AGREEMENTS

Algeria, Netherlands negotiate to tax treaty

Posted on Updated on

The Finance Minister of Algeria has announced that representatives of Algeria and the Netherlands met on 31st July 2017 to discuss bilateral relations and strengthening the relationship through the conclusion of an income tax treaty. The treaty must be finalized after negotiation, signed, and ratified before entering into force.

Protocol to treaty between Argentina and Brazil signed

Posted on Updated on

Argentina and Brazil signed an amending protocol to the, Argentina – Brazil Income Tax Treaty of 1980 on 21st July 2017. The protocol sets out maximum levels of taxation at source in specific categories of income; modifies the method to avoid double taxation in Argentina, and inserts a capital gains article into the treaty.

U.S. and Estonia sign an agreement on the exchange of CbC reports

Posted on Updated on

According to an IRS announcement on its website, the competent authorities of the U.S. and Estonia have concluded an arrangement on the exchange of Country-by-Country Reports. The competent authority arrangement (CAA) for exchange of country-by-country reports is on the basis of a double tax convention (DTC). The agreement was signed on 26 July 2017.

Under the arrangement, the first fiscal year for which the U.S. and Estonia intend to exchange CbC reports is the fiscal years of MNE Groups commencing on or after January 1, 2016. The CbC report is intended to be exchanged as soon as possible and no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates. CbC reports with respect to fiscal years of MNE Groups commencing on or after January 1, 2017 are intended to be exchanged as soon as possible and no later than 15 months after the last day of the fiscal year of the MNE Group to which the CbC report relates.

The Competent Authorities intend to exchange the CbC Reports automatically through a common schema in Extensible Markup Language (XML).

U.S. and Australia sign an agreement on the exchange of CbC reports

Posted on

According to an IRS announcement on its website, the competent authorities of the U.S. and Australia have concluded an arrangement on the exchange of Country-by-Country Reports. The competent authority arrangement (CAA) for exchange of country-by-country reports is on the basis of a double tax convention (DTC). The agreement was signed on 1 August 2017.

Under the arrangement, the first fiscal year for which the U.S. and Australia intend to exchange CbC reports is the fiscal years of MNE Groups commencing on or after January 1, 2016. The CbC report is intended to be exchanged as soon as possible and no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates. CbC reports with respect to fiscal years of MNE Groups commencing on or after January 1, 2017 are intended to be exchanged as soon as possible and no later than 15 months after the last day of the fiscal year of the MNE Group to which the CbC report relates.

The Competent Authorities intend to exchange the CbC Reports automatically through a common schema in Extensible Markup Language (XML).

Turkey: TIEA ratifies with Guernsey

Posted on Updated on

The Exchange of Information Agreement regarding Tax Matters (TIEA) between Turkey and Guernsey was ratified on August 2, 2017 by the Turkish Government. This treaty was signed on March 13, 2012. It will come into force thirty days after the ratification mechanisms are swapped.

DTA between Japan and Slovenia will enter into Force

Posted on Updated on

The Japanese Ministry of Finance on 26 July 2017 issued a press release announcing that the double taxation agreement (DTA) between Japan and Slovenia, signed on 10 September 2016, will enter into force on 23 August 2017.

The Treaty contains following treaty-based recommendations from the BEPS project:

  • Action 2 (neutralizing the effects of hybrid mismatch arrangements);
  • Action 6 (preventing the granting of treaty benefits inappropriate circumstances),
  • Action 7 (preventing the artificial avoidance of permanent establishment status); and
  • Action 14 (making dispute resolution mechanisms more effective).

In addition, its preamble clarifies that tax treaty is not intended to be used to generate double non-taxation or reduced taxation through tax evasion and avoidance and in cases where a person other than an individual is resident in both Japan and Slovenia, both competent authorities shall endeavour to determine by mutual agreement the Contracting State of which the person shall be deemed to be a resident. Furthermore, the Treaty contains a PPT.

On the PE front, the Treaty contains an anti-fragmentation rule and the new definition of agency PE. Moreover, the Treaty enables taxpayers to present a case for mutual agreement procedure to the competent authorities of either Contracting State and any unresolved issues arising from the case shall be submitted to arbitration if the person so requests.

Japan and Slovenia also have signed the MLI. Given that the treaty already incorporated the treaty-related BEPS minimum standards, it can be expected that this treaty will not be listed as a covered tax agreement and thus will not likely be further modified by the MLI.

Protocol to treaty between Ecuador and Switzerland signed

Posted on Updated on

Ecuador and Switzerland signed an amending protocol to the Ecuador – Switzerland Income and Capital Tax Treaty of 1994 on 26th July 2017. The protocol introduces a provision for exchange of information on request.