India’s Bombay High Court today dismissed a writ petition filed by Hindustan Unilever Limited concerning non-deduction of income tax on payment of INR 30.45 billion made to GlaxoSmithKline Consumer Healthcare towards acquisition of certain brands.

The leading FMCG maker had earlier disclosed that it received an INR 9.7 billion tax notice from the Income Tax Department in relation to the said acquisition.

As per the Income Tax Department, the sum remitted by Hindustan Unilever Limited was subject to deduction of tax under section 195 of the Income Tax Act. Because there was a failure to deduct the tax, proceedings under section 201 of the Income Tax Act were initiated treating Hindustan Unilever Limited as “assessee-in-default”.

The company contended before the Bombay High Court that the Department had failed to apply the principle laid down by the Delhi High Court in an earlier decision. In that decision, the Delhi High Court had ruled that the situs of a trademark shall be the situs of the owner.

The company contended that the owner of the brands in the instant case was not situated in India and therefore no sum is chargeable to tax in India under section 9 of the Income Tax Act.
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The Bombay High Court, in a decision pronounced today, declined to entertain the petition in exercise of its extraordinary writ jurisdiction. The court said that Hindustan Unilever Limited has an alternate remedy by way of appeal and must pursue that remedy.

On August 29, 2024, the protocol to Australia-New Zealand tax treaty entered into force.
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The protocol was signed on September 12, 2023. The protocol applies from October 1, 2024.

Bahrain has issued a Decree on implementation of the Domestic Minimum Top-up Tax (DMTT) for Multinational Enterprises (MNEs).

The rules and guidance issued by the OECD shall be taken into consideration when applying or interpreting the provisions of the Decree.
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The Decree will enter into force on January 1, 2025.

The New Zealand-Slovak Republic tax treaty will enter into force on November 1, 2024, for withholding taxes.
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The treaty was signed last year. The protocol applies from January 1, 2025, for withholding taxes.

New Zealand’s Inland Revenue has published a statement setting out the Commissioner’s position and operational approach in relation to the withholding obligations that may arise in relation to transfer pricing arrangements.

The statement confirms that the Commissioner’s position and operational approach remains unchanged from his current practice.
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The statement also confirms how the transfer pricing rules in Subpart GC of the Income Tax Act, 2007, interact with the dividend rules in Subpart CD, when determining the withholding obligations that arise under Part R for payments made under a transfer pricing arrangement.

Brazil’s Federal Revenue Service is consulting stakeholders on the Normative Instruction that will regulate the specific consultation procedure for proposing an Advance Pricing Agreement (APA).
 
The Normative Instruction is intended to apply from January 1, 2025.
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Comments must be received by September 30.

Iceland’s Ministry of Finance and Economic Affairs has published for stakeholders’ comments a bill to implement a global minimum tax on multinational corporations.

Iceland intends to incorporate the OECD rules in this regard into the country’s domestic law. 
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Comments must be received by September 11.

On August 27, 2024, Ireland’s government published the Second Feedback Statement on the introduction of a participation exemption in the Irish corporate tax system for foreign dividends.

The Feedback Statement contains potential draft approaches to key elements of the legislation as well as information on some consequential amendments that may be introduced in conjunction with the participation exemption for foreign dividends.
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Comments must be received by September 5.

The South African Revenue Service has published guidelines regarding the completion of the Withholding Tax on Royalties return, how to make payment on e-Filing, and apply for a refund using the Rev16 form.

Guidance is included on completion on withholding tax on royalties return, declaration, payment of withholding tax on royalties, and refund of withholding tax on royalties, among other things.
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The guide was published on August 23.

Bermuda’s Finance Ministry is consulting stakeholders on the country's new corporate income tax regime.

The Corporate Income Tax Act,  2023 was enacted in December 2023 and provides that Bermuda Constituent Entity Groups, comprised of one or more Bermuda Constituent Entities of an “In Scope” MNE Group, are subject to Bermuda corporate income tax with respect to fiscal years beginning on or after January 1, 2025.

The consultation paper is intended to provide Bermuda stakeholders with a preliminary, high-level summary of the proposed taxpayer compliance framework and to obtain public feedback on the proposals.
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Comments must be received by September 5.

The Indian Supreme Court has dismissed a review petition filed in the controversial most-favored-nation (MFN) judgment delivered by it last year in Assessing Officer (International Taxation) vs. M/s Nestle SA.

The controversial ruling concerned MFN clauses in India’s tax treaties with countries including France, the Netherlands and Switzerland. The tax authority had refused to accept the taxpayers’ request for invoking the MFN clauses in the tax treaties, under which a reduced withholding tax rate were to be applied.

The top court, however, found in favour of the tax authority. The court accepted the tax authority’s argument that the MFN clauses could not be invoked because the Indian government did not issue any notification to activate the MFN clause – a prerequisite under Indian domestic legal framework.

Subsequently, the taxpayer filed a petition asking the court to review its own judgment.
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In a short order dated August 6, 2024, the court said that there are no grounds for review and dismissed the review petition.

Ireland’s tax authority has published a new manual setting out an overview of the Administration of Pillar Two rules.

In addition, the tax authority has published an update to existing guidance on the operation of the Pillar Two rules, along with the detailed correlation table which cross references the legislation contained within Part 4A of the TCA 1997 with:
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• the relevant article of the EU Minimum Tax Directive,
• the relevant article of the OECD Model Rules,
• OECD Commentary, where relevant, and
• OECD Administrative Guidance, where relevant.

On 6 August 2024, Ecuador and the United Kingdom signed a tax treaty.
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Further details would be reported when available.

Australian tax authority is setting up a special purpose working group to support consultation on the implementation of the global and domestic minimum tax in Australia for multinational businesses.

Through consultation, the working group will seek feedback on administrative aspects of the implementation of the new measure.
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Expressions of interest in this regard may be submitted by August 9.

Argentina has removed five tax jurisdictions from the list of non-cooperative tax jurisdictions maintained under Article 24 of the country’s Income Tax Regulations.

The following five tax jurisdictions have been removed: Benin, Burkina Faso, Papua New Guinea, Rwanda, and Vietnam.

Under Article 19 of the Income Tax Regulations, a “non-cooperative” tax jurisdiction is a country or jurisdiction that does not have a tax treaty (with an elaborate exchange information clause) or an information exchange agreement with Argentina.

As per the government, the five countries removed from the list are now in a position to exchange tax information with Argentina.
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The updated list was gazetted on July 11.