In India, the Supreme Court has released a landmark ruling to finally settle years of litigation on the tax rules for cross-border sales of software to the Indian market.
The ruling, delivered in the case of Engineering Analysis Centre of Excellence v. the Commissioner of Income Tax grouped numerous taxpayers’ appeals, all contesting the Indian authorities’ assertion that income received by non-resident suppliers from the sale of software in India should be taxable as royalties.
Instead, the Supreme Court sided with the appellants’ argument that software transactions should be treated as sales, not the provision of the right to use software, and as such should be treated as business income, not as royalties, for the purposes of India’s tax treaties and domestic tax withholding rules.
The Supreme Court, after analyzing the text of Article 12 in various Indian tax treaties, concluded that this … Read More »
In Ireland, which is currently stepping back up the COVID restriction ladder, the Government announced changes to the Employment Wage Subsidy Scheme (EWSS) and the COVID Restrictions Support Scheme (CRSS).
EWSS has been in place since September 1, 2020. EWSS provides a flat-rate subsidy to qualifying employers based on the number of paid and eligible employees on the employer’s payroll. The employer must have tax clearance to be eligible to join the EWSS and remain “tax clear” in order to receive the subsidy.
The Government said that, broadly, the EWSS rates will be aligned with the rates of payment available under the Pandemic Unemployment Payment, up to EUR350 per week, effective from the next payroll date after October 19. The maximum weekly subsidy rate per employee was previously EUR203.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
Another Australian tax development caught my eye recently. This was the announcement of tax cuts for craft brewers – the third time in less than a year that the Australian Government has announced tax concessions for the brewing industry. Well, it has been a tough few years for governments of both political stripes in Oz, I suppose.
There’s also an election to be fought soon. And what better way is there to ingratiate yourself with the electorate than to help cut the price of the nation’s favorite tipple? Yes, I know, cynical old me returns!
But there could also be another trend emerging here. It probably went largely unnoticed, but the TCJA included provisions to temporarily extended tax cuts for beverage makers, from brewers, to vintners and distillers. Then, in February 2019, a bipartisan bill was introduced in the Senate that would … Read More »
As I write, we’re still largely none the wiser about the UK’s future relationship with the EU. But if there’s one conclusion that can be drawn from all this, it’s that the Mother of Parliaments might be ready for a makeover. The British constitution, largely unwritten, and famous for its flexibility and adaptability, has coped with many past national emergencies. But it’s no exaggeration to say that the constitution’s elasticity is being stretched to breaking point by Brexit. What’s more, it’s difficult to know who’s in charge now – the Government? MPs? Speaker Bercow? The Downing Street cat? Anyone? No-one?
Understandably, now is not really the right time for Britain to have a debate on constitutional reform, given that the nation is already in the throes of a collective nervous breakdown. Such a thing would also be a turmoil too far … Read More »
Brexit is becoming harder for businesses to come to terms with, both those in Britain and beyond. And, even though December saw UK and EU negotiators reaching a tentative agreement on the first phase of talks, in reality this ship has barely left port.
As far as businesses are concerned, the negotiators have only scratched the surface of the issues they are most worried about, like customs, potential trade taxes, VAT, regulatory divergences, product standards, etc., etc.
You would think that regimes in the UK and the EU have so much in common that there would be no need to wipe the slate clean and start again from scratch. But that would be too easy, wouldn’t it? After all, the EU doesn’t do things the easy way – I’m not sure if it even knows how. So bespoke Brexit it will be, at … Read More »
Major tax reform efforts are often undertaken with the intention of making life easier for taxpayers. But they can be enormously disruptive for tax planning in the short-term, as taxpayers adjust to life under a new regime. Spare a thought then for taxpayers in India. There, they are still getting used to the idea of the national goods and services tax, often described as one of the most significant economic reforms in India’s post-colonial history. Now they could be faced with a shake-up of direct taxation as well.
By putting in place the GST regime this year, the current Government was congratulated for achieving in three years what the previous administration failed to do in ten. Will it be able to pull off a similar achievement with the direct taxes code?
Reforming the outdated direct tax regime in a similarly expedient manner would represent … Read More »
There are many alternative phrases to describe the sharing economy. One of them is the “collaborative” economy. Collaboration seems to be in very short supply, however, when it comes to the taxation of the companies and individuals involved.
It seems that the attitude of many tax authorities when confronted with new ways of doing business in the digital economy is to tax first and ask questions later. Indeed, in many cases, they just tax, and don’t bother with awkward questions.
Uber’s business model seems to be a particularly challenging one for traditional tax regimes. Uber insists that its drivers provide “ride-sourcing” services, rather than traditional “taxi” services. Many governments, on the other hand, beg to differ, which puts Uber drivers and the company itself in a very uncertain position with regards to tax and regulation.
It’s at this point I would like to … Read More »
Global competitive rankings, like the latest Doing Business Index from the World Bank, often throw up some surprising results. New Zealand usually performs well in such surveys, but who’d have thought that it is literally the best place in the world to set up and run a company from a regulatory, administrative, and tax point of view – better even than low-tax Singapore, according to Doing Business 2017?
Or, perhaps even more startling, that Denmark – yes, high-tax, high-spend Denmark – the object of derision from the right and praise from the left, during the US presidential election campaign, is the fourth best place to operate a firm, exceeding laissez-faire Hong Kong as a business location? Similarly, Sweden’s brand of social democracy is often criticized as overbearing and fiscally unsustainable. Yet, Sweden is just behind the United States in ninth place.
If … Read More »
Singapore may not be everybody’s cup of tea. Social and cultural attitudes are still quite conservative, it’s often insufferably hot and humid, and, like in many Asian cities, lungs of steel are required when the haze descends. But as a place to do business, it’s second to none. At least according to the latest Doing Business report by the World Bank, which attempts to measure how easy (or not) it is to establish and operate a business in a given country, and which again ranks Singapore first out of the 189 jurisdictions reviewed. The relative ease with which companies in Singapore are able to discharge their tax obligations combined with relatively low tax rates are, of course, a major factor in Singapore’s enduring success in these sorts of polls. But it also goes beyond tax. It’s all well and good … Read More »
There are numerous annual studies attempting to rank nations in terms of how attractive they are to do business in, and Australia fares well in several of them. For example, the World Bank’s most recent Doing Business Index, which, as its name suggests, ranks economies on the ease of doing business, puts Australia in 10th place out of 189 countries. The Heritage Foundation/Wall Street Journal Index of Economic Freedom, which measures the strength of a number of economic and other rights in 178 nations, places Australia a very creditable fourth. However, when it comes to comparing Australia’s taxes with the rest of the world, the Lucky Country fares less well. According to PwC’s Paying Tax Index 2015, Australia languishes in 39th place out of 189, with a total tax rate on an average business pushing 50 percent. To be fair … Read More »