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TP WEEK NEWS BRIEFS For April 25, 2016

The latest headline news from Transfer Pricing Week. TP News Briefs include: the impact of US Treasury plans for earnings stripping on foreign MNEs; Australian deal to fast-track corporate tax cases, Czech Transfer Pricing Inspections; OECD to focus on BEPS; and US IRS meeting on new CbCR rules.

US Treasury plans for earnings stripping are troubling news for foreign-headquartered MNEs
   April 25 - The US Treasury’s plan to implement new rules on ‘earnings stripping’ will cause problems for foreign multinationals, including increased costs and limitations with debt leveraging, tax advisors warn. The proposed regulations could affect almost any company with transactions between members of an ‘expanded group’ that are intended to be characterised as debt for US federal tax purposes, Michelle Johnson of Duff & Phelps (pictured) told TP Week.

US Internal Revenue Service to examine new CbCR rules in May 
   April 25 – 
New US regulations requiring annual country-by-country reporting (CbCR) for US-parented MNEs (REG– 109822–15) will be the focus of the Internal Revenue Service public hearing in Washington, DC on May 13. The IRS plan would require the the report to be filed with the ultimate US parent entity’s income tax return for the taxable year. The US expects to finalise CbCR rules by July.

Czech Financial Administration performs 800 transfer pricing inspections
   April 25 – Czech tax officials at the Financial Administration (FA) performed 800 inspections focused on transfer pricing among related parties, resulting in additional income tax assessment in the amount of CZK 450 million ($18.7 million) in 2015, according to the Prague Daily Monitor news.  The success rate of transfer pricing inspections improved 31 per cent year on year. Andrej Babiš, Minister of Finance, said tax entities had started submitting additional tax returns on their own initiative to rectify their tax liabilities.  

Australia hopes to fast-track large corporate tax cases worth hundreds of millions of dollars
   April 25
 - The Australian Tax Office (ATO) and Federal Court are close to a deal to fast-track “strategically important” corporate tax cases, Tax Commissioner Chris Jordan told a Senate corporate tax avoidance inquiry last week. Some cases are worth hundreds of millions in unpaid tax and have dragged on for years, according to the Sydney Morning Herald. The ATO believes the public is being short-changed, the Herald reported. Separately, Australia is leading an international group of tax inspectors planning cross-border investigations to target tax evaders.

OECD to focus on BEPS at the Beijing meeting 
   April 25
 - The OECD will focus on international tax reform, including the impact of the post-BEPS environment on tax administrations, at the 10th Plenary meeting of the OECD Forum on Tax Administration in Beijing on May 11-13. The Forum brings together tax commissioners from 46 advanced tax administrations, including OECD and G20 countries. Taxpayers are invited to take the TP Week BEPS survey before the closing date April 26. Following the survey link here

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