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On August 21, 2017 the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) published the first 10 outcomes of a new and enhanced peer review process aimed at assessing compliance with international standards for the exchange of information on request between tax authorities. It is interesting to see that in this peer review process Ireland, Mauritius and Norway have outperformed jurisdictions like a.o. Australia, Canada and Germany.

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In this edition: Japan and Mexico – The Government of Japan and the Government of the United Mexican States have signed an Agreement regarding Mutual Assistance and Cooperation in Customs Matters; OECD – Nigeria signs both the Multilateral BEPS Convention and the CRS Multilateral Competent Authority Agreement to tackle international tax avoidance and evasion

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On August 15, 2017 the UK HM Revenue & Customs released its rules for completing the XML schema that a relevant multinational group will need to upload through the reporting service.

A relevant multinational group will use the XML (extensible markup language) schema provided by the OECD for the County-by Country (CbC) Report it has to file with the HMRC. However, the HMRC has its own procedures, which a relevant multinational group must follow. The HMRC provides detailed information on these rules in a “Country-by-Country XML Schema Guidance”, which it released on August 15, 2017.

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On July 11, 2017, the OECD released the draft contents of the 2017 Update to the OECD Model Tax Convention. Interested parties were invited to provide comments with respect to the following parts of the 2017 Update to the OECD Model Tax Convention that had not previously been released for comments (For further information see our article from July 11, 2017). Now the OECD has published the comments it received the on the draft contents of the 2017 Update to the OECD Model Tax Convention which it released on July 11, 2017.

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In this edition: The European Commission – WORKING PAPER No 69 – 2017 (Towards a European R&D Incentive? An assessment of R&D Provisions under a Common Corporate Tax Base); Japan – Tax Convention with Slovenia will Enter into Force; New Zealand – Govt announces BEPS decisions; New Zealand – NZ to strengthen tax agreements with India, San Marino; Singapore – Singapore and Nigeria Sign Agreement for Avoidance of Double Taxation; Austria – Steuerliche Behandlung von Kryptowährungen (virtuelle Währungen); Switzerland – Additional agreement to double taxation agreement with Belgium entered into force; Switzerland – Switzerland and Ecuador sign protocol of amendment to double taxation agreement; United Kingdom – Reform to Corporation Tax loss relief draft guidance; Ireland – Revenue eBrief No. 73/17 - Guidelines for requesting Mutual Agreement Procedure (MAP) assistance in Ireland; Ireland – Revenue eBrief No. 74/17 - Transfer Pricing Documentation Obligations; Ireland – Revenue eBrief No. 72/17- Guide to Exchange of Information under Council Directive 2011/16/EU, Ireland’s Double Taxation Agreements and Tax Information Exchange Agreements and the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters.

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The Belgian Minister of Finance has issued a press release announcing following the example of its neighbouring countries, the optional submission to the vat regime will apply to the letting of immovable property to professionals. This neutral situation to the tenant also allows the deduction of VAT on the construction of the building, if relevant.

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On August 1, 2017 the Platform for Collaboration on Tax published a draft toolkit designed to help developing countries tackle the complexities of taxing offshore indirect transfers of assets. The Platform for Collaboration on Tax is seeking public feedback on the draft toolkit.

The Platform partners (IMF, OECD, UN and World Bank Group) seek comments by September 25, 2017 from all interested stakeholders on this draft. Comments should be sent by e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it., a common comment box for all the Platform organisations. According to the Platform Spanish and French language versions of the toolkit are forthcoming and will also be posted for comment. The Platform states that it aims to release the final toolkit by the end of 2017.

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On July 27, 3017 the OECD released a report on  Neutralising the Effects of Branch Mismatch Arrangements (BEPS Action 2).

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On July 26, 2017 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Mengozzi in the Case C-355/16, Christian Picart versus Ministre des Finances et des Comptes publics (ECLI:EU:C:2017:610) was published.

The present request for a preliminary ruling, submitted by the Conseil d’État (Council of State) (France), concerns the interpretation of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, signed in Luxembourg on 21 June 1999 (‘the AFMP’), which entered into force on 1 June 2002.

 

The request was submitted in the context of a dispute between Mr Christian Picart, a French national, and the French tax authorities concerning the tax authorities’ decision to re-assess the amount of the unrealised gain on the shares which he held and had declared when he transferred his tax residence from France to Switzerland and to make him liable for additional assessments to income tax and social security contributions, with penalties.

 

The present case provides the Court with the opportunity to clarify, in essence, whether, in keeping with its rulings concerning the FEU Treaty provisions on freedom of establishment, the scope of the terms of the AFMP on the right of establishment and the principle of non-discrimination extends to a fiscal measure, consisting in taxing unrealised gains ‘on leaving’ the national territory, adopted by the State of origin of a national of a Member State when he transfers his tax residence to Switzerland.

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On July 26, 2017 the Court of Justice of the European Union (CJEU) judged in Case C-386/16, ‘Toridas’ UAB versus Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (intervening party: Kauno apskrities valstybinė mokesčių inspekcija) (ECLI:EU:C:2017:599).

This request for a preliminary ruling concerns the interpretation of Articles 138(1), 140(a) and 141 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with Articles 33 and 40 of that directive.

 

The request has been made in proceedings between ‘Toridas’ UAB and the Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania) concerning the classification of transactions carried out by Toridas between 2008 and 2010 as intra-Community supplies and payment of the value added tax (VAT) relating to those transactions together with default interest and a tax penalty.

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On July 21, 2017 the Cypriot Ministry of Finance issued a press release announcing that already on July 1, 2017 the Cypriot Commissioner of Taxation has issued a Circular for the tax treatment of intra-group financing arrangements. According to the announcement this followed constructive contact with the Directorate General for Competition of the European Commission on the matter.

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On July 22, 2017 the Irish Ministry of Finance issued a press release announcing the launch of the procurement process in relation to Apple state aid recovery.

On August 30, 2016 the European Commission announced that it had concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. In its decision the European Commission o.a. also decided that:

·   Ireland shall recover the aid from Apple Sales International.

·   Ireland shall recover the aid from Apple Operations Europe.

·   The sums to be recovered shall bear interest from the date on which they were put at the disposal of the beneficiaries until their actual recovery.

·   Recovery of the aid shall be immediate and effective.

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On July 17, 2017 the Republic of Singapore and the Swiss Confederation concluded an Agreement on the Automatic Exchange of Financial Account Information to Improve International Tax Compliance (Hereafter: the Agreement).

Although the Agreement has been signed, it has not entered into force yet. For the Agreement to enter into force, the respective ratification procedures have to have been finalized in both countries. However Switzerland and Singapore have agreed that in the meantime the Agreement shall provisionally apply from January 1, 2018 (See Article 7, Paragraph 1 of the Agreement (“Term of Agreement”)).

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On July 18, 2017 the OECD released an update of its Guidance on the Implementation of Country-by-Country Reporting.

The additional guidance addresses two specific issues:

·   How to treat an entity owned and/or operated by two or more unrelated MNE Groups (a new paragraph 5 is added to chapter III); and

·   Whether aggregated data or consolidated data for each jurisdiction is to be reported in Table 1 of the CbC report (a new paragraph 3 is added to chapter II).

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On July 13, 2017 the Government of Liechtenstein issued a press release announcing that on July 11, 2017 it adopted a report and a proposal for the amendment of the Automatic Exchange of Information (AEoI) Law.

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On July 10, 2016 the Swiss Federal Tax Administration issued a press release by which it announced that the amount of taxes it retained on behalf of the EU in 2016 amounted to CHF 74,8 million (was CHF 169,3 million in 2015, CHF 317 million in 2014 and CHF 510.1 million in 2013). At the same time it is noted that in 2016 approximately 350,000 voluntary declarations to the tax authorities were received (was 328,000 in 2015 and 150,000 in 2014).

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On July 12, 2017 the Dutch State Secretary for Finance sent a letter to the Dutch House of Representatives, which was a reaction to questions that were raised with respect to his earlier letter of April 11, 2017. As an annex to his answers, the State Secretary enclosed a letter that was sent by the Maltese Presidency of the Council of the EU to the U.S. Department of the Treasury.

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On July 14, 2017 the Japanese Ministry of Finance issued a press release announcing that on July 13, 2017 the Government of Japan and the Government of the Republic of Lithuania signed a Convention between Japan and the Republic of Lithuania for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (Hereafter: the DTA).

Although the DTA has been signed, it has not entered into force yet. For the DTA to enter into force, the respective ratification procedures have to have been finalized in both countries.

 

Below we will discuss a selection of provisions included in the DTA of which we think they might interest our readers.

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