles Italy Tax Dispute Over Cash Transfers

The Bank of China paid 20 million euros ($22.4 million) to resolve a tax disputewith Italy over thousands of money transfers the bank orchestrated between Chinese nationals in Italy and their home country, the Italian government said June 21.
To read more go here

Posted on

OECD to Release Updated Transfer Pricing Guidelines, Branch Mismatches Report

The OECD is set to release an updated version of its transfer pricing guidelines, aswell as a report on branch mismatches, in July, according to top OECD officials.

Speaking during the OECD's sixth installment of the Tax Talkswebcast series June 26, Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration (CTPA), confirmed that the new version of the transfer pricing guidelines,whichwere last updated in 2010 and amended in 2016 based on the final base erosion and profit-shifting reports on actions 8-10 (transfer pricing) and action 13 (transfer pricing documentation),will be published soon.
To read more go Subscription Required

Posted on

Lets talk about the tax reform in the Philippines

There are a lot of those previously exempt from value-added tax (VAT) or zero-rated VAT transactions that are being disallowed under the Tax Reform for Acceleration and Inclusion. However, these transactions are usually not applicable anyway to business enterprises. Though these proposed changes in the VAT law are quite significant, let me just skip these and go to one change closer to the heart of start-up businesses.
To read more go here

Posted on

The British Virgin Islands is trying to prove it's not a tax haven campaigners aren't buying it

Transparency and tax campaigners are clashingwith officials from the British Virgin Islands (BVI) over a new report claiming the Caribbean islands are not a tax haven.

The report,written by Capital Economics and commissioned by BVI Finance,which promotes the country's financial sector, said the islands are strong contributors to the global economy and help facilitate international trade and investment.
To read more go here

Posted on

Austrian Parliamentary Committee Approves for Ratification MLI, Tax Treaty With Israel

The Austrian parliament's Finance Committee on June 21 approved for ratification the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and the pending tax treatywith Israel, according to information published on the Parliament'swebsite.
To read more go Subscription Required

Posted on

Bribes, Borders and Middlemen: Why India's GST Is a Game Changer

Seized vehicles. Bribes. Days-long delays. Moving goods across Indian states isn't exactly easy -- and that's a major barrier to economic growth.

Rolling a truck of vegetables into Gujarat, the state once governed by Prime Minister Narendra Modi, requires a bribe of 500 rupees to 2,000 rupees evenwith your papers in order, according to Rakesh Kaul, vice-president of Caravan Roadways Ltd.,which has about 400 trucks plying India's pot-holed roads.
To read more go here

Posted on

Disappointed by Failed VAT Proposal, Scicluna Reviews Maltas EU Presidency

The lack of agreement on an e-book VAT proposalwas both a surprise and a disappointment, Edward Scicluna, president of the Economic and Financial Affairs Council, told members of the European Parliament (MEPs) during a June 19 meeting of the Committee on Economic and Monetary Affairs.
To read more go Subscription Required

Posted on

$1.5 trillion of assets move through the British Virgin Islands twice as much as previously thought

Assets held offshore in the British Virgin Islands (BVI) areworth $1.5 trillion (£1.19 trillion), double the International Monetary Fund's 2010 estimate. That's according to a new report by Capital Economics, seen by the Financial Times.
To read more go here

Posted on

EU Fails to Agree on Reduced VAT Rates, Reverse Charge Mechanism

European finance ministers failed to reach an agreement on two important VAT files that the Maltese presidency of the Council of the EU had hoped to close on June 16. Aswas expected, the Czechs blocked an agreement on reduced VAT rates on e-books because they didn't getwhat theywanted on a proposal thatwould allow them to apply a general reverse charge mechanism.
To read more go Subscription Required

Posted on

Nigeria Ratifies Treaties to Curb Tax Evasion by Multinationals

Nigeria has ratified multilateral conventions on tax related treaties to end profit shifting and tax evasion by multinational companies.

The ratification of the treatieswednesday followed the approval of a memo submitted by the Minister of Finance, Kemi Adeosun,who said thiswas part of government's plan towiden its tax base and improve revenue generation.
To read more go here

Posted on

India Signals Tax Overhaul on Track as Timing Questioned

Indian officials are signaling a sweeping tax reformwill go ahead as scheduled on July 1, pushing back against speculation the governmentwill delay amid predictions of chaos from some business groups.
To read more go here

Posted on

New tax treaty will close loopholes that allow multinationals to avoid tax

Australia,with another 70 countries, has signed a multilateral treaty to create more coherence in fighting tax avoidance by large multinational corporations. The Multilateral Convention to Implement Treaty Measures to Prevent Base Erosion and Profit Shifting, or BEPS Convention, aims to close loopholes in the international tax system that result from differences in individual country tax systems.
To read more go here

Posted on

U.K. Vote Adds to Uncertainty Over Tax and Brexit

U.K. Prime Minister Theresa Maywill form a governmentwith the support of Northern Ireland's Democratic Unionist Party (DUP) to "provide certainty and lead Britain forward," after the June 8 general election that May had hopedwould deliver "strong and stable" government but instead produced a hung Parliament.
To read more go Subscription Required

Posted on

Concessions given to selected sectors as India ploughs ahead with major tax reform

A series of last-minute concessions to critics of the incoming nationwide goods and services tax (GST)will see rates lowered on 66 different items, ranging from school bags and cinema tickets to levies on labour in industries like textiles.
To read more go here

Posted on

CCCTB Would Cost Ireland Billions, Business Association Claims

An EU common consolidated corporate tax base (CCCTB)would cost Ireland ÔøΩ4 billion a year in tax revenue, according to a projection by the Irish business association Ibec.

Member states are considering a proposal for a common corporate tax base, advocated by EU Tax Commissioner Pierre Moscovici, as a first step toward greater tax harmonization.
To read more go Subscription Required

Posted on

India Signs Tax Super-Treaty With Some Reservations

India June 7 entered into a super-treaty thatwill overhaul the global tax ecosystem, but indicated reservations over recently negotiated tax treatieswith Mauritius, Singapore and Cyprus.

The multilateral instrumentwill swiftly modify more than 2,000 active tax treaties to incorporate the action items from the Organization for Economic Cooperation and Development's Base Erosion and Profit Shifting initiative,which is aimed at expanding the global tax net, easing the flow of information between countries, and curbing tax avoidance by multinational corporations.
To read more go here

Posted on

EU to Shed Light on Tax Planning Schemes

Therewill soon be no more place to hide in the EU. On June 21 the European Commissionwill unveil new plans to require tax advisers to disclose to tax authorities the tax planning arrangements they design.
To read more go Subscription Required

Posted on

Ukraine Clarifies Transfer Pricing, Corporate Tax, and VAT Matters

The Ukrainian State Fiscal Service (SFS) has released three Guidance Letters inwhich it clarified transfer pricing, corporate tax, and VAT matters.
To read more go Subscription Required

Posted on

David Cameron vowed to crack down on offshore tax evasion so why has it disappeared from the Tory manifesto?

In all the election noise, you are unlikely to have heard anything about a paragraph appearing on the 124th page of the Labour Manifesto – even though it is a manifesto pledge that could transform theworld in a truly fundamentalway.
To read more go here

Posted on

40 Countries to Adopt New Permanent Establishment Provision in MLI

Approximately 40 of the countries that sign onto the OECD's multilateral instrument (MLI)will reportedly adopt the revised permanent establishment standard, Tax Analysts has learned.
To read more go Subscription Required

Posted on

India struggles to agree one nation, one tax, one rate

When he came to power three years ago, Narendra Modi pledged to unlock India's untapped economic potential ÔøΩ and ensure an acceleration of the country's then sluggish growth.

Indiawill take its biggest leap yet in that questwithinweeks,when a long-awaited tax reform is supposed to turn a highly fragmented marketwith an unwieldywelter of taxes into a true single market for manufactured goods,with a single, unified value added tax regime.
To read more go here Subscription Required

Posted on

China Extends Preferential Tax Treatment of Advertising Expenses

China's Ministry of Finance and State Administration of Taxation on June 2 issued Caishui [2017] 41 (Circular 41),which extends a preferential tax deduction for advertising and business promotion expenses to the manufacturing and sales sector, the pharmaceutical manufacturing sector, and the beverage manufacturing sector (excluding alcoholic beverages).
To read more go here Subscription Required

Posted on

Europe inches closer to a plan for fixing its financial flaws

Donald Trump and Theresa May may have done more to push Europeans together, and open up an opportunity for reform of its institutions, than any pro-European American president or British prime minister could ever have dreamt. The Commission's "Reflection paper on the deepening of the Economic and Monetary Union", issued on May 31st, points theway towards a package deal that could be acceptable to Northern and Southern euro area countries. But some key elements are still missing.
To read more go here

Posted on

New VAT Threshold for Shipments to Swiss Customers to Start January 1

A previously approved amendment to a Swiss law extending the country's VAT to all services provided by foreign companies and abolishing the de minimis threshold belowwhich imports of goods are exempt from VATwill go into effect January 1, 2018, the Swiss Federal Council said June 2.
To read more go here Subscription Required

Posted on

Spain's Lower House Approves Protocol to Tax Treaty With Mexico

Spain's Congress of Deputies (lower house of parliament) on May 11 approved the pending protocol to the Mexico-Spain income and capital tax treaty, according to information published on itswebsite.
To read more go here Subscription Required

Posted on

The 1000 richest families in Scandinavia evade a third of their taxes, finds a new bombshell study

A new study indicates that Scandinavia'swealthiest families are moving their money abroad to avoid paying taxes.

The study estimates that the 1000 richest families in Scandinavia havewithheld as much as 32 procent of the taxes theywould otherwise be required to pay.
To read more go here

Posted on

Juncker survives Parliaments tax hot seat

A relaxed European Commission President Jean-Claude Juncker calmly dismissed allegations that he helped foster corporate tax avoidance in Luxembourg, during a hearing before MEPs in Brussels on Tuesday.

He instead proclaimed his ignorance over the Grand Duchy's suspect tax dealingswith corporations as he deflected critical questioning in the European Parliament's committee of inquiry into money laundering, tax avoidance and tax evasion (PANA).
To read more go here

Posted on

Kosovo, Switzerland Sign Tax Treaty

Officials from Kosovo and Switzerland signed a tax treaty and accompanying protocol in Pristina on May 26, according to information published on the Swiss government'swebsite.
To read more go here Subscription Required

Posted on

OECD releases peer review document for assessment of the BEPS Action 6 minimum standard

  • By OECD
Today the OECD released the key document, approved by the Inclusive Framework on BEPS,whichwill form the basis of the peer review of the Action 6 minimum standard on preventing the granting of treaty benefits in inappropriate circumstances.

The Action 6 minimum standard is one of the four BEPS minimum standards. Each of the four BEPS minimum standards is subject to peer review in order to ensure timely and accurate implementation and thus safeguard the level playing field. All members of the Inclusive Framework on BEPS commit to implementing the minimum standards and participating in the peer reviews.
To read more go here

Posted on

Italy offers multinationals voluntary "webtax" to avoid wrangles

Italy sought to boost revenue from multinational internet companies on Monday by offering them the chance to agree on their future tax bills rather than risk disputes.

For years, Italy has argued that companies such as Amazon, Apple and Google avoid taxes by maintaining that they do not have a "stable presence" in Italy, even though they generate huge revenues there.
To read more go here

Posted on

U.S. Company Seeks Treasury's Help in Tax Brawl With Georgia

A private company based in Miami is seeking the Department of Treasury's support for a disputewith the country of Georgia involving tax assessments of more than $82.45 million and a review process it said is unjust.

Georgian American Alloys Inc. (GAA) urged the U.S. competent authority, in a May 4 letter released under the Freedom of Information Act, to acknowledge the possibility of its claim that Georgia's tax measures have expropriated the company's investments in Georgia.
To read more go here Subscription Required

Member Companies

Back to top