Tax news
Newsletters from the RSM Tax Centre of Excellence, covering recent developments in taxation around the world.
30 March 2021
The recent OECD guidance around transfer pricing provides clarification for taxpayers on the application of transfer pricing rules during the pandemic. This article explores the key points from the guidance, across four key areas.
24 March 2021
RSM experts discuss the international impact of the global pandemic on transfer pricing. The article provides an in-depth insight into how 2020 has affected transfer pricing laws.
27 January 2021
Michael Kratz and Juan Dosal consider the Transfer Pricing implications of actions taken to combat profitability shortfalls, liquidity issues and supply chain disruption.
8 September 2020
Conversations have already started about how the increased government expenditures to support citizens during the pandemic will be funded. Rob Mander of RSM International suggests that resisting the urge to increase taxes may be the best way to support economic growth.
3 September 2020
Transfer pricing refers to the price of goods and services that are exchanged cross border between related companies. Multinational enterprises (“MNE’s”) should establish a transfer pricing policy that ensures profits are recognised in accordance with where economic value is created.
26 August 2020
The COVID-19 crisis is creating tremors that are being felt, on an international scale, by businesses as they look to safeguard their future in terms of cashflow and liquidity.
13 August 2020
In the strange new reality of the COVID-19 world, one person’s challenge could become someone else’s opportunity. While the crisis has left many businesses facing business continuity issues, wealth managers have found themselves in high demand, fielding calls from private investors who are in a rush to recalibrate their portfolios.
21 July 2020
Breaking VAT news from RSM’s experts around the world, including updates from Australia, New Zealand, Germany, Netherlands, Portugal and Poland
26 May 2020
In these now very different times of globalisation and mass world travel, the business world is contemplating the consequences of COVID-19 on the global and indeed our domestic economies.
29 April 2020
As part of a webinar series, International Tax Leader Rob Mander, speaks to RSM US’s Global Employer Services Partner, Sarah Gish to discuss some of the key issues global employers will face during the Coronavirus pandemic and some of the steps they should be taking.
15 April 2020
As COVID-19 continues to bring unprecedented global disruption and many businesses experience a halt on both supply and demand, business leaders are having to rethink their strategies and how they do business.
31 March 2020
The global impact of coronavirus aligned with the fact that different countries are at different stages in responding to the pandemic will mean a new way of doing business will be with us for many months (and probably longer).
18 March 2020
The COVID 19 situation is changing rapidly and governments and tax administrations are moving quickly, to deal with the economic consequences of what will be a significant downturn in business activity.
29 January 2020
Breaking VAT news from RSM's experts around the world
27 August 2019
Breaking VAT news from RSM's experts around the world
9 August 2019
From 1 November 2019, Polish tax authorities will be introducing significant changes in value added tax by introducing the Split Payments Mechanism (SPM).
16 May 2019
Breaking VAT news from RSM's experts around the world
4 February 2019
Breaking VAT news from RSM's experts around the world, including updates from the European Union, United Kingdom, Denmark, Ireland, Netherlands and the United States.
31 August 2018
Breaking VAT news from RSM's experts around the world, including updates from Belgium, Poland, United Kingdom, France, United States and Germany
5 June 2018
Breaking VAT news from RSM's experts around the world, including updates from Portugal, Norway, UK, Italy, Australia, Canada, South Africa and Malaysia.
5 March 2018
Breaking VAT news from around the world, including updates from the European Union, France, Italy, Germany, Australia, Switzerland and Hungary.
10 November 2017
Breaking VAT news from around the world, including updates from the European Union, Romania, Hungary, Slovakia, Ireland, Norway and the Gulf Cooperation Council.
11 August 2017
Breaking VAT news from around the world, including updates from the Netherlands, Hungary, Switzerland, US and Australia.
22 May 2017
Tax complexity is a challenge that is particularly acute for middle market businesses who lack the scale to invest in large compliance teams, but have the agility to adapt more quickly than large corporates. We spoke to RSM experts in Australia, Brazil, UK, and US to ask how middle market businesses can untangle this mess.
16 May 2017
Breaking global VAT news, including updates from the EU, the Arabian Gulf, Russia, Italy, UK, Latvia, Poland and Bulgaria.
31 January 2017
Breaking news from the RSM Indirect Tax Group, including updates from the GCC, EU, Netherlands, Hungary and China.
28 October 2016
Breaking news from the RSM Europe VAT Group, including updates from the EU, UK, Netherlands, Germany, Portugal, Ireland and Luxembourg.
15 July 2016
Breaking news from the RSM Europe VAT Group, including updates from the UK, Germany, Norway, Hungary, Russia, Netherlands and EU.
26 April 2016
Breaking news from the RSM EU VAT Group, including updates from the European Union, UK, Belgium, Netherlands and China.
17 February 2016
This edition of the RSM EU VAT Group's Indirect Tax Update includes Netherlands, Switzerland, Belgium, France, Hungary, Italy and the UK.
12 February 2016
In October 2015, two and a half years of frenetic activity culminated in the release of the Final Reports of the G20/OECD ‘Action Plan’. These outline the changes necessary to make the international tax framework ‘fit for purpose’ in the digital age.
10 February 2016
RSM has teamed up with Euromoney to produce a survey, helping to reveal the views of global tax decision-makers from around the world regarding BEPS, including CFOs, Heads of Tax, Corporate Treasurers and other C-suite executives from internationally active enterprises.
2 February 2016
On 28 January 2016, the European Commission (EC) presented its EU Anti- tax Avoidance Directive, a constituent part of the EC’s Anti- Tax Avoidance Package (ATAP ) which increases tax transparency and makes for fairer, simpler and more effective corporate taxation in the EU.
19 November 2015
Reduction in VAT “distance selling” thresholds
24 October 2015
Tax avoidance by large businesses is a topic that continues to attract attention, with governments keen to state that they are tough on those that abuse the rules.
19 October 2015
Tax avoidance by large businesses is still a topic that attracts attention, with politicians keen to state that they will be tough on those that abuse the rules.
12 October 2015
Undoubtedly, Tax Reform Law 20.870 is the largest break in Chilean tax history. The reform has the peculiarity that its implementation will take place over four years, from 2014 up to and inlcuding 2017, in order to minimise the effects of it on the economy and companies.
21 July 2015
The New Zealand Inland Revenue Department ‘IRD’ has announced a two year focus on multinational businesses. The IRD has also identified specific transactions that will be actively reviewed during this project.
21 July 2015
In its judgement of 16 April 2015 the European Court of Justice held that the German tax legislation, which allows that capital gains realised from the sale of certain business assets (mostly land and buildings) may be ‘rolled-over’ to reinvestments into new assets if both the sold and the newly purchased assets belong to a German permanent establishment, violates
21 July 2015
As part of its five-tier Action Plan on fair and efficient corporate taxation within the European Union (EU) the European Commission (EC) announced on 17 June 2015 that they will continue its work on the Common Consolidated Corporate Tax Base (CCCTB) by developing a completely new CCCTB proposal.
21 July 2015
In its judgement of 21 May 2015, the European Court of Justice decided that a tax legislation of a Member State which, in the case of a transfer of assets from a company located within the territory of that Member State to a permanent establishment of that company located within the territory of another Member State, provides for the disclosure of unrealised capita
21 July 2015
On 17 June 2015, the European Commission (EC) presented their five-tier Action Plan on a fair and efficient corporate taxation within the EU. The Action Plan sets out a series of initiatives to tackle tax avoidance, secure sustainable revenues and strengthen the Single Market for businesses.
In particular this means that:
21 July 2015
On 20 March 2015, the Ministry of Finance of Austria published the first details of the planned Tax Reform. On 16 June 2015, the Austrian Government approved a draft version of the Tax Reform Act 2015. The reform will, in principle, be applicable from 1 January 2016.
Corporate key elements of the reform are:
13 July 2015
The UK government announced yesterday that the main rate of UK corporation tax will be cut to 18% by 2020. It is currently 20% for the 2015 financial year which is the joint-lowest rate in the G20 group of countries. It will be reduced to 19% for the financial years 2017, 2018 and 2019 and then to 18% for 2020.
15 June 2015
On 27 May 2015, the European Commission held an orientation debate on how to develop a fairer and more efficient corporate tax system. Vice-President Dombrovskis of the European Commission held a speech afterwards to point out the main topics that were discussed:
15 June 2015
On 26 May 2015, the Ministry of Finance published new guidelines on transfer pricing documentation requirements. The Guideline will apply as of 1 January 2015 and replaces the previous guidelines of October 2014.
15 June 2015
On 20 May 2015, the members of the European Parliament adopted rules to combat money laundering and terrorist financing. This is one of the key actions in the European Security Agenda that was announced last month (28 April 2015).
15 June 2015
On 1 June 2015, the OECD published the comments it has received on this discussion draft. In the past, the OECD had invited comments from interested parties on a discussion draft on revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (work that relates to Action 8 of the OECD’s BEPS Action plan).
15 June 2015
On 15 May 2015, the Netherlands ratified the Germany–Netherlands Income Tax Treaty 2012. This new treaty will replace the Germany–Netherlands Income and Capital Tax Treaty of 1959. The Treaty is in line with the OECD Model tax treaty.
The maximum withholding tax rates included in the treaty are:
4 June 2015
Poland proposed legislation on Country by Country (CbC) reporting and related transfer pricing reporting obligations. The proposed legislation reflects the reporting obligations as included in Action 13 of the OECD’s initiative on Base Erosion and Profit Shifting. To be more specific, Poland has introduced thresholds for the Local File, Master File and CbC-report.
4 June 2015
The European Commission (EC) published its strategy on the Digital Single Market on 6 May 2015. The strategy includes 16 initiatives to be delivered by the end of 2016 and is built on three pillars: Access, Environment and Economy & Society.
4 June 2015
On 23 April 2015, clarification on the impact of the changes of the OECD Model commentary on articles 15 and 17 was published in a special Decree (effective 2 May 2015). The Decree provides guidance with respect to termination payments and on the interpretation of the term 'personal activities' of artist and sportsmen.
4 June 2015
According to the last changes on the Corporate Income Tax law (Official Gazette of the Republic of Macedonia no. 112/14 from 25/07/2014), the obligation for paying corporate income tax (CIT) on net income is restored as from the fiscal year 2014. The CIT rate remains 10%.
4 June 2015
On 15 May 2015, the OECD released a revised discussion draft on Action 7. The revision is a follow-up to the discussion draft on Action 7 of 31 October 2014, which addressed a number of PE avoidance strategies and potential strategies to deal with these.
20 May 2015
With technology making the world a smaller place, it is understandable that large corporations expand their businesses into multiple jurisdictions as they continue to grow. However, setting up a new operation for an existing business in a foreign jurisdiction is not necessarily an easy task.
20 May 2015
Non-US businesses face a variety of complex tax burdens when they choose to do business in the United States. A number of federal and state compliance and substantive tax obligations make doing business in the US potentially quite challenging, especially in California.
20 May 2015
Non-US businesses face a variety of complex tax burdens when they choose to do business in the United States. A number of federal and state compliance and substantive tax obligations make doing business in the US potentially quite challenging, especially in California. However, many tax incentives exist that can mitigate the effect of some of these burdens.
20 May 2015
If I had to summarise 2014 in one sentence, based on the economic and law-enforcement aspects, I would say that first of all, this year represents a ‘step up’ in the war that the Israel Tax Authority (ITA) leads to reduce the ‘black capital’ (unreported capital) phenomenon in an attempt to increase the circle of those obligated to submit financial statements.
20 May 2015
Permanent establishment (PE) is a common term in international tax. The concept is very common in advice concerning cross-border business expansion. Many discussions between advisers and their clients will begin with a question along the following lines: “Do these activities to be undertaken create a PE risk?”
13 May 2015
From 1 January 2001, Venezuela changed its territorial income tax system to include non territorial income tax; in other words, a Worldwide Tax System.
13 May 2015
The Danish tax authorities have, for the third year in a row, increased the taxable income of multinational groups with a record-breaking amount. The latest years’ audit results in 20 billion DKK:
The Danish tax authorities have, for the third year in a row, increased the taxable income of multinational groups with a record-breaking amount.
13 May 2015
German domestic law requalifies rental and interest income into business income in cases where a business consists of two entities under common control or when the shareholder holds assets that are key for the business, privately.
13 May 2015
On 1 April 2015, the French tax authorities announced several measures aimed at improving legal certainty for individuals and businesses. To be more specific, the tax authorities published a list of practices and transactions that are deemed to be abusive:
13 May 2015
The Czech Ministry of Finance has announced a new second reduced VAT rate of 10%, applicable as of 1 January 2015 in the Czech Republic. As a result, the following three VAT rates are currently applicable in the Czech Republic:
13 May 2015
Changes in the procedure for calculating interest on borrowed fund
8 May 2015
In March 2015, the Ministry of Finance reported that the Global Forum on Transparency and Exchange of Information for Tax Purposes, the multilateral organisation in which international standards on transparency and tax cooperation are developed, approved unanimously the technical report referred to the Uruguayan case corresponding to Phase 2.
8 May 2015
In connection with a recent statement to increase revenue collection, the Brazilian Government published new rules related to PIS/COFINS. The main points are:
15 April 2015
Under the 'Authorised OECD Approach' (AOA) the profit attributed to a permanent establishment (PE) should be in line with what the PE would have earned under arm's length conditions, i.e. as if it were a separate and independent entity, engaged in the same or similar activities, under similar circumstances.
15 April 2015
On 18 March 2015, the Chancellor of the Exchequer presented the Budget for 2015-16 to the Parliament. Details of the Budget relating to business taxation are summarised below.
Corporation Tax Rate
The Corporation Tax Rate is reduced to 20% from 2015 to 2016.
15 April 2015
On 1 April 2015, the Ministry of Economy and Finance issued a press release announcing two Ministerial Decrees amending the black list for cost deduction and the black list for the application of the Controlled Foreign Companies (CFC) regime.
15 April 2015
On 25 February 2015, the Ministry of Finance of Albania published an instruction on Advance Pricing Agreements (APA). In this instruction the various types of APA’s are defined, and the application process and conditions are comprehensively substantiated.
Types of APAs
The following types of APA's are included in the instruction:
15 April 2015
In a recent High Court decision – the “Herkules case” – it was concluded that carried interest should be considered employment income. The decision was appealed with the Supreme Court, but highlights the risk of structuring Norwegian management of private equity funds. The case comes as a follow up of previous cases related to brokers, where internal partnership pr
15 April 2015
Currently, it is at the discretion of Member States to decide whether tax rulings might be relevant to other Member States. The Tax Transparency Package includes measures for Member States to automatically exchange information on their tax rulings.
1 April 2015
On 15 December 2014, the Italian Parliament approved the 'voluntary disclosure' procedure (Law n. 186/2014).
18 March 2015
Following the judgment by the Court of Justice of the European Union (CJEU) on 12 June 2014 regarding the Dutch tax consolidation regime, the French tax consolidation regime has recently been modified.
18 March 2015
On 6 February 2015, the Dutch State secretary of Finance published new guidance regarding the application of articles 14a (split-ups and split-offs) and 14b (legal mergers) of the Dutch Corporate Income Tax Law 1969 (CIT Act).
18 March 2015
Intragroup dividends paid or earned as of 1 January 2014 are exempt from local withholding tax if they meet the following criteria:
18 March 2015
In July 2014, Cyprus harmonised its legislation in an effort to modernise its legislation on investment fund products in accordance with the EU directives.
18 March 2015
On 1 October 2014, the former Belgian government increased the withholding tax on liquidation proceeds from 10% to 25%. Under certain conditions companies were allowed to benefit from a transitional regime resulting in a 10% withholding tax rate.
13 January 2015
HMRC has provided an insight into its policy thinking and the implications of the proposed new “Google tax”.
19 December 2014
On 10 October 2014, Mexico’s federal tax authority, the Servicio de Administracion Tributaria (SAT), published a package of miscellaneous tax rules (the “October 10 Rules”) that included guidance on various Mexican tax provisions.
19 December 2014
In 2014, Hong Kong signed seven Tax Information Exchange Agreements (TIEAs) with the US and six Nordic jurisdictions. The signing of the TIEAs marks a new era of Exchange of Information (EOI) in Hong Kong.
19 December 2014
The Electronic Road Transportation Control System (EKAER) will help the tax authority in tracking every product transported in Hungary. The purpose of the system is to ensure no goods are put into circulation in Hungary that have not been previously reported to the Hungarian Tax and Customs Authority.
11 December 2014
The UK Government has announced details of their crowd pleasing measure dubbed “the Google tax”. But not everyone is smiling. Baker Tilly, RSM International member firm in the UK, reviews the impact this will have on multi-nationals.
8 December 2014
The majority of tax advisers expect corporate tax rates to remain relatively unchanged over the next three years, according to research by RSM, the seventh largest global network of independent audit, tax and advisory firms. This is in spite of global tax reform led by the OECD aimed at targeting tax avoidance by multinational corporations.
10 November 2014
The exchange rate established by 'CENCOEX' is fixed and is set at 6,30 bolívares (Bs.) per U.S. dollar. It is applicable to items such as medicines, food, housing, education and any other item designated by the institution. So far, several items directly associated to the needs of the government sector have been added.
10 November 2014
On 28 March 2010, the National Congress of Honduras passed a law called “Strengthening of Income, Social Equity and Rationalization of Public Spending Law” contained in decree No. 17-2010.
10 November 2014
The figure of the self-transfer of the Value Added Tax (VAT) applies when general services are provided or when the enjoyment or benefit is obtained from the use of goods by natural resident persons, or natural or legal non-resident, not responsible tax collectors of VAT or not registered before the tax authority.
10 November 2014
This change in taxation for companies has generated a significant slowdown in economic growth (current 5% down to 2% in the future). The gradual change in company income tax (20% in 2013) will be as follows:
26 October 2014
On 29 April 2014, Law No. 19,210 (or Financial Inclusion Law) was approved. The Law aims to promote access to banking services and the use of electronic means of payment, such as debit card, credit card and electronic transfers, by all the population.
16 September 2014
Since the start of the OECD’s BEPS project, Ireland has been very supportive of all initiatives. Already in October 2013, the Irish government broadcasted a so-called international tax strategy statement. This document contained Ireland’s objectives and commitments concerning the countering of international corporate tax policy issues.
16 September 2014
The legislation seeks to prevent profits being transferred to another group company by way of a payment of all, or a significant part, of the profits of a company.
16 September 2014
Since April 2012 secondary adjustments were treated as deemed loans, but this caused a lot of uncertainty and practical problems. This may be the reason that the Taxation Laws Amendment Bill, 2014 (Draft), includes that secondary adjustments shall now be treated as deemed dividends or capital contributions, depending on the facts and circumstances of the case.
16 September 2014
Recently the Dutch State secretary of Finance reacted through a public letter on the statement ‘The OECD’s Arms Length Principle, which is based on comparable market prices that do not really correspond to reality, provides several loopholes through which MNCs avoid tax’. This statement was included in a report of Oxfam titled ‘Business among Friends – Why corporat
16 September 2014
On 29 July 2014, the Chinese State Administration of Taxation issued an announcement ('ShuiZongBanFa 2014 No. 146') to strengthen its investigation on service and royalty charges from overseas related parties during the past ten years from 2004 to 2013.
1 September 2014
In January 2015 the VAT legislation providing for the place of taxation for e-services, broadcasting and telecom services will change. Although the actual change in legislation will be minimal, it will have a substantial impact on the providers of these services from a VAT compliance perspective.
1 September 2014
Act XXII of 2014 on Advertisement Tax enters into force on 15 August 2014. The new public burden does not only concern the publishers of press products and commercial television channels.
1 September 2014
The globalisation and development of the digital economy has fostered continuous growth of cross-border transactions. As different countries adopt different tax regimes, taxpayers may avoid taxation in their home countries by pushing activities abroad to low or no tax jurisdictions.
1 September 2014
In order to encourage investment in certain areas in the People’s Republic of China, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly published the notice Caishui 2014 No.
1 September 2014
Emboldened by the plethora of new legislation and guidance passed by the United States, many countries are considering implementing a standardised global information reporting (GIR) system.
26 August 2014
The Supreme Court ruled, once again, that the Minimum Presumptive Income Tax in the Diario Perfil SA c/AFIP-DGI case is unconstitutional, in line with the June 2010 ruling in the Hermitage SA case.
26 August 2014
At the end of 2009, the Panamanian government adopted a national policy with the purpose of being excluded from the OECD grey listing.
14 July 2014
Following the recent release of draft rulings and practice statements by the Australian Taxation Office (ATO) relating to the new transfer pricing legislation in Australia, the ATO recently invited comment from respected practitioners across the country to discuss practical, simplified and pragmatic measures for taxpayers in order to adequately, yet cost-effectivel
14 July 2014
The Income Tax Act (ITA) has brought about a number of important changes that affect transfer pricing. In connection with the amendment to the OECD Transfer Pricing Guidelines in July 2010, the amendment to the ITA has abolished the hierarchy of transfer pricing methods.
14 July 2014
A new item has been included in the Income Tax Return for the Year of Assessment 2014 which requires the taxpayer to indicate whether transfer pricing documentation has been prepared by the taxpayer for the relevant year of assessment.
14 July 2014
The State Secretary of Finance published new decrees that provide guidance on the various aspects of the regime that covers the Advance Pricing Agreement (APA) and replace the decrees of 2004.
23 June 2014
On 26 May 2014, the OECD held a webcast giving an update on the progress of the BEPS project. During this webcast the spokesmen of the OECD, Pascal Saint- Amans, declared the two-year BEPS project to be ‘on schedule’. The four discussion drafts that have been published so far contain 3,587 pages of commentary from 462 commentators spanning e.g.
23 June 2014
On 31 March 2014, the Danish tax authorities published their Transfer Pricing report for 2013. The report contains an overview of transfer pricing corrections made by the Danish tax authorities. In 2013, the Danish tax authorities adjusted the taxable income of 77 Danish companies. These corrections amounted to well over EUR 2 billion.
23 June 2014
On 16 April 2014, the Australian Taxation Office (ATO) published its Transfer Pricing Guidance Package. It contains two draft taxation rulings and two draft transfer pricing statements. These documents are intended to provide guidance for the application of the new transfer pricing legislation that entered into force in July 2013.
23 June 2014
Following a ruling of the Mexican Supreme Court of Justice on 19 March 2014, pro rata payments made outside of Mexico to non-residents are deductible – given that certain conditions are met.
17 June 2014
Law No. 247/2013 allows Italian companies that prepare their financial statement in accordance with the Italian Standard Accounts to revaluate the assets recorded in the financial statement as of 31 December 2012. The relevant benefits for the companies that adopt the revaluation are:
17 June 2014
The first action of the Base Erosion and Profit Shifting (BEPS) Action Plan consists of addressing the tax challenges of the digital economy. On 24 March 2014, the OECD released a discussion draft on this subject. The discussion draft contains four main issues:
17 June 2014
European countries are increasingly being confronted with the problem of double taxation of profits resulting from business relations with their associated enterprises based in so-called BRICS countries (Brazil, Russia, India, China, South Africa).
12 June 2014
n 1 January 2014, a new law entered into force providing additional regulations for the offsetting of tax credits relating to income taxes, withholding taxes, substitute taxes and the Regional Tax on Productive Activities (IRAP).
8 May 2014
By the end of 2011, the Salvadoran Income Tax Law was modified by, amongst other things, requesting companies to pay their income tax based on the higher of (a) 30% of net profit or (b) 1% of annual taxable revenues. With the latter there is no possibility to deduct costs or expenses that were already part of the provisions in this same Law.
8 May 2014
On 1 January 2013, the Government of Nicaragua passed Law Nº 822: 'CONCERTATION TAX LAW'(CTL). This Act and its regulations contain important changes in the tax regime.
8 May 2014
On 27 and 28 December 2013, the Peruvian Congress approved four International Tax Treaties to avoid double taxation (Tax Treaties) signed by Peru with Mexico, Korea, Portugal and Switzerland.
8 May 2014
In March 2014, the recently elected President of Chile submitted a Bill to Congress with the goal of performing several changes through a structural tax reform to generate revenues. This reform is focused on four clear objectives:
8 May 2014
According to the provisions in the Income Tax Law, only those dividends arising from profits generated from 1 January 2001 shall be taxed.
This means that dividends arising from profits prior to 1 January 2001 shall not be taxed.
The methodology used by the Law is as follows:
1 April 2014
On 27 February 2014, the Advocate General (AG) of the European Court of Justice (ECJ) issued her opinion on the cases C-39/13, C-40/13 and C-41/13. These three cases were directed to the ECJ by the Dutch court in the light of prejudicial questions.
1 April 2014
Australia’s tax law exempts from tax foreign income derived by a company “in carrying on a business, at or through a permanent establishment (“PE”)”. Capital gains are also exempt from tax where “the company used the asset wholly or mainly for the purpose of producing foreign income in carrying on a business at or through a PE”.
1 April 2014
On 10 March 2014, the European Commission issued MEMO/14/172 (Memo) to answer frequently asked questions about the EU Savings Directive and the Savings Taxation Agreements with non-Member States. In this memo, the European Commission underlines the importance of a strong unified approach in tackling tax evasion.
1 April 2014
In late 2013, the IRD released their Multinational Enterprises Compliance Focus Document. This document outlines the various areas the IRD will be focusing on for the next 12 months with regards to multinational enterprises (MNEs). This article summarises the must read sections of the document.
1 April 2014
Bitcoins have received their fair share of attention over the past couple of months. The volatility of the market price for bitcoins makes for a lot of potential profits. Therefore, it is not surprising that the crypto currency has been receiving more attention from the British tax authorities.
1 April 2014
For many years, the US-Canada Income tax treaty (the “Treaty”) did not grant treaty benefits to US Limited Liability Companies (“US LLCs”) because, in the view of the Canadian government, LLCs were not US tax residents since they are typically exempt from US tax1.
1 April 2014
On 3 March 2014, the Belgian Council of Ministers issued a press release concerning the new turnover threshold under which small businesses and associations qualify for VAT exemption. The turnover threshold will be increased from EUR 5,580 (current) to EUR 15,000 (announced).
1 April 2014
On 25 December 2013, the Amendment of the Income Tax Ordinance Law (the “Law”) was published. As part of the Law, significant changes were made to some of the provisions of Section 75B of the Income Tax Ordinance (the “Ordinance”), dealing with the taxation of a controlled foreign corporation (the “CFC”).
1 April 2014
On 11 December 2013, the German Federal Tax Court (FTC) submitted the question to the Federal Constitutional Court (FCC) whether the treaty override provision (article 50d (10) of the Personal Income Tax Act) is unconstitutional.
1 April 2014
When US companies deal with value added tax “VAT” challenges in Europe, whether newly established or well established, they often fall into the same avoidable traps.
1 March 2014
The Advocate General at the Court of Justice for the European Union (CJEU) recently published his opinion on two (joined) cases about Dutch entities distributing profits to their parent companies located on Curacao in 2005 and 2006.
1 March 2014
As of 1 January 2014, financial service entities must report in their annual corporate income tax returns whether or not they meet the new substance requirements.
1 March 2014
On 29 January 2014, the Belgian Constitutional Court ruled on the compatibility of the Belgian foreign tax credit rules with the Belgian constitution. The Constitutional Court ruled that denying the carry-forward or carry-back of an unused foreign tax credit is not unconstitutional. The same goes for not refunding an unused foreign tax credit.
1 March 2014
On 25 November 2013, the European Commission (EC) proposed to change the European Parent Subsidiary Directive (PSD). The EC wishes to close certain loopholes in the PSD that multinationals may have started to use to avoid corporate taxes.
1 March 2014
The French parliament has approved the amended Finance Bill 2013 and the new Finance Bill 2014. The bills include changes to corporate taxation, individual taxation and indirect taxes. Some of these important measures are described below.
Changes in corporate taxation
28 February 2014
The U.S. government continues to view offshore tax evasion as a significant loss of potential tax revenue. As a result, the government has been increasing its international enforcement efforts and targeting US taxpayers with undisclosed foreign accounts or holdings with a number of punitive rules designed to force reporting compliance.
28 February 2014
According to legislation in force in Uruguay, activities by foreign entities outside Uruguay; and those with goods in transit or deposited in customs facilities, port facilities, bonded warehouses and free trade zones of Uruguay, are exempt from income tax, when the merchandise is neither originated nor destinated to Uruguay.
28 February 2014
Significant amendments have been introduced to Income Tax regulations, extending the tax scope to include certain financial gains, that were exempt from income tax and establishing an additional tax rate on dividend distributions and companies profits.
Law 26.893 provides that as from 23 September 2013:
28 February 2014
On 13 September 2013, the Ministry of Finance published Decree 37898-Hthat establishes new legislation on transfer pricing for Costa Rican taxpayers. Much of the legislation is common to that used in other countries in the region but there are some particular considerations to this new legislation.
28 February 2014
2013 was a year full of changes in the business environment in Mexico. Perhaps the most significant one is derived from the changes made to the Mexican legal framework. Between 2013 and 2014 new legal provisions have been and will be enacted that will have great impact on the way we do business in Mexico.
Appoint a “compliance officer”
1 February 2014
On 25 September 2013, the Finnish Supreme Administrative Court (SAC) ruled that interest must be paid when refunding Dividend Withholding Tax (DWT) that has been levied incorrectly from dividends intended for foreign entities. This was already the case for DWT levied from dividends intended for Finnish entities.
1 February 2014
On 23 December 2013, the Italian government published a decree concerning the Italian advance tax ruling procedures.
1 February 2014
On 31 December 2013, the Greek parliament approved an amendment to the thin capitalisation rules. Greek thin capitalisation rules apply to all types of loans. This includes intragroup loans as well as third party loans, regardless of whether or not that third party is a certified financial institution.
1 February 2014
On 27 December 2013 the protocol to the UK–India tax treaty entered into force. As a result of this protocol, several provisions of the treaty are altered, e.g. the recognition of partnerships for the application of the treaty and the dividend withholding tax rates. Furthermore, a limitation of benefits article has been introduced.
1 February 2014
An individual is considered to be a resident for Swedish tax purposes if the individual has a home at his disposal in Sweden. Any individual without such a real home within Sweden can also be treated as a resident for Swedish tax purposes, provided the individual resides in Sweden permanently.
22 January 2014
On 27 December 2013, the Italian 2014 Budget was approved by the Italian parliament as well as published in the official gazette. The 2014 Budget contains several changes, some of which may affect internationally active companies that operate in the Italian market.
22 January 2014
In 2013 the German legislator renewed section 14, par. 1, no 5 of the German Corporate Tax Act (GCTA). The new rule limits the utilisation of tax losses in fiscal unities (the German group taxation system) in cross- border situations to avoid double-dips.
22 January 2014
In December 2013, the new Luxembourg government announced its political program for the upcoming years. The announcement contains several direct and indirect tax measures.
1 January 2014
Under Italian tax law, companies are obligated to provide the Italian tax authorities with a list of the assets the company provided for use by its private individual shareholders, as well as loans and capital the company has received from its private individual shareholders. Failure to comply results in penalties.
1 January 2014
As it was apparent from the proposal put forward in October that the volume of changes brought by the tax package of 2014 is altogether less significant than that of similar packages of the previous years.
1 January 2014
provide a periodic analysis at least every six months of the value of the issued financial instruments.
4. The last financial statements of the company must be certified by an auditing firm.
5. The financial instruments may only be sold to qualified investors (as defined in DLgs no. 58/1998).
1 January 2014
On 25 November 2013, the European Commission proposed to amend the European Parent Subsidiary Directive (PSD). Corporate tax avoidance has been at the top of the political agenda of EU and non-EU countries alike for over a year. Likewise, the G20 as well as the G8 have emphasized the urgency of countering corporate tax avoidance.
1 January 2014
Australia’s domestic tax law imposes a 5% tax on amounts paid to foreign owners or charterers of ships or aircraft for the carriage of passengers, live-stock, mail or goods shipped in Australia (section 129 of the Income Tax Assessment Act, 1936). Section 129 can apply irrespective of where the passengers or goods are discharged.
1 January 2014
On 27 November 2013, the German government published its tax policy for the upcoming four years. While not containing concrete, imminent measures the policy is a valuable insight into Germany's tax system actively countering base erosion and profit shifting.
1 January 2014
The Inland Revenue (Amendment) Bill (the Bill) was passed by the Legislative Council on 10 July 2013. It provides the legal framework to liberalise the Exchange of Information (EOI) regime in Hong Kong and enable Hong Kong to comply with the latest international standard of tax transparency.
Difference between CDTAs and TIEAs
1 January 2014
The Finnish Supreme Administrative Court applied to the Court of Justice for the European Union’s Marks & Spencer doctrine to a cross-border merger involving tax deductible losses. The final losses were determined in accordance with the Finnish Business Income Tax Act.
1 January 2014
An interest-charge domestic international sales corporation (IC-DISC) can be a powerful tax savings opportunity for many companies exporting products. An IC-DISC is a domestic corporation that primarily engages in foreign sales and exporting activity. Many years ago, the U.S. government created this law as a means to promote U.S.
1 January 2014
Before 2009, non-resident companies directly holding German real estate were denied the higher depreciation rate of 3%. The Lower Fiscal Court of Cologne ruled that forcing non-resident companies directly holding German real estate to use the regular 2% depreciation rate is a breach of the free movement of capital.
1 January 2014
On 5 December 2013, the British government published upcoming changes to the UK tax regime. These upcoming changes will be of particular importance to the employers of expats, as they will target dual contract arrangements and offshore intermediary employment structures.
United Kingdom: Upcoming tax policy
1 January 2014
1. General economic update
28 December 2013
On 26 December 2013, the Budget for Spain’s fiscal year 2014 was published in the official gazette. It contains several new tax measures as well as the extension of existing measures that are to increase Spanish tax revenues.
1 August 2013
On 12 July 2013, the IRS issued Notice 2013-43 (the notice) that extends the date on which Foreign Account Tax Compliance Act (FATCA) withholding is to begin to 1 July 2014.
1 August 2013
On 1 December 2012, important changes in Mexico’s Federal Labour Law (the 2012 amendments) came into effect.
1 August 2013
On 29 June 2013, numerous changes to the German tax law were published in the Federal Law Gazette and are applicable as of that date unless indicated otherwise. The changes in the law mainly concern the areas below.
Correspondent taxation extended to dividends
1 August 2013
This article aims to provide you with the salient points of Circular 165.
1. Circular 601
1 August 2013
On 4 April 2013, the Government released exposure draft legislation and explanatory materials which propose to implement the third and final element of the Investment Manager Regime (IMR) as announced by the Government on 16 December 2011.
Context of amendments
1 August 2013
Trusts in Uruguay are ruled under Law 17,703 which was published on 4 November 2003.
1 August 2013
Whilst governmental attacks on tax avoidance seem to be rarely out of the financial news, the UK Government is also tackling tax evasion by entering into information exchange agreements with a number of tax havens, many of which are British Crown Dependencies.
1 August 2013
According to the general rule in Peruvian Income Tax (IT) Law, services rendered by non-resident individuals are subject to a 30% withholding income tax (WHT) rate. However, services that qualify as ‘technical assistance’ are levied with a 15% WHT rate applied on the Peruvian source income.
1 March 2013
Further to the release of the Treasury’s exposure draft in mid-November, the Government has now introduced into Parliament stage two of the transfer pricing reforms, the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013.
1 March 2013
The UK’s new Controlled Foreign Company (CFC) legislation is effective for all accounting periods beginning on or after 1 January 2013. This represents a timely wholesale revision of the rules as over the last few years there has been numerous revision to the rules in reaction to various recent Court of Justice of the European Union cases.
1 March 2013
From 1 January 2013, the scope of tax allowances available to companies operating in special or free enterprise zones was extended in a number of tax types.
1 March 2013
On 18 March 2013, the IRS and Treasury published final, temporary and proposed regulations under Sections 367 and 12481 that address the treatment of outbound transfers of property by US corporations and other matters (“2013 Regulations”).
1 March 2013
In recent months, there have been several reports by journalists into the tax affairs of multinational corporations resulting in public anger and accusations of tax avoidance.
1 October 2012
In June 2011, the UK Government launched a consultation document on the introduction of a statutory residence test which the government proposed to introduce in April 2012. This has now been delayed until 6 April 2013. The response to this consultation has recently been issued providing greater clarification.
1 October 2012
On 6 June 2012, the OECD published the first discussion draft for the revision of chapter VI of its transfer pricing guidelines.
1 October 2012
In an earlier edition of Border Crossing - 1st Quarter 2012 - we reported on significant and adverse changes to the Living Away From Home Allowance (LAFHA) provisions. Those changes have now been legislated, with effect from 1 October 2012.
1 October 2012
In July 2009, the United States Department of Justice announced that it had reached a settlement with Swiss bank UBS under which the bank agreed to disclose the identities of over 50,000 US customers who used UBS accounts to commit US federal tax evasion.
1 October 2012
On 29 June 2012, the Argentine government notified Spain that it had terminated the Argentina-Spain tax treaty for the Avoidance of Double Taxation (the treaty).
1 June 2012
On 20 February 2012, the PRC State Administration of Foreign Exchange (“SAFE”) issued Circular Huifa [2012] No.7 – ‘Notice regarding certain issues related to foreign exchange administration for individuals employed by domestic companies participating in share-based incentive plans of overseas listed companies’ (“Circular [2012] 7”).
1 June 2012
On 12 April 2012, Germany and the Netherlands signed a new tax treaty and protocol. The new tax treaty avoids double taxation and prevents fiscal evasion with respect to taxes on the income of residents. Furthermore, it regulates and improves the position of frontier workers. The new tax treaty has not yet been ratified.
1 June 2012
Introduction
A new investment funds tax regime has been enacted in Italy meaning investment funds are no longer subject to tax on an accrual basis. Investors are instead taxed on a cash basis. Furthermore, from 1 January 2012 withholding tax and substitutive tax on interest, dividends and capital gains will be set at 20%.
1 June 2012
On 8 February 2012, the IRS issued proposed regulations providing rules pursuant to the Foreign Account Tax Compliance Act (FATCA). The proposed regulations are generally consistent with the guidance set out in prior Notices. However, there are significant modifications and refinements.
1 June 2012
Worldwide debt cap rules were introduced as an extension to the UK thin capitalisation rules to ensure that UK companies bear their fair share of group debt. It applies to accounting periods beginning on or after 1 January 2010.
1 June 2012
The High Net Worth Individuals Rules (the Rules) have recently been introduced to attract high net worth foreign individuals to take up residence in Malta and take advantage of the beneficial rate of tax. The Rules apply to both EU and third country nationals and will run in parallel to the current Residents Scheme Regulations.
1 January 2012
The Australian Government’s latest revenue raising measures are again targeting international businesses. The ‘Living away from home’ allowance and other related benefits have been denied concessional tax treatment for international employees along with increased substantiation requirements for all others.
Background
1 January 2012
With effect from 1 October 2011, South African Transfer Pricing legislation was significantly changed by the implementation of an amended Section 31 to the Income Tax Act 58 of 1962 (”the Act”). The section has now further been amended in terms of the Taxation Laws Amendment Bill 19 of 2011 introduced by the Minister of Finance on 25 October 2011.
31 December 2011
Is there a “best” way for a foreign individual to own U.S. real estate? When planning to acquire U.S. real estate, foreign individuals have a number of ownership alternatives to consider each of which offers its own advantages and disadvantages. There are other items a foreign investor should consider when evaluating the most advantageous method for holding U.S.
12 June 2001
On 24 May, the Government introduced into Parliament the first piece of draft legislation in its reform of Australia’s transfer pricing provisions.
