Two years on since Chapter X of the OECD Transfer Pricing Guidelines (Chapter X) was published in February 2020, the practical transfer pricing aspects of financial transactions are due another look. While financial transactions were often ignored once put in place, administrative practice, case law, interaction with interest limitation rules and new guidance have elevated…

The very recent CJEU judgement in Berlin Chemie A. Menarini v Administraţia Fiscală pentru Contribuabili Mijlocii Bucureşti (Case C-333/20) ECLI:EU:C:2022:291, admirably examined by Giorgio Beretta last week considered the circumstances in which a subsidiary might be a VAT fixed establishment (FE) of its parent company or another affiliate. A Romanian company supplied advertising, marketing and…

Prof.M.F. (Maarten) de Wilde[1] Summary Yesterday, on 14 March 2022, the OECD published the Commentary on the Pillar 2 Model Rules, the global minimum rate for large multinationals. When reading the first pages, the author was overwhelmed by the urge to write this opinion and, ‘equally, however’, to make a connection with an animal farm….

Trésor-Gauthier M. Kalonji [1] Summary The Covid-19 pandemic has shaken several rules applicable in conventional tax law, in particular with regard to determining the conditions for qualifying a “building site or construction or installation project” as a permanent establishment (hereafter “PE”), as defined by the OECD Model Tax Convention on Income and on Capital (hereafter…

Prof.dr. M.F. (Maarten) de Wilde[1] Summary On 20 December 2021, the OECD published the announced Pillar Two Model Rules, as part of the envisaged establishment of a global 15% minimum level of company taxation for large multinationals (Pillar 2). No mechanism has been considered to provide for a parallel adaptation of countries’ tax treaty networks…

Introduction On 8th October 2021, 136 jurisdictions reached an historic agreement to reform the international tax system and, in the words of the OECD, bring it into the 21st century.[1]  The so-called two-pillar solution was presented to the G-20 Finance Ministers and the G-20 Leaders, who endorsed it. Thus, the future work of the OECD…

G E Financial Investments Limited v HMRC [2021] UKFTT 210 (TC)  raised central aspects of the interpretation of double tax treaties. My previous blogs considered the corporate residence  under article 4(1) of the UK-US Double Tax Treaty and the existence of a permanent establishment under article 5(1) of the treaty. The First-tier Tribunal decided that…

Just two weeks ago on 8 October 2021, 136 of 140 member countries of the OECD/G20 Inclusive Framework agreed on a global tax deal that also features the GloBE international effective minimum tax (the so-called Pillar 2 of their work program). The G20 finance ministers backed the deal in their subsequent meeting, too. The agreement…

Though India has been having tax treaties with over 90 countries across the globe for several decades now, interpretation of various provisions of the treaties continues to be a subject matter of protracted litigation to date. Many issues remain vexed in India, as very few of them are settled at the Supreme Court level. As…

  A conversation on International Tax Practice culminated into an IFA webinar series on May 20th with global experts sharing their perspectives on landmark treaty and transfer pricing rulings delivered by Courts in various jurisdictions suggesting areas of alignment and divergence of principles. In an eminent panel moderated by Professor Robert Danon, Mr. Mukesh Butani…

Last month my blog discussed the questions relating to corporate residence and article 4(1) of the UK-US Double Tax Treaty raised in G E Financial Investments v HMRC  [2021] UKFTT 210 (TC). This month the focus is on the permanent establishment issues. The case concerned a complex financing structure General Electric Company group. The taxpayer,…

  On 20 May, 2021 the first Webinar of IFA’s online series “A conversation on International Tax Practice” was held. Chaired by Robert Danon (Chair IFA Permanent Scientific Committee), global experts shared their perspectives on India’s software royalty case and on landmark transfer pricing rulings delivered by Courts in various jurisdictions thereby suggesting alignment and…

When is a taxpayer a resident of a contracting state for purposes of a tax treaty? The decades old definition in article 4(1) of the OECD Model that ‘“resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place…

Today, there is an exponential increase in new forms of commercialization of goods and the provision of services that make use of digital platforms. This situation is altering the functioning of the transport, delivery and digital services markets, among others. The rise of the sharing and gig economy, powered by digital platforms, has triggered the…