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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 from across our site

This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
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