Dbriefs Bytes

1. BEPS • Country-by-country reporting - No interest, royalties, and service fees - No entity-by-entity reporting – instead, country reporting - Flexibility regarding sources of financial data • TP master file: flexibility regarding group-wide basis vs. by business line • IMF request: include indirect transfers in BEPS Project • Discussion draft on Action 1 (digital economy) - “Wait and see” approach in regard to section VII options 2. Cases • Huawei (India) - Sale of equipment with embedded software: “royalty”? - PE under India / China treaty: another Rolls Royce / Convergys case? • Bamford (India) - Secondment of employees: “furnishing of services” PE under India / UK treaty? - Individuals held to be employees of UK company (“legal form” approach) - But does the UK company “furnish services”? • RCF (Australia) and Antwerp Diamond Bank (India) 3. India • DTC - Indirect share transfers: (i) “substantially” = 20%; (ii) de minimis exception - CFC rules - GAAR rules • APAs: 5 down, 391 to go 4. In brief • China / Germany treaty - Dividends: 5% / 10% - Interest: 10% / 0% (sale of equipment on credit) / no limit (profit-participating debt) - Royalties: 10% / 6% (equipment rentals) • Australia: tax amnesty • Malaysia: GST bill • Singapore: GST guidance regarding fund management services • Greece: non-cooperative jurisdictions • Japan: not joking

1. BEPS • OECD issues discussion draft on Action 1 (digital economy) • No specific proposals • First key point: BEPS planning, in the digital economy, will be significantly impacted by all the other Actions in the BEPS Project • Second key point: but that will not be sufficient – something more fundamental would need to be done • Potential options for "fundamental change" - Article 5(4): trim or delete - "Significant digital presence" / "fully dematerialized digital activity" (FU-DDA) - "Virtual PE" - Withholding tax on digital transactions - VAT: exemptions on imports of low valued goods, and inbound B2C transactions • To obtain a copy of the discussion draft, visit www.deloitte.com/ap/dbriefs/bepscentral 2. Australia • Carbon tax and mining tax • Protective legislation regarding abandoned measures • ISAPS: 86 multinationals • Debt vs. equity paper • David Bradbury • For information: David Watkins (Sydney): dwatkins@deloitte.com.au 3. India • Bharti Airtel case: TP legislation does not apply to corporate guarantee without a fee • APAs: first batch • Nokia: US$394 million tax assessment for State VAT • For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Philippines • CS Garment case • Taxpayer takes advantage of amnesty program in regard to tax assessment under litigation • For information: Fredieric Landicho (Manila): flandicho@deloitte.com 5. In brief • Treaty developments: China / Ecuador enters into force, and Hong Kong / U.S. sign tax information exchange agreement • New Zealand: Interpretation Statement on tax residency - For information: Teresa Farac (Auckland): tfarac@deloitte.co.nz

1. BEPS • OECD issues discussion draft on Action 1 (digital economy) • No specific proposals • First key point: BEPS planning, in the digital economy, will be significantly impacted by all the other Actions in the BEPS Project • Second key point: but that will not be sufficient – something more fundamental would need to be done • Potential options for "fundamental change" - Article 5(4): trim or delete - "Significant digital presence" / "fully dematerialized digital activity" (FU-DDA) - "Virtual PE" - Withholding tax on digital transactions - VAT: exemptions on imports of low valued goods, and inbound B2C transactions • To obtain a copy of the discussion draft, visit www.deloitte.com/ap/dbriefs/bepscentral 2. Australia • Carbon tax and mining tax • Protective legislation regarding abandoned measures • ISAPS: 86 multinationals • Debt vs. equity paper • David Bradbury • For information: David Watkins (Sydney): dwatkins@deloitte.com.au 3. India • Bharti Airtel case: TP legislation does not apply to corporate guarantee without a fee • APAs: first batch • Nokia: US$394 million tax assessment for State VAT • For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Philippines • CS Garment case • Taxpayer takes advantage of amnesty program in regard to tax assessment under litigation • For information: Fredieric Landicho (Manila): flandicho@deloitte.com 5. In brief • Treaty developments: China / Ecuador enters into force, and Hong Kong / U.S. sign tax information exchange agreement • New Zealand: Interpretation Statement on tax residency - For information: Teresa Farac (Auckland): tfarac@deloitte.co.nz

1. BEPS • OECD issues discussion draft on Action 1 (digital economy) • No specific proposals • First key point: BEPS planning, in the digital economy, will be significantly impacted by all the other Actions in the BEPS Project • Second key point: but that will not be sufficient – something more fundamental would need to be done • Potential options for "fundamental change" - Article 5(4): trim or delete - "Significant digital presence" / "fully dematerialized digital activity" (FU-DDA) - "Virtual PE" - Withholding tax on digital transactions - VAT: exemptions on imports of low valued goods, and inbound B2C transactions • To obtain a copy of the discussion draft, visit www.deloitte.com/ap/dbriefs/bepscentral 2. Australia • Carbon tax and mining tax • Protective legislation regarding abandoned measures • ISAPS: 86 multinationals • Debt vs. equity paper • David Bradbury • For information: David Watkins (Sydney): dwatkins@deloitte.com.au 3. India • Bharti Airtel case: TP legislation does not apply to corporate guarantee without a fee • APAs: first batch • Nokia: US$394 million tax assessment for State VAT • For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Philippines • CS Garment case • Taxpayer takes advantage of amnesty program in regard to tax assessment under litigation • For information: Fredieric Landicho (Manila): flandicho@deloitte.com 5. In brief • Treaty developments: China / Ecuador enters into force, and Hong Kong / U.S. sign tax information exchange agreement • New Zealand: Interpretation Statement on tax residency - For information: Teresa Farac (Auckland): tfarac@deloitte.co.nz

1. BEPS: discussion draft on Action 6 (prevent treaty abuse) • Released on 14 March 2014 • Proposed amendments to OECD model treaty • Limitation-on-benefits (LOB) provision • "Purpose" provision • PEs in third countries • "Saving clause" • Articles 10, 13, and 4(3) • To obtain a copy, visit www.deloitte.com/ap/dbriefs/bepscentral 2. BEPS: discussion drafts on Action 2 (hybrid mismatch arrangements) • Two discussion drafts (domestic law changes and treaty issues) released on 19 March 2014 • Domestic law recommended changes regarding i. Hybrid financial instruments and transfers ii. Hybrid entity payments iii. Imported mismatches and reverse hybrids • Double deduction (DD) structures and deduction / no income (D/NI) structures • Primary response, defensive rule, and scope • Proposed amendment to OECD model treaty: comprehensive hybrid income and entity provision • To obtain a copy of the two discussion drafts, visit www.deloitte.com/ap/dbriefs/bepscentral 3. China • VAT pilot program: proposed extension to more industries • Considering resource tax • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 4. Hong Kong • Advance ruling published by tax authorities • Obtaining financing in Hong Kong caused profits to be sourced in Hong Kong: surprising conclusion • To obtain a copy of our Tax Analysis on this ruling, visit www.deloitte.com/ap/dbriefs/bytes • For information: Davy Yun (Hong Kong): dyun@deloitte.com.hk 5. Treaties • Recently entered into force: India / Romania and Korea / Peru

1. BEPS: discussion draft on Action 6 (prevent treaty abuse) • Released on 14 March 2014 • Proposed amendments to OECD model treaty • Limitation-on-benefits (LOB) provision • "Purpose" provision • PEs in third countries • "Saving clause" • Articles 10, 13, and 4(3) • To obtain a copy, visit www.deloitte.com/ap/dbriefs/bepscentral 2. BEPS: discussion drafts on Action 2 (hybrid mismatch arrangements) • Two discussion drafts (domestic law changes and treaty issues) released on 19 March 2014 • Domestic law recommended changes regarding i. Hybrid financial instruments and transfers ii. Hybrid entity payments iii. Imported mismatches and reverse hybrids • Double deduction (DD) structures and deduction / no income (D/NI) structures • Primary response, defensive rule, and scope • Proposed amendment to OECD model treaty: comprehensive hybrid income and entity provision • To obtain a copy of the two discussion drafts, visit www.deloitte.com/ap/dbriefs/bepscentral 3. China • VAT pilot program: proposed extension to more industries • Considering resource tax • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 4. Hong Kong • Advance ruling published by tax authorities • Obtaining financing in Hong Kong caused profits to be sourced in Hong Kong: surprising conclusion • To obtain a copy of our Tax Analysis on this ruling, visit www.deloitte.com/ap/dbriefs/bytes • For information: Davy Yun (Hong Kong): dyun@deloitte.com.hk 5. Treaties • Recently entered into force: India / Romania and Korea / Peru

1. BEPS: discussion draft on Action 6 (prevent treaty abuse) • Released on 14 March 2014 • Proposed amendments to OECD model treaty • Limitation-on-benefits (LOB) provision • "Purpose" provision • PEs in third countries • "Saving clause" • Articles 10, 13, and 4(3) • To obtain a copy, visit www.deloitte.com/ap/dbriefs/bepscentral 2. BEPS: discussion drafts on Action 2 (hybrid mismatch arrangements) • Two discussion drafts (domestic law changes and treaty issues) released on 19 March 2014 • Domestic law recommended changes regarding i. Hybrid financial instruments and transfers ii. Hybrid entity payments iii. Imported mismatches and reverse hybrids • Double deduction (DD) structures and deduction / no income (D/NI) structures • Primary response, defensive rule, and scope • Proposed amendment to OECD model treaty: comprehensive hybrid income and entity provision • To obtain a copy of the two discussion drafts, visit www.deloitte.com/ap/dbriefs/bepscentral 3. China • VAT pilot program: proposed extension to more industries • Considering resource tax • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 4. Hong Kong • Advance ruling published by tax authorities • Obtaining financing in Hong Kong caused profits to be sourced in Hong Kong: surprising conclusion • To obtain a copy of our Tax Analysis on this ruling, visit www.deloitte.com/ap/dbriefs/bytes • For information: Davy Yun (Hong Kong): dyun@deloitte.com.hk 5. Treaties • Recently entered into force: India / Romania and Korea / Peru

1. BEPS • “Country-by-country” reporting and transfer pricing documentation: OECD publishes all comments • OECD regional consultations: Asia Pacific and Latin America / Caribbean • U.S.: “correcting extreme views”, “completely off the wall” • U.S. tax reform proposals: BEPS fingerprints • IMF and UN consultations • Israel's VAT and Italy's Google Tax • Dbriefs: BEPS Central - www.deloitte.com/ap/dbriefs/bepscentral 2. China • Circular 13: export VAT refunds for Chinese export companies - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn • China / Taiwan double tax arrangement: negotiations - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw 3. India • Sanofi “indirect share transfer” appeal: decision expected on 1 April 2014 • Changes to India’s model investment protection agreement (in response to Vodafone case?) - For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Cases • Singapore – AQQ: GAAR (section 33) - For information: Daniel Ho (Singapore): danho@deloitte.com • Spain: withholding tax on embedded royalty - For information: Brian Leonard (Madrid): bleonard@deloitte.es 5. In brief • Treaties enter into force - Laos / Luxembourg - Laos / Belarus - Sri Lanka / Belarus • OECD discussion draft on transfer pricing comparable data and developing countries - To obtain a copy of the document, please visit www.deloitte.com/ap/dbriefs/bytes • Indonesia: export duties on mineral concentrates - For information: Nazly Siregar (Jakarta): nsiregar@deloitte.com • Bitcoins: guidance in UK and Japan - For information: Tom Downing (Birmingham): tdowning@deloitte.co.uk Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp • Australia – Article 10: “holds directly... voting power” - For information: David Watkins (Sydney): dwatkins@deloitte.com.au

1. BEPS • “Country-by-country” reporting and transfer pricing documentation: OECD publishes all comments • OECD regional consultations: Asia Pacific and Latin America / Caribbean • U.S.: “correcting extreme views”, “completely off the wall” • U.S. tax reform proposals: BEPS fingerprints • IMF and UN consultations • Israel's VAT and Italy's Google Tax • Dbriefs: BEPS Central - www.deloitte.com/ap/dbriefs/bepscentral 2. China • Circular 13: export VAT refunds for Chinese export companies - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn • China / Taiwan double tax arrangement: negotiations - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw 3. India • Sanofi “indirect share transfer” appeal: decision expected on 1 April 2014 • Changes to India’s model investment protection agreement (in response to Vodafone case?) - For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Cases • Singapore – AQQ: GAAR (section 33) - For information: Daniel Ho (Singapore): danho@deloitte.com • Spain: withholding tax on embedded royalty - For information: Brian Leonard (Madrid): bleonard@deloitte.es 5. In brief • Treaties enter into force - Laos / Luxembourg - Laos / Belarus - Sri Lanka / Belarus • OECD discussion draft on transfer pricing comparable data and developing countries - To obtain a copy of the document, please visit www.deloitte.com/ap/dbriefs/bytes • Indonesia: export duties on mineral concentrates - For information: Nazly Siregar (Jakarta): nsiregar@deloitte.com • Bitcoins: guidance in UK and Japan - For information: Tom Downing (Birmingham): tdowning@deloitte.co.uk Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp • Australia – Article 10: “holds directly... voting power” - For information: David Watkins (Sydney): dwatkins@deloitte.com.au

1. BEPS • “Country-by-country” reporting and transfer pricing documentation: OECD publishes all comments • OECD regional consultations: Asia Pacific and Latin America / Caribbean • U.S.: “correcting extreme views”, “completely off the wall” • U.S. tax reform proposals: BEPS fingerprints • IMF and UN consultations • Israel's VAT and Italy's Google Tax • Dbriefs: BEPS Central - www.deloitte.com/ap/dbriefs/bepscentral 2. China • Circular 13: export VAT refunds for Chinese export companies - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn • China / Taiwan double tax arrangement: negotiations - For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw 3. India • Sanofi “indirect share transfer” appeal: decision expected on 1 April 2014 • Changes to India’s model investment protection agreement (in response to Vodafone case?) - For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. Cases • Singapore – AQQ: GAAR (section 33) - For information: Daniel Ho (Singapore): danho@deloitte.com • Spain: withholding tax on embedded royalty - For information: Brian Leonard (Madrid): bleonard@deloitte.es 5. In brief • Treaties enter into force - Laos / Luxembourg - Laos / Belarus - Sri Lanka / Belarus • OECD discussion draft on transfer pricing comparable data and developing countries - To obtain a copy of the document, please visit www.deloitte.com/ap/dbriefs/bytes • Indonesia: export duties on mineral concentrates - For information: Nazly Siregar (Jakarta): nsiregar@deloitte.com • Bitcoins: guidance in UK and Japan - For information: Tom Downing (Birmingham): tdowning@deloitte.co.uk Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp • Australia – Article 10: “holds directly... voting power” - For information: David Watkins (Sydney): dwatkins@deloitte.com.au

1. BEPS • “Country-by-country” reporting and TP documentation - Public comments on discussion draft – common themes + Information that should not be included (e.g., intra-group payments of interest, royalties, and service fees) + “Bottom up” versus “top down” approach: flexibility needed + Confidentiality + Timing - For information: Bill Dodwell (London): bdodwell@deloitte.co.uk Alison Brock (London): albrock@deloitte.co.uk - To obtain a copy of the Deloitte comments, please visit: www.deloitte.com/ap/dbriefs/bytes • Updated BEPS calendar - To obtain a copy of the updated OECD BEPS calendar, please visit: www.deloitte.com/ap/dbriefs/bytes - To obtain a copy of Deloitte’s color-coded and reformatted version, please visit: www.deloitte.com/ap/dbriefs/bytes 2. China • Shanghai Pilot Free Trade Zone: cross-border use of RMB • Cross-border RMB cash pooling • POBO / ROBO • Other changes • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 3. Budgets • Singapore - Extension of expiring tax incentives - Singapore banks: Basel III additional tier 1 capital - Significant increase in welfare payments - For information: Daniel Ho (Singapore): danho@deloitte.com - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes • Hong Kong - Government is studying the issue of deductibility of interest expense - For information: Anthony Lau (Hong Kong): antlau@deloitte.com.hk - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes 4. In brief • Treaties - Treaties signed: Bangladesh / Kuwait and Singapore / Laos - Treaties entered into force: India / Malta and Indonesia / Suriname • Taiwan - Proposal to increase personal income tax rates on high earners and the business tax rate for financial institutions - For information: Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw • Vietnam - Circular 219: VAT zero-rating for exported services - For information: Tom McClelland (Ho Chi Minh): tmcclelland@deloitte.com • India - Vodafone proposes international arbitration to settle tax dispute regarding Hutchison indirect share acquisition

1. BEPS • “Country-by-country” reporting and TP documentation - Public comments on discussion draft – common themes + Information that should not be included (e.g., intra-group payments of interest, royalties, and service fees) + “Bottom up” versus “top down” approach: flexibility needed + Confidentiality + Timing - For information: Bill Dodwell (London): bdodwell@deloitte.co.uk Alison Brock (London): albrock@deloitte.co.uk - To obtain a copy of the Deloitte comments, please visit: www.deloitte.com/ap/dbriefs/bytes • Updated BEPS calendar - To obtain a copy of the updated OECD BEPS calendar, please visit: www.deloitte.com/ap/dbriefs/bytes - To obtain a copy of Deloitte’s color-coded and reformatted version, please visit: www.deloitte.com/ap/dbriefs/bytes 2. China • Shanghai Pilot Free Trade Zone: cross-border use of RMB • Cross-border RMB cash pooling • POBO / ROBO • Other changes • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 3. Budgets • Singapore - Extension of expiring tax incentives - Singapore banks: Basel III additional tier 1 capital - Significant increase in welfare payments - For information: Daniel Ho (Singapore): danho@deloitte.com - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes • Hong Kong - Government is studying the issue of deductibility of interest expense - For information: Anthony Lau (Hong Kong): antlau@deloitte.com.hk - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes 4. In brief • Treaties - Treaties signed: Bangladesh / Kuwait and Singapore / Laos - Treaties entered into force: India / Malta and Indonesia / Suriname • Taiwan - Proposal to increase personal income tax rates on high earners and the business tax rate for financial institutions - For information: Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw • Vietnam - Circular 219: VAT zero-rating for exported services - For information: Tom McClelland (Ho Chi Minh): tmcclelland@deloitte.com • India - Vodafone proposes international arbitration to settle tax dispute regarding Hutchison indirect share acquisition

1. BEPS • “Country-by-country” reporting and TP documentation - Public comments on discussion draft – common themes + Information that should not be included (e.g., intra-group payments of interest, royalties, and service fees) + “Bottom up” versus “top down” approach: flexibility needed + Confidentiality + Timing - For information: Bill Dodwell (London): bdodwell@deloitte.co.uk Alison Brock (London): albrock@deloitte.co.uk - To obtain a copy of the Deloitte comments, please visit: www.deloitte.com/ap/dbriefs/bytes • Updated BEPS calendar - To obtain a copy of the updated OECD BEPS calendar, please visit: www.deloitte.com/ap/dbriefs/bytes - To obtain a copy of Deloitte’s color-coded and reformatted version, please visit: www.deloitte.com/ap/dbriefs/bytes 2. China • Shanghai Pilot Free Trade Zone: cross-border use of RMB • Cross-border RMB cash pooling • POBO / ROBO • Other changes • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 3. Budgets • Singapore - Extension of expiring tax incentives - Singapore banks: Basel III additional tier 1 capital - Significant increase in welfare payments - For information: Daniel Ho (Singapore): danho@deloitte.com - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes • Hong Kong - Government is studying the issue of deductibility of interest expense - For information: Anthony Lau (Hong Kong): antlau@deloitte.com.hk - To obtain a copy of our report, please visit: www.deloitte.com/ap/dbriefs/bytes 4. In brief • Treaties - Treaties signed: Bangladesh / Kuwait and Singapore / Laos - Treaties entered into force: India / Malta and Indonesia / Suriname • Taiwan - Proposal to increase personal income tax rates on high earners and the business tax rate for financial institutions - For information: Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw • Vietnam - Circular 219: VAT zero-rating for exported services - For information: Tom McClelland (Ho Chi Minh): tmcclelland@deloitte.com • India - Vodafone proposes international arbitration to settle tax dispute regarding Hutchison indirect share acquisition

1. Cases • India: Booz - Authority for Advanced Rulings (AAR) - Non-resident affiliates of Booz India were each held to have a PE in India - Decision based on the fact that Booz India’s business is entwined with, and commercially dependent on, non-resident affiliates - Contrast between this case and Delhi High Court’s decision in e-Funds (discussed in Dbriefs Bytes last week) is striking • India: Gupta Overseas - Agra Income Tax Appellate Tribunal - Indian company failed to withhold tax from payments to non-residents - Thus, tax deduction denied for such payments - Taxpayer argued that the provision which denies the deduction breaches the non-discrimination article under the relevant treaties - Tribunal: Article 24(4) (deduction neutrality) is breached, but not Article 24(1) (nationality) 2. Japan • Consumption tax - Japan is planning to change law to impose consumption tax on in-bound supplies of services and intangibles, in B2C situations – effective 1 October 2015 - Compliance is the difficult issue - Similar issue is faced in South Africa and the EU • Foreign asset report - New report is required to be filed (for the first time) by 17 March 2014 - Failure to file can be punished by imprisonment • 2013 protocol to Japan / U.S. treaty - U.S. ratification process is “stuck” in the Senate • For information: Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp 3. India • “Interim budget” released this week • No income tax changes • Finance Minister: Direct Taxes Code (DTC) will be placed on Finance Ministry’s website • For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. BEPS • G20 Finance Ministers meet in Sydney this weekend • Expect strong political statements supporting BEPS Project • Updated OECD BEPS timetable: www.deloitte.com/ap/dbriefs/bytes • For information: David Watkins (Sydney): dwatkins@deloitte.com.au 5. In brief • Treaties - India / Croatia - Philippines / Nigeria • Upcoming budgets - Singapore: today - Hong Kong: 26 February 2014 • OECD publishes comments on two discussion drafts - To access the comments, please visit www.deloitte.com/ap/dbriefs/bytes • New Zealand: Alesco case - Taxpayer’s appeal to Supreme Court discontinued after settlement agreed with tax authorities

1. Cases • India: Booz - Authority for Advanced Rulings (AAR) - Non-resident affiliates of Booz India were each held to have a PE in India - Decision based on the fact that Booz India’s business is entwined with, and commercially dependent on, non-resident affiliates - Contrast between this case and Delhi High Court’s decision in e-Funds (discussed in Dbriefs Bytes last week) is striking • India: Gupta Overseas - Agra Income Tax Appellate Tribunal - Indian company failed to withhold tax from payments to non-residents - Thus, tax deduction denied for such payments - Taxpayer argued that the provision which denies the deduction breaches the non-discrimination article under the relevant treaties - Tribunal: Article 24(4) (deduction neutrality) is breached, but not Article 24(1) (nationality) 2. Japan • Consumption tax - Japan is planning to change law to impose consumption tax on in-bound supplies of services and intangibles, in B2C situations – effective 1 October 2014 - Compliance is the difficult issue - Similar issue is faced in South Africa and the EU • Foreign asset report - New report is required to be filed (for the first time) by 17 March 2014 - Failure to file can be punished by imprisonment • 2013 protocol to Japan / U.S. treaty - U.S. ratification process is “stuck” in the Senate • For information: Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp 3. India • “Interim budget” released this week • No income tax changes • Finance Minister: Direct Taxes Code (DTC) will be placed on Finance Ministry’s website • For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 4. BEPS • G20 Finance Ministers meet in Sydney this weekend • Expect strong political statements supporting BEPS Project • Updated OECD BEPS timetable: www.deloitte.com/ap/dbriefs/bytes • For information: David Watkins (Sydney): dwatkins@deloitte.com.au 5. In brief • Treaties - India / Croatia - Philippines / Nigeria • Upcoming budgets - Singapore: today - Hong Kong: 26 February 2014 • OECD publishes comments on two discussion drafts - To access the comments, please visit www.deloitte.com/ap/dbriefs/bytes • New Zealand: Alesco case - Taxpayer’s appeal to Supreme Court discontinued after settlement agreed with tax authorities