OECD: Peer reviews of exchange of information on tax rulings

On 4 December 2017 the OECD released the first analysis of progress by individual countries on the spontaneous exchange of information on tax rulings. This was one of the recommendations of the final report on action 5 of the project on base erosion and profit shifting (BEPS) released in October 2015. This first annual report on the exchange of information on tax rulings assesses the situation in 44 countries, including all OECD members and G20 …

WTO: World Business Priorities for the WTO Agenda

A statement issued by the International Chamber of Commerce (ICC) on 12 December 2017 at the close of the Business Forum held alongside the World Trade Organization (WTO) Ministerial Conference set out business priorities for the WTO agenda. The statement contained recommendations to members of the WTO in relation to the future world trade agenda. Role of the WTO The statement acknowledged the gains made by the progressive rounds of global trade integration and emphasized …

UK: Research on impact of entrepreneurs’ relief

On 4 December 2017 HMRC published the results of a survey carried out in May 2017 into the impact of the availability of capital gains tax (CGT) entrepreneur’s relief on the behavior and motivation of individuals in the UK who could be eligible for the relief. The survey looked for information on whether the entrepreneurs’ relief affects an individual’s decision on issues such as investment, reinvestment and retirement, and whether there are barriers to claiming …

UK: Consultation on conditionality measures to combat hidden economy

On 8 December 2017 HMRC published a consultation document entitled Tackling the hidden economy: public sector licensing. The document looks at measures that make compliance with tax obligations a condition of obtaining certain licenses and introduce a need to check the tax status of an applicant as part of the application process for licenses. The document considers the particular licenses that would be suitable for this kind of measure and asks interested parties to comment …

WTO: Director General comments on WTO dialogue with business

On 12 December 2017 the Director General of the World Trade Organization (WTO) opened the WTO Business Forum by emphasizing the significance of cooperation between the WTO and business. The WTO is an organization where governments meet to discuss and negotiate trade issues and this year the Business Forum is being held alongside the WTO Ministerial Conference. Business and other stakeholders are users of the world’s trading system and the positive effects of trade agreements …

Russia: Approves profit-based oil tax regime

On 23 November 2017, the Government approved a plan to introduce a profit-based tax on the oil industry, expected to come into force on January 1, 2019, later than previously thought. Currently, the tax regime for the oil industry stipulates that oil companies pay the so-called mineral extraction tax (MET), which is calculated on the basis of the volumes of oil and gas extracted. The oil extraction tax is adjusted to reflect the fluctuations in …

OECD: Consultation document on mandatory disclosure rules

On 11 December 2017 the OECD released a consultation document asking for input from stakeholders on the design of model mandatory disclosure rules. These rules would set out disclosure obligations for promoters and service providers who involved in designing, marketing or implementing arrangements aimed at avoiding obligations under the common reporting standard or involving offshore structures. These intermediaries would be required to disclose to the tax authorities information about their schemes including the identity of …

India clarifies position on acceptance of the MAP and bilateral APA

On 27 November 2017, the Indian Government has announced that the MAP for transfer pricing disputes and the bilateral advance pricing agreement (APA) process would be available to taxpayers even where Article 9(2) or the equivalent is not present in the double taxation avoidance agreement (DTAA) with the taxpayer’s jurisdiction. The clarification would likely encourage more mutual agreement procedures (MAP) and provide consistency in the country’s direct tax regime, experts said.

UK: Research on attitudes to tax in the sharing economy

Research commissioned by HMRC on the sharing economy aimed to understand the extent of the sharing economy in terms of income of those participating for profit (known as providers) and the number and characteristics of the providers. The research also aimed to understand the attitudes and decision-making processes of providers in relation to the taxation of income generated through the sharing economy. The sharing economy is defined for the purpose of the research as economic …

WTO: Director General presents annual report on trade developments

On 4 December 2017 the Director General of the World Trade Organization (WTO) presented to members the annual overview report on trade-related developments. Member countries of the WTO introduced fewer trade-restrictive measures in the year to mid-October 2017 compared to the previous year and implemented more trade-facilitating than trade-restrictive measures despite the challenging economic environment. In terms of the amount of trade covered the measures to facilitate imports accounted for more than double the amount …

UK: Finance (No 2) Bill 2017

The UK Finance (No 2) Bill 2017 was introduced into Parliament on 28 November 2017 and published on the government’s website on 1 December 2017. This Bill includes some of the changes announced in the autumn budget and sets the levels of tax rates and allowances for 2018/19. Among the measures included in the Bill are the changes to the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) reliefs in relation to knowledge intensive …

Tax Treaty News: November 2017

Netherlands and Uzbekistan On 31 December 2017, the amending protocol of Double Taxation Agreement (DTA) between Netherlands and Uzbekistan will enter into force and it will apply from 1 January 2018. Georgia and Moldova On 29 November 2017, the Double Taxation Agreement (DTA) between Georgia and Moldova was signed for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, in Tbilisi. Bulgaria and Saudi Arabia On 29 …

Hong Kong-Belarus tax treaty enter into force

On 30 November 2017, the income and capital tax treaty between Hong Kong and Belarus entered into force. The agreement was signed on 16 January 2017. It will be in effect in Hong Kong for any year of assessment beginning on or after April 1, 2018. The treaty applies in Belarus from 1 January 2018.

Latvia: Parliament approves protocol to tax treaty with Singapore

On 30 November 2017, the Latvian Parliament agreed to ratify the protocol to income tax treaty with Singapore. The protocol was signed on 20 April 2017 to amend the income tax treaty of 1999. The protocol will enter into force once both parties have completed their internal ratification procedures. The protocol will generally apply in Latvia from 1 January of the year following its entry into force. In Singapore, it will apply from 1 January …

Luxembourg: Government approves income tax treaty with Cyprus

On 1 December 2017, the Luxembourg Cabinet approved the income tax agreement with Cyprus for ratification. The agreement was signed on May 8, 2017. It will enter into force once both parties have completed their internal ratification procedures, and will apply from 1 January of the year following its entry into force.

OECD: Further Guidance on CbC Reporting

On 30 November 2017 the Inclusive Framework released further guidance for tax administrations and multinationals in relation to the implementation of Country-by-Country (CbC) Reporting under Action 13 of the action plan on base erosion and profit shifting (BEPS). The jurisdictions participating in the inclusive framework 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, in addition …

World Tax Brief: November 2017

Argentina Main corporate income tax rate: On 31 October 2017, Argentina’s Minister of the Treasury, announced a tax reform plan that would gradually reduce the corporate income tax rate for reinvested earnings. The rate would be gradually reduced from 35% to 30% in 2019 and 2020, and 25% in 2021 and ongoing. There are also plans for reductions in employer social security taxes. Taxation of capital gains: The government is also planning a 15% capital …

Transfer Pricing Brief: November 2017

Belgium: Main corporate income tax rate: On 27 October 2017, the government has approved the corporate tax reform bill. The rate of corporate income tax will be gradually reduced to 29% in 2018, and will be further reduce to 25% in 2020. Belgium will also grant a 100% participation exemption on dividends (current 95%) as of 1 January 2018. Capital gains on shares will also be 100% exempt as of 2018. See the story in …

Hungary: Parliament approves new tax measures

On 14 November 2017, the Hungarian Parliament approved a package of tax which includes measures related to the tax procedural rules and also some other provisions that will affect corporate and individual taxpayers. The new tax legislative package includes following measures: Corporate income tax treatment of a “development” tax allowance and a “tax donation” Local business tax and the definition of sales revenue; The new law will rephrase the tax audits rules including the types …

US: Senate passes long awaited tax reform bill

On December 3, 2017, the Senate has accepted nearly $ 1.5 trillion of Republican tax bills, a historic volume and urgent political priority for President Donald Trump and his party. The poll was 51-49, mostly along party lines. Not a single Democrat voted for legislation created by Republican senators behind closed doors. The House of Representatives endorsed its own tax reform plan last month, and the two chambers are expected to come to the conference …

PGA Highlights: November 2017

In the United States the following events have taken place under the several PGA during the month of November 2017. Agencies Summary Federal Register General notice of ACE becoming the sole EDI system: From December 9, 2017, Automated Commercial Environment (ACE) will be the sole CBP-authorized Electronic Data Interchange (EDI) system for generating, transmitting, and updating daily and monthly statements, and Automated Commercial System (ACS) will no longer be a CBP-authorized EDI system for such …

United States: ADD/CVD Roundup for November 2017

Following table shows the Federal Register notices related to ADD/CVD cases for November 2017 in United States. Country Product Investigations Case Number Details Belarus Certain Carbon and Alloy Steel Wire Rod Affirmative Final Determinations of Sales at Less Than Fair Value and Partial Affirmative Finding of Critical Circumstances A-822-806 See the Federal Register notification Belgium Citric Acid and Certain Citrate Salts Postponement of Preliminary Determinations of Less-Than-Fair-Value Investigations A-423-813 See the Federal Register notification Brazil …

OECD: MAP Statistics for 2016

Action 14 of the action plan on base erosion and profit shifting (BEPS) was concerned with improving the effectiveness and timeliness of dispute resolution mechanisms. The minimum standard under action 14 requires jurisdictions to try to resolve mutual agreement procedure (MAP) cases within 24 months on average. Around 65 member countries of the Inclusive Framework on BEPS are now reporting their MAP statistics under an agreed reporting framework. On 27 November 2017 these MAP statistics …

UK: Autumn Budget Announcements 2017

The UK’s autumn budget measures were announced on 22 November 2017. Important measures affecting business are as follows: R & D Tax Relief The Research & Development Expenditure Credit (RDEC) rate available to companies claiming under the Large Company R&D scheme is set to rise from 11% to 12% from 1 January 2018. A new advanced clearance service is to be piloted, providing for a pre-filing agreement for three years for RDEC claimed. Intangible fixed …

France: Constitutional Court confirmed its judgment on temporary surcharge on large companies

The French Constitutional Court declared its judgment on the recently approved temporary surcharge on large companies on the 29 November 2017. More than sixty Senators and more than sixty MPs criticized the procedure for passing the law. The deputies also invoked a breach of the principle of sincerity of financial laws.  But the he Constitutional Council considers that the procedure for adopting the law has been regular, the requirements for prior consultations have been met and …