Archive for OECD

Australian Tax Office BEPS “Progress Report”

In a speech last week ATO’s Mark Konza, Deputy Commissioner – International, gave an insight into the ATO’s activities in responding to a number of the OECD’s post Cairns G20 Minister’s Conference BEPS Action Plan items.

Deputy Commissioner Konza put particular emphasis on the ATO’s strategy in connection with “Action Item 1: address the tax challenges of the digital economy”. Commenting on the ATO’s work on this aspect he said-

“The broader digital economy is also being addressed through our four-year dedicated compliance program to address International Structuring and Profit Shifting (ISAPS). Tax and law professionals from external firms have been recruited into the ATO to help Read More

Written by | Posted in Australia/Oceania • Income Tax • International • OECD • Tax Controversy • Tax Policy • Tax Risk Management • Transfer Pricing

Tax Dodgers Beware!

In an effort to crack down on tax evasion the OECD developed what it calls a “New single global standard for the automatic exchange of information between key authorities worldwide.” The standard was approved by the OECD council on 15 July 2014 and is expected to result in an elimination of the secrecy surrounding some banking transactions as it relates to tax matters.
The new standard has been endorsed by more than 60 countries or jurisdictions including the United States, United Kingdom, European Union and Canada and other major jurisdictions already committed to implementation.

The standard requires detailed account information to be provided to governments by financial institutions. The information obtained from the financial institutions will be Read More

Written by | Posted in FATCA • International • OECD • Tax Fraud/Evasion/Crimes

Transfer Pricing: 25% Rule of Thumb Not Applicable To Determining Royalty Rates

Attached please find a recent U.S. Court of Appeals for the Federal Circuit case (September 16, 2014 in VirnetX, Inc. v. Cisco Sys., Inc.) in which a U.S. court finds again the “25 percent rule of thumb” to determine royalty rates inadmissible:

“[W]e agree with the courts that have rejected invocations of the Nash theorem without sufficiently establishing that the premises of the theorem actually apply to the facts of the case at hand. The use here was just such an inappropriate “rule of thumb.” Previously, damages experts often relied on the “25 percent rule of thumb” in determining a reasonable royalty rate in a hypothetical negotiation. That rule hypothesized that 25% of the value of the infringing product would remain with the patentee, while the remaining 75% would go to the licensee. [W]e held the “25 percent rule of thumb” to be inadmissible Read More

Written by | Posted in International • OECD • Transfer Pricing

47 Countries Declare GATCA Adoption

GATCA Declaration

47 countries and major financial centers on May 6, 2014 declared am automatic exchange of information between their jurisdictions, announced the OECD.  All 34 OECD member countries, as well as Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa endorsed the Declaration on Automatic Exchange of Information in Tax Matters that was released at the May 6-7, 2014 Meeting of the OECD at a Ministerial Level.

The Declaration commits countries to implement a new single global standard on automatic exchange of information (“GATCA”).  The OECD stated that it will deliver a Read More

Written by | Posted in FATCA • International • OECD

Swiss Account Holders – Losing The Right To Be Informed About IRS Disclosure

The Swiss continue to cave in and erode any bastion of bank secrecy within its picture perfect borders. The Swiss Parliament voted on March 6, 2014 to turn over information to foreign governments on certain account holders with undeclared accounts in Swiss financial institutions without providing the holders any advance notice of the disclosure. The move was in reaction to the 2011 admonishment to Switzerland by the Global Forum on Transparency and Exchange of Information for Tax Purposes to take measures to increase its tax transparency. If Switzerland took no action, it risked being placed on a global blacklist. The Global Forum is a division of the Organization of Economic Co-operation and Development (commonly referred to as “OECD”). We understand that the amendment must be finally approved at the end of the current Swiss legislative Read More

Written by | Posted in FBAR • International • IRS • OECD • OVDP

BEPS And Transfer Pricing

The news headlines that many multinational companies (MNCs) have been reducing their income tax burden through shifting of income to no- or low-tax countries have resulted in the OEC’s Action Plan on addressing Base Erosion and Profit Shifting (BEPS). The BEPS action plan is very aggressive and comprehensive.

Major countries including China, India and the US are actively involved in the BEPS project.

MNCs are challenged with getting ready for potential regulatory changes that may happen soon to impact their existing tax planning structures that they put in place a few years ago.

Major Goals of BEPS Read More
Written by | Posted in OECD • Transfer Pricing

Australian Tax Office Is Probing 86 Multinationals

Pat McGrath of Australia’s national broadcaster ABC News reports that “About 100 Tax Office staff have begun a four year investigation into the tax affairs of big companies global companies operating in Australia.” (sic)

In an interview with Pat McGrath, Mark Konza (ATO Deputy Commissioner) said: “At the moment – and I should say this process is ongoing, so other cases will be identified over time – these 86 cases where we felt that the structuring events that had taken place seem to have a very bad effect on a company’s Australian tax position…”. Deputy Commissioner Konza continued, “We will issue assessments on companies that we think weren’t applying the law correctly. If they’re involved in profit shifting, they’ll get an assessment; they’ll get penalties as well.” Read More

Written by | Posted in Australia/Oceania • International • OECD

Senate Finance Committee Blank Slate Project 2013 – Senator Rockefeller’s Suggestions

Evaluation of Senator Suggestions for the Blank Slate Project

As noted in my 9/9/13 post, I’m going to summarize and analyze proposals senators offered to the Senate Finance Committee, and that the senator made public. Despite falling behind on my project, as tax reform likely heats up in 2014, I’m back at it as I’d like to look at and share what might be a broader array of proposals and issues. In no particular order, the second set of suggestions I’m commenting on are from Senator Rockefeller (D-WV) (7/26/13 letter). Senator Rockefeller is a member of the Senate Finance Committee.

Read More

Written by | Posted in Capital Gains • Federal • Gift Tax • Income Tax • OECD

Beneficial Ownership Registry for the Cayman Islands is Imminent!

On November 4, 2013, Wayne Panton, the Minister for Financial Services, Commented on the Commencement of Cayman’s Consultation on its G8 Action Plan.

On 31 October, the United Kingdom announced a proposal for a public register of beneficial ownership information, following the results of its public consultation. If implemented, the register conceivably would allow a citizen of any country to access information on the beneficial owners of UK-registered entities.

In the Cayman Islands, we also are assessing our regime on beneficial ownership. In our action plan on the misuse of companies and other legal structures, published immediately following the June G8 Summit, we committed to assess whether a central Read More

Written by | Posted in Caribbean • Europe, Middle East • OECD

OECD Releases New Global Common Reporting Standard for Exchange of Tax Info!

The Organization for Economic Cooperation and Development released a new single global common reporting standard for the automatic exchange of information between tax authorities worldwide, intended to help fight cross-border tax evasion.

This document was approved and declassified by the Committee on Fiscal Affairs (“CFA”) on 17 January, 2014 and contains the global standard for automatic exchange of financial account information. It has been developed by the OECD, working with G20 countries, and in close co-operation with the EU.

• Part I contains the introduction to the standard and

• Part II contains the text of the Model Competent Authority Agreement (CAA) and the Read More

Written by | Posted in OECD

OECD Releases Draft of Radical Country-by-Country Reporting Template

The OECD has just published its draft of “A Model Template of Country-by-Country Reporting” that would require companies for the first time to provide tax administrations with exhaustive details of how they allocate their income, taxes, and business activities on a country-by-country basis.

On July 19, 2013 BEPS Action Plan, the OECD was directed to “develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into account the compliance costs for business.

The rules to be developed will include a requirement that MNE’s provide all relevant governments with needed information on their global allocation of the income, economic Read More

Written by | Posted in OECD • Transfer Pricing

Israel/South Africa Expatriates Face Costly New Tax Rules

In terms of the Right of Aliyah doctrine (the right of every Jew to immigrate to Israel) every Jew going to or intending to go to Israel will be granted an Oleh’s visa. Oleh, for my colleagues not dealing with Israeli law (plural: olim) means a Jew immigrating into Israel. The Oleh Visa is granted by mere expression of the interest to “relocate” to Israel as a qualifying Jew (albeit born outside Israel after 1950).

A person shall not be registered as a Jew by ethnic affiliation or religion and will be denied Oleh Visa, despite being a Jew as defend, inter alia because of political status / activity (i.e. is engaged in an activity directed against the Jewish people or which is likely to endanger public health or the security of the state of Israel) or secondly, where a notification (issued under the Law of Return 5710-1950 as amended by Law of Return Read More

Written by | Posted in Africa • Europe, Middle East • Expatriate • Gift Tax • Individual • International • OECD • Specialty Tax Incentives • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting
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