February 12th to 16th, 2018

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1. OECD announces further developments in BEPS implementation

The Inclusive Framework on BEPS has released additional guidance to give certainty to tax

administrations and MNE Groups alike on the implementation of Country-by-Country (CbC)

reporting (BEPS Action 13). The Inclusive Framework also approved updates to the results for

preferential regime reviews conducted by the Forum on Harmful Tax Practices (FHTP) in

connection with BEPS Action 5.

The additional guidance addresses two specific issues: the definition of total consolidated group

revenue and whether non-compliance with the confidentiality, appropriate use and consistency

conditions constitutes systemic failure. Also released a compilation of the approaches adopted by

member jurisdictions of the Inclusive Framework with respect to issues where the guidance allows

for alternative approaches.

Members of the Inclusive Framework are continuing to make progress in delivering the international

standard on BEPS Action 5.

Source: http://www.oecd.org/tax/beps/oecd-announces-further-developments-in-beps-implementation-february-2018.htm

February 12th to 16th, 2018

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2. IRS taking leadership role in OECD's CbC risk assessment program

The IRS has taken a leadership role in the OECD’s International Compliance Assurance Program

(ICAP) assessing the transfer pricing and permanent establishment risks facing jurisdictions when

multinationals begin country-by-country reporting, an IRS official said.

“The ICAP program is one example of how we are trying to be proactive with regard to CbC

reporting,” said Jennifer Best, director treaty and transfer pricing operations.

The OECD announced that eight members of the Forum on Tax Administration had launched a pilot

program for assessing the multilateral risks posed by large multinational enterprise groups. The eight

countries participating are Australia, Canada, Italy, Japan, the Netherlands, Spain, the United

Kingdom, and the United States. Action 13 of the base erosion and profit-shifting project calls for

CbC reporting, and the OECD has been issuing regular guidance on the issue.

Source: https://www.taxnotes.com/worldwide-tax-daily/base-erosion-and-profit-shifting-beps/irs-taking-leadership-role-oecds-cbc-risk-assessment-

program/2018/02/13/26wcy

February 12th to 16th, 2018

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3. OECD updates CbC reporting guidance, preferential regime statuses

The OECD has updated conclusions on two preferential tax regimes in Barbados to reflect planned

amendments to the regimes and revised its country-by-country reporting guidance to address the

definition of total consolidated group revenue and noncompliance with conditions of confidentiality,

appropriate use, and consistency.

Members of the Inclusive Framework are continuing to make progress in delivering the international

standard on BEPS Action 5. Two Barbados' regimes, the International financial services and the

Credit for foreign currency earnings/Credit for overseas projects or services, were concluded as

"potentially harmful" by the Inclusive Framework in the 2017 Progress Report on Preferential

Regimes.

An updated table of regime results is now available. The OECD will continue to communicate

updated results of reviews of preferential regimes as approved by the Inclusive Framework.

Source: https://www.taxnotes.com/worldwide-tax-daily/transfer-pricing/oecd-updates-cbc-reporting-guidance-preferential-regime-

statuses/2018/02/09/26vzl

February 12th to 16th, 2018

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4. Tax Agencies To Discuss TP Proactively With Willing MNEs

The OECD has recently launched a new program – the International Compliance Assurance

Programme – being spearhead by the Forum on Tax Administration that is aimed at providing

assurance to multinationals with regards to their transfer pricing (TP) affairs.

The pilot, which groups can join on a voluntary basis, will use country-by-country reports and other

information to facilitate open and cooperative multilateral engagements between multinationals and

tax administrations, with a view to providing early tax certainty and assurance for multinationals,

the OECD said.

A pilot for ICAP, which includes eight FTA member tax administrations (Australia, Canada, Italy,

Japan, the Netherlands, Spain, the United Kingdom, and the United States), was launched at the end

of January.

Source: https://www.tax-news.com/news/Tax_Agencies_To_Discuss_TP_Proactively_With_Willing_MNEs____76366.html

February 12th to 16th, 2018

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5. Australia legislates to target “Black Economy”

The Australian Government has introduced legislation to crack down on the use of electronic sales

suppression tools and to extend the Taxable Payments Reporting System.

Revenue Minister Kelly O'Dwyer said that the new law "will restrict the avenues for people

participating in the black economy, whether by engaging in tax evasion or by deliberately

underreporting their income."

The legislation will create new offenses to ban the use of electronic sales suppression tools at each

stage of the supply chain. It also includes new penalties to discourage the use of such software.

Source: https://www.tax-news.com/news/Australia_Legislates_To_Target_Black_Economy____76361.html

February 12th to 16th, 2018

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6. Oxfam welcomes new EU committee on tax evasion

Following the Paradise Papers revelations, the European Parliament decided to establish a new

special committee on tax fraud, tax evasion, money laundering, tax avoidance and aggressive tax

planning.

Oxfam's Policy Advisor on tax and Inequality Aurore Chardonnet, said:

• “With this new committee on tax issues, the European Parliament has again proved its

willingness to tackle tax avoidance and push EU countries to adopt and implement the

reforms needed to avoid an umpteenth tax scandal.

• "The latest attempts at global tax reform like the OECD's agreement on base-erosion and

profit-shifting has clearly not solved the issue of corporate tax avoidance. We need political

action after the Paradise Papers scandal to identify new trends in tax avoidance schemes in a

post-BEPS era. We invite the European Parliament to question the heads of multinationals

particularly exposed in the latest revelations, especially as their tax dodging schemes operate

in EU members states such as the Netherlands and Ireland.

• “The committee should also encourage EU countries to put their own house in order by

ensuring they rapidly implement all the EU tax legislation adopted over recent years, and by

looking deeper at the harmful tax practices within Europe itself.”

Source: http://www.taxnotes.com/lr/resolve/worldwide-tax-daily/oxfam-welcomes-new-eu-committee-on-tax-evasion/26w06

February 12th to 16th, 2018

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7. Six additional jurisdictions sign Multilateral Convention to Implement Tax

Treaty Related Measures to Prevent BEPS

Six additional jurisdictions (Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia)

signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base

Erosion and Profit Shifting (BEPS) (the MLI) during a second signing ceremony which took place

at the Organisation for Economic Co-operation and Development (OECD) Headquarters in Paris, in

conjunction with a plenary session of the Inclusive Framework on BEPS. Four other jurisdictions

(Algeria, Kazakhstan, Oman and Swaziland) expressed their intent to sign the MLI in the near future.

At the time of signature, the six signatories submitted a list of their tax treaties in force that they

would like to designate as Covered Tax Agreements (CTAs), i.e., treaties to be amended through

the MLI. At this stage, it is expected that over 1,200 tax treaties will be modified based on matching

of the specific provisions that jurisdictions wish to add or change within the CTAs nominated by

signatories.

Together with the list of CTAs, signatories also submitted a preliminary list of their reservations and

notifications (MLI positions) in respect of the various provisions of the MLI. The definitive MLI

positions for each jurisdiction will be provided upon the deposit of its instrument of ratification,

acceptance or approval of the MLI. As part of the options contained in the MLI, jurisdictions may

opt into mandatory binding arbitration, an element of BEPS Action 14 on dispute resolution.

Source: http://taxinsights.ey.com/archive/archive-news/six-additional-jurisdictions-sign-multilateral-convention-to-implement.aspx

February 12th to 16th, 2018

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8. Cayman Islands issues notice on country-by-country reporting for

multinationals

The Cayman Island government on February 2 published an advisory for multinational corporations

on country-by-country reporting in advance of the release of planned guidance on the topic.

The government also said it expects to launch a portal for filing the country-by-country reports in

early March.

The advisory, published by the Ministry of Financial Services and Home Affairs, covers various

topics, including which entities must file a country-by-country report, what notifications must be

provided to the government, due dates for the notifications, and legal mechanisms that will be used

to enforce compliance with country-by-country reporting.

Source: https://mnetax.com/cayman-islands-issues-notice-country-country-reporting-multinationals-26014

February 12th to 16th, 2018

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9. Pakistan releases more draft amendments to country-by-country reporting

rules for MNEs

Pakistan’s government on February 9 published more amendments to draft rules that establish

transfer pricing documentation and country-by-country reporting rules for large multinational firms.

Federal Board of Revenue’s draft follow changes made to the rules on January 31.

The latest draft revisions include a clarification that a “constituent entity” for purposes of the

country-by-country reporting rules includes a permanent establishment in Pakistan of a nonresident

person. Also, the words “entity” and “related party” are clarified.

Source: https://mnetax.com/pakistan-releases-draft-amendments-country-country-reporting-rules-mnes-26030

February 12th to 16th, 2018

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10. Bermuda Lists CbC Report Exchange Partners

The Bermuda Government on January 31, 2018, updated the lists of the countries with which it will

exchange country-by-country reports filed in Bermuda in 2018 and in 2019.

The Government has disclosed that it expects to exchange CbC reports with a total of 41 territories

in 2018 relating to financial periods in 2016. This is an increase of seven territories since its last

update in December 2017, when it had added five territories. These seven territories newly added

are: Bulgaria, Colombia, Croatia, Hungary, Indonesia, Malta, and Romania (to be confirmed).

In 2019, it will exchange CbC reports filed in Bermuda with 45 territories. In its January 31, 2018,

update, it added Brazil, Chile, Liechtenstein, and Uruguay.

Source: https://www.tax-news.com/news/Bermuda_Lists_CbC_Report_Exchange_Partners____76367.html

February 12th to 16th, 2018

11

11. Germany’s new government signals paradigm shift in international tax

policy

German Chancellor Angela Merkel’s conservatives reached an agreement on a coalition government

with the center-left Social Democrats.

Although these parties have ruled together the past four years, the agreement could signal a paradigm

shift for tax policy. Breaking from Germany’s previous positions, the coalition appears willing to

go beyond the OECD/G20 base erosion profit shifting (BEPS) plan agreements to ensure “fair

taxation,” potentially putting less emphasis on domestic corporate or economic interests for a greater

European objective.

In general, the coalition agreement echoes previous corporate tax policy objectives, such as further

combating “tax evasion, tax avoidance, unfair tax competition and money laundering efficiently and

unbureaucratically on a national, European and international level.”

The agreement aims for “the widest possible implementation of the OECD BEPS commitments and

recommendations worldwide.” However, only the implementation of BEPS obligations agreed to

under the EU Anti-Tax Avoidance Directive are mentioned, such as timely updating controlled

foreign company rules, supplementing the hybrid regulations, and adjusting the interest barrier.

Source: https://mnetax.com/germanys-new-government-signals-paradigm-shift-international-tax-policy-25958

February 12th to 16th, 2018

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12. India signs seven more APAs, including first bilateral agreement with US

India’s Central Board of Direct Taxes (CBDT) announced that in January it entered into entered into

five unilateral advance pricing agreements (APAs) with multinational taxpayers and two bilateral

APAs, including the first bilateral agreement involving the US.

Thus, India has to date signed 178 unilateral APAs and 18 bilateral APAs, the CBDT said.

The seven January APAs address various transfer pricing issues, including IT-enabled services,

provision of software development services, contract manufacturing, payment of royalties, and sale

of goods, the government said.

The progress of the APA scheme strengthens the government’s resolve to foster a nonadversarial

tax regime, the CBDT said.

Source: https://mnetax.com/indian-signs-seven-apas-addressing-transfer-pricing-issues-25944