On November 11, 2021, Members of European Parliament (MEPs) gave their final green light to new rules obliging big multinationals to publicly declare the taxes they pay in each EU country, to undermine tax avoidance.

Multinationals and their subsidiaries with annual revenues over EUR 750 million - and which are active in more than one EU country - will now have to publish the amount of tax they pay in each member state. This information will also need to be made available on the internet, using a common template and in a machine-readable format.

The directive will enter into force 20 days after publication in the Official Journal. Member states will then have 18 months to transpose the law into their national laws. This means that businesses will need to be complying with the first provisions of the directive by mid-2024.

See Announcement 

On November 5, 2021, Ireland Minister for Finance, Paschal Donohoe, launched a public consultation seeking stakeholder views on the introduction of New Taxation Measures to apply to Outbound Payments. 

The Update to Ireland’s Corporation Tax Roadmap, published in January 2021, set out a series of commitments designed to update and enhance Ireland’s corporation tax rules. This consultation delivers on the commitments contained in the Update to Ireland’s Corporation Tax Roadmap as well as delivering on milestones in Ireland’s National Recovery and Resilience Plan.

The consultation period will run from 5 November 2021 to 20 December 2021.

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Mauritania has joined international efforts against tax avoidance by joining the OECD/G20 Inclusive Framework on BEPS as its 141st member.
 
Through its membership, Mauritania committed to addressing the tax challenges arising from the digitalisation 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, bringing to 137 the total number of jurisdictions participating in the agreement.
 
Collaborating on an equal footing with all other members of the Inclusive Framework, Mauritania 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.
 
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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.

See Announcement

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.
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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.

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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:

• a statement in the Preamble to emphasize that the intention of both countries is to eliminate double taxation, without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance
• the possibility for a taxpayer to have recourse to arbitration where a tax dispute cannot be resolved by the competent authorities within a period of three years after the case has been referred for consideration; and
• to clarify the cases which are not eligible for arbitration.

See Release

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.

See Announcement 

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.
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See Announcement 

Spain has deposited its instruments of ratification for the BEPS MLI Convention, thus underlining strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

The Convention will enter into force on January 1, 2022, for Spain.
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The MLI offers concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the BEPS project into bilateral tax treaties worldwide.
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The MLI now covers 96 jurisdictions.

The Council today adopted its position at first reading on the proposed directive on the disclosure of income tax information by certain undertakings and branches, commonly referred to as the public country-by-country reporting (CBCR) directive, paving the way for its final adoption. The adoption of the Council’s position follows a provisional agreement reached with the European Parliament in June.

The CBCR directive aims to enhance the corporate transparency of big multinational companies. It will require certain multinational undertakings with revenue of more than €750 million to disclose publicly in a specific report the income tax they pay. For the first time, non-European multinationals doing business in the EU through subsidiaries and branches will also have to comply with the same reporting obligations as EU multinational undertakings.

The reporting will take place within 12 months of the date of the balance sheet for the financial year in question. The directive sets out the conditions under which a company may defer the disclosure of certain information for a maximum of five years. 
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The proposed directive also stipulates who bears responsibility for ensuring compliance with the reporting obligation.

​See Release

On September 24, 2021, the Indian Finance Ministry issued a notification extending the transfer pricing safe harbor rules.

The rules are contained in Rule 10TD of the Income Tax Rules 1962.

The extension applies for assessment years 2020-21 and 2021-22.

The Cyprus Tax Department has informed that there will be no imposition of administrative fines for overdue submission of DAC6 information that will be submitted until 30 November 2021.

The penalty will not apply in the following cases:

Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021.

Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 and had to be submitted by 31 January 2021.

Reportable cross-border arrangements made between 1 January 2021 and 31 October 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occurred first.

Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021 and 31 October 2021 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice.

The first periodic report for marketable arrangements that had to be submitted by 30 April 2021.

See Announcement

On September 21, 2021, Philippine House of Representatives approved a proposal imposing a 12% tax on digital transactions in the country to generate new funding sources for the country's Covid-19 response efforts.

The Chamber passed Bill 7425 seeking to amend Section 105 of the National Internal Revenue Code (NIRC) by taxing digital service providers that operate through online platforms. The bill seeks to clarify the imposition of VAT on online advertisement services, digital services in exchange for a regular subscription fee, and supply of other electronic and online services that can be delivered through the Internet.

Albay Rep. Joey Salceda, a principal author of the bill, said foreign corporations selling digital services, such as Netflix, Spotify, and others, will have to pay for and impose VAT on their services. Digital services include online licensing or software, updates and add-ons, website filters and firewalls, mobile applications, video games and online games, and webcasts and webinars, Salceda said.
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See Announcement