Ireland Launches Transfer Pricing Consultation

Posted on March 24th, by Global Tax Weekly in International Taxation. No Comments

In Ireland, the Finance Department has launched a consultation (running until April 16) on proposed changes to the transfer pricing regime, focusing on the attribution of profits to branches of non-resident companies.

The proposed changes would extend transfer pricing rules to the taxation of branches in Ireland, in line with the Authorized OECD Approach (AOA).

The AOA seeks to ensure that profits from intra-group dealings are attributed to a permanent establishment, or branch, that would have been earned if the branch or PE were a legally distinct and separate enterprise from the head office. These profits are determined with reference to the profits that would been earned by an unrelated party undertaking the same or similar functions under the same or similar conditions.

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Indian Software Transactions To Be Treated As Sales

Posted on March 18th, by Global Tax Weekly in Business. No Comments

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 »

UK Announces Tax Changes

Posted on March 11th, by Global Tax Weekly in Budgets. No Comments

Following the UK’s exit from the European Union earlier this year, and with the economy in the COVID doldrums, the UK Chancellor, Rishi Sunak, made a number of attention-grabbing announcements in his March 3 speech, including a hike to the headline corporate tax rate, new value-added tax and property tax relief measures for businesses, and the creation of a number of new freeports.

The Chancellor revealed that the corporate tax rate will be hiked to 25 percent from April 2023. Businesses with profits of GBP50,000 (USD69,800) or less will continue to benefit from the 19 percent rate, while a tapered rate will be introduced for profits above this ceiling such that only businesses with profits of GBP250,000 or more will be fully subject to the new 25 percent rate.

The Government has also announced that the rate of VAT for the tourism and hospitality … Read More »

Hong Kong Releases Budget

Posted on March 8th, by Global Tax Weekly in Budgets. No Comments

Hong Kong’s 2021-22 budget has been announced, in which the Government will waive up to HKD10,000 of profits tax, salaries tax, and tax under personal assessment, subject to a ceiling of HKD10,000 per case, and to certain provisos and conditions.

The Budget further also included a waiver of business registration fees for 2021-22 and an increase to the rate of ad valorem stamp duty from 0.1 percent to 0.13 percent of the consideration or value of each transaction of Hong Kong stock, payable by buyers and sellers.

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