Bulletin 49

Printable Version

SWITZERLAND: Switzerland removed from list of non-cooperative jurisdictions

European Union finance ministers agreed to white-list Switzerland as compliant with all required tax cooperation commitments. The United Arab Emirates has also been removed from the EU blacklist, having enacted satisfactory economic substance legislation. Nine jurisdictions remain on the list.

CORPORATE TAXATION: OECD invites comments on proposed solution to digital taxation

The OECD has proposed a solution to the problem of taxing multinational enterprises, especially digital companies. Its proposal, a compromise between three competing proposals sponsored by the US, Europe and emerging economies, would ensure that multinationals will be taxed in places where they conduct significant business but do not have a physical presence, through the creation of new nexus rules stating where tax should be paid, and profit allocation rules stating on what portion of profits they should be taxed. The OECD wants the G20 countries to agree in principle by the end of January.

NETHERLANDS: List of low-tax jurisdictions is revised

The Dutch government has released its latest draft list of low-tax jurisdictions for public consultation. Barbados and Turkmenistan are being added to the list, while Belize and Saudi Arabia are to be removed.

SPAIN: Courts nullify ‘disproportionate’ fines for non-reporting of foreign assets

The Spanish courts have begun nullifying penalties imposed by the country’s tax authority regarding the reporting of taxpayers’ offshore assets. The heavy penalties for non-compliance attracted European Commission infraction proceedings in 2015. Spain’s tax authority has still not changed its regulations, but the High Courts of Justice of both Estremadura and Catalonia have both now nullified fines for late reporting as disproportionate and unlawful. A decision from the European Court of Justice is being sought.

TAX INFORMATION EXCHANGE: Switzerland suspends automatic information exchange with Bulgaria following data leak

The Swiss Federal Council has cancelled the automatic exchange of financial account information with Bulgaria, following the discovery that the personal data of four million Bulgarian and foreign taxpayers was hacked from the Bulgarian National Revenue Agency in July.

INTERNATIONAL FINANCIAL CENTRES: Asian IFCs now close behind London and New York

The latest biannual Global Financial Centres Index report shows New York in first place for the first time, with a clear lead over London. Seven of the top ten places in the index are now taken by Asia-Pacific centres, with Hong Kong in third place, Singapore in fourth, Shanghai fifth, Tokyo sixth, Beijing seventh and Shenzhen in ninth. Dubai’s ranking rose to eighth place, with Sydney ranked tenth.

MONTENEGRO: Automatic exchange of tax information approved

Montenegro has signed the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters, committing it to automatic exchange of financial account information in tax matters under the OECD’s Common Reporting Standard. The country has also just opened its citizenship-by-investment programme for high-net-worth investors, who can apply for citizenship in return for EUR100,000 plus either a EUR450,000 investment in developed areas or a EUR250,000 investment in less developed areas, plus fees.

EU: Apple’s State Aid Appeal Heard by EU General Court

Apple’s €14 billion Euro appeal against the EU Commission’s 2016 decision that Ireland’s tax authorities granted Apple a “selective advantage” by failing to employ appropriate profit allocation methods to calculate the Irish source income of the Irish Apple branches, in contravention of EU State aid law, was heard last week by the EU General Court.

EU: Commission Publishes Report on Administrative Cooperation Directive

The European Commission has published an evaluation document concerning Council Directive 2011/16/EU on Administrative Cooperation, and the five subsequent amendments made to the directive which expanded the scope of the cooperation and exchange of information. The evaluation examines the effectiveness, efficiency, relevance, coherence and EU added-value of the directive. The evaluation concludes that it is difficult to ascertain whether the directive has been effective or efficient in its aims, given that data is extremely limited concerning monetary benefits derived from having introduced the directive in terms of demonstrated reduced tax evasion. However, the evaluation concludes that the administration cooperation is useful, and that furthermore there is scope to enhance the use of the information exchanged, and means of tracking the value the cooperation produces.

FINLAND: Tax Administration European Union Summit

The heads of the tax administrations of EU Member States and the Director General of the European Commission, DG TAXUD met in Helsinki for the first plenary meeting of the Tax Administration EU Summit (TADEUS). The meeting aimed to explore ways in which to improve the administrative cooperation and support the level playing field in the Single Market from a tax administration perspective. An Outcome Statement on the meeting has been published to highlight the scope of the activities.

ICELAND: Iceland Deposits MLI Ratification Instrument

Iceland deposited the legal instruments for ratification of the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting on 26 September. The MLI will enter into force on 1 January 2020 concerning Iceland. This OECD document contains a list of signatories and parties to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.

CORPORATE TAXATION: OECD Publishes Tax Morale Report

The OECD has published a report on individual and business tax morale, examining the factors that contribute to tax morale and the modality to improve the revenue collection mechanisms through voluntary compliance. Age, religion, gender and education were all identified as significant factors which influence tax morale.

Source: STEP | Malta Institute of Taxation

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