News

BEPS

Last week, the Inclusive Framework on BEPS approved the latest results of the reviews of jurisdictions’ domestic laws which were carried out by the OECD Forum on Harmful Tax Practices (FHTP). The reviews covered preferential tax regimes and the substantial activities standard for “no or only nominal tax jurisdictions”. The FHTP reviewed the domestic laws of the 12 “no or only nominal tax jurisdictions” and considered 56 preferential tax regimes. The FHTP has reviewed 287 regimes since the start of the BEPS Project. Read more.

Jul 29, 2019
BEPS

The OECD is now gathering feedback for Stage 1 peer reviews on specific Mutual Agreement Procedure (MAP) related issues and invites taxpayers to submit input by 12 August 2019. The MAP peer review process is part of BEPS Action Plan 14 which was launched in December 2016 and aims to improve the tax treaty dispute resolution process. The MAP peer review process is conducted under two stages. The OECD is now gathering input for Stage 1 peer reviews of Andorra, Anguilla, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Faroe Islands, Macau (China), Morocco and Tunisia and invites taxpayers to submit input using the taxpayer input questionnaire. The completed questionnaire should be returned to fta.map@oecd.org by 12 August 2019.

Jul 22, 2019
BEPS

The OECD has updated its Matching Database for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI). It now includes information on entry into effect dates and reference to synthesised texts, if available. The Matching Database makes projections on how the MLI modifies a specific tax treaty covered by the MLI by matching information from Signatories’ MLI positions. According to the OECD, this tool is a preliminary (beta) version that will be improved over time. The OECD welcomes comments and suggestions from the public on the development of improved versions of the MLI Matching Database.

Jun 24, 2019
Tax International

Find out about updates to Revenue guidance on restricted share schemes and Revenue powers, Easter payroll procedures in the UK and how Luxembourg becomes the 87th state to ratify the Multilateral BEPs Convention.            Ireland Revenue’s Tax and Duty Manual Revenue Information Powers now incorporates information previously available in Statement of Practice SP GEN-1-99 (Revenue Powers). Read more Revenue’s guidance ‘Share Schemes – Restricted Shares’ has been incorporated into the Share Schemes Manual - Chapter 8   UK Read HMRC’s communication on Easter payroll processes Check out the latest Talking Points schedule   International Luxembourg becomes the 87th state number to ratify the Multilateral BEPS Convention (MLI).  The MLI will enter into force for Luxembourg in August this year    

Apr 16, 2019
BEPS

The Netherlands and Georgia recently deposited instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) with the OECD.  The MLI will take effect for both states on 1st July this year.  The MLI facilitates the closing of gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide. The MLI modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation.  There are currently 87 states joined up to the MLI. 

Apr 01, 2019
BEPS

Australia will not progress plans to introduce interim digital taxes, but will instead wait to see the outcome of multilateral efforts coordinated by the OECD for taxing the digital economy according to Australia’s Treasurer Josh Frydenberg. Australia conducted a government consultation in October 2018 on the implications of an interim unilateral approach to dealing with the digital economy. Feedback from that consultation process along with international developments lead by the OECD culminated in a decision by the Australian government to focus on a multilateral process in place of putting a unilateral tax in place. The UK confirmed in its recent Spring Statement that its plans to unilaterally introduce a digital services tax will proceed from April 2020.  

Mar 25, 2019
Tax

Finland recently submitted its instrument of acceptance of the BEPS Multilateral Convention (MLI) which is due to take effect in June 2019.  A total of 87 states are currently committed to implementing the MLI.  The MLI aims to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide. The MLI modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. It also implements agreed minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaties. 

Mar 04, 2019
Tax International

The OECD recently published a Policy Note which steps up efforts to resolve the international challenge of taxing the digital economy along with a renewed effort to resolve outstanding BEPS issues.  The Policy Note was published following a meeting of the OECD/G20 Inclusive Framework group on 23/24 January which brought together 264 delegates from 95 member jurisdictions and 12 observer organisations.  According to the OECD, countries and jurisdictions participating in the Inclusive Framework will step up efforts toward reaching a global solution to the growing debate over how to best tax multinational enterprises in a rapidly digitalising economy. The first pillar of the Policy Note focuses on how existing rules that divide up the right to tax the income of multinational enterprises among jurisdictions, including traditional transfer-pricing rules and the arm’s length principle, could be modified to take into account the changes that digitalisation has brought to the world economy. According to the OECD, this will require a re-examination of the so-called ‘nexus’ rules which determine the connection a business has with a given jurisdiction and the rules that govern how much profit should be allocated to the business conducted there.   The Policy Note identified a second pillar which aims to resolve remaining BEPS issues. In the Policy Note, the OECD restates its intension to deliver a solution on the taxation of the digital economy by 2020 The Inclusive Framework will issue a consultation document that describes the two pillars in more detail, and a public consultation will be held on 13 and 14 March 2019 in Paris as part of the meeting of the Task Force on the Digital Economy. According to the OECD, further details on the consultation process, including how stakeholders can provide input and most effectively participate, along with the consultation document, will be published in the coming weeks.

Feb 04, 2019
Tax International

The Faroe Islands and Greenland became the latest jurisdictions to join the Inclusive Framework on BEPS which now numbers 127 jurisdictions. 

Jan 21, 2019
Tax International

The Cook Islands is the latest jurisdiction to sign up to the Inclusive Framework on BEPS while Malta and Singapore deposited their instruments of ratification for the Multilateral BEPS Convention before Christmas. One hundred and twenty-five countries and jurisdictions are now part of the Inclusive Framework on BEPS with the latest addition of the Cook Islands.   Meanwhile, the Multilateral Instrument (MLI) will enter into force for Malta and Singapore in April this year.  The MLI is a mechanism for governments to transpose measures from the OECD/G20 BEPS Project into bilateral tax treaties worldwide. The MLI modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. It also implements agreed minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaty policies.

Jan 07, 2019
Tax International

The Inclusive Framework on BEPS to date has assessed the progress of 92 individual jurisdictions in exchanging information on tax rulings according to the latest report from the OECD. The 2017 Peer Review Reports on the Exchange of Information on Tax Rulings says that more than 16,000 tax rulings and almost 21,000 exchanges of information have taken place to date. The report also noted that 60 percent of the recommendations issued in the first annual report have been successfully addressed. The report contains 60 jurisdiction-specific recommendations on issues such as improving the timeliness of the exchange of information and ensuring that exchanges of information are made with respect to preferential tax regimes that apply to income from intellectual property. For more information, see the OECD’s press release. 

Dec 17, 2018
BEPS

Qatar recently became the 85th state to sign the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.  This Convention now covers 1,500 bilateral tax treaties. The Convention allows jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing networks of bilateral tax treaties. The Convention will become effective on 1 January 2019 for the first 47 tax treaties concluded among the 15 jurisdictions that have already deposited their acceptance or ratification instrument.

Dec 10, 2018
BEPS

The Secretary-General of the OECD, Angel Gurría presented a report at the G20 Leaders’ Summit in Buenos Aires last week. Mr Gurría’s report noted that the key issue for the international tax community in 2018 remains how to address the tax challenges arising from digitalisation. The report notes that the OECD Task Force on digitalisation will meet in December and the Inclusive Framework on BEPS then meets in January to take these proposals further. The Inclusive Framework will hold a second meeting in 2019 just before the next G20 Leaders’ Summit where leaders are expected to reach agreement on the a long-term solution to digitalisation for international delivery in 2020.

Dec 03, 2018
BEPS

Over 200 delegates from more than 100 jurisdictions and regional groups recently met in Uruguay at the annual Global Forum on Transparency and Exchange of Information for Tax to strengthen the international fight against tax evasion. The meeting marked the widespread rollout of automatic exchange of financial account of information. Each exchange contains detailed information about the financial accounts each jurisdiction’s taxpayers hold abroad. Further details are available through the OECD. 

Nov 26, 2018
BEPS

The OECD recently published a progress report from the Inclusive Framework on BEPS which covers the assessment of 53 preferential tax regimes. This report forms part of the ongoing implementation of Action 5 under the BEPS initiative. Action 5 deals with harmful tax practices with a focus on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for preferential regimes, such as IP regimes. The latest batch of assessments includes: 18 regimes where jurisdictions have delivered on their commitment to make legislative changes to abolish or amend the regime (Andorra, Curaçao, Hong Kong (China), Mauritius, San Marino and Spain). A number of new or replacement regimes that have been specifically designed to meet Action 5 standard (for example Lithuania, Mauritius and San Marino). New commitments to make legislative changes to amend or abolish a further 10 regimes, by Aruba, Australia, Maldives, Mongolia, Montserrat, the Philippines and Saint Lucia. An additional 17 regimes that have been brought into the FHTP review process (Aruba, Brunei Darussalam, Curaçao, Gabon, Greece, Jordan, Kazakhstan, Malaysia, Panama, Paraguay, Saint Kitts and Nevis and the United States). A number of regimes have been found to be out of scope, not yet operational or were already abolished or without harmful features (for example Aruba, Kenya, Paraguay).  

Nov 19, 2018
BEPS

The OECD is currently gathering input for peer reviews of Brazil, Bulgaria, China (People's Republic of), Hong Kong (China), Indonesia, Papua New Guinea, Russian Federation and Saudi Arabia.  The OECD has requested taxpayers to submit input on specific issues relating to access to Mutual Agreement Procedure (MAP), clarity and availability of MAP guidance and the timely implementation of MAP agreements for each of these jurisdictions. As taxpayers are the main users of MAP, this input is key for the review process according to the OECD and taxpayers and associations of taxpayers (e.g. business and industry associations) are encouraged to complete the questionnaire and return it to fta.map@oecd.org (in Word format) by 13 December 2018.

Nov 19, 2018
BEPS

The OECD recently released new Guidance for the Development of Synthesised Texts dealing with the modifications to tax treaties resulting from the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (“MLI”) which entered into force on 1 July 2018.  A Secretariat note was also released to clarify the “entry into effect rules” for tax treaties of jurisdictions that deposited their ratification instruments last September. The Guidance is designed for use by governments to provide an insight into the impact of the Convention on existing treaties. According to the OECD’s press release, Synthesised Texts also provide comprehensive information to taxpayers, auditors, advisors and other users about when the modifications will have effect in each jurisdiction.  Ireland’s double tax treaties are expected to be updated to reflect the MLI from 1 January 2020. 

Nov 19, 2018
BEPS

Grenada recently joined the Inclusive Framework on BEPS which brings together countries and jurisdictions to collaborate on the implementation of the OECD/ G20 Base Erosion and Profit Shifting (BEPS) Package. Members of the Inclusive Framework on BEPS now total 123 jurisdictions.

Oct 30, 2018