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Timothy McCormally Timothy McCormally has joined KPMG as a director in the firm's Washington national tax practice.

Scott Wilkie Janice McCart We are accustomed to thinking of new developments as discrete events on the fiscal calendar, for example, budget measures, bespoke technical changes to the Income Tax Act in response to judicial decisions and the like. We are less inclined, standing back, to observe fiscal patterns, and Canadian tax law's situation in them. Yet, in performing the very valuable advisory function of anticipating where it all may be going and, in that vein, how to interpret and apply the law we have, patterns may indeed be highly significant. Occupying centre stage, at the moment, is the OECD's seminal substantive analytical report on base erosion and profit shifting. Addressing Base Erosion and Profit Shifting (BEPS) is a G20 inspired report by the OECD broaching the incompatibility, perhaps, of venerable notions of tax jurisdiction – which are found in transfer pricing, the permanent establishment notion, what it means to carry on business in a place, and in many other markers of tax presence – and the manner in which contemporary global business may be conducted. Of particular interest is the role played by intangibles and contracts to result in entrepreneurial return being earned by members of a corporate group presented as the risk takers, which may not necessarily be those conducting activities more closely aligned with customary tax jurisdiction tests.

Luis M Viñuales Spain launched a very particular type of REIT in 2009, the SOCIMI (sociedades cotizadas de inversión en el mercado inmobiliario or listed corporations for investment in the real estate market), with a tax regime that was very different from any other REIT regime in developed countries. For instance, the SOCIMI was taxed at a reduced 19% corporate income tax rate, while a typical feature of REITs is that the vehicle is not taxed but must distribute a significant part of its profits regularly, so that its dividends are normally taxed in the hands of its investors. This 19% tax at the level of the SOCIMI raised concerns among international investors about how to avoid double taxation. Three years later, there were no SOCIMIs listed on the Spanish Stock Exchange, so the new government decided to revise the SOCIMI regime to adapt it to the REIT regimes of neighboring countries. Consequently, Spain has approved a true REIT regime, with effect from January 1 2013, the main features of which are:

Clint O’Connell The introduction in December 2012 of a new category of registration tax under the 2013 Financial Management Law on share transfers in Cambodian entities, gives a possible glimpse as to how the Cambodian tax authorities may deal with existing loopholes in the tax regulations regarding the taxation of shares in Cambodian entities. In particular, the Cambodian tax regime does not provide a specific income tax regime for non-resident shareholders that realise a gain on shares issued by a Cambodian company, even though capital gains on shares are, as a matter of principle, taxable income under Article 7 of the Law on Taxation:

Khoonming Ho Lewis Lu On December 31 2012, the Ministry of Finance (MoF) and the State Administration of Taxation (SAT) jointly issued Circular Caishui [2012] 84 (Circular 84) setting out the substantive framework under which head offices and branches are eligible to group for VAT purposes. Presently separate legal entities, including wholly-owned subsidiaries, are not permitted to group with the head company for VAT purposes. Circular 84 only effectively applies to taxpayers in industries subject to the VAT pilot programme. It does not apply to VAT taxpayers engaged in traditional VAT activities (that is the sale or importation of goods, processing, repair and replacement services).

Eylem Philippou To enhance its position as a financial business centre and to attract more international business, Cyprus has recently signed two double tax treaties with Spain and Portugal. These tax treaties also serve to maintain and strengthen its economic and commercial ties with other countries. The double tax treaty signed with Portugal on November 19 2012 is a step further in bilateral relations between the two countries, especially following Cyprus's removal from Portugal's blacklist of jurisdictions back in 2011.

Abhishek Shah of Ernst & Young analyses the indirect tax proposals of the Indian budget and finds there is not much good news for taxpayers.

One week after George Osborne, UK Chancellor of the Exchequer, delivered his Budget 2013, Stephen Herring, senior tax partner at BDO in London, looks at the impact on businesses.

Rajendra Nayak Aastha Jain The Andhra Pradesh High Court (HC) recently ruled on the issue of taxability of indirect transfers of shares of an Indian company in the case of Merieux Alliance, France (MA) and Groupe Industriel Marcel Dassault (GIMD) (collectively referred to as taxpayers) [TS-57-HC-2013(AP)]. Taxpayers, tax residents of France, held shares in ShanH, a French company which in turn held shares of an Indian company. ShanH held no assets other than shares in the Indian company. The taxpayers transferred shares of ShanH to Sanofi Pasteur Holding (Sanofi), another French company. As per Article 14(5) of the India-France treaty, capital gains arising to a French tax resident from alienation of shares representing a participation of at least 10% in a company resident in India may be taxed in India. The taxpayers had earlier approached the authority for advance ruling (AAR) which held that the transfer of shares of ShanH was a scheme for avoidance of Indian tax and that the capital gains arising from the indirect transfer of shares of an Indian company was liable for tax in India, going by a purposive interpretation of the India-France treaty. This ruling was rendered before the decision of the Supreme Court of India in the case of Vodafone International Holdings BV (341 ITR 1) and the retrospective amendment to the Indian Tax Laws (ITL) on taxation of indirect transfers of Indian assets by Finance Act 2012. Aggrieved by the ruling of the AAR, the taxpayers filed a writ petition before the HC.

Ragna Flækøy Skjåkødegård In January 2013, Norway and the US entered into a competent authority agreement, clarifying in which cases fiscally transparent entities are entitled to benefits under the Convention between the US and Norway for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Property (the treaty). The treaty's Paragraph 1 (a)(ii) of Article 3, on fiscal residence, states that the term "resident of Norway" means a partnership, estate or trust only to the extent that the income derived by such person is subject to Norwegian tax as the income of a resident. The corresponding paragraph regarding the US, Paragraph 1 (b)(ii) of Article 3, states that the term "resident of the United States" means a partnership, estate or trust only to the extent that such income is subject to tax as the income of a resident.