Nearly all members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have agreed to refrain from imposing newly enacted digital services taxes or relevant similar measures on any company before December 31, 2024, or the entry into force of the Multilateral Convention (MLC) if earlier, provided the signature of the MLC has made sufficient progress by the end of the year.
The commitment is made in recognition of the progress made to date and the need to prevent disruption or delay of the ratification of the MLC.
The agreement follows 20 months of intense technical negotiations by delegates to continue the work to implement the Two Pillar Solution.
Japan’s tax treaty with Azerbaijan will enter into force on August 4, 2023.
The treaty will be effective from January 1, 2024.
The provisions concerning the exchange of information and the assistance in the collection of taxes will have effect from August 4, 2023.
Brazil is consulting stakeholders on a draft Normative Instruction that would regulate the country’s new transfer pricing regime.
The Normative Instruction would cover several aspects of the new transfer pricing law as well as administrative issues related to transfer pricing.
Comments must be received by July 25.
Latvia’s Finance Ministry has published an updated list of tax havens.
The updated list includes the following tax jurisdictions: Anguilla, Bahamas, British Virgin Islands, Costa Rica, Fiji, Guam, Marshall Islands, Palau, Panama, Russia, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands, and Vanuatu.
The updated list came into force on July 1, 2023.
The Intra-European Organisation of Tax Administrations (IOTA) has terminated the membership of Russia and Belarus.
The decision was made by the 27th General Assembly of IOTA in Tbilisi, Georgia.
The termination of membership resulted from an absolute majority vote of IOTA members and came into effect on June 27, 2023.
Denmark’s Finance Ministry is consulting on a draft bill that would implement the EU Directive on Pillar Two into Danish tax law.
The draft bill proposes to introduce an income inclusion rule, an undertaxed profit rule and rules on a qualified domestic top-up tax.
The new rules are intended to come into force on January 1, 2024.
The OECD has launched an updated version of the BEPS MLI matching database used to make projections on how the MLI modifies a specific tax treaty.
The updated database includes significant improvements that will enhance user experience and provide additional features to support the implementation and application of the BEPS MLI. One of the key updates is the inclusion of historical data, which allows users to view the application of the BEPS MLI at specific points in time.
The upgrade also offers a more intuitive interface that makes it easier for users to search for and access information.
Pakistan has amended its domestic tax law to expand the definition of permanent establishment to include virtual presence.
The amendment was enacted on June 26, 2023.
The amended law omits the term ‘fixed’ from the main definition of permanent establishment, which refers to place of business. The new law also provides that services provided through an ‘entity’ will also give rise to a permanent establishment.
The OECD has published new results on preferential tax regimes noting that tax jurisdictions continue making progress on implementing the international standard under BEPS Action 5 to address harmful tax practices.
The results are as follows:
The OECD will soon commence its annual monitoring of substantial activities requirements for no or only nominal tax jurisdictions and review any new and outstanding regimes of Inclusive Framework members.
The European Commission is proposing to make withholding tax procedures in the EU more efficient.
A common EU digital tax residence certificate is being proposed to make withholding tax relief procedures faster and more efficient. Member States currently rely on paper-based procedures.
The Commission is proposing to complement the existing standard refund procedure with a two fast-track procedures: a “relief at source” procedure and a “quick refund” system.
A standardized reporting obligation is being proposed to provide national tax administrations with the necessary tools to check eligibility for the reduced rate and to detect potential abuse.
UK government is seeking stakeholders’ views on potential reforms to the UK international tax legislation on transfer pricing, permanent establishment, and Diverted Profits Tax.
The chief objective of the consultation is to clarify and modernize the legislation, and ensure it achieves its objectives, while developing simpler, legislation that is easier to understand, and supports growth by improving tax certainty.
Comments must be received by August 14.
Today, the OECD's Forum on Tax Administration (FTA) Pillar Knowledge Sharing Network held its first virtual meeting of what will be a series of peer-to-peer knowledge-sharing events where experts from tax administrations in 'early implementer' jurisdictions will offer high-level practical advice and share lessons learned on administrative and implementation aspects of the Two-Pillar Solution.
The first meeting, gathering more than 250 delegates from over 70 countries and jurisdictions, looked at Pillar Two implementation from a change management perspective and how officials are working across policy, operations and technology to prepare for and implement the necessary changes. Further meetings will be held over the course of the year.
The new Pillar Knowledge Sharing Network will complement the OECD's wider strategy for supporting developing countries in implementing Pillar One and Pillar Two through a multifaceted program including training, guidance and hands-on country engagements.
Uzbekistan joins international efforts against tax evasion and avoidance by joining the OECD/G20 Inclusive Framework on BEPS.
Through its membership, Uzbekistan has also committed to addressing the tax challenges arising from the digitalization of the economy by joining the two-pillar plan to reform the international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate.
Collaborating on an equal footing with all other members of the Inclusive Framework, Uzbekistan will participate in the implementation of the BEPS package of 15 measures to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment.
As part of the Fiscal Transition Support Program in West Africa (FTSP), the OECD organized a training workshop on transfer pricing from 30 May to 1 June 2023 in Lomé, Togo, for representatives of the 15 Member States of the Economic Community of West African States (ECOWAS), the Islamic Republic of Mauritania, as well as the Commissions of ECOWAS and the West African Economic and Monetary Union (WAEMU).
This training workshop is part of a three-year training cycle on transfer pricing organized by the OECD under the FTSP and intended to train thirty tax auditors from West African countries.
The training focused on the Mutual Agreement Procedure which aims to eliminate double taxation resulting from transfer pricing upward adjustments and consisted of presentations by OECD experts alongside practical cases and role plays designed to expose the participants to concrete transfer pricing issues. Held in French, English and Portuguese, it provided opportunities for participants to share their experience for the benefit of their respective tax administrations.
On May 23, 2023, the UAE tax authority published Decision No. 126 of 2023 on the general rules for limiting the deduction of interest for corporate tax purposes.
The ruling includes provisions on the definition of interest. It states that the amount of interest that may be deducted from taxable income is the greater of AED 12,000,000 or 30% of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).
This Decision came into effect the day following the date of its publication.