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 (4)

New Zealand

Responsive image

New Zealand Announces Transfer Pricing Focus for 2016 and Implementation of Exchange of Information on Tax Rulings

In New Zealand Inland Revenue's Large Enterprises Update, published 15 February 2016, Inland Revenue set out its transfer pricing focus for 2016 and announced that it will implement the standard for exchange of information on tax rulings developed as part of Action 5 of the OECD BEPS Project.

According to the update, the 2016 transfer pricing focus will be on the following:

  • Unexplained tax losses returned by foreign-owned groups;
  • Inbound and outbound loans in excess of NZD 10 million principal as well as guarantee fees;
  • Cash pooling arrangements;
  • Payment of unsustainable levels of royalties and/or service charges;
  • Material associated-party transactions with low or no tax jurisdictions including the use of offshore hubs for marketing, logistics and procurement services;
  • Appropriate booking of income arising from e-commerce transactions;
  • Supply chain restructures involving the shifting of any major functions, assets or risks away from New Zealand; and
  • Any unusual arrangements or outcomes that may be identified in controlled foreign company disclosures.

Concerning the exchange of information, Inland Revenue will implement the exchange of tax ruling information with tax treaty partners in 2016, which will include:

  • Rulings related to preferential regimes;
  • Cross-border unilateral advance pricing agreements and any other cross-border unilateral tax ruling covering transfer pricing or the application of transfer pricing principles;
  • Cross-border rulings giving a unilateral downward adjustment to the taxpayer's taxable profits in the country giving the ruling;
  • Permanent establishment rulings; and
  • Related party conduit rulings.

This is to include new rulings as well as past rulings issued on or after 1 January 2010 and still in effect on 1 January 2014.

Ukraine

Responsive image

Ukraine Reverses Restriction on Carryforward of Excess Advance Tax on Dividends

The Ukraine State Fiscal Service (SFS) recently published guidance letter 2779/7/99-99-19-02-01-17. The letter, dated 28 January 2016, amends prior guidance that excess advance tax payments on dividends could only offset corporate income tax (CIT) in the current reporting year and could not be carried forward.

Under the new guidance, any excess advance tax payments on dividends as of 1 January 2015 may offset the CIT liability of 2015 and carried forward to subsequent years until fully offset. The guidance also clarifies that excess advance tax payments on dividends may not be refunded or used to offset any taxes other than CIT.

United Kingdom

Responsive image

UK Updates Guidance on Rules for Disclosure of Tax Avoidance Schemes for VAT, Direct Taxes and National Insurance Contributions, and Related Penalties

On 19 February 2016, the UK HMRC published updated guidance on the rules for disclosure of tax avoidance schemes for value added tax (VAT), direct taxes and National Insurance contributions, and related penalties. Under UK law, failure to provide notification of involvement in tax avoidance schemes to HMRC may result in penalties.

VAT

VAT avoidance schemes to be disclosed include listed schemes and hallmarked schemes (schemes that include or are associated with a ‘hallmark’ of avoidance). VAT schemes must be disclosed in the following cases:

  • Listed schemes must be disclosed by taxpayers registered for VAT in the UK, or are liable to be, unless their annual turnover or group turnover is less than GBP 600,000; and
  • Hallmarked schemes must be disclosed if the taxpayer's annual turnover or group turnover is GBP 10 million or more, unless a third party has voluntarily disclosed the scheme and provided the taxpayer a Voluntary Registration Scheme (VRS) reference number.

Failure to disclose when required will result in a penalty of 15% of the VAT to be avoided for listed schemes, and a penalty of up to GBP 5,000 for hallmarked schemes.

Direct Taxes and National Insurance Contributions

Under the UK's disclosure of tax avoidance schemes (DOTAS) regime, the promoters of schemes are required to disclose to HMRC that the schemes are being made available or implemented. However, notification must also be provided by users of avoidance schemes and by employers of employees who may be using such schemes. The disclosures must be made in a report filed by 19 April following each tax year in which a tax advantage is expected to arise.

Failure to file the report when required will result in an initial penalty of up to GBP 5,000 plus penalties of up to GBP 600 per day of delay. HMRC may impose higher penalties in certain cases.

Click the following link for the full guidance, which also includes links for additional information.

United States

Responsive image

U.S. IRS Publishes Practice Units on Outbound Transfers of Foreign Stock, the Residual Profit Split Method, Gross Effectively Connected Income of a Foreign Corporation, and Others

The U.S. IRS has recently published nine international practice units, including:

International practice units are developed by the Large Business and International Division of the IRS to provide staff with explanations of general international tax concepts as well as information about specific transaction types. They are not an official pronouncement of law, and cannot be used, cited or relied upon as such.

Click the following link for the International Practice Units page on the IRS website.

Treaty Changes (4)

Brunei-Greenland-Sweden

Responsive image

Brunei's TIEAs with Greenland and Sweden have Entered into Force

According to a recent update from the Brunei Ministry of Finance, the tax information exchange agreement (TIEA) with Greenland entered into force on 7 August 2015 and the TIEA with Sweden entered into force on 20 December 2015. The TIEAs were both signed 27 June 2012 and are in line with the OECD standard for information exchange. They are the first of their kind between Brunei and the respective countries.

The TIEA with Greenland applies for criminal tax matters from the date of its entry into force and for other matters from 1 January 2016. The TIEA with Sweden generally applies from the date of its entry into force.

Finland-Germany

Responsive image

Tax Treaty between Finland and Germany Signed

On 19 February 2016, officials from Finland and Germany signed an income tax treaty. The treaty will enter into force after the ratification instruments are exchanged, and once in force and effective will replace the 1979 tax treaty between the two countries, which is currently in force.

Additional details will be published once available.

Montserrat-Guernsey

Responsive image

Montserrat Ratifies TIEA with Guernsey

On 19 January 2016, Montserrat ratified the pending tax information exchange agreement with Guernsey. It was ratified by Guernsey on 25 September 2014.

The agreement, signed 7 April 2014, is the first of its kind between the two jurisdictions and will enter into force and apply from the first day of the second month following the exchange of the ratification instruments.

Switzerland-Korea, Rep of

Responsive image

Switzerland Signs Joint Declaration on Automatic Exchange of Information with South Korea

On 18 February 2016, officials from Switzerland and South Korea signed a joint declaration on the automatic exchange of information in tax matters on a reciprocal basis, according to a press release from the Swiss Federal Council. The information exchange will be carried out under the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information and the Convention on Mutual Administrative Assistance in Tax Matters. Switzerland and South Korea intend to begin the automatic exchange of financial account information in 2018.

Click the following link for the press release.

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

Worldwide Tax Treaties

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

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