OECD has released new transfer pricing profiles for Egypt, Liberia, Saudi Arabia, and Sri Lanka.
These country profiles focus on countries' domestic legislation regarding key transfer pricing principles, including the arm's length principle, transfer pricing methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, transfer pricing documentation, administrative approaches to avoiding and resolving disputes, safe harbours and other implementation measures.
The information contained in these profiles is intended to clearly reflect the current state of countries' legislation and to indicate to what extent their rules follow the OECD Transfer Pricing Guidelines.
The OECD is seeking public comments on two consultation documents relating to tax certainty: a Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A under Pillar One.
A central element of Amount A is an innovative Tax Certainty Framework for Amount A which guarantees certainty for in-scope groups over all aspects of the new rules, including the elimination of double taxation. This eliminates the risk of uncoordinated compliance activity in potentially every jurisdiction where a group has revenues, as well as a complex and time-consuming process to eliminate the resulting double taxation.
Furthermore, a tax certainty process for issues related to Amount A will ensure that in-scope Groups will benefit from dispute prevention and resolution mechanisms to avoid double taxation due to issues related to Amount A (e.g. transfer pricing and business profits disputes), in a mandatory and binding manner.
Interested parties are invited to send their written comments no later than 10 June 2022.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) entered into force for Bahrain and Romania on June 1, 2022.
With respect to the covered agreements (tax treaties) between Bahrain and the other countries for which the MLI has already entered into force, the MLI is generally effective from 1 January 2023 in respect of withholding taxes and for taxable periods beginning on or after 1 December 2022 in respect of other taxes (six months after entry into force).
With respect to the covered agreements (tax treaties) between Romania and other countries for which the MLI has already entered into force, Romania took the reservation that the MLI will not be effective until additional internal procedures have been completed for each covered agreement and notification on the completion of the procedures is deposited.
During its meeting on May 18, 2022, the Swiss Federal Council adopted the dispatch on the introduction of the automatic exchange of financial account information (AEOI) with 12 further partner states.
Entry into force is planned for 2023, with the first exchange of data taking place in 2024.
Specifically, the Federal Council intends to exchange financial account information with the following additional partner states for the first time in 2024: Ecuador, Georgia, Jamaica, Jordan, Kenya, Moldova, Montenegro, Morocco, New Caledonia, Thailand, Uganda, and Ukraine.
China has deposited its instrument of approval for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention), which now covers over 1 820 bilateral tax treaties.
China's instrument of approval also covers Hong Kong (China)'s bilateral tax treaties. The Convention will enter into force on 1 September 2022 for China.
On 1 June 2022, over 880 treaties concluded among the 76 jurisdictions which have ratified, accepted, or approved the BEPS Convention will have already been modified by the BEPS Convention. Around 940 additional treaties will be modified once the BEPS Convention will have been ratified by all Signatories.
Ireland has launched a public consultation seeking stakeholder views on the implementation of the Pillar Two Minimum Tax Rate proposal in Ireland.
The purpose of the consultation is to seek the views of stakeholders on the transposition of Pillar Two into Irish law.
The consultation period will run until 22 July 2022.
On May 12, 2022, the South African Revenue Service (SARS) published a comprehensive guidance on dividends tax.
Guidance is included on exemption from dividends tax and relief from double taxation; and withholding of dividends tax, among others.
Comments on the guidance may be sent to firstname.lastname@example.org.
On April 29, 2022, the Maltese Commissioner for Revenue published DAC6 guidance in the form of FAQs.
The guidance explains the definition of intermediary, reporting deadlines and obligations, and other general questions.
There are a total of 27 questions.
On April 25, 2022, the OECD held a public consultation meeting on the Implementation Framework of the global minimum tax.
The meeting discussed the input provided and consider the mechanisms to put in place in order to ensure that tax administrations and MNEs can implement and apply the Global Anti-Base Erosion (GloBE) Rules in a consistent and co-ordinated manner.
Following the release of the GloBE Rules as part of a landmark agreement on a two-pillar solution and the related Commentary, the OECD/G20 Inclusive Framework on BEPS is developing an Implementation Framework to support tax authorities in the implementation and administration of the GloBE Rules.
Cameroon has deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention).
The Convention will enter into force on August 1, 2022, for Cameroon.
The Convention now covers over 1820 bilateral tax treaties, thus underlining their strong commitment to prevent the abuse of tax treaties and BEPS by multinational enterprises.
The OECD has released, as part of its work on BEPS Action 14, the Stage 2 peer review monitoring reports for Andorra, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Faroe Islands, Macau (China), Morocco and Tunisia.
These reports evaluate the progress made by these nine jurisdictions in implementing the recommendations resulting from their Stage 1 peer review.
They take into account any developments in the period of 1 September 2019 – 30 April 2021 and build on the Mutual Agreement Procedure (MAP) statistics for 2016-2020.
The Swiss tax authority has published withholding tax rates for treaty countries.
The rates have been published for Albania, Belarus, Belgium, the Czech Republic, Croatia, Denmark, Finland, Hungary, Iceland, Latvia, Lithuania, Luxembourg, Moldova, Montenegro, the Netherlands, North Macedonia, Norway, Poland, Romania, Russia, Serbia, the Slovak Republic, Slovenia and Sweden.
The rates are available on the tax authority’s website.
On April 12, 2022, the OECD and Brazil's Receita Federal (RFB) held a joint high-level to present the key features of Brazil’s proposed new transfer pricing system.
The outcome of the joint project between OECD and RFB will be a new transfer pricing framework for Brazil, aligned to the OECD standard.
In welcoming this important step forward, Paulo Guedes, Brazil’s Finance Minister noted: “As we successfully converge with the OECD standard, we are not only celebrating a key step forward but also addressing two main challenges: the harm of excessive taxation and double taxation that prevent investments; and the damage of tax avoidance through the transfer of profits to locations providing for a more favorable taxation. This is fundamental because it allows us to gain in efficiency, with effective allocation of investments across this global community that is embracing itself through the convergence of these practices.”
The OECD is seeking public comments on the Extractives Exclusion under Amount A of Pillar One.
The Extractives Exclusion will exclude from the scope of Amount A the profits from Extractive Activities. The exclusion applies where a Group derives revenue from the exploitation of Extractive Products and the Group has carried out the relevant Exploration, Development or Extraction.
This approach reflects the policy goal of excluding the economic rents generated from location-specific extractive resources that should only be taxed in the source jurisdiction, while not undermining the comprehensive scope by limiting the exclusion in respect of profits generated from activities taking place beyond the source jurisdiction, or later in the production and manufacturing chain.
India's Central Board of Direct Taxes has entered into 62 Advance Pricing Agreements (APAs) in FY 2021-22 with Indian taxpayers.
This includes 13 Bilateral APAs (consequent to Mutual Agreement between India and its treaty partners) and 49 Unilateral APAs.
With this, the total number of APAs since inception of the APA program has gone up to 421.