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Approved Changes (5)

Brazil

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Brazilian Tax Appeals Court Holds Tax Planning Advisors Not Jointly Liable for Assessed Tax Liabilities

Brazil’s Administrative Council of Tax Appeals (CARF) has reportedly taken a new approach in a recently issued decision concerning the liability of a tax planning advisor for a tax assessment issued to their client. In the past, the CARF typically held that tax advisors, such as accountants, lawyers, etc. had a common interest with their clients when engaged in tax planning, which under Article 124 (I) of the National Tax Code meant the advisor could be held jointly and severally liable for a relevant tax assessment. However, in this recent case, the CARF held that a common interest for the purpose of liability requires a legal interest, and that the provision of tax planning services does not qualify. Therefore the advisor in the case could not be held jointly and severally liable. Although the decision only applies for this particular case, it is expected that the same approach will be take in other cases.

Canada

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Canada Publishes Updated Tax Collection Policies

The Canada Revenue Agency has published an updated version of its Tax Collection Policies document (Circular IC98-1R7). The document provides an overview of collection policies for individuals, businesses, and organizations in relation to filing and payment, the canceling or waiving of penalties or interest, legal action to collect, and other related issues for individual and corporate income tax and goods and services tax / harmonized sales tax. The latest version, with a modification date of 16 May 2017, replaces the previous version (Circular IC98-1R6) dated 20 January 2017.

Mauritius

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Mauritius Establishes Alternative Tax Dispute Resolution Panel

The Mauritius Revenue Authority (MUR) established an Alternative Tax Dispute Resolution (ATDR) Panel in April 2017 to deal with applications for review made by any person dissatisfied with an income tax or value added tax assessment. Provided that a taxpayer has formally lodged an objection or appeal to an assessment, an application for review by the ATDR Panel may be made, if:

  • The amount of tax payable under dispute exceeds MUR 10 million;
  • The applicant has not been convicted of an offence and is not the subject of an enquiry relating to trafficking of dangerous drugs under the Dangerous Drugs Act, money laundering under the Financial Intelligence and Anti-Money Laundering Act, financing of terrorism under the Prevention of Terrorism Act, or corruption under the Prevention of Corruption Act; and
  • The grounds of dissatisfaction specified in the application to the Panel are not different from those in the notice of objection or appeal.

Once the application is made, it will be referred to the ATDR Panel within one month, and the taxpayer will be informed of the Panel's decision within six months from the date of the referral notice. If the decision is accepted, an agreement will be made between the taxpayer and the tax authority to settle the dispute. If the taxpayer does not accept the decision, the ATDR Panel must be informed within one month of the notice of decision, and the taxpayer may proceed with their objection or appeal.

Click the following links for the ATDR Panel guidelines and the application form.

Poland

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Poland Updates Tax Haven List

On 22 May 2017, Poland published in the Official Gazette the regulation of 17 May 2017 on the list of countries and territories applying harmful tax practices (tax havens). The latest list applies from 23 May 2017 and replaces the list issued in April 2015. Taxpayers dealing with listed countries and territories may be affected in relation to Poland's anti-avoidance rules, including controlled foreign company (CFC) rules and transfer pricing rules. As compared to the previous list, countries and territories removed  in the latest list include:

The Bahamas; Barbados; Liechtenstein; Saint Kitts and Nevis; and Saint Vincent and the Grenadines.

Countries and territories that remain listed include:

Andorra; Anguilla; Antigua and Barbuda; Bahrain; British Virgin Islands; Cook islands; Curaçao and Sint Maarten - the countries of the Kingdom of the Netherlands; Dominica; Grenada; Hong Kong; Liberia; Macau; Maldives; Marshall Islands; Mauritius; Monaco; Nauru; Niue; Panama; Samoa; Seychelles; Saint Lucia; Sark; Tonga; U.S. Virgin Islands; and Vanuatu.

Ukraine

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Ukraine Clarifies Controlled Transactions between Two Parties Controlled by a Third Party

The Ukraine State Fiscal Service has published guidance letter No. 9012/6/99-99-15-02-02-15 concerning transactions between two parties when the parties are controlled by a third party. The letter clarifies that for the purpose of the transfer pricing rules, a resident entity and non-resident entity will be deemed related when a third non-resident (or resident) entity separately owns corporate rights of 20% or more in each entity. In such case, transactions between the resident and non-resident entity will be deemed controlled for transfer pricing purposes if meeting the standard conditions, which include UAH 150 million annual revenue for the resident entity and UAH 10 million transaction value between the entities.

Proposed Changes (2)

Bermuda

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Bermuda Proposes Enhancements to Beneficial Ownership Regime

The Bermuda government has announced proposed revisions to enhance its beneficial ownership regime in response to growing demands for transparency from the global community. Changes include:

  • Requiring local companies to file updates for changes in beneficial ownership (currently information only filed at time of formation);
  • Imposing an obligation on all companies formed or operating in Bermuda to maintain a register of beneficial owners at the registered office, or other place, in Bermuda;
  • Expanding the definition of beneficial ownership to include not only the individual who ultimately owns equity voting shares, but also owners of capital shares without voting rights and persons who have significant control;
  • Introducing additional statutory powers to request information and to impose civil sanctions in order to deter non-compliance and to enable authorities to effectively manage an ownership registry.

Click the following links for the government announcement and the consultation paper for the proposed revisions

Israel

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Israel Issues Update on Information Exchange including CbC Reports

On 22 May 2017, the Israel Tax Authority issued a release providing an update on information exchange, including in relation to the OECD Common Reporting Standard (CRS) for financial account information and the exchange of Country-by-Country (CbC) reports. The release notes that Israel signed the relevant multilateral agreements for the exchange of CRS data and CbC reports in May 2016 and that CRS data will be exchanged from September 2018 and CbC reports will be exchanged with respect to 2016 fiscal years. As such, financial entities and international companies should prepare accordingly. With respect to CbC reporting requirements, the release references the guidelines in the BEPS Action 13 final report as well as the OECD guidance for the XML schema.

Note - The required regulations and legislation for the new requirements are still pending final approval and are being worked on by the Ministry of Finance.

Treaty Changes (4)

Argentina-Canada

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Argentina and Canada Conclude SSA Negotiations

Officials from Argentina and Canada have reportedly concluded negotiations for a social security agreement. The agreement will be the first of its kind between the two countries and must be signed and ratified before entering into force.

Belgium-Tunisia

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New SSA between Belgium and Tunisia has Entered into Force

The new social security agreement between Belgium and Tunisia entered into force on 1 May 2017. The agreement, signed 28 March 2013, replaces the 1975 social security agreement between the two countries and generally applies from the date of its entry into force.

Georgia-Mauritius

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Georgia to Negotiate Tax Treaty with Mauritius

On 17 May 2017, Georgia published Decree No. 841 in the Official Gazette, which authorizes the negotiation of an income tax treaty with Mauritius. Any resulting treaty would be the first of its kind between the two countries, and must be finalized, signed, and ratified before entering into force.

Uruguay

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Uruguay Approves Signing of BEPS Multilateral Instrument

According to recent reports, the Uruguay Government has issued a resolution authorizing the signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The signing ceremony for the MLI is scheduled to take place in Paris on 7 June 2017, but it is uncertain if Uruguay will sign at that time. The BEPS MLI is for the purpose of implementing the treaty-related measures developed as part of the BEPS Project without needing to separately amend each bilateral treaty. This includes measures developed as part of BEPS Action 2 (Hybrid Mismatches), Action 6 (Preventing Treaty Abuse), Action 7 (Preventing Artificial Avoidance of a PE), and Action 14 (Improving Dispute Resolution).

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