On October 21, 2021, Ireland’s Minister for Finance, Paschal Donohoe, published the Finance Bill, 2021, which includes key international tax measures.
The Finance Bill includes new measures which will complete transposition of the Anti-Tax Avoidance Directives, through the introduction of Anti-Reverse-Hybrid rules and a new interest limitation ratio to supplement our long-standing domestic interest rules.
As was announced in the January 2021 Update to the Corporate Tax Roadmap, the Finance Bill will introduce the Authorized OECD Approach for Transfer Pricing of Branches. This is another step in aligning our tax code with new international norms.
The Finance Bill will also transpose a recent EU Directive in respect to important new tax transparency rules for digital platforms.
On October 23, 2021, Inland Revenue Authority of Singapore published updates to the e-Tax Guide on Avoidance of Double Taxation Agreements.
Section 7 has been updated to provide guidance on arbitration provisions found in Singapore’s tax treaties. Additionally, footnote 2 has been updated to remove the reference to the tax treaty with South Korea.
Editorial changes have been made throughout the guide for greater clarity.
See e-Tax Guide
On October 18, 2021, the OECD released the latest outcomes of the implementation of BEPS Action 13 on the transparency of global operations of large MNEs and BEPS Action 14 on the resolution of tax related disputes between jurisdictions.
Over 100 jurisdictions have already introduced legislation to impose a filing obligation on MNE groups, covering practically all MNE Groups with consolidated group revenue at or above the threshold of EUR 750 million. Remaining Inclusive Framework members are working towards finalising their domestic legal frameworks with the support of the OECD. Where legislation is in place, the implementation of country-by-country (CbC) reporting has been found largely consistent with the Action 13 minimum standard.
Many recommendations made in the first three peer review phases have now been addressed and these recommendations have been removed. More than 3000 bilateral relationships for the exchange of CbC reports are now in place.
The BEPS Action 13 peer review is an annual process, and the next peer review report will be released in the third quarter of 2022.
On October 15, 2021, the Mauritian Cabinet agreed to sign a Protocol to the tax treaty with Germany.
The objective of the Protocol is to amend the tax treaty so that it complies with the OECD’s base erosion and profit shifting recommendations.
The Protocol, would incorporate in the Agreement, the following new provisions:
On October 8, 2021, major reform of the international tax system was finalized to ensure that multinational enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023.
136 jurisdictions (out of the 140 members of the OECD/G20 Inclusive Framework on BEPS) joined the Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. With Estonia, Hungary, and Ireland having joined the agreement, it is now supported by all OECD and G20 countries. Four countries - Kenya, Nigeria, Pakistan, and Sri Lanka - have not yet joined the agreement.
Pillar One will ensure a fairer distribution of profits and taxing rights among countries with respect to the largest and most profitable multinational enterprises. It will re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.
Pillar Two introduces a global minimum corporate tax rate set at 15%. The new minimum tax rate will apply to companies with revenue above EUR 750 million and is estimated to generate around USD 150 billion in additional global tax revenues annually.
On October 11, 2021, Irish Revenue updated Tax and Duty Manual (Part 33-03-04) on DAC6 reporting requirement.
Sections 3.2 and 4.2 has been amended to include updated screenshots and guidance in line with the new schema.
See Revenue eBrief No. 184/21
On October 5, 2021, the EU Council decided to remove Anguilla, Dominica, and Seychelles from the EU list of non-cooperative jurisdictions for tax purposes.
All three had previously been placed on the list because they did not meet the EU’s tax transparency criteria of being ranked as at least ‘largely compliant’ by the OECD Global Forum regarding the exchange of information on request. The delisting was preceded by the forum’s decision to grant these jurisdictions a supplementary review on this matter.
Pending the granted supplementary review, Anguilla, Dominica, and Seychelles are now included in the state of play document (Annex II), which covers jurisdictions that do not yet comply with all international tax standards but that have committed to implementing tax good governance principles.