Base Erosion and Profit Shifting – A project of the OECD to curb international income tax planning.
On May 10, 2016, the Indian Finance Ministry announced that a new protocol has been finalized to amend certain provisions of the Indo-Mauritius double taxation avoidance agreement. According to a press release issued by the Finance Ministry, the protocol is aimed at tackling the dual problem of treaty shopping and round tripping of funds, besides…
The attribution of profits to a permanent establishment is already a complex issue with at least three separate regimes in the tax treaty context- the OECD Authorised Approach under the 2010 OECD version of Article 7 of the OECD Model, the AOA subject to limitations required by the pre-2010 version and that permitted by Article…
Corporate Social Responsibility (“CSR”) has become one of the top priorities on the Agenda of almost all supranational bodies (OECD, EU, UN) and many jurisdictions. Due to the overall lack of revenues by Countries and the innumerable tax-related leaks (Luxleaks, Panama papers, etc.) along with the recent and ongoing changes within the worldwide international tax…
On June 27, 2016 the EU Commission published the long awaited Starbucks State Aid decision (see here). The EU Commission’s decision challenges the outcome of the Advanced Pricing Agreement (APA) between the Netherlands Tax Authority (Tax Authority) and Starbucks Manufacturing BV (SMBV), a wholly owned and controlled coffee roasting operation. Below is the Part I…
Is tax avoidance a bad thing? The international tax community seems recently to adopt an almost unanimous position: Yes, it is supposedly a very bad thing, as it not only reduces public revenue, but also makes taxation “less fair”, since tax-avoiding taxpayers do not pay their “fair share”. It is surprising how unanimous is this…
The EU Commission and EU Parliament want to settle for nothing less than public country-by-country-reporting, in direct conflict with G20 BEPS adoption resolution. For many good reasons, business in Europe is opposed to such publication. I do not need to dwell on the arguments here. These are widely available. My interest has been piqued by…
1. The Tendency We live in a time where the media, politicians, NGOs and activists increasingly are preoccupied with international tax matters. A simultaneous preoccupation is observed among the OECD, G20, EU countries and most other developed countries alike. This has led to continuously increasing regulatory requirements and strengthened legislation towards companies. The tendency is…
Change is the only constant! As businesses find new ways to operate, tax authorities are finding new ways to tax. All is fair in the world of taxes! The tax world has been brimming with, news and claims of tax avoidance. Tax has become representative of responsible corporate behaviour, governance and citizenry, and some big…
I recently participated in a seminar on tax & innovation in Naples, my home town where I stay often to arrange personal issues, which has a sparkling start-up community, in an increasingly conducive ecosystem. I was trying to remain engaging for non-tax folks and not sleep them out with tax technical issues, so I structured my short…
In highly dramatic fashion the French tax authorities and IT specialists raided Google’s headquarters and McDonalds. I don’t own Google stock. I’m not in favor of Google’s near monopoly on search (though it has accomplished this by offering a really great product and (free) work tools that make my life much easier). I don’t eat…
George Orwell’s parable, Animal Farm, offers insights on political and governmental institutions that bear revisiting from time to time. BEPS Action 6 with the broad title “Prevent treaty abuse” has among its objectives “developing model treaty provisions to prevent the granting of treaty benefits in inappropriate circumstances” and “to clarify that tax treaties are not…
Treasury recently released its 2015 Transfer Pricing Advance Pricing Agreements Report to Congress, the seventeenth report since the initial 1999 report. Each year, the Treasury APA Report describes the annual experience, structure, and activities of the APMA Program. Treasury also formally released the much discussed new audit/examination protocols that will become effective 1 May 2016. …
A critical appraisal of the EU Switch Over Rule and the Indian Equalization Levy At present, it is unavoidable to recognize that the international tax scenario is in transition to a much more inter-nation equitable system, where the national tax base will be better protected against erosion and profit-shifting corporate manipulations than it was in…
The OECD BEPS project was kicked off by the observation that the interaction of domestic tax systems sometimes leads to an overlap, resulting in double taxation as well as gaps, which result in an item of income not being taxed anywhere, thus resulting in so called “double non-taxation”. Co-operation among countries historically addressed double taxation…
