Czech Republic: Cabinet approves ratification of BEPS MLI

The Cabinet of Czech Republic on February 14, 2018, approved ratification of the Multilateral Instrument (MLI) to implement into bilateral tax treaties the tax treaty-related measures arising from the OECD / G20 BEPS Project to tackle base erosion and profit shifting (BEPS). Czech Republic must now complete the ratification process and deposit its instrument of ratification so that the MLI can enter into force.

Norway: Government publishes new guidance on MAP

The Norwegian Government published detailed taxpayer guidance on the mutual agreement procedure (MAP) framework set out in Norway’s tax treaties on 7th February 2018. It is an instrument which shall ensure that states apply the tax treaties correctly. The guidance covers: General information about mutual agreement procedures (MAP): The guidance is general in nature, but on certain points it provides specific details relevant for cases related to pricing of intra-group transactions. Access to MAP: MAP …

Canada: CRA announces prescribed interest rates for 2018

The Canada Revenue Agency (CRA) has announced the recommended annual interest rates for the first quarter (Q1) on December 15, 2017. It will apply to any amounts owed to the CRA and to any amounts owed by the CRA to individuals and corporations. The interest rate to be paid on corporate taxpayer overpayments is 1%; in case of individual taxpayer, the rate is 3%. Also, the interest rate for corporate taxpayers’ pertinent loans or indebtedness …

Platform for Collaboration on Tax: Global Conference

The first Global Conference on Taxation and SDGs convened by the Platform for Collaboration on Tax (PCT) concluded in New York on Friday, 16 February 2018. The PCT brings together the key players in international organizations mandated to work on global tax issues, i.e the IMF, the OECD, the UN  and the World Bank Group (WBG). More than 500 delegates including Ministers of Finance and heads of tax administrations from around the world participated. The …

Canada: Federal Budget 2018 is to be scheduled on February 27, 2018

On February 14, 2018, the Finance Minister, Bill Morneau, announced that the Federal Budget 2018 will be presented on February 27, 2018, in the House of Commons. According to the Budget 2018, the Government will take some steps towards equality, and a more competitive, diverse and inclusive Canada, where everyone can have a real and fair chance at success.

Platform for Collaboration on Tax: Closing Statement of Conference on Tax and SDGs

On 16 February 2018 the Platform for Collaboration on Tax (PCT) released the closing statement following its conference on taxation and the sustainable development goals (SDGs). The PCT was set up by the IMF, OECD, UN and World Bank at the request of the G20 group of countries to ensure effective coordination and implementation of technical assistance programs. The Addis Ababa Action Agenda noted that much of the greater public financing required to meet the …

UK: HMRC wins case on employment status

HMRC has won a case concerning employment status and the IR35 rules. The IR35 legislation aims to ensure that in defined circumstances individuals working for an intermediary such as a personal service companies pay the same tax as an employee performing the same function. An individual working for the public broadcaster BBC was providing services through a personal services company called Christa Ackroyd Media (CAM). HMRC claimed additional tax on the grounds that from 2006/07 …

OECD: Taxing Energy Use 2018

On 14 February 2018 the OECD issued Taxing Energy Use 2018, a publication that summarises the patterns of energy taxation in 42 countries of the OECD and G20. The countries included in the publication account for around 80% of global energy use. The facts are presented for fuels and energy sectors for the period 2012 to 2015. The report is based on the data in the OECD’s Energy Tax Use database. The OECD considers that …

Platform for Collaboration on Tax: Conference on Taxation and SDGs

The Platform for Collaboration on Tax (PCT) was set up by the IMF, OECD, UN and World Bank at the request of the G20 of countries to recommend mechanisms to ensure effective implementation of technical assistance programs. On 14 February 2018 a three day conference on the subject of Taxation and the Sustainable Development Goals (SDGs) opened in New York. The conference is being attended by ministers and deputy ministers of finance; tax authorities; and …

Turkey: New digital VAT system update

The tax administration has brought some clarifications regarding the implementation of the new rules, via the VAT Communiqué no.17, published in the Official Gazette on January 31, 2018. This VAT Application Communiqué 17 had been published in December 2017 for non-resident suppliers of digital services to local consumers. Under the Communiqué, banks, e-money and payment institutions in Turkey shall notify the Revenue Administration about the payments which are made to those who do not have …

India: CBDT Issues FAQs on the Introduction of a 10% Tax on LTCG

On 4 February 2018, the Central Board of Direct Taxes (CBDT) has published Frequently Asked Questions (FAQs) on the introduction of a 10% tax on long-term capital gains (LTCG). The CBDT has issued a detailed FAQ and it addressed numerous questions relating to the method for calculation of long-term capital gains, the cost of acquisition, the fair market value, availability of inflation index, TDS obligations etc. The CBDT has also clarified the law applicable to …

Hong Kong: IRD gazettes law on joining multilateral tax agreement

On 2 February 2018, the Inland Revenue Department published a law in the official gazette outlining the legal framework for Hong Kong to join a multilateral tax agreement on implementing automatic exchange of information in tax matters (AEOI), automatic exchange of CbC reports of multinational entities, and spontaneous exchange of information on tax rulings. The new law would enable Hong Kong to implement the AEOI and fulfill its commitments under the OECD / G20 base …

Ukraine clarifies the definition of controlled transactions for transfer pricing purposes

On 19 January 2018, the State Fiscal Service (SFS) released Guidance Letter No. 119/6 / 99-99-15-02-02-15 / IPK of January 12, 2018, which defines the definition of controlled transactions for cross border transaction purposes. Under the amendments to article 39.2.1.1 of the Tax Code effective from 1 January 2018 transactions with non-resident related parties, transactions with residents of low-tax jurisdictions and sales of goods through a non-resident agent are classified as controlled. In addition, transactions …

India: Budget 2018 proposes rules for implementation CbC reporting requirements

On 1 February 2018, the Finance Minister presented the Union Budget 2018. The budget includes proposals to clarify rules for implementation of the country-by-country (CbC) reporting requirements. Consequently, the due date for submits the CbC report is extended to 12 months after the end of the reporting year. The due date would therefore vary for each situation depending on the taxpayer’s accounting year. For the financial year 2016/17, the due date has already been extended …

Finland: Tax administration publishes new guidance on transfer pricing documentation

On 29 January 2018, the tax administration issued the new guidance No.A129/200/2017 on transfer pricing documentation, which replaces the previous guidance of 2007. The documentation requirement is divided into a master file and a local file. The documentation must be submitted by 60 days upon request from the tax administration. The documentation of the master file must contain organizational structure data based on § 14b (1) (1) VML. It must contain information about the legal …

Costa Rica: Tax administration Gazettes CbC reporting resolution

On 2 February 2018, Costa Rica published the Resolution no.DGT-R-001-2018. Resolution No.DGT-R-001-2018 requires multinationals to submit a CbC report in accordance with the OECD’s recommendations for the erosion and profit shifting base (BEPS) Action 13. Resolution No DGT-R-001-2018 remained at the same level as the threshold for multinationals, as contained in the resolution published on 26 October 2017. The first CbC report must be made by December 31, 2018, at the latest, relating to the …

Switzerland: Federal Council set the parameters for the dispatch on tax proposal 17

The Swiss Federal Council announced that it has set the parameters for the dispatch on the country’s tax reform proposal (tax proposal 17) on 31st January 2018. The Federal Council’s parameters that will be contained in the dispatch on tax proposal 17 (TP17) are closely aligned with the consultation draft. The most significant difference is that the Federal Council wants to raise the cantons’ share of direct federal tax from 17% to 21.2%, instead of …

South Africa: SARS issues draft guide on understatement penalties for public comment

On the 22 January 2018, the South African Revenue Service (SARS) released a draft guide on understatement penalties for public comment by 12 February 2018. The aim of the guide is to provide taxpayers with an understanding of understatement penalties and their application. The understatement penalty regime under Chapter 16 of the Tax Administration Act, 2011 (Act No. 28 of 2011) has replaced the discretion to impose ‘additional tax’ under various repealed provisions of the taxation …

South Africa: National Treasury issues 2nd draft of the carbon tax bill for public comment

On 14 December 2017, the National Treasury was published the 2nd draft of the Carbon Tax Bill for public comment and presented in Parliament. The version of the second draft law is generally follows the first version (published in 2015) but reflects some changes that take into account specific public comments. The actual implementation date of the carbon tax will be set out in a separate Finance Minister’s report, which will be published in 2018 …

OECD: Platform for Collaboration on Tax to hold global conference

The first global conference of the Platform for Collaboration on Tax (PCT) is to be held on February 14-16, 2018, focusing on important directions for tax policy and administration so as to achieve the Sustainable Development Goals (SDGs). The PCT was set up by the IMF, OECD, UN and World Bank at the request of the G20 group of countries to support domestic resource mobilization and recommend mechanisms to ensure effective implementation of technical assistance …

OECD: Updated report on preferential tax regimes

Action 5 of the OECD/G20 action plan on base erosion and profit shifting (BEPS) aimed to counter harmful tax practices more effectively, taking into account transparency and substance. The minimum standard set out in the final report on Action 5 consisted of two parts. The first part related to preferential tax regimes, involving a peer review to identify features of those regimes that could facilitate BEPS and unfairly impact the tax base of other jurisdictions. …

OECD: Inclusive Framework issues more guidance on implementation of CbC reporting

On 8 February 2018 the Inclusive Framework issued additional guidance to give on the implementation of country-by-country (CbC) reporting under Action 13 of the OECD/G20 project on base erosion and profit shifting (BEPS). The jurisdictions participating in the Inclusive Framework on BEPS are involved in the development of the monitoring process for the four minimum standards under BEPS and in the review mechanisms for other parts of the BEPS package. The guidance covers the definition …

Malaysia: IRBM amends the APA rules and updates the MAP guidelines

Recently, the MIRB (Malaysia Inland Revenue Board) has published an amendment to the APA Rules and the updated Mutual Agreement Procedure (“MAP”) Guidelines. The APA rules referred to as the Income Tax (Advance Pricing Arrangement) Rules 2012 were published in the official gazette in May 2012, but applied retroactively from 1 January 2009.The amendment to the APA rules 2012 was released in December 2017 which allowed the tax authority to charge the taxpayer an application fee …