Get an immediate FREE trial of Orbitax's International Tax Research & Compliance Expert (ITRCE) software for 7 days.

The Tax Hub

Daily Tax Newsletter

Worldwide Tax News

Approved Changes (1)
Responsive image

OECD Publishes Discussion Draft Comments on BEPS Action 8 (Cost Contribution Arrangements)

On 1 June 2015, the OECD published comments received in response to the public discussion draft for Action 8 (Cost contribution arrangements) of the Base Erosion and Profiting Shifting (BEPS) Project.

Action 8 requires the development of rules to prevent BEPS by moving intangibles among group members and involves updating the guidance on cost contribution arrangements. The discussion draft set out a proposed revision to Chapter VIII of the Transfer Pricing Guidelines and is intended to align the guidance in that chapter with the other elements of Action 8 already addressed in the Guidance on Transfer Pricing Aspects of Intangibles released in September 2014.

Click the following links for the discussion draft and the over 330 pages of comments received:

A public consultation meeting will be held in Paris at the OECD Conference Centre on 6/7 July 2015.

Proposed Changes (2)

European Union

Responsive image

European Commission Agrees on the Need for New Approach to Corporate Taxation in the EU

On 27 May 2015, the EU College of Commissioners held an orientation debate where it was agreed that a new approach to corporate taxation in the EU is needed to successfully address tax abuse, ensure sustainable revenues and foster a better business environment in the internal market. The orientation debate will feed into an Action Plan in June, which will include a strategy to re-launch the works on the introduction of a Common Consolidated Corporate Tax Base (CCCTB) at the level of the EU, to implement measures against tax avoidance which are being developed at international level within the OECD, and to further strengthen tax transparency.

Click the following link for a press release issued by the European Commission following the debate.

Responsive image

OECD Announces that Work on the BEPS Multilateral Instrument is Underway

The OECD recently issued a release announcing that work on the Multilateral‎ Instrument to implement the tax treaty-related measures developed as part of the Base Erosion and Profit Shifting (BEPS) Project began on 27 May 2015 in Paris. The development of a Multilateral Instrument follows the report produced as part of Action 15 of the BEPS Project, which looked at the feasibility of developing and employing such an instrument to implement the tax treaty-related measures.

During the 27 May meeting of the ad hoc group formed to develop the instrument, the Chair and Vice-Chairs were appointed and agreement was reached on a number of procedural issues so that the substantive work can begin at an Inaugural Meeting which will take place on 5-6 November 2015.

Members of the ad hoc Group are (as of 28 May 2015): Andorra, Argentina, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belgium, Bhutan, Brazil, Bulgaria, Burkina Faso, Canada, China (People’s Republic of), Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Dominican Republic, Fiji, Finland, France, Georgia, Germany, Greece, Guatemala, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea, Latvia, Lebanon, Liberia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Moldova, Morocco, Netherlands, New Zealand, Nigeria, Norway, Philippines, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Senegal, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Swaziland, Sweden, Switzerland, Tanzania, Thailand, Tunisia, Turkey, United Kingdom, Uruguay, Vietnam and Zambia.

Treaty Changes (6)

Czech Rep-Colombia

Responsive image

Tax Treaty between Colombia and the Czech Republic has Entered into Force

According to a recent update published by the Czech Ministry of Finance, the income tax treaty with Colombia entered into force on 6 May 2015. The treaty, signed 22 March 2012, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Colombian income tax and its complementary taxes, and the Czech tax on income of individuals and the tax on income of legal persons.

Residence

If a company is considered a resident in both Contracting States, the competent authorities will determine the company's residence for the purpose of the treaty through mutual agreement. If the authorities cannot reach mutual agreement, the company will not be entitled to claim any relief or exemption from tax provided by the treaty.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise of one Contracting State furnishes services in the other State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months within any 12-month period.

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company directly holding at least 25% of the paying company's capital; otherwise 15%
  • Interest - 0% for interest on the credit sale of merchandise or equipment, on a loan or credit granted by a bank for a period of at least three years, or on a loan or credit guaranteed by the government; otherwise 10%
  • Royalties, including payments for technical assistance, technical services or consultancy services - 10%

MFN Clause

Article 12 (Royalties) includes the provision that if Colombia signs any convention, agreement or protocol with a third state that provides for a more favorable tax rate and/or treatment of income from the furnishing of technical assistance, technical services or consultancy services than provided for in the treaty with the Czech Republic, then such regime will automatically be applicable for the purposes of the Colombia-Czech tax treaty from the date on which the convention, agreement or protocol with the third state is effective.

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
  • Gains from the alienation of shares or comparable interests in a company resident in the other State

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Limitation on Benefits

The treaty includes Limitations on Benefits Article (25). According to the provisions of the Article, the benefits provided under the treaty will not be granted to companies of either Contracting State if the purpose of such companies is to obtain benefits under the treaty that would not otherwise be available.

Effective Date

The treaty applies from 1 January 2016.

Guinea-bissau-Morocco

Responsive image

Tax Treaty between Guinea-Bissau and Morocco Signed

On 28 May 2015, officials from Guinea-Bissau and Morocco signed an income tax treaty. The treaty is the first of its kind between the two countries and will enter into force after the ratification instruments are exchanged.

Additional details will be published once available.

Iran-Poland

Responsive image

Tax Treaty between Iran and Poland to be Amended

According to recent reports, officials from Iran and Poland are planning to begin negotiations for amending the 1998 income tax treaty between the two countries. The treaty entered in to force 1 December 2006, and has applied since 1 January 2007. Any amendments must be finalized, signed and ratified before entering into force.

Malta-Netherlands

Responsive image

Malta and the Netherlands Terminate SSA

The Dutch government has announced that officials from Malta and the Netherlands have agreed to terminate the social security agreement between the two countries with retroactive effect from 1 May 2010. The agreement, signed 11 September 2001, had applied from 1 January 2003.

Nigeria- OECD

Responsive image

Nigeria Deposits Ratification Instrument for Mutual Assistance Convention

On 29 May 2015, Nigeria deposited the ratification instrument for the Council of Europe-OECD Convention on Mutual Administrative Assistance in Tax Matters as amended by the 2010 protocol. The convention will enter into force and apply for Nigeria on 1 September 2015.

Norway-Romania

Responsive image

Update - Tax Treaty between Norway and Romania Signed

On 27 April 2015, officials from Norway and Romania signed a new income tax treaty. Once in force and effective, the new treaty will replace the 1980 income and capital tax treaty between the two countries, which currently applies.

Taxes Covered

The treaty covers Romanian tax on income and tax on profit. It covers the following Norwegian taxes:

  • The national tax on income;
  • The county municipal tax on income;
  • The municipal tax on income;
  • The national tax relating to income from the exploration for and the exploitation of submarine petroleum resources and activities and related work, including pipeline transport of petroleum produced; and
  • The national tax on remuneration to non-resident artistes

Residence

If a company is considered resident in both Contracting States, then the competent authorities will determine the company's residence for the purpose of the treaty through mutual agreement based on its place of effective management, place of registration and any other relevant factors. If the authorities cannot reach mutual agreement, then any relief or exemption from tax provided by the treaty will not apply unless agreed upon by the competent authorities.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through an individual or individuals present in the other state for the same or connected project for a period or periods aggregating more than 183 days within any 12-month period.

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company directly holding at least 10% of the paying company's capital; otherwise 10%
  • Interest - 5%
  • Royalties - 5%

Limitation on Benefits

The beneficial provisions of Articles 10 (Dividends), 11 (Interest) and 12 (Royalties) will not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims or other rights in respect of which the dividends, interest or royalties are paid was to take advantage of those Articles by means of that creation or assignment. The limitation is included in each of the Articles

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
  • Gains from the alienation of shares or comparable interests in a company, the assets of which consists wholly or principally of immovable property situated in the other State

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Entry into Force and Effect

The treaty will enter into force once the ratification instruments are exchanged, and will apply from 1 January of the year following its entry into force.

The 1980 treaty between the two countries will terminate once the new treaty enters into force, and will cease to have effect from the date the new treaty is effective.

Sitemap

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Crosss Border Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment Streams.

Get Started with Orbitax Today

With Orbitax, you get reliable and comprehensive solutions for international tax research, compliance and planning. Contact us today to get started with Orbitax.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More