Trends in Brazilian tax treaties

This article evaluates possible new tendencies in Brazilian tax treaties, considering double tax conventions recently signed by the country with Norway and the United Kingdom, which also include innovative provisions.

Released on Apr 5, 2023

How to ride the waves of EU tax developments

The EU tax developments panel discussed a selection of recent and upcoming tax developments at the EU level, including the following topics: the adoption of the OECD's Pillar Two rules in the EU; the ATAD 3/Unshell Directive proposal; the EU's debt-equity bias reduction allowance (DEBRA) proposal; the BEFIT (Business in Europe: Framework for Income Taxation); withholding tax (WHT) recoveries; practical experiences of DAC6; and the tax enablers consultation (SAFE).

Released on Mar 29, 2023

Emerging jurisprudence surrounding entitlement to treaty benefits in India

This article analyses the sufficiency of a tax residency certificate in claiming treaty benefits in light of the principal purpose test introduced under the OECD led multilateral instrument framework, domestic general anti-abuse rules and recent Indian judicial developments.

Released on Mar 29, 2023

Crypto, blockchain and FinTech – can tax keep pace with technology?

This session provided guidance on the tax treatment of gains and losses on cryptos, the issues arising in connection with the use of crypto funds, tax compliance matters in relation to crypto ownership and trading, and the tax treatment of staking (but not mining) in South Korea, Spain, Switzerland and the US.

Released on Mar 29, 2023

Internet services in exchange for user data: Facebook’s potential VAT sales tax bill in Italy of USD 925 million

Facebook’s parent company Meta has been requested by the Italian tax authorities to pay EUR 870 million (USD 925 million) in unpaid VAT sales tax from 2015 to 2021. Based on information provided by an Italian newspaper, the Italian tax authorities seem to be arguing that Facebook membership is granted upon a consideration in kind.

Released on Mar 29, 2023

Taxation in Brazil and the social policy goals

When looking to deepen the analysis of the social policy goals, especially within the Brazilian tax system as an instrument for its implementation, there are discussions on how taxation may have a relevant impact on the consumption of essential goods and services, energy, telecommunication, public transportation, and basic food.

Released on Mar 29, 2023

Paris Court of Appeal says no to the Parent–Subsidiary Directive for funnel entities

A recent decision by the Paris Court of Appeal uses the notion of beneficial ownership to refuse the application of the Parent–Subsidiary Directive in the context of a purely European real estate structure. This decision, which raises questions about the autonomy of the said notion vis-à-vis the abuse of law procedure, calls for caution.

Released on Mar 28, 2023

New Portuguese personal income tax framework applicable to crypto-assets

The Portuguese State Budget for 2023 introduced new rules for the personal income taxation of income connected to crypto-assets. The boost in the mainstream adoption of crypto-assets led to the increased attention from tax authorities worldwide to income that otherwise would typically fall outside the scope of taxation or would be incompatible with the rules in place. Until the 2023 State Budget was approved, no tax law provisions were directly applicable to crypto-assets in Portugal.

Released on Mar 28, 2023

Taxation in Brazil and the social policy goals

When looking to deepen the analysis of the social policy goals, especially within the Brazilian tax system as an instrument for its implementation, there are discussions on how taxation may have a relevant impact on the consumption of essential goods and services, energy, telecommunication, public transportation, and basic food.

Released on Mar 28, 2023

Specific considerations on the consequences resulting from Spanish income tax laws regarding transactions carried out with countries or territories that have recently been listed as ‘non-cooperative jurisdictions’

This article outlines the significant Spanish tax implications that could arise from transactions undertaken with, or by, persons resident or incorporated in non-cooperative jurisdictions, as enumerated in a recent ministerial order.

Released on Mar 27, 2023

Pushing the investment fund industry in Italy: the new investment management exemption regime

‘Providing certainty to the operators of the investment business industry active in Italy’: this is the rationale that led to the introduction into the Italian tax system of the so-called ‘investment management exemption’. We consider here below some of the interpretative issues arising in relation to the application of the new rule, which will hopefully be addressed in the implementing decree.

Released on Mar 27, 2023

Statutory limitation in Lithuania concerning historical tax losses

The utilisation of historical tax losses by Lithuanian companies might appear very attractive, as the Lithuanian Law on Corporate Income Tax provides that it is generally unlimited in time (for tax losses from general economic activities). The general statutory limitation term for the recalculation of taxes is also quite short, three years. Recent case law from the Supreme Administrative Court has provided the explanation that the statutory limitation term, however, does not apply to situations when the taxpayer wishes to utilise tax losses from earlier periods. Thus, the taxpayer should substantiate and the tax administration could challenge the historical tax losses incurred in the out-of-statutory limitation term periods, if the taxpayer wishes to use them within the open period.

Released on Mar 27, 2023

The recent public consultations on Pillar Two and BEFIT

The IBA Taxes Committee submitted contributions in response to two recent public consultations on Pillar Two – Tax Certainty for the GloBE Rules issued by the OECD's Inclusive Framework and on an EU common consolidated corporate tax base as part of the European Commission’s BEFIT (Business in Europe: Framework for Income Tax) initiative.

Released on Mar 27, 2023

Turkish Superior Court decision: can a website, in itself, constitute a permanent establishment?

The Council of State ruled that the websites constitute the permanent establishment, and that the income generated from Turkey by the companies, which provide online advertising.

Released on Mar 27, 2023

Turkey’s new earthquake tax

With Act No 7440, published in the Official Gazette on 12 March 2023, a new earthquake tax was introduced in Turkey. This tax will be paid at a rate of ten (and in special cases, five) per cent in the 2022 corporate tax return.

Released on Mar 27, 2023

Conversion of the Brazilian transfer pricing rules into the OECD framework

This article comments on the ongoing reform of the Brazilian transfer pricing rules, briefly describing the ‘fixed margin methodology’ as it was originally provided by Law 9,430/96 and the challenges facing the country and the Brazilian tax administration regarding the replacement of the old rules with new ones that converge with the OECD transfer pricing framework, via the enactment of Provisional Measure (PM) No 1,152/22. The new rules, which if eventually approved in Congress are expected to enter into force in 2024 going forward, though companies may elect to apply them from 2023, abandon the free choice of traditional transfer pricing methods with predetermined margins, while migrating to the so-called ‘best method approach’ to determine the arm’s length parameters, taking into consideration the dealignment of the controlled transaction and the comparability analysis for transactions contracted with unrelated parties.

Released on Mar 27, 2023

ATAD3 - The Unshell Directive: An overview of the latest developments as at 13 March 2023

The initial draft of the proposal for a directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU, otherwise known as the ‘ATAD3 directive’, was made public by the European Commission on 22 December 2021. On 17 January 2023, the European Parliament approved the European Commission’s draft ATAD3 directive, as amended by the Committee on Economic and Monetary Affairs. Between the technical and implementation date uncertainties, the discussions that follow attempt to synthesise the current state of affairs regarding the ambitious ATAD3 directive.

Released on Mar 27, 2023

Turkey introduces new tax law

Law No 7440 on the Restructuring of Certain Receivables and the Amendment of Certain Laws, which entered into force after being published in the Official Gazette on 12 March 2023, provides for the restructuring of taxes, insurance premiums, and administrative fines; the settlement of existing and potential disputes; the correction of business records, such as cash, receivables from shareholders, and inventories; and the increase of the tax base for certain taxes.

Released on Mar 27, 2023

Tax on the market value of real estate properties in France owned by legal entities (the so-called three per cent tax)

The three per cent tax was introduced in France in 1983 to identify the ultimate owners of real estate properties located in France despite the interposition of French or foreign legal entities. To summarise, French and foreign entities owning real estate properties (or real estate property rights relating to such properties) must annually declare their shareholding and disclose the identity of their ultimate owner. If they fail to file a proper tax return and disclose the required information, entities can be sanctioned to pay, for each failing year, a tax equal to three per cent of the market value of the real estate property or the rights of the real estate property they own.

Released on Mar 27, 2023

The ‘Unshell Directive’ and its potential impact on domestic minimum substance tests

The ATAD 3 goals of preventing tax avoidance through the misuse of shell entities should be seen more as EU-wide goals, rather than an objective to be achieved at the level of EU Member States. This article focuses on the ‘minimum substance test’ under ATAD 3 as a potential guide for Member States when assessing domestic minimum substance tests.

Released on Mar 27, 2023

The new Spanish tax regime on carried interest income earned by Spanish residents

Spanish Law 28/2022 of 21 December 2022, the so-called ‘Start-up Law’ includes, for the first time in Spanish tax history, a special tax regime applicable to the so-called carried interest income earned by directors, employees and/or managers of eligible closed-end alternative investment funds.

Released on Mar 27, 2023

New Mexican tax obligation: identification of beneficial owners

The Mexico Tax Reform of 2022 imposed new tax obligations regarding beneficial ownership. The new obligation is not only applicable to legal entities, but also to service providers, including lawyers and notaries.

Released on Mar 27, 2023

Why the sale of Austrian real estate by a company can trigger an exit tax at shareholder level

Asked to provide its view on a specific case, the Austrian Federal Ministry of Finance recently responded that the sale of real estate property by an Austrian company could trigger Austrian exit tax at the level of a non-resident shareholder and also stated at what time in the process such a tax would be triggered.

Released on Mar 27, 2023

Trends in transfer pricing (2023)

The topics covered in this session included: advance pricing agreements and mutual agreement procedure practice trends and experience; Covid-19 and extraordinary events; transfer of functions across borders; the International Compliance Assurance Programme, the European Trust and Cooperation Approach and tax rulings; intercompany financing: the HMRC v Blackrock and HMRC v Singtel cases; and data collection and sale by related companies.

Released on Mar 1, 2023

Pillar 2 implementation: latest updates and hot topics

The topics addressed by this panel were the recent Organisation for Economic Co-operation and Development (OECD) guidance and United Kingdom implementation update; an overview of United States transactional issues; and updates on the Pillar 2 implementation in Mexico, Spain and Switzerland.

Released on Mar 1, 2023

Permanent establishment (2023)

The topics addressed by the panel were the establishment of permanent establishments (PEs) by employees working from home, recent case law and administrative practice regarding PEs and evolving trends.

Released on Mar 1, 2023

Trends in private equity and credit funds (2023)

This panel addressed the question of whether private equity and venture capital structures are under siege in the respective jurisdictions of the panellists. The panel focused on the following topics: challenges and opportunities at portfolio company level; challenges and opportunities at holding company level; challenges and opportunities at fund structure level; challenges and opportunities at manager level; and carried interest.

Released on Mar 1, 2023

Decentralised finance: how blockchain-based finance works and how it is treated for tax purposes (2023)

This panel on decentralised finance discussed how blockchain-based finance works and how it may be treated for tax purposes for individuals in the respective jurisdictions of the panellists. The discussion focused on explaining how typical transactions work and possible interpretations of how such transactions could be treated for tax purposes in the case of individuals only.

Released on Mar 1, 2023

Hybrid instrument update (2023)

This panel provided an update on the treatment of hybrid instruments. The topics included issues relating to the distribution of dividends to non-EU funds, with a focus on the Anti-Tax Avoidance Directive, and anti-hybrid and pre-existing avoidance rules.

Released on Feb 28, 2023

Current developments affecting the securitisation and derivatives markets (2023)

A report on a session at the Taxation Section at the 12th Annual London Finance and Capital Markets Conference in London, covering Ireland, Italy, the Netherlands, the United Kingdom and the United States.

Released on Feb 28, 2023