Tag Archive for OECD

Cloud Computing and Other High Tech Tax Issues

Annette Nellen3

Cutting edge activities challenge tax rules written with different business methods and products in mind. For example, cloud computing raises issues as to how longstanding tax provisions, such as the research tax credit and Section 199 manufacturing deduction apply. This and other current tax topics relevant to high tech companies and their tax advisers are on the agenda for the 31st Annual TEI-SJSU High Tech Tax Institute, November 9 & 10, 2015 in Palo Alto. Additional topics include BEPS Relevance, M&A activities, state tax haven activities, European Union hot topics and how these topics also affect the income tax provision on financial statements.

For the complete agenda and list of speakers, as well as to register, please visit Read more

BEPS – The View From Around the World

Annette Nellen2

We hear a lot about the OECD’s BEPS project (base erosion and profit shifting) and its action items. What is the relevance of “country-by-country” reporting for transfer pricing documentation? Does the statement on harmful tax practices mean that the US should adopt a patent box? The 31st Annual TEI-SJSU High Tech Tax Institute, scheduled for November 9 and 10, 2015 in Palo Alto, will address these questions and more. A BEPS panel will include attorneys from China, Ireland and the U.S. to share how other countries are responding the BEPS project and what it means for your company or clients.  Another panel with practitioners from the UK and Ireland will explore hot topics in the EU. Heather Maloy, (former) Commissioner for the IRS Large Business & International Division will also be speaking, along with numerous other experts on hot tax topics for high tech Read more

Structuring Investment in India – Does Mauritius Holdco Work?

Pallav Acharya2

Tax authorities worldwide distaste the word “treaty shopping” as such. In recent times, OECD has worked out guidelines for BEPS and most U.S. tax treaties have “Limitation of Benefit” clause that prevents abusive tax planning. However, there may still be some opportunities available to U.S. investors in India; one such avenue is investing via Mauritius Holdco structures.

A lot of foreign investors prefer to route their investment through Mauritius in India. Since the India- Mauritius double tax avoidance agreement offers exemption from capital gains tax to Mauritian residents. It has been the key incentive provided by the Indo-Mauritius tax treaty where by tax on capital gains is exempted for investors from Mauritius. As per the last finance bill almost 42% of the foreign direct investment into India is routed through Read more

IRS Actively Seeking US Tax Dodgers Abroad!


According to Bloomberg (subscription required) The Department of Justice Tax Division is ramping up an intense crackdown on offshore tax evasion, and people hiding assets overseas should come forward as soon as possible, an agency official said March 6, 2015. Caroline D. Ciraolo , principal deputy assistant attorney general for policy and planning at the division said:

“Time is of the essence,”
“Come in now or face the consequences.”

Speaking at the Federal Bar Association Tax Law Conference, Ciraolo said the government’s reach has extended far beyond Switzerland to jurisdictions including: Read more

Tax Dodgers Beware!

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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

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

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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

47 Countries Declare GATCA Adoption

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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

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

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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

Australian Tax Office Is Probing 86 Multinationals

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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

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

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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.

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

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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