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News Briefs for October 20, 2016

China cropped

The latest transfer pricing news includes the updated Chinese APA programme, Indonesian plans for a lower tax rate, and UK concerns on proposed penalties.



China APA structure revised

   The State Administration of Taxation has issued guidelines on the administration of advance pricing agreements, according to KPMG.

   The rules require more detailed preparation from taxpayers prior to the formal application acceptance but still follow the six stage application process as the 2009 arrangement, including pre-filing meeting, intention, analysis and appraisal, formal application, negotiation and signing, and supervision of implementation.

   Announcement 64 will be effective from December 1 2016. Any APA applications that have not been formally accepted before that date will be considered under the new rules.

Indonesia to attract multinationals with lower tax rate

   Indonesian President Joko Widodo has said the next step to attract foreign direct investment to his country is to lower tax rates and simplify the tax system.

   In an interview with the Wall Street Journal, Widodo said he is considering lowering Indonesia’s tax rate to 17% to compete with neighbouring financial-hub Singapore. He also suggested making one of Indonesia’s islands a tax haven with minimal tax imposed on individuals and companies there.

   Indonesia’s government and president are keen to present a multinational-friendly tax environment however, it has struggled to reach its tax audit targets in recent years and in response the authorities have targeted multinationals in an attempt to increase revenue.

UK accountants angry at “draconian” measures

   The Chartered Institute of Taxation has described proposed penalties for advisers arranging tax avoidance schemes as “draconian and broad”, reports the Financial Times.

   The proposals, first introduced by former chancellor George Osborne, would see advisers facing fines of up-to 100% of the avoided tax if found guilty of constructing and advising on schemes for individuals and companies to avoid tax.

   The Institute of Chartered Accountants in England and Wales and the Law Society have also spoken out against the proposals. 



more across site & bottom lb ros

More from across our site

David Pickstone and Anastasia Nourescu of Stewarts review the facts and implications of Ørsted’s appeal at the Upper Tribunal.
The Internal Revenue Service will lose the funding as part of the US debt limit deal, while Amazon UK reaps the benefits of the 130% ‘super-deduction’.
The European Commission wanted to make an example of US companies like Apple, but its crusade against ‘sweetheart’ tax rulings may be derailed at the CJEU.
The OECD has announced that a TP training programme is about to conclude in West Africa, a region that has been plagued by mispricing activities for a number of years.
Richard Murphy and Andrew Baker make the case for tax transparency as a public good and how key principles should lead to a better tax system.
‘Go on leave, effective immediately’, PwC has told nine partners in the latest development in the firm’s ongoing tax scandal.
The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.
UAE firm Virtuzone launches ‘TaxGPT’, claiming it is the first AI-powered tax tool, while the Australian police faces claims of a conflict of interest over its PwC audit contract.
The US technology company is defending its past Irish tax arrangements at the CJEU in a final showdown that could have major political repercussions.