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International – Tax Implications of Recovery and Resolution Planning and Banking Reform Author:Gunst, E. de Published online:23 July 2013 2013 (Volume 15), No. 4 Derivatives & Financial Instruments This article discusses some of the tax aspects which should be taken into consideration when undertaking recovery and resolution plan and ring-fencing-type impact assessments and implementation planning.
India – Ruling on Applicability of Transfer Pricing Provisions to Situations Where No Income Arises under the Income Tax Act Author:Jhabakh, P.R. Kumar Published online:23 September 2013 2013 (Volume 15), No. 5 Derivatives & Financial Instruments In its recent judgment in the Vijai Electricals Ltd case, the Income Tax Appellate Tribunal considered the applicability of transfer pricing provisions in situations where no income can be said to arise under the Income Tax Act, 1961.
International – Deductibility and Transfer Pricing of Banks’ Liquidity Reserve Expense Author:Lim, C. Published online:19 September 2013 2013 (Volume 15), No. 5 Derivatives & Financial Instruments The author considers the tax implications of a bank’s liquidity reserve expense and, specifically, the challenges a bank may encounter in devising a global transfer pricing policy and obtaining a deduction for liquidity reserve expense in the countries in which it conducts business.
Australia – Australia’s Commitment to the OECD BEPS Programme Author:Joseph, A. Published online:27 February 2014 2014 (Volume 16), No. 2 Derivatives & Financial Instruments Australia has always supported OECD efforts with regard to base erosion and profit shifting. The author reviews action points in the Australian Treasury’s scoping paper on risks to the sustainability of the tax base, showing alignment with OECD action points.
Australia – Securitization and Thin Capitalization Author:Joseph, A. Published online:22 September 2014 2014 (Volume 16), No. 5 Derivatives & Financial Instruments The author considers recent changes to law governing securitization and thin capitalization in Australia, and reviews guidance from the Tax Office regarding the exemption of certain special purpose entities from the thin capitalization rules.
Netherlands – The Classification of Debt and Equity Author:Kok, R. Published online:22 July 2014 2014 (Volume 16), No. 4 Derivatives & Financial Instruments The author analyses the classification of an instrument as debt or equity from a Dutch perspective. It can be expected that the insights gained from this discussion of the Dutch approach to the classification question, will also be useful for other jurisdictions.
International – Captives to 2020: Opportunities and Challenges Author:Soar, J.; Burtwell, S.; Smith, J. (James) Published online:28 November 2014 2014 (Volume 16), No. 6 Derivatives & Financial Instruments Over the past decade the role of captives has changed dramatically and captives are now more generally viewed as dynamic vehicles to facilitate risk financing, rather than just risk transfer or self-insurance tools. The authors consider the current landscape for captives, and present their views on future opportunities and challenges.
Finland – Debt Classification Leads to BEPS Action in Finland Author:Laukkanen, A. Published online:23 February 2015 2015 (Volume 17), No. 2 Derivatives & Financial Instruments The author analyses a recent Finnish case concerning the ability of the tax authorities to reclassify debt as equity under domestic law. The Finnish response to the OECD’s base erosion and profit shifting initiative is also considered
New Zealand – Update on BEPS and FATCA Author:Sawyer, A.J. Published online:9 July 2015 2015 (Volume 17), No. 4 Derivatives & Financial Instruments New Zealand is actively involved in reviewing its domestic legislation in light of the various BEPS Actions, and has concluded an intergovernmental agreement under FATCA. This article analyses New Zealand’s approach to BEPS and FATCA, observing that it is a dependable team player, but certainly not a leader in terms of giving effect to these developments. The New Zealand government believes that with regard to BEPS it is already “largely compliant”, and has a clear plan in place to review its position with regard to the BEPS Actions over the coming months. With a concluded intergovernmental agreement in place, the Inland Revenue Department is collecting information from financial institutions in preparation for transferring data to the IRS later in 2015.
Indonesia – BEPS Effects in Indonesia Author:Karyadi, F.; Tanuwijaya, C. Published online:17 July 2015 2015 (Volume 17), No. 4 Derivatives & Financial Instruments
Australia – New Regime for Managed Investment Trusts Author:Joseph, A. Published online:20 April 2016 2016 (Volume 18), No. 2 Derivatives & Financial Instruments Taxation of trusts in Australia has been tangled for a very long time in a web of English law concepts of equity and later statutory intervention. The author discusses amendments to income tax law that are basically focussed on adopting an income attribution method for determining the tax liability of trust beneficiaries.
International – GATCA: The Globalization of Anti-Tax Evasion Frameworks Author:McGill, R. Published online:11 July 2016 2016 (Volume 18), No. 3 Derivatives & Financial Instruments The author brings clarity and order to the major challenges being faced by the financial services industry and its customers in light of GATCA – the globalization of anti-tax evasion measures.
International – Treading Carefully through the Murky Labyrinth of Intra-Group Financial Derivatives Author:Bakker, A.J.; Łukosz, K. Published online:13 October 2016 2016 (Volume 18), No. 4 Derivatives & Financial Instruments
India – The Unsettled Issue of Intercompany Guarantees Author:Bilaney, S.K. Published online:27 January 2017 2016 (Volume 18), No. 6 Derivatives & Financial Instruments Based on an analysis of existing Indian transfer pricing provisions, judicial precedents in India, the OECD Transfer Pricing Guidelines (OECD Guidelines) and the Actions 8-10 Final Report, the author considers types of intercompany guarantees and whether they are a chargeable service, the approach of tax authorities to determining the arm’s length rate of guarantee fees or commissions, and an ideal benchmarking approach for guarantee fees or commissions.
International – The Engie Case: Fiscal State Aid and Mismatches in One Member State Author:Nuku, E.; Vermeulen, H. Published online:29 June 2017 2017 (Volume 19), No. 3 Derivatives & Financial Instruments This article analyses the European Commission’s approach to State aid arising from an inconsistent application of national law that derogates from what should have been its correct interpretation, taking the Engie opening decision as the basis of the present analysis.
International – BITs and Taxes Author:Kubicová, J. Published online:17 November 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments This article studies bilateral investment treaties (BITs) and their application to taxation. The main focus is on the potential application of BITs in tax-related investor-state dispute resolution. It pays attention to the emerging issues that challenge the applicability of BITs in a tax-related investor-state dispute in the European Union.
European Union – Council Directive on Double Taxation Dispute Resolution Mechanisms: “Resolving Companies’ Areas of Concern?” Author:Wiertsema, T. Published online:13 October 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments Without effective dispute resolution mechanisms between Member States of the European Union, companies will face the increasing possibility of unresolved double taxation. This is in particular due to new BEPS Actions that will provide Member States with expanding taxation opportunities. This article discusses whether the new Council Directive on Double Taxation Dispute Resolution Mechanisms in the European Union (the Directive) will resolve the areas of concern that companies currently face in dispute resolution procedures between Member States under tax treaties and the EU Arbitration Convention. Three areas of concern discussed here are (i) access to the procedure, (ii) length of the procedure and (iii) outcome of the procedure. The article concludes that the Directive will provide an overall improvement within these areas of concern because of the extended scope for qualifying disputes and the inclusion of clear deadlines and fall-back mechanisms in the Directive. However, this improved legal certainty for taxpayers is expected to come at a (high) price in the form of increased durations of already lengthy dispute resolution procedures.
International – WTO Appellate Body Report in Argentina – Financial Services: Further Clarity on Likeness Analyses in a GATS Context? Author:Lamensch, M. Published online:12 October 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments The General Agreement on Trade in Services (GATS) is the first and only multilateral agreement to subject supply of services to international trading rules. The GATS is part of the World Trade Organization, including its dispute settlement structure. However, and surprisingly perhaps, there is little case law with respect to the key most-favoured-nation (MFN) and national treatment (NT) GATS obligations. After a short summary of the GATS framework for financial services, this article discusses the recent Appellate Body report in the case Argentina – Financial services that provides clarifications (but also opens new questions) regarding the “likeness analysis” to be undertaken when assessing compliance with MFN and NT GATS obligations.
International – Tax Controversies and Dispute Resolution under Tax Treaties: Insights from the Arbitration Sphere Author:Snodgrass, E. Published online:2 October 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments This article focuses on recent initiatives to embed arbitration as a mechanism for resolving tax controversies under income tax treaties. Drawing on the author’s experience as an arbitration lawyer, the article considers developments in the frameworks for arbitration under income tax treaties, including (i) the OECD Model, (ii) the EU Arbitration Convention and (iii) the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the BEPS Multilateral Instrument). These frameworks are compared to existing (non-tax specific) arbitration frameworks, in order to evaluate the efficacy of arbitration as a mechanism for resolving tax controversies and identify where some lessons may be learned as the tax arbitration process is further developed and refined.
United States – Recent Developments in US Tax Enforcement Author:Feller, B. Published online:22 September 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments
The Tax State Aid Investigations, and the Role of Economic and Financial Analysis Author:Robins, N. Published online:1 September 2017 2017 (Volume 19), No. 5 Derivatives & Financial Instruments In August 2016, the European Commission announced its largest-ever aid recovery order, requiring Apple to repay EUR 13 billion as a result of its tax arrangements in Ireland. This landmark tax State aid decision followed aid recovery orders faced by Starbucks in the Netherlands, Fiat Finance and Trade in Luxembourg, and 35 other multinationals in Belgium under the “excess profit” scheme. As it has been reported that a large number of tax rulings are under review, companies’ tax arrangements face an unprecedented level of State aid scrutiny. This article provides an overview of the State aid framework and procedure, reviews the status of the ongoing tax State aid investigations, highlights the key economic issues raised by the Commission in the Apple case, and discusses how an economic and financial analysis can help companies mitigate future State aid risks, in light of the importance of ensuring that tax arrangements are State aid-compliant.
International – Benchmarking Approaches for Compulsorily Convertible Debentures Author:Bilaney, S.K. Published online:9 August 2017 2017 (Volume 19), No. 4 Derivatives & Financial Instruments Although there is no clear guidance from the OECD or UN regarding the determination of the arm’s length price of intercompany financial transactions, the author offers two approaches to benchmarking compulsorily convertible debentures, based on economic theory and financial models.
Spain – Restriction to the Tax Deductibility of Financial Expenses: A Spanish View Author:Ferrer, C.; Irazusta, P. Published online:31 July 2017 2017 (Volume 19), No. 4 Derivatives & Financial Instruments Spain has introduced measures that significantly limit the deductibility of financial costs. This article goes through those limitations and makes a comparison with the EU trends.