Tax is not a boring subject – and the past 12 months have proven that.
As just a flavour, ITR has reported on “groundbreaking” rulings, “landmark” disputes and the political volatility of the OECD’s flagship pillar two initiative.
We’ve also been lucky enough to receive expert insights on all the latest developments in AI, transfer pricing (TP) and more.
To illustrate the point, here are our 10 picks of the best stories from 2024 listed in no particular order.
1. TP experts laud ‘groundbreaking’ Italian Supreme Court ruling
In August, ITR reported on experts hailing a “groundbreaking” Italian Supreme Court ruling which overturned a common and well-established position of the Italian tax authorities.
The ruling, which followed OECD guidelines on comparables, set a highly significant precedent and showed that tax authorities can be overly aggressive, experts said.
Read the full article here.
2. HMRC loses ‘landmark’ R&D tax credit case
In July, ITR reported on UK tax agency HM Revenue and Customs losing a case at the First-tier Tribunal against a software company it claimed was not entitled to an R&D tax credit.
Software company Get Onbord (GO) brought the case against HMRC. It was heard in January and the judgment was handed down in July.
The tribunal looked at whether GO could claim for an R&D tax credit under section 1054 of the UK’s Corporation Tax Act 2009 and whether tests for R&D in the Department of Business, Energy and Industrial Strategy guidelines had been met.
The court held that the answer was yes, and that GO could appeal. Rufus Meakin, an R&D tax credit strategic partnership manager with advisory firm MSC R&D, said it was a “landmark judgment”.
Read the full article here.
3. Permanent establishment is key in Danish remote working ruling
In September, ITR reported on the Danish Tax Council deciding that a Swedish company created a permanent establishment in Denmark because its chief executive officer worked from his home in the country some of the time.
According to the ruling, even though overall management of the company was being carried out in Sweden, the CEO from Denmark still played a significant part in its daily decision-making.
Read the full article here.
4. Pepsi succeeds in Australia IP royalties appeal
As one of the year’s most-watched disputes, ITR reported in June on PepsiCo successfully appealing an Australian ruling which concerned royalty withholding tax stemming from intellectual property.
In dispute were a couple of exclusive bottling agreements which involved PepsiCo and Stokely-Van Camp. The Australian Taxation Office had previously argued that certain portions of payments made in relation to the bottling agreements constituted royalties and therefore were subject to royalty WHT.
The Federal Court of Australia’s full court ruled in favour of PepsiCo against the Australian Taxation Office.
Read the full article here.
5. OECD official on pillar two: ‘The politics is quite volatile’
OECD official John Peterson told ITR’s Pillar Two Forum in September that the organisation is confident of resolving thorny issues over countries that don’t implement pillar two.
However, Peterson also admitted he couldn’t give a clearer prediction because of sensitive political issues.
Read the full article here.
6. AI and TP: a perfect partnership?
Hank Moonen, CEO of TaxModel, in May took to ITR to argue that AI will speed up some of the most laborious TP processes without making human input redundant.
While AI is not a silver bullet, it will be a game changer for manual benchmarking, Moonen said.
His persuasive piece ended up being our most-read expert analysis article of the year.
Read the full article here.
7. Debunking common myths: BEPS pillar two preparation
The month of July saw a webinar hosted by ITR Commercial Editor Phil Myers which addressed the question of whether tax functions are doing enough to prepare for the implementation of pillar two.
It covered key rules, safe harbours, and approaches that may be taken to avoid falling behind.
Senior tax professionals from Wolters Kluwer and BDO raised concerns based on their advisory experiences.
Read the full article here.
8. Navigating DEMPE in TP: IP ownership and economic return allocation
CMS France partner Mohamed Haj Taie argued in ITR in October that companies that master the DEMPE analysis of their intangibles stand to benefit from a greater economic return.
Read the full article here.
9. Global economic changes and the impact on TP from an industry perspective
Deloitte Germany’s Jobst Wilmanns and Anodri Suchdeve in August introduced this year’s ITR guide which presented TP insights across different industries.
It included analysis from Deloitte’s TP industry experts and factored in global economic changes.
Among the topics covered by the guide were amount B, country-by-country reporting and TP issues in the banking sector.
Read the full article here.
10. Arm’s-length remuneration of wholesale and retail distribution activities: a never-ending story?
Senior tax practitioners at Deloitte Germany in August considered amount B’s possible impact on the profit allocation of companies operating in the wholesale and retail distribution sector.
Although amount B provides for opportunities to effectively address some of the challenges the consumer goods industry is facing, the implementation and processing of amount B principles triggers various questions on the ‘how’, they concluded.
Read the full article here.
