TaxConnections


 

Archive for OECD

Platform For Collaboration On Tax Invites Final Comments On “Taxation of Offshore Indirect Transfers of Assets”

The Platform for Collaboration on Tax – a joint initiative of the IMF, OECD, UN and World Bank Group – has undertaken, at the request of the G20, the development of a series of “toolkit” reports to help guide developing countries in the implementation of policy options for issues in international taxation of greatest relevance to these countries. One such issue identified by developing countries themselves is the taxation of offshore indirect transfers of assets. Though an important area of international tax policy, no unifying principle has been adopted by individual countries on how to treat these transactions. This issue is, though, addressed in both main double taxation model treaties, of the OECD and the UN. Countries now follow very different approaches in their domestic law—and many treaties now in effect do not include the relevant model treaty provisions.

Read more

Landmark Tax Agreement To Strengthen Tax Treaties Enters Into Force With Additional Countries Joining

OECD, Landmark Tax Agreement

Ministers and senior officials from Kazakhstan, Peru and the United Arab Emirates have signed the BEPS Multilateral Convention bringing the total number of signatories to 79 and the number of covered jurisdictions to 81. This Convention updates the existing network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises. Estonia intends to sign the MLI on 29 June. The signatures this week come a few days before the Convention enters into force on 1 July 2018 for five of the jurisdictions that signed last year.

The Convention is the first multilateral treaty of its kind, allowing jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing networks of bilateral tax treaties. The OECD/G20 BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to “disappear” or be artificially shifted to low or no tax environments, where companies have little or no economic activity.

Read more

Base Erosion And Profit Shifting(BEPS) – Organization For Economic Co-Operation And Development Public Discussion Draft

OECD and BEPS

Under the mandate of the Report on Actions 8-10 of the BEPS Action Plan (“Aligning Transfer Pricing Outcomes with Value Creation”), Working Party No. 6 (“WP6”) has produced a non-consensus discussion draft on financial transactions.

The first part of the discussion draft provides guidance on the application of the principles contained in Section D.1 of Chapter I of the Transfer Pricing Guidelines to financial transactions.

In particular, Section B.1 of the discussion draft elaborates on how
the accurate delineation analysis under Chapter I applies to the capital structure of an MNE within an MNE group. The discussion draft clarifies that the guidance included in this section does not prevent countries from implementing approaches to address capital
structure and interest deductibility under their domestic legislation. Section B.2 outlines the economically relevant characteristics that inform the analysis of the terms and conditions of financial transactions.

The second part of the discussion draft, contained in sections C, D and E, addresses specific issues related to the pricing of financial transactions such as treasury function, intra-group loans, cash pooling, hedging, guarantees and captive insurance.The discussion draft also includes a number of questions to commentators on which inputs from stakeholders will be particularly relevant to WP6 to further its work and prepare another discussion draft after considering the input received.
Read more

What is the Economic Activity Requirement that Offshore Financial Center’s Agreed to Adopt into Law?

Fair Tax Competition: The country should not have harmful tax regimes, which go against the principles of the EU’s Code of Conduct or OECD’s Forum on Harmful Tax Practices. Those that choose to have no or zero-rate corporate taxation should ensure that this does not encourage artificial offshore structures without real economic activity. In the context of the screening process, the Code of Conduct Group invited each jurisdiction where concerns were identified to commit to address such concerns. The large majority of jurisdictions have decided to introduce the relevant changes in their tax legislation in order to comply with the EU screening criteria.  The following jurisdictions are committed to addressing the concerns relating to economic substance by 2018: Bermuda; Cayman Islands; Guernsey; Isle of Man; Jersey; and Vanuatu.

Read more

OECD Launches Effective Inter-Agency Co-Operation in Fighting Tax Crimes and Other Financial Crimes

More than 200 global tax and economic crime experts have identified key areas for international action following the fifth OECD Forum on Tax and Crime, in London. In a week dominated by media coverage of offshore issues, the Forum brought experts on tax, customs, anti-corruption, anti-money laundering, policing, and prosecution together to agree priorities for action.

The Forum is the latest in a series of OECD-led events and an important opportunity for the international community to strengthen collaboration in tackling these global issues.

Read more

Peru Becomes 114th Country To Sign OECD’s Multilateral Convention On Mutual Administrative Assistance In Tax Matters

Claudia María Amelia Teresa Cooper Fort, Minister of Economy and Finance of Peru, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in the presence of the Deputy Director of the OECD’s Centre for Tax Policy and Administration, Grace Perez-Navarro.

Read more

Mauritius Signs The Multilateral BEPS Convention

Mahess Rawoteea of the Ministry of Finance and Economic Development of Mauritius, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) in the presence of Douglas Frantz, OECD Deputy Secretary-General.

Based on expressed reservations at this point in time, 23 tax treaties would be impacted by this signing. Read more

Seven More Jurisdictions Sign Tax Co-operation Agreement

William Byrnes

As part of continuing efforts to boost transparency by multinational enterprises (MNEs), Gabon, Hungary, Indonesia, Lithuania, Malta, Mauritius and the Russian Federation have now signed the Multilateral Competent Authority Agreement for Country-by-Country Reporting (CbC MCAA), bringing the total number of signatories to 57. Lithuania and Hungary joined the Agreement in October and December 2016 respectively.

Read more

OECD Updates BEPS Financial Payments And Tax Treaties

William Byrnes

The 2015 Report on BEPS Action 4 established a common approach which directly links an entity’s net interest deductions to its level of economic activity, based on taxable EBITDA. Further work on two aspects of the common approach was completed in 2016 and this is included in this update.

Read more

Peru Joins The Inclusive Framework On BEPS

William Byrnes

Following the first meeting of the Inclusive Framework on BEPS in Japan, on 30 June – 1 July, and recent regional meetings, more countries and jurisdictions are joining the framework. The Inclusive Framework on BEPS recently welcomed Peru bringing to 91 the total number of countries and jurisdictions participating on an equal footing in the Project.

Read more

Tax Residency In Canada: Deemed VS. Factual Resident

John Richardson

Tax Residency is becoming an increasingly important topic. Every country has its own rules for determining who is and who is not a “tax resident” of that country. The advent of the OCED CRS (“Common Reporting Standard”) has made the determination of “tax residence” increasingly important.

Read more

More Than 1,000 Relationships Now In Place To Automatically Exchange Information Between Tax Authorities

William Byrnes

As a further step to implement the OECD Common Reporting Standard (CRS), the first series of bilateral automatic exchange relationships were established among the first batch of jurisdictions committed to exchanging information automatically as of 2017.

Read more

Meet Tax Experts At TaxConnections...