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Approved Changes (2)

India

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India Issues FAQ on APA Rollback Provisions

On 10 June 2015, India's Central Board of Direct Taxes issued a FAQ to provide clarification on the rollback provisions for advance pricing agreements. Some of the main issued covered are summarized as follows.

Rollback for Same Transactions

For the rollback provisions to apply, the transactions covered must be the same as the transactions covered by the APA for future years. The FAQ explains that this means that the transaction in the rollback year has to be of same nature and undertaken with the same associated enterprise(s), as proposed to be undertaken in the future years and in respect of which agreement has been reached. This includes that the Functions, Assets, Risks (FAR) analysis performed for the past transactions may not differ materially from the FAR validated for the purpose of reaching an agreement in respect of international transactions to be undertaken in the future years for which the agreement applies.

Rollback Period

When applying for the rollback provision, a transaction must be covered for all rollback years. The FAQ explains that this mean when applying for a rollback, the applicant has to either apply for all the four years or not apply at all. An applicant may only apply for a shorter period when the relevant transaction did not exist in all four years or when the conditions for rollback are not met in a particular year. In the case the conditions are not met, the rollback may be applied for the other years.

Rollback Disallowance if Order Disposing an Appeal has been Passed

The FAQ clarifies that a rollback will not be allowed if the Appellate Tribunal has passed an order disposing of an appeal, because the Tribunal is the final fact finding authority and therefore the matter has already reached finality in that year. However, if an appeal is pending and the Tribunal has not passed an order, then the matter has not reached finality and the rollback provisions can still be applied.

Click the following link for the APA Rollback Provisions FAQ.

Ukraine

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Ukraine Clarifies Audit Restrictions for 2015 and 2016

Ukraine's State Fiscal Service recently issued guidance clarifying audit restrictions in 2015 and 2016 for companies with revenues of UAH 20 million in less in the previous year. According to the guidance, the tax authorities may only audit such companies in 2015 or 2016 with the permission of the Cabinet of Ministers of Ukraine, on the application of a petition by the company, according to a court decision, or when stipulated by the Criminal Procedure Code.

The restriction applies for all types of tax audits, but does not apply for companies importing goods into Ukraine or those that manufacture or sell excisable goods.

Proposed Changes (1)

United States-OECD

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U.S. Treasury Considering Earlier CbC Reporting Deadline

According to recent reports, U.S. Treasury Attorney Advisor Brian Jenn has stated that the Treasury may implement an earlier filing deadline for country-by-country (CbC) reports than the deadline provided for in the OECD BEPS Action 13 Guidelines. Under the guidelines, the parent entity of a multinational group would be required to file the initial CbC report by 31 December 2017, in respect of the tax year ending December 31 2016. However, the Treasury is considering an initial filing deadline of 31 September 2017. The Treasury and the IRS are also considering whether the CbC report will be part of the tax return or a separate filing, and whether any corrections will be allowed once filed.

Additional details will be published as the implementation of U.S. CbC reporting requirements progresses.

Treaty Changes (6)

Angola-China

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Tax Treaty between Angola and China to be Negotiated

During a meeting held 9 June 2015, officials from Angola and China agreed to begin negotiations for an income tax treaty. Any resulting treaty will be the first of its kind between the two countries, and must be finalized, signed and ratified before entering into force.

Brunei-Finland

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TIEA between Brunei and Finland has entered into Force

The tax information exchange agreement between Brunei and Finland entered into force on 1 May 2015. The agreement, signed 27 June 2012, is the first of its kind between the two countries. It applies for criminal tax matters from the date of its entry into force and for other tax matters from 1 January 2016.

Egypt-Ghana-Jordan-Kenya-Namibia

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Egypt Negotiating Tax Treaties with Ghana, Jordan, Kenya, and Namibia

Egypt has entered into income tax treaty negotiations with Ghana, Jordan, Kenya, and Namibia. Any resulting treaties will be the first of their kind between Egypt and the respective countries, although both Egypt and Jordan are parties to the 1973 Arab Economic Unity Council Income Tax Treaty.

Additional details of each treaty will be published as negotiations progress.

Guernsey-Panama

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TIEA between Guernsey and Panama to be Negotiated

On 11 June 2015, the government of Guernsey announced that a tax information exchange agreement will be negotiated with Panama. Any resulting agreement will be the first of its kind between the two jurisdictions, and must be finalized, signed and ratified before entering into force.

Iraq-Ukraine

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Tax Treaty between Iraq and Ukraine under Negotiation

An income tax treaty between Iraq and Ukraine is reportedly under negotiation and nearly concluded. The treaty will be the first of its kind between the two countries, and must be finalized signed and ratified before entering into force.

Additional details will be reported once available.

Korea, Rep of-Samoa

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TIEA between Korea and Samoa Signed

On 15 May 2015, officials from Korea and Samoa signed a tax information exchange agreement. The agreement is the first of its kind between the two countries and will enter into force after the ratification instruments are exchanged.

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