Latest news from international tax and transfer pricing

US election results may provide opportunities for major tax law changes

President-elect Donald J.Trump has stated one of his top priorities is comprehensive tax reform to significantly lower individual and business tax rates. Refer to Tax Insights from PwC Washington National Tax Services for further information.

2017 Papua New Guinea National Budget

On 1 November 2016, the 2017 Papua New Guinea National Budget was handed down. Key highlights include:

  • resourcing the Internal Revenue Commission to improve compliance
  • changes to corporate income tax, foreign contractor withholding tax and dividend withholding tax rates
  • imposing Additional Profits Tax across all mining and petroleum projects
  • adjusting the taxable value of employer provided housing.

PwC PNG's National Budget Commentary provides an overview of the tax developments and amendments contained in the Budget.

2017 Malaysia Budget

On 21 October, 2016, the 2017 Malaysia Budget was handed down. PwC's TaXavvy Budget 2017 edition part 1 and part 2 provides an analysis of the key tax proposals in the Budget which include a corporate tax reduction.

EU consultation on mandatory disclosure scheme for intermediaries who facilitate tax evasion and avoidance

The European Commission has launched a public consultation to gather feedback on the way forward for European Union action on advisers and intermediaries who facilitate tax evasion and tax avoidance. In particular, the Commission is interested in gathering views on the Organisation for Economic Co-operation and Development (OECD) base erosion and profit shifting (BEPS) Action item 12 and how a mandatory disclosure scheme for tax advisers could be put in place.

Luxembourg adopts OECD transfer pricing standard

On 12 October 2016, the Luxembourg Government presented a Bill to Parliament outlining its 2017 budgetary measures. This includes the new transfer pricing provisions, augmenting the basic arm'slength rule in force since 1 January 2015, which formally adopt the OECD standard into Luxembourg law and expect to take effect from 1 January 2017. Refer to Tax Insights from PwC Transfer Pricing.

Thailand's incentives for headquarters, foreign trading companies, and treasury centres

Thailand recently revamped its incentive regimes, by creating a new international headquarters company regime, with add-on benefits for treasury centres, and an international trading centre regime. The most prominent incentives include a full corporate income tax exemption on qualifying income for 15 years, withholding tax exemptions, and other non-tax benefits. Refer to Tax Insights from PwC International Tax Services for further information.

OECD and BEPS developments

The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes held its annual meeting on 2-4 November 2016. Key highlights from the meeting include:

  • the completion of the first round of the Forum's peer review process, with the release of 17 new reports assessing the level of compliance with the international standard for exchange of information on request
  • a special fast-track review procedure was agreed to enable the Global Forum to recognise progress made and to assess changes being made n various jurisdictions by mid-2017, and
  • a second round of peer reviews is now underway which will include an assessment of the availability of and access by tax authorities to beneficial ownership information of all legal entities and arrangements.

Through the Centre for Tax Policy and Administration, the OECD also released a publication, OECD work on Taxation, which summarises the initiatives undertaken by the OECD to ensure tax transparency.

The OECD released a number of new guidance materials and information on BEPS Action 14 (Making dispute resolution mechanism more effective) including:

  • key documents, which will form the basis of the Mutual Agreement Procedure (MAP) peer review and monitoring process, and
  • the schedule for reviews, which will commence in December 2016.

As part of this review, taxpayers will be invited to provide input in relation to:

  • access to MAP
  • clarity and availability of MAP guidance, and
  • the timely implementation of MAP agreements.

As a next step to implementing the OECD Common Reporting Standard, the OECD has announced that the first series of bilateral automatic exchange relationships were established among the first batch of jurisdictions committed to exchanging information automatically as of 2017.

Brazil, Guernsey, Jersey the Isle of Man, Latvia, Panama, Cook Islands and St Lucia have signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (see the full list of current participating jurisdictions).