Tunisia has committed to implement the international Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEOI) by 2024.
This commitment makes Tunisia the 121st Global Forum member to commit to start AEOI by a specific date, and the tenth African country to do so. Tunisia will also benefit from the expertise of the Swiss Federal Tax Administration as part of a pilot project aimed at assisting the country in its implementation of AEOI. See Announcement Irish Revenue has updated Tax and Duty Manual concerning Guidelines for requesting Mutual Agreement Procedure (“MAP”) assistance to incorporate Council Directive (EU) 2017/1852 of 10 October 2017 on Tax Dispute Resolution Mechanisms in the European Union.
The Manual has also been updated to reflect section 959AW of the Taxes Consolidation Act 1997, which enables the collection of disputed tax to be suspended where, on foot of an assessment or amended assessment raised by Revenue, the taxpayer makes a MAP request within 30 days after the date of the notice of assessment and has paid any undisputed tax amounts. Last, guidance relating to correlative adjustment claims has been removed from this Manual. See Announcement On December 22, 2021, the European Commission proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinational groups.
Today's proposal follows closely the international agreement and sets out how the principles of the 15% effective tax rate – agreed by 137 countries – will be applied in practice within the EU. It includes a common set of rules on how to calculate this effective tax rate, so that it is properly and consistently applied across the EU. The proposed rules will apply to any large group, both domestic and international, with a parent company or a subsidiary situated in an EU Member State. If the minimum effective rate is not imposed by the country where a low-taxed company is based, there are provisions for the Member State of the parent company to apply a “top-up” tax. See Announcement The OECD's Forum on Tax Administration (FTA) held its 14th Plenary meeting on December 16-17, 2021, bringing together tax commissioners from across the globe as well as representatives from international organizations and regional tax administration bodies. Participants discussed top-of-mind tax administration issues including the implementation of the landmark Two-Pillar Solution, lessons learned from the ongoing responses to the global COVID-19 pandemic, digital transformation, and capacity building.
FTA members agreed to prioritize support for implementation of the Two-Pillar Solution, including through the possible further development of tax certainty tools to help prevent disputes and reduce burdens. They agreed to develop a new strategic framework covering both digitalization and digital transformation to inform both domestic reforms and international collaboration, drawing from the new digital transformation maturity model and the web-based Inventory of Tax Technology Initiatives to be launched in early 2022. The members also agreed to prioritize tax capacity building initiatives to assist developing countries with the implementation of the Pillars and the further digitalization of tax administration. See Announcement On December 20, 2021, Ireland launched a public consultation on the implementation of Directive EU 2021/2101 on the disclosure of income tax information by certain undertakings and branches.
The Directive introduces for the first-time public country-by-country reporting of corporate tax information by multinational enterprises (MNE), regardless of whether they are headquartered in the EU or not, with a net turnover of more than €750m, and who are doing business in the EU, including through subsidiaries and branches, for each of the last two consecutive financial years. The deadline for submissions is February 18, 2022. See Announcement On December 14, 2021, Kenyan government published a draft version of the Tax Procedures Act (Common Reporting Standards) Regulations, 2021.
The rules would come into operation on January 1, 2022. Comments must be received by January 4, 2022. See Announcement On December 13, 2021, OECD released the second batch of updated transfer pricing country profiles for Austria, Belgium, Bulgaria, France, Georgia, Germany, Indonesia, Ireland, Italy, Latvia, Malaysia, Mexico, Peru, Poland, Seychelles, Singapore, South Africa and Sweden.
Today’s release also includes for the first-time country profiles for Albania, Kenya and the Maldives, bringing the total number of countries covered to 63. The transfer pricing country profiles contain up-to-date and harmonised information on key aspects of transfer pricing legislation and practice, provided by countries themselves in response to a questionnaire. See Profiles On December 10, 2021, South African Revenue Service (SARS) published a high-level model and draft legislative framework for an advance pricing agreement (APA) unit and associated processes at SARS and the introduction of an APA program in South Africa.
It is hoped that the release of the model and draft of the APA legislation will not only lay the groundwork for the APA program but will facilitate comprehensive engagement from all affected parties. Comments may be submitted by January 31, 2022. See Announcement Singapore’s Ministry of Finance is inviting stakeholders to share their views and hopes for the upcoming Budget 2022, which is scheduled to be presented in February 2022.
Information on Singapore’s national Budget process and Budget 2021 measures can be found on MOF’s Budget website. Stakeholders can provide their suggestions for the coming Budget through several channels over a six-week period. Comments must be received by January 17, 2022. See Release The tax treaty between Brazil and Singapore entered into force on December 1, 2021.
The tax treaty was signed on May 7, 2018. The treaty will benefit businesses in both Singapore and Brazil as well as boost bilateral trade and investment flows between the two countries. The full text of the treaty is available on IRAS’s website. See Treaty Belgium, Estonia, the Netherlands, and Qatar have deposited new notifications under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS MLI) subsequent to their ratification.
Estonia has notified, in relation to Article 35(7)(a)(i) of the BEPS MLI, the completion of its internal procedures for the entry into effect of the provisions of the BEPS MLI with respect to its treaties with Austria, Cyprus, Finland, Latvia, Poland, Slovak Republic and Ukraine in accordance with Article 35(7)(b) of the BEPS MLI; and the Netherlands and Qatar have notified additional bilateral treaties to which the BEPS MLI can apply and made additional notifications with respect to provisions of the BEPS MLI. Belgium made an additional notification with respect to its treaty with the Netherlands. The BEPS MLI entered into force for Belgium on October 1, 2019, for Estonia on May 1, 2021, for the Netherlands on July 1, 2019, and for Qatar on April 1, 2020. The new notifications made by those jurisdictions will take effect in accordance with Articles 29 and 35 of the BEPS MLI. The BEPS MLI, which covers over 1700 bilateral tax treaties, underlines the strong commitment of the 96 jurisdictions that have already joined it to prevent the abuse of tax treaties and address BEPS by multinational enterprises. The BEPS MLI has already started to impact the bilateral treaties of 67 jurisdictions that have ratified it. From January 1, 2022, it is expected to impact over 850 treaties concluded among those 67 jurisdictions, with an additional 900 treaties to become modified once the BEPS MLI is ratified by all Signatories. See Announcement Estonia’s adoption of the EU directive on the OECD-led global minimum tax is highly conditional upon the possibility to retain Estonia’s current investor-friendly corporate tax system, Minister of Finance Keit Pentus-Rosimannus has said.
The Minister made the statement at a November 24 meeting with the Director-General for Taxation and Customs Union Mr Gerassimos Thomas to discuss the ongoing international tax reform. “As the European Union talks regarding the directive are about to start, we intend to make sure that the change will impact only the large multinationals with the revenue exceeding EUR 750 million and leave the rest of our existing system untouched. Estonia values fair tax competition and simple efficient tax rules that do not hinder the growth of business. We are keen to maintain our current tax system as it encourages both job creation and innovation. Even now, our revenue from corporate tax is comparable to that of many large countries where the nominal tax rates are much higher.” “We wouldn’t want the EU to open several tax battlefronts at once. It would be reasonable to await the outcome of the one major reform – the global minimum tax – before launching into debates over the next.” See Release On November 22, 2021, the OECD released the latest mutual agreement procedure (MAP) statistics covering 118 jurisdictions and practically all MAP cases worldwide.
The data was released as part of the BEPS Action 14 minimum standard and the wider G20/OECD tax certainty agenda to improve the effectiveness and timeliness of tax-related dispute resolution mechanisms. According to the 2020 MAP Statistics, around 2500 new cases started in 2020, with the top 25 jurisdictions accounting for 95% of them and the remaining cases involving around 40 other jurisdictions. The number of transfer pricing cases started has kept increasing (almost +15%), while the number of other cases has slightly decreased compared to 2019 (-2%). Approximately 5% fewer MAP cases were closed in 2020 than in 2019, which is mainly owing to a decrease for other cases (-12%), while the number of transfer pricing cases closed has increased (+6%). Competent authorities were still able to close a significant number of cases in 2020, because they adapted to the changing landscape and replaced physical meetings with other forms of communication, including digital meetings, and prioritized simpler cases. Nevertheless, MAP inventories have increased in the majority of jurisdictions and this may require additional actions in the coming years. Around 75% of the MAPs concluded in 2020 fully resolved the issue both for transfer pricing and other cases (compared to 85% for transfer pricing cases and 71% for other cases in 2019). Approximately 3% of MAP cases were closed with no agreement compared to 2% in 2019. In addition, the amount of cases withdrawn by taxpayers nearly doubled in 2020 (11% compared to 6% in 2019). On average, MAP cases closed in 2020 took 35 months for transfer pricing cases (31 months in 2019) and approximately 18 months for other cases (22 months in 2019). Some jurisdictions experienced delays, especially for more complex cases, and the COVID-19 crisis affected the quality of their communication with some treaty partners. Also, while it is not possible to estimate the time that will be necessary to close pending cases, the data shows that approximately 15% of the 2020 end inventory relates to cases that have been pending for at least five years. See Statistics Over 100 delegates from 18 Eurasian jurisdictions, as well as participants from business and academia, and international organisations, gathered virtually on November 18-19, 2021, for the 7th Regional Meeting on BEPS for Eurasian Countries.
This meeting offered participants the opportunity to provide their views and input into the work on the development and monitoring of international tax standards under the OECD/G20 Inclusive Framework on BEPS. Updates were provided on the Inclusive Framework’s membership and in particular, on the recent agreement reached by 137 countries and jurisdictions on a two-pillar plan to address the tax challenges of the digitalisation of the economy. Participants had the opportunity to share their experiences, discuss the challenges to overcome and actions required for the effective implementation of the BEPS measures, including on the tax challenges arising from the digitalisation of the economy which participants flagged as a key area of work. The meeting also fostered discussions on the implementation of the substantial activities requirements in relation to preferential tax regimes (BEPS Action 5), country-by-country reports (BEPS Action 13), and on making dispute resolution more effective (BEPS Action 14). See Release Singapore and Cabo Verde have signed a tax treaty.
The treaty clarifies the taxing rights of both countries on all forms of income flows arising from cross-border business activities and minimizes the double taxation of such income. This will lower barriers to cross-border investment and boost trade and economic flows between the two countries. The full text of the treaty is available on the Inland Revenue Authority of Singapore’s website. The treaty will enter into force after ratification by both countries. See Announcement |
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