The Japanese Diet recently approved reforms to change the country’s general tax rules applicable to a foreign corporation (FC) with a permanent establishment (PE). The reforms, which highlight the OECD’s growing influence in Japan, are expected to create more controversy over taxable income and complicate foreign tax credit (FTC) positions.
Commercial sensitivity has been the focus of the morning’s discussion at the OECD’s Public Consultation on Transfer Pricing Documentation and Country-by-Country Reporting (CbCR).
The OECD’s public consultation on transfer pricing and country-by-country reporting (CbCR) today raised the possibility of cross-referencing in a company’s master file, to help ease the compliance burden for taxpayers and authorities.
The Australian exposure draft legislation, released on May 8 2014, aims to target base erosion and profit shifting and limit multinationals’ ability to pay deductible returns to shareholders. The reforms have generated concern because reductions in debt to equity ratios would prove damaging to multinationals.
The OECD BEPS project has created concern amongst some tax practitioners in the US, who argue it could increase cross-border disputes and reduce US tax revenue, putting the country’s tax base at risk.
Others feel the growth in aggressive auditing and strict permanent establishment (PE) rules in Europe, brought on by BEPS, could attract business to the US.
The EU’s Joint Transfer Pricing Forum (JTPF) published transfer pricing (TP) profiles of the EU Member States last month, promoting transparency. However, concern remains over how the Arbitration Convention (AC) will cope with an influx of double taxation cases.
