“The fight back has started. #ParadisePapers must be really hurting Appleby which says docs ‘were stolen in a cyber-hack and there was no public interest in the stories published about it and its clients.’ Legal action vs the @guardian & @BBC only.”
Source: OECD Press Release 21 December 2017
21/12/2017 – Today, a further important step was taken to implement Country-by-Country (CbC) Reporting in accordance with the BEPS Action 13 minimum standard, through activations of automatic exchange relationships under the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (“the CbC MCAA”).
The automatic exchange of Country-by-Country Reports which is set to start in June 2018 will give tax administrations around the world access to key information on the annual income and profits, as well as the capital, employees and activities of Multinational Enterprise Groups that are active within their jurisdictions.
With more than six months before the first exchange deadline, there are now over 1400 automatic exchange relationships in place among jurisdictions committed to exchanging CbC Reports as of mid-2018, including those under EU Council Directive 2016/881/EU and bilateral competent authority agreements (including 31 with the United States).
Source: BBC.co.uk 12 December 2017
“Facebook is to overhaul its tax structure so that it pays tax in the country where profits are earned, instead of using an Irish subsidiary.
The online advertising giant is to make the change in every country outside the US where it has an office.
However, that does not necessarily mean it will start paying more tax in other countries as a result of the overhaul, Professor Prem Sikka of the universities of Sheffield and Essex told the BBC.
Taxes are paid on profits, and “the huge difficulty with large companies is trying to determine exactly what the profit is,” he said.
There are a number of ways firms can muddy the waters, including charging intra-group management fees, royalty fees, and profit-sharing, he said.”
The UK has an annual requirement (following BEPS13) for certain MNEs with consolidated group revenue of at least €750m to notify and electronically deliver to HMRC a report of revenue, pre-tax profit and taxes paid in each country in which they operate. Guidance on preparing and filing the reports has been published.
For groups planning to file a report with HMRC for the year ended 31 December 2016, the filing deadline is 31 December 2017 and notifications are also required for the year ending 31 December 2017 by 31 December 2017.
Your HMRC Customer Relationship Manager should be your first point of contact for any questions about notifications, the registration service, the reporting service or HMRC’s rules for completing the XML schema. If you don’t have a CRM, email firstname.lastname@example.org.
The ultimate group parent is primarily responsible for filing the report with HMRC although the UK entities are required to make a “local filing” where:
- the ultimate parent’s country of residence does not require it to file a CbC report,
- that country does not have specific exchange of information arrangements with the UK in respect of CbC reporting, or
- such arrangements do exist but are not operating effectively.
in which case the UK entity must request from its ultimate parent all the information it needs to complete a full CbC report and file it with HMRC unless another group member has filed the report with HMRC or where a report containing the necessary information has been filed in another country that has effective information exchange arrangements with the UK. If it does not receive the information in time, the UK entity must inform HMRC and must file a report in respect of the UK entities in the group only.
You must make your report using XML format and in the structure, called a schema, published by the OECD. You must follow HMRC’s rules to create a valid template as only reports in this approved format will be accepted for electronic filing.
In accordance with OECD guidance, UK partnerships that are parent entities of multinational groups must also file CbC reports (as well as other group entities that are required to file).
“United States: Anti-Inversion Rules Are Not Just For Mega-Mergers – Private Client Advisors Take Note”
Source: Ruchelman PLC via mondaq.com 7 December 2017
“Transactions known as corporate “inversions” or “expatriations” have made headlines for years. Recently, the proposed merger of the U.S. pharmaceutical giant Pfizer, Inc. with the Irish-based pharmaceutical company Allergan Plc was in the news. The coverage addressed the implications of creating the world’s largest pharmaceutical company, the loss of yet another American corporate behemoth to a lower-tax jurisdiction, and later, the plan’s cancellation, arguably as a result of the U.S. government’s regulatory action.
As laws limiting tax-free inversions have developed, tax attorneys specializing in corporate mergers and acquisitions have been required to keep up with regulatory developments and consider new planning techniques – but they are not the only ones with such obligations. Tax attorneys advising individuals and families who own closely-held businesses, investment structures, and even personal use property, with cross-border aspects, must also keep the inversion rules on the forefront of tax planning. In the private client setting, inversions are sometimes overlooked, perhaps because the issue is so closely associated with large “M&A” deals.
This article examines how the inversion rules can affect cross-border tax planning for individuals. It begins with a brief discussion on the development of the inversion rules over time and some of the planning techniques that have been used to address the legislative and regulatory changes.”