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As governments around the world assess the best way to attract – and tax – R&D and intellectual property investment, Giulia Cipollini and Bianca Macrina of Withers in Milan look at the incentives taxpayers can avail in Italy, tracking the nuances of the Italian Patent Box regime from introduction to operation.

Charles Yorke and David Stainer, of Allen & Overy, review the latest UK Government proposals on improving compliance by large corporate taxpayers, including a ‘voluntary’ code of practice likely to give rise to fears of ‘mission creep’.

Jock McCormack The Australian Government is continuing its strong focus on greater tax transparency, disclosures, reporting and stricter transfer pricing documentation requirements. The Australian Taxation Office (ATO) has also elevated its examination of perceived international tax abuses, including offshore marketing hubs, procurement hubs, permanent establishment (PE) status and financing arrangements. Multinationals entities (MNEs) are under the spotlight both internationally, through the OECD/G20 BEPS project, and domestically in Australia, by way of the Senate inquiry into corporate tax avoidance. Draft legislation has been publically released on August 6 2015, impacting MNEs with annual global revenues in excess of A$1 billion (US$740 million). This draft legislation will:

Petar Varbanov On July 8 2015, the Bulgarian Parliament ratified the convention for the avoidance of double taxation concluded with the Kingdom of Norway. The convention will apply to persons who are residents of one or both of the contracting states and to any substantially similar taxes that are imposed after the date of signature of the convention in addition to, or in place of, the existing taxes. The existing taxes to which the convention will apply are taxes on income, municipal tax on income, tax relating to submarine petroleum income, pipeline transport of petroleum, national tax on remuneration to non-resident artistes, corporate income tax and patent tax. Income derived by a resident of a contracting state from immovable property (including income from agriculture or forestry) situated in the other contracting state may be taxed in that other state. Also, business profits of an enterprise of a contracting state will be taxable only in that state unless the enterprise carries on business in the other contracting state through a permanent establishment (PE) situated therein. Profits of an enterprise of a contracting state from the operation of ships, aircraft, and railway or road transport vehicles in international transport shall be taxable only in that state.

Jeffrey Shafer

Devrim Askin Turkish Revenue Administration (TRA) recently published draft guidelines on advance pricing agreements (APAs) with the aim of informing corporate taxpayers planning to apply for an APA. In this context, the draft guidelines provide information regarding: definition, scope and duration of APA; APA process which consists of five steps (pre-filing, formal application, preliminary evaluation, analysis, and unconditional/conditional acceptance or rejection of the application); preparation of annual APA report for monitoring the implementation of the signed APA; and revision, renewal and cancellation of an existing APA. In fact, the draft guidelines reiterate the explanations already made in the existing transfer pricing legislation, particularly the provisions contained in the Transfer Pricing General Communiqué No.1. However, more specific information is requested by TRA from taxpayers in their APA application than those listed under section 7.2 of the above-mentioned General Communiqué No.1, including:

Giuliano Foglia

Tim Stewart

Igor Vujasinovic On June 16 2015, in accordance with articles 7 and 8 of the Law on Indirect Taxation System in BIH (Official Gazette No. 44/03, 52/04, 34/07, 4/08, 49/09 and 32/13) in conjunction with article 25 of the Law on the Indirect Taxation Authority (Official Gazette 89/05) the Director of Indirect Taxation, with the approval of the Boards of Directors, issued a decision (the Decision) on the threshold for large VAT taxpayers. The Decision determines the period and prescribes the conditions which serve as a standard for determining which indirect taxpayers will have the status of 'large indirect taxpayers'.

Peter Dachs South Africa's new double tax agreement (DTA) with Mauritius was published in the Government Gazette of June 17 2015. In terms of article 28 of the new DTA, the provisions thereof shall only be effective in both countries from January 1 2016. The main changes introduced by the new DTA relate to dual residence for persons other than individuals, withholding taxes (dividends, interest and royalties) and capital gains.