Canada has objected to a reservation to the BEPS Multilateral Convention (MLI) lodged by Denmark, the OECD updated on November 27, 2020.
Denmark lodged with the OECD a list of Reservations and Notifications upon MLI ratification, including a reservation on article 28(2) that states that "Part VI (Arbitration) of the Convention shall apply to a tax case only insofar the Parties agree that (a) the Chair of the arbitration panel shall be a judge, and (b) Denmark shall be permitted to publish abstracts of decisions made by the arbitration panel."
According to Canada, the reservation exceeds the scope of cases for which a reservation may be made under that provision. Canada has stated that the objection would become obsolete should Denmark withdraw above mentioned reservation.
Jurisdictions continue making progress in countering harmful tax practices, as contemplated in the BEPS Action 5 Minimum Standard, with the Inclusive Framework on BEPS now having approved the outcomes of the 2020 reviews by the OECD Forum on Harmful Tax Practices (FHTP).
This year's review by the FHTP has resulted in significant legislative changes to 44 of the 49 reviewed regimes, with 37 having been redesigned or abolished and a further 7 being currently in the process of being amended.
For the remaining 5 regimes, the FHTP has concluded that they do not currently pose BEPS risks. As a result, regimes in the following 18 jurisdictions are now in line with the BEPS Action 5 Minimum Standard.
On November 17, 2020, the US Department of Treasury released the 2020-2021 Priority Guidance Plan setting forth guidance priorities for the Treasury and the Internal Revenue Service.
The Plan contains guidance projects that will be the focus of efforts during the 12-month period from July 1, 2020, through June 30, 2021. The 2020-2021 Priority Guidance Plan contains 191 guidance projects.
As of September 30, 2020, 57 guidance items have been released. In addition to the projects on the 2020-2021 plan, the Appendix lists routine or ministerial guidance that is generally published each year.
See Priority Guidance Plan
On November 18, 2020, the OECD released the latest mutual agreement procedure (MAP) statistics covering 105 jurisdictions and almost all MAP cases worldwide.
The statistics were presented during the second OECD Tax Certainty Day where tax officials and stakeholders from over 60 jurisdictions took stock of the tax certainty agenda and discussed ways to further improve dispute prevention and resolution.
The 2019 MAP statistics show (a) that number of MAP cases keeps increasing; (b) number of MAP cases closed is increasing as well, but at a slower pace; (c) MAP outcomes are generally positive; and (d) MAP cases still take a long time to be resolved.
Swiss Federal Council adopts dispatches on amendment of tax treaties with Liechtenstein, Malta and Cyprus
During its meeting on November 11, 2020, the Swiss Federal Council adopted the protocols of amendment to the tax treaties with Liechtenstein, Malta and Cyprus. The protocols implement the minimum standards for the tax treaties.
The protocols of amendment contain an abuse clause which refers to the main purpose of a tax arrangement or transaction and thus ensures that the tax treaties are not abused. In addition, they strengthen the mutual agreement procedure and thus promote the effective avoidance of double taxation.
The cantons and the business circles concerned have welcomed the conclusion of the protocols of amendment. The protocols have to be approved by the legislative bodies of the countries in question before they can come into force.
On November 11, 2020, the South Africa Revenue Service published for public comments a discussion paper on advance pricing arrangements.
The discussion paper covers the following issues: dispute resolution and tax certainty, considerations in implementing an APA system, recommendations by the Davis Tax Committee, international benchmarking, the way forward and legislative framework.
Comments must be received by December 18.
See Discussion Paper
On November 5, 2020, Panama deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting with the OECD.
For Panama, the MLI will enter into force on March 1, 2021.
At the time of ratification, Panama listed 17 of its tax treaties that it wishes to cover under the MLI.
On November 3, 2020, Irish Revenue published Revenue e-Brief No. 200/20 pertaining to the domestic law implementing the EU Directive on reportable cross-border tax arrangements (commonly referred to as DAC6).
Revenue e-Brief No. 200/20 notes that Appendix II in the Revenue Tax and Duty Manual Part 33-01-01 has been updated.
Appendix II sets out a list of exemptions and reliefs that are excluded from the scope of hallmark A.3 where certain criteria are met.