Search results for

Giuliano Foglia

David Cuellar Historically the Mexican Income Tax Law (MITL) has disallowed the deduction of allocated expenses paid abroad when charged on a pro-rated basis. The deduction of pro-rated expenses, conditioned to comply with certain requirements, has only been allowed for Mexican branches or permanent establishments registered in Mexico. During the past summer the Mexican Supreme Court took a step forward in favour of the taxpayers. The outcome of the case in question concludes that for the pro-rata expense to be deductible, there should be a reasonable relation between the expense and the benefit obtained by the Mexican tax resident, the payer of the service.

Richard Asquith, VP of Global Tax Compliance at Avalara, explains upcoming changes to European Union VAT rules and how they will affect digital service providers from January 1 2015. The changes are contained within article 58 2006/122/EC of the EU VAT Directive and all 28 member states are in the process of ratifying the changes through local VAT legislation.

Rajendra Nayak To encourage compliance with withholding tax (WHT) provisions of the Indian Tax Laws (ITL), payments made without such compliance are disallowed as an expense for the payer, thereby enhancing its tax base. Relief from such disallowance can be availed where the resident recipient includes such payment as its income in its return of income (ROI), pays tax and certain other conditions are met. A comparable relief is absent where the recipient is a non-resident. However, like some of India's double taxation avoidance agreements (DTAA), the India – Japan DTAA contains a deduction neutrality clause in its non-discrimination article (DND clause). According to this clause, when computing taxable income of an Indian enterprise, payments made by it to a resident of Japan would be deductible under the same condition as if they had been paid to an Indian resident. In its recent ruling in the Mitsubishi Corporation India Pvt. Ltd case, the Delhi Income Tax Appellate Tribunal (Tribunal) had to analyse the applicability of the DND clause on certain payments to its Japanese group entities having permanent establishment (PE) in India. These payments were made without complying with WHT provisions. However, the recipient Japanese entities filed their ROIs, including such payment as income and paid the necessary taxes. The tax authorities disallowed the payments for non-compliance of WHT provisions and contended that protection under the DND clause cannot be accessed by an Indian resident taxpayer. Aggrieved by this, the taxpayer appealed to the Tribunal.

Read this month's special features on India and Brazil – IFRS

The OECD’s transfer pricing baton has now been passed over to Andrew Hickman, formerly a transfer pricing partner at KPMG in the UK, who has spoken exclusively with TPWeek of his trepidation about taking on such a demanding role and what he hopes the next TP project will be.

Online cryptocurrency

Indian law firm Lakshmikumaran & Sridharan has confirmed that H Raghavendra Rao is joining the firm as the country head and leader of the direct tax practice. Rao spent nine years working for BMR Advisors as a legal senior advisor, following work at the Income Tax Department as a standing counsel before the Karnataka High Court.

Chairman of UN Tax Committee

Dajana Topic Because of the damages that the flooding has caused in May 2014, for a period of six or 12 months, employers and employees in Bosnia and Herzegovina (BiH), depending on the entity, are obliged to pay a special solidarity contribution to fund reconstruction projects. This contribution is payable on the net employment income. As a result, the National Assembly of the Republic of Srpska (RS) adopted the Law on Special Solidarity Contribution on June 15 2014, for financing the flood damage reconstruction projects.