Magazine
February 2019

Magazine Archive

The dangers of tax 'over-tooling'

In-house tax teams are implementing tailored software solutions due to the low cost of technology, but should beware of ‘over-tooling’ and employ a coherent purchasing strategy, writes Danish Mehboob.
Despite ‘panic’, Italian e-invoicing seems to have landed smoothly

Italy’s new e-invoicing regime came into effect on January 1. Companies expected teething trouble, but the early signs are positive and the changes should lead to long-term benefits.
UK’s profit diversion compliance facility shows emphasis on TP

A new ‘profit diversion compliance facility’ (PDCF) announced by the UK tax authority aims to encourage companies to bring their transfer pricing (TP) arrangements in line with HMRC’s interpretation of the arm’s-length principle, writes Ben Regan, transfer pricing partner at EY.
Tax heads: A global standard is essential for blockchain adoption

Tax directors examining tax technology opportunities know that regulating internal data and establishing a global reporting standard is a must when it comes to the successful cross-border adoption of any digital platform. Blockchain is no different.
Tax directors should change how they think about VAT in the GCC

Businesses are at risk of being caught unaware if they ignore the continuous amendments to VAT regimes across the Gulf Cooperation Council (GCC) member states, tax heads warn.
Stronger tax competition predicted among Swiss cantons post-tax reform

Tax competition between Switzerland’s cantons is expected to become even stronger following tax reform, say tax directors at leading companies.
The biggest US states are getting serious about Wayfair

For all companies that sell to US consumers without a physical presence in states, 2018’s Wayfair decision was a bolt from the blue. But the work of complying with ‘economic nexus’ rules in every taxing jurisdiction will be an ongoing project, not a one-off effort.
Stop the press: Not another tax named after a multinational

Editor Joe Stanley-Smith introduces the February 2019 issue of International Tax Review
Financial institutions adapt to tax transparency

Tax transparency initiatives such as the CRS, AEOI and FATCA, and the upcoming mandatory disclosure rules, are having a profound impact on the operations and IT infrastructure of financial institutions (FIs) worldwide. Ronald Frey, chief product officer of the RegTech product unit within BearingPoint, discusses how these are creating trends towards data alignment and centralisation, and are changing the role of FIs and wealth managers in cross-border tax reporting.
Dutch court rules on deductibility acquisition and disposal costs

The Dutch Supreme Court has provided clarity on deductibility of acquisition and disposal costs. Kuba Grabarz and Wessel Dekker of Baker McKenzie Amsterdam explore the consequences.
The battle for resources: Making the case for tax departments

The rate of change in the tax regulatory environment in recent years has been rapid, arguably more so than at any other time in recent history. Heads of tax are competing with colleagues in other functions for a share of finite budgets. The challenge is to show value for money, writes Sandy Markwick, head of the Tax Director Network at Winmark.
2019: The eye of the storm

After several years of rapid change, the international tax system appears to be entering a calmer phase, but the outlook suggests that some big challenges are on the horizon. Josh White looks at the 2019 forecast.
A practical guide for operational transfer pricing excellence

A well-constructed and executed global operational transfer pricing (OTP) framework is essential to properly manage financial statements, taxes and reputational risk for multinational enterprises (MNEs), writes Richard Goldberg, former tax director at Mitsubishi Financial Group.
Special features - January 2019

Read this month's special feature on Mexico
Albania: Income tax implications following changes to gambling laws
ATO releases guidelines for inbound distributors, hybrid mismatch rules

In recent months, there have been several important tax developments driven by the Australian Taxation Office (ATO) that are relevant to inbound distributors, multinationals and foreign-incorporated companies.
Bosnia and Herzegovina: Law on Cash Registers in Brčko District amended
Bulgaria: Bulgaria’s new AML measures still require urgent action by companies
Canada confirms withholding tax can apply to the assumption of accrued interest

Canada's Revenue Agency (CRA) confirmed in a recent technical interpretation (2017-071330117) that Canadian withholding tax can apply to the accrued (but unpaid) interest on a debt owed by a Canadian resident to a non-resident when the debt is assumed by another entity and such an assumption constitutes a "novation" of the debt obligation for purposes of the applicable commercial law.
China: China introduces tax and regulatory measures to stimulate investment

In recent months, the Chinese government has been actively taking measures to stimulate the economy and attract further inbound investment.
Croatia: Agreement on double taxation avoidance signed with Japan
Germany: Digitisation trends and use of the profit split method
Greece: Greece rules that the special solidarity tax falls within the scope of double tax conventions
Hong Kong: Hong Kong concludes free trade agreement negotiations with Australia
India: Delhi’s High Court maintains that overseas GE entities have a PE in India

Delhi High Court (HC) has confirmed the Income Tax Appellate Tribunal's decision that various overseas entities of the GE Group had a fixed place, permanent establishment (PE), and a dependent agent PE in India.
Indonesia: Indonesia releases tax regulations on food and beverage provisions to employees
Israel’s tax outlook for 2019 eyes exponential R&D investment

With spending on research and development (R&D) and venture capital investment as a percentage of GDP among the highest in the world, Israel has entered 2019 as a leading technology country.
Italy: Italy implements the EU’s Anti-Tax Avoidance Directive
Luxembourg: Luxembourg transposes the EU’s interest limitation rule into domestic law
Macedonia: Macedonia introduces progressive personal income tax while increasing corporate tax rate
Malta’s tax framework surrounding an individual’s ownership of cryptoassets

Malta's Commissioner for Revenue (CfR) released its guidelines on the income tax treatment of transactions or arrangements involving distributed ledger technology (DLT) assets in November 2018, providing a framework to assess the tax obligations of individuals who hold cryptoassets as an investment. What does it mean, and what could have been addressed?
New Zealand: New Zealand proceeds with reform of GST on low-value imported goods
Norway: Norway’s 2019 budget sees corporate income tax dip

Norway's Parliament passed legislative changes for the 2019 budget on December 20 2018, seeing notable changes to inbound investments, particularly a reduced corporate income tax (CIT) rate and stricter interest limitation rules (ILR).
Poland: Poland reforms income taxes for 2019
Russia: Russia amends concept of beneficial ownership
South Africa’s courts hand down judgment on Sasol and substance over form

South Africa's Supreme Court of Appeal (SCA) handed down an important judgment on the doctrine of simulation, or substance over form, on November 9 2018, putting to rest some significant confusion created by an earlier judgment of the Gauteng Tax Court.
The varied holding structures for Spanish residential properties

The mere holding of a Spanish residential property by a non-tax resident gives rise to tax on an annual basis, regardless of whether the property is held directly by the individual or through a corporate structure.
Switzerland: Swiss corporate tax reform to be subject to a referendum

Switzerland's Tax Reform and AHV Financing Bill (TRAF, formerly known as Swiss Tax Reform 17 and Swiss Corporate Tax Reform III) will officially be subject to a referendum, as a largely left wing alliance made up of junior green and socialist parties has secured more than 50,000 signatures against the proposed law. The public vote is now scheduled for May 19 2019.
Not another tax department transformation

One of the principal subjects of discussion and analysis in tax in recent months is digitalisation. I am not only talking about the OECD, EU and unilateral proposals to address the taxation of the digital, or digitalised, economy, but also the potential of digital innovations to change business, tax administration and tax department processes.
Tax Relief

Because tax doesn’t have to be taxing. A less-than-serious look back at some of the quirkier tax stories from the past month.
Tax departments frustrated by French DST as France settles Apple case

Tax departments in France are increasingly agitated by the government’s efforts to impose a digital services tax (DST). This is just as the French government settles its long-running dispute with Apple.
Womble Bond Dickinson hires tax consultant in London

Bob Savic has joined transatlantic law firm Womble Bond Dickinson (WBD) as a tax consultant in the firm's London office.