BEPS

TP Back to Basics – Transfer Pricing Documentation

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This article is accompanied by a slide presentation on YouTube. Feel free to use my material for your own in-house purposes, all I ask is that you acknowledge the source. Read the rest of this entry »

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UK country-by-country reporting notification deadline approaches

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Source: Deloitte Global Transfer Pricing Alert 2017-033

“The first country-by-country (CbC) reporting notifications required to be made to the UK tax authorities are due by 1 September 2017.

This deadline applies to all reporting periods that end on or before 1 September 2017.

After 1 September 2017, the standard UK notification date is the end of the CbC reporting period.

A few examples regarding the application of these rules follow.
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Public Discussion Draft – BEPS ACTION 10 – Revised Guidance on Profit Splits

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DRAFT REVISED GUIDANCE ON THE TRANSACTIONAL PROFIT SPLIT METHOD (TO REPLACE PART III SECTION C OF CHAPTER II OF THE 2010 TRANSFER PRICING GUIDELINES)

Source: OECD Discussion Draft, 22 June 2017. Deadline for responses – 15 September 2017

Public comments are invited on this discussion draft which deals with the clarification and strengthening of the guidance on the transactional profit split method, as set out in the BEPS Actions 8-10, 2015 Final Report.

This draft sets out the text of proposed revised guidance on the application of the transactional profit split method, together with a number of questions, listed below. Read the rest of this entry »

Country By Country Reporting

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Country-By-Country Reporting (CBCR) is simply a report produced by multi-national enterprises (MNEs) showing their revenue, profit before tax, tax paid, tax accrued, capital, tangible earnings, retained earnings and their total number of employees, for each tax jurisdiction in which they operate. They are also required to identify each group member doing business in each jurisdiction along with details of their business activities.

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OECD releases discussion draft on approaches to address BEPS involving interest in the banking and insurance sectors

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28/07/2016 – Interested parties are invited to provide comments on a discussion draft which deals with approaches to address BEPS involving interest in the banking and insurance sectors under Action 4 (Interest deductions and other financial payments) of the BEPS Action Plan.

Comments should be submitted by 8 September 2016 at the latest (no extension will be granted) by email to interestdeductions@oecd.org  in Word format. They should be addressed to the International Co-operation and Tax Administration Division, OECD/CTPA.

Please note that all comments received regarding this discussion draft will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective grouping or coalition, or the person(s) on whose behalf the commentator(s) are acting.

OECD Press Release here

 

 

BEPS amendments to Chapter 1 of the OECD TP Guidelines

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The 2013 Organisation for Economic Co-operation and Development (OECD) Action Plan on Base Erosion and Profit Shifting (BEPS) recognised that existing internationally agreed rules for transfer pricing could be misapplied, resulting in outcomes where the allocation of profits is not aligned with the economic activity that produced those profits.

Of the fifteen Action Points in the BEPS Project, Actions 8 – 10 directly addressed transfer pricing and the arm’s length principle. Read the rest of this entry »

The tax deductibility of corporate interest expense

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This is a short presentation to tell you about the UK Government’s consultations on the tax deductibility of corporate expense, BEPS Action 4.

The deadline for responses to the 46 questions raised in the Consultation Document is 4th August 2016, so check this out and get your response in soon if you want your views included.

The presentation is here (YouTube)

How will the new BEPS Action 4 interest restriction rules affect UK ATCAs?

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Advance Thin Capitalisation Agreements (ATCAs) are provided in the UK under the Advance Pricing Agreement legislation, to determine in advance the transfer pricing of financial transactions within Part 4 of TIOPA 2010.

The legal basis for ATCAs is provided by the legislation at TIOPA 2010, sections 218 to 230, which provides for Advance Pricing Agreements (APAs) in relation to transfer pricing more broadly.

The ATCA process is initiated by the business, in accordance with TIOPA 2010, section 223, as an application for clarification by agreement of the effect of applying the arm’s length principle to the financial provisions between the business and lenders.

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UK tax deductibility of corporate interest expense: second consultation

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Sources: HMRC Consultation Document, 12 May 2106, KPMG response dated 13 May 2016

Following the first consultation the UK government announced at Budget 2016 that new rules for addressing BEPS through interest expenses will be introduced from 1 April 2017 in line with the OECD recommendations.

This is a demonstration of the UK’s commitment to aligning the location of taxable profits with the location of economic activity, and is in line with the UK’s more territorial approach to corporate taxation.

Due to the importance of this issue,   Read the rest of this entry »

OECD issues additional guidance on CbC reporting

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Source: Deloitte Global Transfer Pricing Alert, 1st July 2016

The OECD on June 29, 2016, issued additional guidance on the implementation of the country-by-country (CbC) reporting requirement introduced in the BEPS Action 13 Final Report issued on October 5, 2015.

The guidance covers four issues:

  • Transitional filing options to eliminate initial year effective dates differences (the “gap” year issue)
  • The application of CbC reporting to investment funds
  • The application of CbC reporting to partnerships
  • The impact of currency fluctuations on the EUR 750 million filing threshold

Source article here