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2015

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Castleton case wrapped up as FIIs and FPIs exempted from MAT


The Indian government's decision not to apply the minimum alternate tax (MAT) to foreign investors has translated into a positive Supreme Court decision for Castleton Investment.
For the ITR story, go here.

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New EU rules for automatic exchange of advance cross-border tax rulings and APAs from 2017

  • By ITR Correspondent

EU finance ministers yesterday reached political agreement in Council to amend the existing Directive 2011/16/EU on administrative cooperation in the field of taxation. The changeswill apply from January 2017.

For the ITR story, go here.

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OECD tax boss Pascal Saint-Amans forecasts company tax rates will fall as multinational rorts are stamped out


The Frenchman spearheading the OECD's unprecedented global crackdown on multinational tax rorts expects successwill result in lower rates of company tax, benefiting smaller firms.
The Organisation for Economic Cooperation and Development (OECD) finalised recommendations on Tuesday aimed at preventing an estimated US$100 billion to $240b of corporation tax earned by the likes of Google, Apple and Facebook slipping through tax departments' fingers each year.
For the New Zealand Business Day article, go here.

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E.U. to Force Members to Share Data on Multinationals Tax Deals


European Unionfinance ministers agreedon Tuesdayto force member states to share information about preferentialtaxdeals granted to multinational corporations.
Suchtaxdeals,which have angered ordinary citizens squeezed by years of austerity, cause friction among member states competingwith one another for jobs and investment. The deals also raise concerns that they may violateEuropean Unionrules, and that companies use them to unfairly avoid taxes.
For the New York Times story, go here.

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Interpretation or Override? Introducing the Hybrid Tax Agreement


Allison Christians considers the legal status of intergovernmental agreements andwhether they override, or merely interpret, the terms of existing tax treaties.
For thewWTD article, go here. (subscription required)

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Parsing BEPS (and much more on tax avoidance)


The sweeping new plan from the Organization for Economic Cooperation and Development to crack down on corporate tax avoidance is entering a period of limbo inwashington, as corporate lobbyists game out theway the tiniest provisions of the 15 reports could affect them. The future of the plan -- in the United States and dozens of other countries that have tentatively agreed to its recommendations -- lies in its implementation, and the OECD remained coy Monday about the kind of "monitoring mechanism" itwill use to police implementation efforts.
For the Politico story, go here.

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Nonprofits Blast BEPS Action Plan, Claiming Exclusion


Several nongovernmental organizations blasted the OECD's action plan on base erosion and profit shifting, claiming the organization's two-year effort to overhaul the international tax system excluded developing countries and failed to truly root out systemic problems.
For the DTR story, go here. (subscription required)

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Multinationals to Face Greater EU Scrutiny of Tax Rulings


Multinational companies doing cross-border business in the European Unionwill face unprecedented scrutiny of their tax and transfer pricing agreementswith EU-member states after finance ministers backed legislation requiring mandatory exchange of the accords.
For the DTR story, go here. (subscription required)

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Report: Fortune 500 reliant on tax havens


More than 7 in 10 Fortune 500 companies have stashed profits in a tax haven, according to a new study from two liberal groups.

Citizens for Tax Justice and the U.S. PIRG Education Fund found that at least 358 large U.S. multinationals have more than 7,600 subsidiaries in tax havens,with Bermuda and the Cayman Islands the most popular destinations.
For the Hill story, go here.

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Observers Find Uncertainty, Shortcomings in Final BEPS Reports


Responding to the release of the OECD's final base erosion and profit-shifting project reports, practitioners highlighted the prospect of increased taxpayer uncertaintywhile nongovernmental organizations lamented the OECD's failure to make more fundamental reforms.
For the TNT story, go here. (subscription required)

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Major steps towards more tax fairness and transparency

  • By European Commission

The European Commission haswelcomed the unanimous agreement by EU Member States on the automatic exchange of information on cross-border tax rulings and the adoption of the OECD's international tax reform package.
For the EC release, go here.

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Tax avoidance rules: will business end up paying more?


New rules aimed at cracking down on tax avoidance by multinationalswere published on Monday by the Paris-based Organisation for Economic Co-operation and Development. More than 60 countrieswere involved in drawing up the new rule bookwhich is being billed as "the first substantial ÔøΩ and overdue ÔøΩ renovation of the international tax standards in almost a century".

For the Financial Times story, go here.

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Reigniting U.S. Competitiveness Through Corporate Tax Reform


Imagine two companies that sell the same product across the globe and directly compete against one another. Further imagine that both companies earn the same gross profit. However, the first company is located on the U.S. side of the U.S.-Canadian border; the second company is located on the Canadian side. Thanks to the corporate tax system in the U.S., this is all the advantage the Canadian company requires.
For the Forbes story, go here.

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A crackdown on corporate tax dodgers or a let-off for big companies?


It's more than three years since public fury over the meagre amounts of UK corporation tax being paid by large global companies such as Starbucks, Google and Amazon to the Treasury first erupted. And now the global response to tax avoidance by multinational firms seems to be taking shape.
For the Independent story, go here.

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Many Companies Not Ready For Global Tax Reform


A monumental proposal for global tax reformwill be presented at the G20 Finance Ministers meeting in Lima, Peru, later thisweek. That'swhen the Organization for Economic Cooperation and Development (OECD)will present its final Base Erosion and Profit Shifting (BEPS) Project guidelines, a set of tax reform proposals designed to clamp down on tax avoidance among multinational corporations.
For the Forbes story, go here.

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Europes tax crusade


Withwealthycountries around theworlddesperate to reel in billions of dollars in unreported corporate tax receipts, the EU is rushing to finishnegotiations onhow toshare tax information for the first time in order tocombat evasion.
For the Politico story, go here.

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Oxfam criticizes toothless OECD Tax Package

  • By Oxfam

The OECD's Tax Package, released in Paris today,will not stop corporate tax dodgers cheating poor countries out of billions of dollars of tax revenues, says Oxfam. The Base Erosion and Profit Shifting (BEPS) Action Plan outlines 15 measures aimed at tackling aggressive tax avoidance by multinational companies.
For the Oxfam story, go here.

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GOP: New tax rules will drive businesses overseas


Top Republican lawmakers are uneasywith new international plans to curb corporate tax avoidance, but they may not have many options to prevent the crackdown.
Rep. Paul Ryan, chairman of the tax-writing Houseways and Means Committee,warned Monday that the rules introduced earlier in the day by the Organization for Economic Cooperation and Development "will only increase the pressure for American businesses to move overseas" and "could put huge new burdens on American job creators."
For thewashington Examiner story, go here.

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Higher Taxes Loom for Big Firms


Multinational companies are girding for new rules designed to force them to pay greater corporate income taxes in more countrieswhere they operate, setting up potential clashes between Silicon Valley giants and European governments angling fortaxrevenue.
TheOrganization for Economic Co-operation and Developmenton Mondayissued recommendations aimed at stopping large companies in many industries from avoiding paying hundreds of billions of dollars in taxes every year through baroque structures that are legal, but have come under increasing political pressure, particularly in Europe.
For thewall Street Journal story, go here.

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BEPS Transfer Pricing Report Aligns Outcomes, Value Creation


The OECD's final report on the transfer pricing items under its project to combat base erosion and profit shifting (BEPS),which follows two years of arduous negotiations, reflects a compromise,with country delegates toworking Party No. 6walking back some of the more radical provisions in the discussion drafts.

For the DTR story, go here. (subscription required)

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EU Members' Reactions to BEPS Outcomes Vary Widely


European Union reaction to the OECD's finalwork on its action plan on base erosion and profit shifting ranged from enthusiasticwelcome to scathing criticism, combinedwithwary optimism, indifference andwarnings against the EU implementing the measures if the U.S. doesn't.

For the DTR story, go here. (subscription required)

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New PE Language for BEPS Scales Back Earlier Drafts


Through tweaks to the Model Tax Convention, the OECD believes itswork on profit shiftingwill stem elaborate structures, such as commissionaire arrangements, used by large multinationals to avoid the creation of a permanent establishment.

For the DTR story, go here. (subscription required)

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Multinationals receive OECD recommendations on BEPS proposals for G20 and wider take-up

  • By PwC

Multinational enterprises received on 5 October final recommendations from the OECD's base erosion and profits shifting (BEPS) project. Thisweek the G20 Finance Ministers are likely to agree on these OECD recommended changes to the international tax rules and to implementation plans. A number of non-G20 countries have also been involved inwork on the Action Plan and contributed to the proposals.


For the PwC Tax Policy Bulletin, gohere.

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Countries Given Option to Protect Against Hybrid Mismatches


Countries may be able to unilaterally protect their tax bases from hybrid mismatch arrangementswithout creating opportunities for double taxation under model language finalized by the Organization for Economic Cooperation and Development.

For the DTR story, go here. (subscription required)

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Apple Tax Probe Won't Wound Ireland, Finance Minister Says


The findings of a probe into Apple Inc.'s tax affairs in Irelandwon't hurt the country, according to Finance Minister Michael Noonan,who vowed to go to court to fight any negative ruling from European Unionwatchdogs.
For the DTR story, go here. (subscription required)

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OECD Recommendations Keep Patent Box, With Adaptations


The OECD's final recommendations on harmful tax practices, covered in Action 5 of its action plan on base erosion and profit shifting (BEPS), set forth a patent box regime that even GermanyÔøΩlong opposed to the favorable tax regimesÔøΩmight consider adopting, a spokesman for the country's finance ministry told Bloomberg BNA.
For the DTR story, go here. (subscription required)

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Country-by-Country Plan May Be Project's Greatest Legacy


The OECD's final report on Action 13 under the base erosion and profit shifting projectÔøΩwhich calls for countries to adopt a country-by-country reporting template, master file and local fileÔøΩhas the potential to be one of its "greatest legacies."

For the DTR story, go here. (subscription required)

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Twenty Nations Back Binding Arbitration to Settle Tax Disputes


Twenty nations have committed to provide mandatory binding arbitration in their bilateral tax treaties as away to guarantee that treaty-related disputes are resolvedwithin a specified time frame, according to new standards under Action 14 of the OECD's project to prevent base erosion and profit shifting.
For the DTR story, go here. (subscription required)

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Ryan: BEPS Will Encourage U.S. Companies to Move Overseas


The OECD's recommendations for addressing profit shifting and tax base erosion are only likely to increase pressure on U.S. businesses to move overseas, Houseways and Means Committee Chairman Paul D. Ryan (R-Wis.) said.
For the DTR story, go here. (subscription required)

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Now It's Up to the Nations: OECD Delivers Global Tax Plan


The OECD has released its final package of measures to tackle base erosion and profit shifting (BEPS), representing the most ambitious effort in history to harmonize tax laws across national boundaries.
A major achievement of the two-year projectÔøΩundertaken by the Organization for Economic Cooperation and Development on the authority of the Group of 20 countriesÔøΩis revised transfer pricing guidance that replaces guidelines from "pre-history," according to the OECD's top tax official.
For the DTR story, go here. (subscription required)

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US firms pan international tax proposal


The architects of a sweeping set of recommendations to battle offshore tax avoidance insist their projectwon't allow foreign countries to simply grab cash from U.S. companies.

The business community isn't convinced.

For The Hill story, go here.

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BEPS Should Not Be Excuse for Hidden Tax Increase, Says ITIF

  • By Information Technology & Innovation Foundation

In implementing the final OECD base erosion and profit-shifting project measures, the United States should follow the arm's-length principle, allow tax competition among national governments, and provide more clarity on how tax lawwill be applied, the Information Technology and Innovation Foundation said in October 5 comments.
For the ITIF comments, go here.

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McLernon: BEPS Action Plan Is Not a Substitute for Good Tax Policy

  • By Organization for International Investment

The OECD's base erosion and profit-shifting plan "is not a substitute for good tax policy," the Organization for International Investment said October 5 in response to the release of final BEPS measures, adding that further limits on interest deductibilitywould decrease GDP, reduce investment in the United States, and lead to fewer U.S. jobs.
For the OFII release, go here.

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BEPS Action 15: Multilateral Instrument to Implement BEPS


Lee A. Sheppard outlines the final action 15 report of the OECD's base erosion and profit-shifting project on developing a multilateral instrument to implement treaty-related BEPS measures,which she says amounted to literally stapling a new cover over their 2014 report.
For the TNT story, go here. (subscription required)

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BEPS Action 14: Mandatory Binding Arbitration Provision Planned


The final report on action 14 (improving dispute resolution mechanisms) of the OECD's base erosion and profit-shifting project includes changes to the OECD model tax treaty and commentary to increase the effectiveness of the mutual agreement procedure in resolving treaty-related disputes.
For the TNT story, go here. (subscription required)

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BEPS Action 13: OECD Keeps 3-Tiered Approach to CbC Reporting


The OECD's final base erosion and profit-shifting project action 13 report on transfer pricing documentation and country-by-country reporting closely mirrors the September 2014 report, but adds the implementation guidance, model legislation, and model competent authority agreements.
For the TNT story, go here. (subscription required)

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BEPS Actions 8-10: Questions Resolved on Risk, Intangibles


The OECD's final report on transfer pricing under actions 8, 9, and 10 of its base erosion and profit-shifting project contains significant revisions regarding risk and recharacterization, commodity transactions, intangibles, cost contribution arrangements, and low-value-adding services.
For the TNT story, go here. (subscription required)

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BEPS Action 7: A Mixed Bag of PE Recommendations


Ajay Gupta reviews the OECD's final report on action 7, noting thatworking Party 1 concedes further ground to business in its final recommendations for amending article 5 of the model treaty to crack down on the use of commissionnaire arrangements to circumvent permanent establishment provisions.
For the TNT story, go here. (subscription required)

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BEPS Action 6: The New Role of Tax Treaties


The final report on action 6 of the OECD's base erosion and profit-shifting project -- underwhich itwas taskedwith developing model treaty provisions and recommendations to prevent the granting of treaty benefits in inappropriate circumstances -- sets out a broad new vision of the role of tax treaties.
For the TNT story, go here. (subscription required)

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BEPS Action 4: Interest Deduction Restrictions


Lee A. Sheppard outlines the final action 4 report of the OECD's base erosion and profit-shifting project,which she says does not differ dramatically from the discussion draft, and concludes the report lacks strong, simple solutions.
For the TNT story, go here. (subscription required)

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BEPS Action 3: Final CFC Report Leaves Options Open


The OECD's final report on strengthening controlled foreign corporation rules under action 3 of the base erosion and profit-shifting project is largely a discussion of alternative approaches; none of the alternatives are intended to serve as minimum standards and all are expressly optional.
For the TNT story, go here. (subscription required)

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BEPS Action 2: The Hybrid Hydra


Lee A. Sheppard summarizes and critiques the final action 2 report of the OECD base erosion and profit-shifting project, saying U.S. interests held too much sway over the topic and that simpler, better solutions should have been offered.
For the TNT story, go here. (subscription required)

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OECD Publishes Final BEPS Package Ahead of G-20 Meeting


The OECD on October 5 released its highly anticipated package of final reports from its base erosion and profit-shifting project to combat abusive corporate tax avoidance,which represents a "real agreement, not a lukewarm compromise" among countries, said Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration.
For the TNT story, go here. (subscription required)

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The end of the beginning? Pascal Saint-Amans and raffaele Russo discuss part 2 of BEPS proposals


Pascal Saint-Amans, Raffaele Russo and their tax colleagues at the OECD are happy people after the publication of the second and final set of proposals to tackle base erosion and profit shifting (BEPS) yesterday, following two years of intensive talks.
For the ITR story, go here.

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The end of the (tax) world as we know it? OECD delivers final BEPS recommendations


The OECD has delivered the second part of its recommendations to reform international tax rules by tackling BEPS.while unanimity across all points discussedwas impossible, a higher degree of agreement – either in the form of consensus or agreement on 'minimum standards' – has been achieved than many expected, though this has not stopped non-governmental organisations from criticising the package as "a sticking-plaster approach".
For the ITR story, go here.

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Plans unveiled to crack down on corporate tax avoidance


Sweeping plans for a global crackdown on corporate tax avoidancewere unveiled on Monday, after more than 60 governments agreed the first big overhaul of the rules for taxing profits for nearly a century.

The proposals to improve transparency, close loopholes and restrict the use of tax havens are the culmination of an ambitious international project launched two years ago by G20 governments in response to surging public anger over corporate tax avoidance.


For the Financial Times article, go here.

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Google to Apple Could See Tax Loopholes Curbed in OECD Proposal


Theworld's top body for economic coordination unveiled its blueprint Monday for cracking down on international tax avoidance, an opening salvo inwhat promises to be a prolonged battle between countries and companies overwho gets taxed andwhere.

The Organization for Economic Cooperation and Development, a research institute funded by 34 countries including the U.S., is seeking to curb tax haven use and other strategies by companies such as Google Inc., Starbucks Corp. and Apple Inc.,which the group says costs theworld as much as $240 billion a year in lost revenue.

For the Bloomberg story, go here.

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Ryan Responds to OECD BEPS Proposal

  • By Waysandmeans.house.gov

Today, the Organization for Economic Cooperation and Development (OECD) released long-awaited recommendations under its Base Erosion and Profit Shifting (BEPS) project to address the tax treatment of corporate profits earned across borders. The BEPS proposal does not change U.S. law, but other nations are expected to adopt the recommendations, and itwill have a significant impact on American companies doing business abroad.
For the Ryan statement, go here.

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Fighting Tax Avoidance: Commissioner Moscovici welcomes final adoption of international tax reform package

  • By European Commission

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, haswelcomed the final package of Base Erosion and Profit Shifting (BEPS) measures that the Organisation for Economic Co-operation and Development (OECD) adopted today.
For his statement, go here.

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Call to reform outdated global corporate tax regime


World leaders must step up their efforts to fix the "outdated system of taxing global profits", according to a panel of development expertswho said a planned crackdown on corporate tax avoidance does not go far enough.

However, a G20 plan for a thorough overhaul of international corporate tax rules, to be unveiled on Monday,were hailed as a "a step in the right direction" by the panel set up by trade unions, development charities and campaigners.
For the Financial Times article, go here.

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