Source: WWTPR
lunes, 20 de mayo de 2013
India: CBDT issues Advance Pricing Agreement Guidance booklet with FAQs
The booklet published by CBDT provides guidance on types of APAs, advantages of entering into APA, process of APA from Pre-fling stage to entering into an agreement, minimum period for which APA shall be valid, conversion of unilateral APA to bilateral and vice-a-versa, renewal of APA, etc. It also contains CBDT’s response to 40 frequently asked questions.
domingo, 19 de mayo de 2013
Argentine National Tax Court rejects tax authorities' position on economic relationship
In March 2013, the National Tax Court (an administrative body dependent on the Executive Branch) ruled in favor of Akapol S.A.C.I.F.I.A., regarding the relationship of Akapol and a third party exclusive distributor located in Uruguay (Distributor), sustained by the Administración Federal de Ingresos Públicos(AFIP) in connection with transfer pricing issues.
In Argentina, the section added after the Section 15 of the Income Tax Law (ITL) establishes the concept of economic relationship, while General Resolution 1122/01 (GR 1122) issued by AFIP, rules the application of that law, providing in Schedule III a list of assumptions that would imply economic relationship.
During a tax audit, AFIP attempted to characterize Akapol and Distributor as related parties for tax purposes using the list of assumptions from Schedule III of GR 1122; and thus, applied a transfer pricing adjustment for the fiscal period 2001. The court rejected the economic relationship presumed by AFIP, considering that the exclusive distribution agreement alone does not provide the decision making power to control the activities of Distributor, the fact that the ITL requires for economic relationship to take place, and thus, the application of the transfer pricing rules.
In Argentina, the section added after the Section 15 of the Income Tax Law (ITL) establishes the concept of economic relationship, while General Resolution 1122/01 (GR 1122) issued by AFIP, rules the application of that law, providing in Schedule III a list of assumptions that would imply economic relationship.
During a tax audit, AFIP attempted to characterize Akapol and Distributor as related parties for tax purposes using the list of assumptions from Schedule III of GR 1122; and thus, applied a transfer pricing adjustment for the fiscal period 2001. The court rejected the economic relationship presumed by AFIP, considering that the exclusive distribution agreement alone does not provide the decision making power to control the activities of Distributor, the fact that the ITL requires for economic relationship to take place, and thus, the application of the transfer pricing rules.
Source and more info: PKN
viernes, 17 de mayo de 2013
Renegociación del CDI con Países Bajos
Conforme una nota de prensa publicada por el Ministerio de Hacienda holandés, el inicio de las negociaciones para la renegociación del Convenio de Doble Imposición entre España y los Países Bajos está programado para 2013.
Fuente: IBFD
Fuente: IBFD
EU Finance Ministers (ECOFIN) adopt strong and robust conclusions on tackling tax fraud, tax evasion and aggressive tax planning
The meeting of the EU Finance Ministers (ECOFIN) has reached an agreement on Council Conclusions on tax fraud, tax evasion, and aggressive tax planning1 (the Conclusions). The Conclusions will be discussed at next week’s meeting (22 May 2013) of the European Council by the Heads of State. On 14 May 2013, the EU Finance Ministers held discussions on taxation issues with the recent joint letter2 from Minister Noonan, as ECOFIN President, and EU Commissioner for Taxation Algirdas Šemeta outlining the basis for discussions.
Source: EY
Source: EY
jueves, 16 de mayo de 2013
CDI con Qatar
Según informa el IBFD, el pasado 25 de abril España y Qatar rubricaron en Doha su primer Convenio para Evitar la Doble Imposición.
martes, 14 de mayo de 2013
Nuevo CDI con Austria
Según informa el IBFD, el pasado 15 de abril se rubricó un nuevo Convenio de Doble Imposición entre España y Austria que sustituirá al que está vigente.
Russian MoF clarifies tax residence criteria applicable for individuals residing in more countries
On 12 April 2013, the Russian Ministry of Finance issued Letter No. 03-08-05/12359, clarifying the tax residence of a Russian individual that was residing in more countries.
An individual having Russian citizenship and residence permit in Spain was spending 100 days in Spain, 60 days in Estonia, 30 days in Belarus and 175 days in Russia during a calendar year. His wife and daughter were also citizens of Russia and both were permanently residing in Spain. The Ministry of Finance was inquired whether Russia was considering him as a tax resident under these circumstances.
The Ministry of Finance referred to article 4 of the Russia-Spain Income and Capital Tax Treaty (1998), whereby the term "resident of a Contracting State" with respect to individuals covers any person who is subject to taxation in such state based on his/her domicile or residence.
At the same time, under article 207 of the Tax Code, a person is considered a tax resident in Russia if the individual is actually residing in Russia for at least 183 calendar days within 12 consecutive months.
Consequently, the Ministry of Finance concluded that the individual does not qualify as a tax resident of Russia provided that he does not spend 183 days within a calendar year in Russia. Thus, only the income having source in Russia should be taxed by Russia.
An individual having Russian citizenship and residence permit in Spain was spending 100 days in Spain, 60 days in Estonia, 30 days in Belarus and 175 days in Russia during a calendar year. His wife and daughter were also citizens of Russia and both were permanently residing in Spain. The Ministry of Finance was inquired whether Russia was considering him as a tax resident under these circumstances.
The Ministry of Finance referred to article 4 of the Russia-Spain Income and Capital Tax Treaty (1998), whereby the term "resident of a Contracting State" with respect to individuals covers any person who is subject to taxation in such state based on his/her domicile or residence.
At the same time, under article 207 of the Tax Code, a person is considered a tax resident in Russia if the individual is actually residing in Russia for at least 183 calendar days within 12 consecutive months.
Consequently, the Ministry of Finance concluded that the individual does not qualify as a tax resident of Russia provided that he does not spend 183 days within a calendar year in Russia. Thus, only the income having source in Russia should be taxed by Russia.
Source: IBFD
Germany's desire to pursue mandatory binding arbitration provisions in double taxation agreements
The German Ministry of Finance released its official baseline approach for negotiating double taxation agreements (DTAs) on April 18. This baseline reflects the German taxation agreement policy and serves to support German principles when the government is negotiating new or revised DTAs. The document is intended to help the German government achieve its objectives related to the taxation of international transactions, using provisions that are as consistent as possible.
One of many key elements to this baseline approach is that the German government wishes to pursue provisions that facilitate tax dispute resolution. Specifically, as a basis for negotiations, the German government would like to see a binding, compulsory arbitration procedure that is available upon request. Such a binding arbitration procedure may offer treaty partners an effective means for eliminating double taxation and may also provide a more timely process for taxpayers to resolve disputes. Germany's desire to pursue this provision is further evidence of a growing global trend – fuelled by the substantial increase in the number and size of tax audits worldwide and the increasing burden on the traditional mutual agreement procedures within DTAs.
One of many key elements to this baseline approach is that the German government wishes to pursue provisions that facilitate tax dispute resolution. Specifically, as a basis for negotiations, the German government would like to see a binding, compulsory arbitration procedure that is available upon request. Such a binding arbitration procedure may offer treaty partners an effective means for eliminating double taxation and may also provide a more timely process for taxpayers to resolve disputes. Germany's desire to pursue this provision is further evidence of a growing global trend – fuelled by the substantial increase in the number and size of tax audits worldwide and the increasing burden on the traditional mutual agreement procedures within DTAs.
Source & more info: PKN
sábado, 4 de mayo de 2013
jueves, 2 de mayo de 2013
Spanish exit tax ruled contrary to EU Law
The European Court of Justice has ruled that Spanish legislation levying an immediate exit tax on the transfer of residence or the transfer of a company’s assets to another European Union member state is contrary to EU law.
Source and more info: PWC
miércoles, 1 de mayo de 2013
La viñeta del día
P.D.1: Dedicado a los bancarios que vendieron preferentes a los abuelitos de este país.
P.D.2: TWINKIES es una marca de pastelitos de crema, como Phoskitos o Tigretón en España.
OECD’s Global Forum on Transfer Pricing releases a Draft Handbook on Transfer Pricing Risk Assessment
In November 2011, the Steering Committee of the OECD Global Forum on Transfer Pricing undertook a project on transfer pricing risk assessment. The objective of this project was to produce a practical handbook that provides clear and detailed steps countries can take to assess the transfer pricing risk presented by an individual taxpayer’s operations. The handbook is intended to be sufficiently detailed that it can serve as a manual for both developing and developed countries to use in conducting transfer pricing risk assessments.
The new Draft Handbook on Transfer Pricing Risk Assessment, produced by the Steering Committee of the OECD Global Forum on Transfer Pricing, is a detailed, practical resource that countries can follow in developing their own risk assessment approaches. This handbook supplements useful materials already available with respect to transfer pricing risk assessment. Individual country tax administrations have published information on their risk assessment practices.
The new Draft Handbook on Transfer Pricing Risk Assessment, produced by the Steering Committee of the OECD Global Forum on Transfer Pricing, is a detailed, practical resource that countries can follow in developing their own risk assessment approaches. This handbook supplements useful materials already available with respect to transfer pricing risk assessment. Individual country tax administrations have published information on their risk assessment practices.
Source: OECD
miércoles, 24 de abril de 2013
lunes, 22 de abril de 2013
Norway’s interest deduction proposal – Is it a step to protect tax base?
To avert multinational companies from shifting profits out of Norway and thereby reduce profit offered to tax in the country, Ministry of Finance released a proposal to limit deduction of interest on related party loan. The proposal if implemented will limit deduction of interest to an amount equal to 25% of taxable ordinary income before interest, taxes, depreciation and amortization (‘EBITDA’).
Source: WWTPR
sábado, 20 de abril de 2013
OECD reports new developments in tax information exchange
OECD Secretary-General Angel Gurría has presented a report to G20 Finance Ministers and Central Bank Governorsthat highlights measures to ensure that all taxpayers pay their fair share.
The report covers three strategic initiatives:
The Global Forum, set up in 2000 to agree global tax standards, now has 119 member countries and jurisdictions. Since 2009, when the G20 called for effective implementation of the internationally agreed standard of information exchange, the Forum has published 100 peer review reports. Most countries have completed the first phase of the reviews which looks at legal frameworks. Fourteen are not moving to the second phase due to deficiencies in their legal frameworks. After it completes a set of Phase 2 reviews, looking at effectiveness of the information exchange practices, the Global Forum will start rating countries’ implementation of the standards on the basis of a four-tier classification system: "compliant,” “largely compliant,” “partially compliant” and “non-compliant”. The results of the ratings exercise for the first set of reviews will be completed by year end, with the allocation of overall ratings to approximately 50 tax jurisdictions.
Commending the Global Forum’s achievements, Mr. Gurría noted that, “Now that the tools exist to investigate cross-border tax evasion, all countries must use them to the full. ”
Automatic Exchange of Information: the next step
Commenting on new OECD work to develop a common model for automatic exchange of bank information, Secretary-General Gurria said: “The political support for automatic exchange of information on investment income has never been greater. Luxembourg has changed its position and the US FATCA legislation is triggering rapid acceptance of automatic exchange and propelling European countries to adopt this approach amongst themselves. In response to the G20 mandate to make automatic exchange or information the new standard, the OECD is developing a standardised, secure and effective system of automatic exchange.”
The report identifies the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as the ideal legal instrument for multilateralising automatic exchange of information. The Convention provides governments with a variety of means to fight offshore tax evasion and ensure compliance with national tax laws, while respecting the rights of taxpayers. Over 50 countries have either signed or committed to sign; more are expected to sign the Convention at a ceremony to be held at OECD headquarters on 29 May.
Addressing Base Erosion and Profit Shifting
As Base Erosion and Profit Shifting undermine tax revenues and the fairness of the tax system, the OECD has strengthened its work to put an end to international double non-taxation. The report also provides an update on the OECD’s work on Base Erosion and Profit Shifting noting that an Action Plan will be delivered to the Moscow meeting of G20 Finance Ministers meeting in July 2013.
The report covers three strategic initiatives:
- Progress reported by the Global Forum on Transparency and Exchange of Information for Tax Purposes including the upcoming ratings of jurisdictions’ compliance with the Global Forum’s standards on exchange of information on request;
- Efforts by OECD to strengthen automatic exchange of information;
- Latest developments to address tax base erosion and profit shifting, a practice that can give multinational corporations an unfair tax advantage over domestic companies and citizens.
The Global Forum, set up in 2000 to agree global tax standards, now has 119 member countries and jurisdictions. Since 2009, when the G20 called for effective implementation of the internationally agreed standard of information exchange, the Forum has published 100 peer review reports. Most countries have completed the first phase of the reviews which looks at legal frameworks. Fourteen are not moving to the second phase due to deficiencies in their legal frameworks. After it completes a set of Phase 2 reviews, looking at effectiveness of the information exchange practices, the Global Forum will start rating countries’ implementation of the standards on the basis of a four-tier classification system: "compliant,” “largely compliant,” “partially compliant” and “non-compliant”. The results of the ratings exercise for the first set of reviews will be completed by year end, with the allocation of overall ratings to approximately 50 tax jurisdictions.
Commending the Global Forum’s achievements, Mr. Gurría noted that, “Now that the tools exist to investigate cross-border tax evasion, all countries must use them to the full. ”
Automatic Exchange of Information: the next step
Commenting on new OECD work to develop a common model for automatic exchange of bank information, Secretary-General Gurria said: “The political support for automatic exchange of information on investment income has never been greater. Luxembourg has changed its position and the US FATCA legislation is triggering rapid acceptance of automatic exchange and propelling European countries to adopt this approach amongst themselves. In response to the G20 mandate to make automatic exchange or information the new standard, the OECD is developing a standardised, secure and effective system of automatic exchange.”
The report identifies the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as the ideal legal instrument for multilateralising automatic exchange of information. The Convention provides governments with a variety of means to fight offshore tax evasion and ensure compliance with national tax laws, while respecting the rights of taxpayers. Over 50 countries have either signed or committed to sign; more are expected to sign the Convention at a ceremony to be held at OECD headquarters on 29 May.
Addressing Base Erosion and Profit Shifting
As Base Erosion and Profit Shifting undermine tax revenues and the fairness of the tax system, the OECD has strengthened its work to put an end to international double non-taxation. The report also provides an update on the OECD’s work on Base Erosion and Profit Shifting noting that an Action Plan will be delivered to the Moscow meeting of G20 Finance Ministers meeting in July 2013.
Source: OECD Website
miércoles, 17 de abril de 2013
martes, 16 de abril de 2013
Hungarian Ministry of National Economy proposes changes to transfer pricing rules
In March 2013, Ministry of National Economy (’the Ministry’) proposed changes to Hungarian transfer pricing documentation requirement, introduced provision relating to low value added services and specified criteria for selection of comparable from database like AMADEUS, etc. Some of these changes would simplify the transfer pricing rules. However, the proposal to include criteria for selection of comparable in the regulation is a significant deviation from the international practice.
Source: WWTPR
lunes, 15 de abril de 2013
Argentina: New digital signature and electronic data submission requirements for filing transfer pricing report
On 10 April 2013, the Argentine Federal Tax Authorities (Administración Federal de Ingresos Públicos orAFIP) published General Resolution N° 3,476 in the Official Bulletin (Boletín Oficial), introducing modifications to the current Transfer Pricing regulations. These modifications inter-alia require taxpayer to file Transfer Pricing reports in electronic format.
The key changes introduced by AFIP are as follows:
1. The modifications are applicable to fiscal years ending as of 31 December 2012, inclusive;
2. Certain modification are made in the submission requirements for the Transfer Pricing reports and the respective CPA certification (including the corresponding Professional Counsel’s intervention); and
3. New compliance obligation to submit Transfer Pricing return Form F.4501.
As expressed in the general resolution’s recitals, it is in the general and permanent purpose of the AFIP to help taxpayers and/or their responsible for the fulfillment of tax obligations, through the development of informatics systems.
In this line, the resolution sets forth the obligation to file the Transfer Pricing reports via electronic submission with a “Fiscal Code” (“Clave Fiscal”) in “.pdf” format along with its digital signature requirements, in lieu of the former practice of paper filings.
In addition, there is a new obligation to submit a new Transfer Pricing return Form, F.4501, which must contain the Transfer Pricing report attached and the CPA’s certification. If there is a need to attach a public translation of foreign language content, it must contain a notary public’s digital signature.
The “digital signature” requisite requires the taxpayer to possess a “Digital Certificate” – Level 4 – issued by the AFIP’s Certifying Authority, in conformity with the provisions set forth in General Resolution N° 2,651, and with the corresponding authorization according to the terms set forth in General Resolution N° 3,380.
Finally, in Exhibit VII the procedure for the preparation, digital signature on the part of the taxpayer, the CPA and the respective Professional Council and electronic submission of Form F.4501 is included. Exhibit VII also includes an exception mechanism for those cases in which the electronic file exceeds the maximum permitted size and/or the system is unresponsive.
The provisions of General Resolution N° 3,476 are effective as of this date, and shall be applied for those fiscal years ending as of 31 December 2012, inclusive, whose deadline for the filing of the Transfer Pricing report and pertinent information takes place between the third and ninth of August 2013.
To download General Resolution N° 3,476 click here [It is available only in Spanish Language]
The key changes introduced by AFIP are as follows:
1. The modifications are applicable to fiscal years ending as of 31 December 2012, inclusive;
2. Certain modification are made in the submission requirements for the Transfer Pricing reports and the respective CPA certification (including the corresponding Professional Counsel’s intervention); and
3. New compliance obligation to submit Transfer Pricing return Form F.4501.
As expressed in the general resolution’s recitals, it is in the general and permanent purpose of the AFIP to help taxpayers and/or their responsible for the fulfillment of tax obligations, through the development of informatics systems.
In this line, the resolution sets forth the obligation to file the Transfer Pricing reports via electronic submission with a “Fiscal Code” (“Clave Fiscal”) in “.pdf” format along with its digital signature requirements, in lieu of the former practice of paper filings.
In addition, there is a new obligation to submit a new Transfer Pricing return Form, F.4501, which must contain the Transfer Pricing report attached and the CPA’s certification. If there is a need to attach a public translation of foreign language content, it must contain a notary public’s digital signature.
The “digital signature” requisite requires the taxpayer to possess a “Digital Certificate” – Level 4 – issued by the AFIP’s Certifying Authority, in conformity with the provisions set forth in General Resolution N° 2,651, and with the corresponding authorization according to the terms set forth in General Resolution N° 3,380.
Finally, in Exhibit VII the procedure for the preparation, digital signature on the part of the taxpayer, the CPA and the respective Professional Council and electronic submission of Form F.4501 is included. Exhibit VII also includes an exception mechanism for those cases in which the electronic file exceeds the maximum permitted size and/or the system is unresponsive.
The provisions of General Resolution N° 3,476 are effective as of this date, and shall be applied for those fiscal years ending as of 31 December 2012, inclusive, whose deadline for the filing of the Transfer Pricing report and pertinent information takes place between the third and ninth of August 2013.
To download General Resolution N° 3,476 click here [It is available only in Spanish Language]
Source: WWTPR
More info: PWC
viernes, 12 de abril de 2013
India’s CBDT issues guidance on transfer pricing rules applicable to R&D activities
The Central Board of Direct Taxes has issued two circulars: one clarifying the use of the profit split method for related party transactions involving intangible property and the other stipulating the requirements for an R&D center to be classified as a contract R&D unit.
Source & more info: Deloitte
lunes, 8 de abril de 2013
OECD meets with business on base erosion and profit shifting project
On 26 March 2013, the Organisation for Economic Cooperation and Development (OECD) held a meeting with the Business and Industry Advisory Committee (BIAC) to the OECD on the project on base erosion and profit shifting (BEPS). The OECD issued an initial report, Addressing Base Erosion and Profit Shifting, on 12 February 2013 on issues relating to BEPS and multinational businesses (for more information regarding the OECD report please see EY Global Tax Alert, Addressing Base Erosion and Profit Shifting, dated 15 February 2013).
Source & more info: EY
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