We all know that corporate taxation entails more than just a simple percentage of a company’s profits; it is far, far more involved than that. The 15 weighty tomes that are the final reports of the base erosion and profit shifting project – the fruits of the OECD’s countless hours of labor – are a testament to that.
At the heart of it all is transfer pricing. But, mention the phrase “transfer pricing” to the uninitiated, and they will probably return a blank, bovine stare, almost puppy-like in its wide-eyed, head-slightly-tilted innocence. You’d almost see cartoon-esque question marks forming in their eyes. Start to talk about transfer pricing to them for any length of time, and you might be in danger of losing a valued friend or acquaintance (“where’re you going? I haven’t finished explaining the comparable uncontrolled transaction method yet!”). … Read More »
Taxpayers in Brazil might have been a little alarmed when they read the headline “UK Chancellor mulling Amazon tax.” Brazil has a complicated enough tax regime already, as the International Monetary Fund observed again earlier this month, without other countries adding their two cents to the already mind-bogglingly complex equation.
Obviously, Philip Hammond was talking about Amazon the company, not the Amazon river (although both share the distinction of being extraordinarily large). Nevertheless, given the subject matter and the UK Government’s intent, his words would have reverberated globally, perhaps even as far as the upper reaches of the Amazon. The river, that is. Though no doubt the upper reaches of Amazon’s management structure are well aware that governments and tax authorities the world over are circling, hungry for a piece of the pie.
Indeed, in Amazon’s home country, states have quickly capitalized … Read More »
As corporate tax rates have tumbled, value-added tax rates have tended to climb, as countries shift more of their tax burdens from income to indirect taxation. In the latest example, Russian President Vladimir Putin has signed into law legislation to hike Russia’s VAT rate to 20 percent from January 1, 2019.
Furthermore, VAT is now a very familiar tax globally, with around 160 jurisdictions having adopted some form of this tax. India is probably one of the more notable recent entrants into the VAT and GST club. The United States is certainly the most visible absentee, given that state sales taxes do not operate in the same way as a VAT. And, a few unlikely legislative proposals aside, the US has shown little inclination in joining.
However, just as there are some anomalies in corporate tax trends, with a few jurisdictions having … Read More »
There are plenty of things in this life that can do us harm. One of them can be taxation. But not, as conventional wisdom might have it, because taxes are too high, and too difficult to work out. No, in the world of BEPS and uber-transparency, taxes become harmful when they are too low. Or, as the European Union’s Code of Conduct Group (Business Taxation), a body tasked with rooting out harmful tax regimes, puts it, when tax measures “unduly affect the location of business activity.” Which is quite ironic really, given that the mysterious and shadowy Code Group has itself been accused of operating in a less-than-transparent fashion.
However, despite the time and resources devoted to this matter, the war against harmful taxation has yet to be won. Although, if recent OECD figures are anything to go by, the final … Read More »