Dbriefs Bytes show

Dbriefs Bytes

Summary: Dbriefs Bytes brings you a weekly summary of the significant international tax developments impacting multinationals. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the "Deloitte network") is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

Podcasts:

 8 February 2013 | File Type: video/mp4 | Duration: Unknown

1. Treaties – Guernsey / Singapore • Treaty signed February 6 – Luxembourg / Sri Lanka • Treaty signed January 31 – India / Poland • Protocol signed January 29 • Short-form LOB article – Japan / U.S. • Protocol signed January 24 • Mandatory binding arbitration 2. India – U.S. / India MAP process • Mike Danilack airs his frustrations – Nokia • U.S.$2.4 billion tax demand (mainly transfer pricing) – Shell • U.S.$2.8 billion transfer pricing adjustment • Injection of equity by 100% shareholder: per share price was “too low” – Indian Cricket Board • U.S.$400 million tax demand (challenge to charitable status) 3. Myanmar – Foreign Investment Law Rules issued on January 31 – Identifies specific business activities in which foreign investment will be: a) Prohibited; or b) Only permitted to be carried out through a JV; or c) Only permitted to be carried out subject to conditions – Myanmar Investment Commission 4. Australia – Large and multinational companies will be required to publicly disclose the amount of Australian tax they pay 5. VAT – OECD draft VAT guidelines issued for public comment by Friday, May 3 6. On a lighter note… – Video game: “I Get This Call Every Day” – Bob: outsourced his job to China (and captured location savings!)

 1 February 2013 | File Type: video/mp4 | Duration: Unknown

1. Treaties – U.S. / Japan: protocol • Interest: 0% (currently, 10%) • Dividends: Conditions for 0% rate relaxed • Capital gains on sale of shares in land-rich company • Arbitration – Australia: meaning of “employer” in Article 15(2) of Australia’s treaties • Substance approach 2. Cases – India: LG Electronics • Transfer pricing in regard to marketing intangibles • “Excessive” advertising, marketing & promotion expenses versus two comparables • Characterized as a service for Korean parent – thus, deemed reimbursement plus mark-up – India: Sumitomo Mitsui Banking Corporation • Gross-up for foreign withholding tax incurred by Indian PE of Japanese bank • No deduction and no foreign tax credit for foreign withholding tax • Can foreign tax credit be claimed via non-discrimination article in India / Japan treaty? 3. Philippines – Transfer pricing rules 4. Korea: characterization of offshore entities – Corporation vs. Partnership – Effective 1 January 2013 5. Japan: 2013 Tax Reform – Tax benefits for companies operating in Japan – Tax rate increases for individuals 6. Westminster Grill – www.parliamentlive.tv

 25 January 2013 | File Type: video/mp4 | Duration: Unknown

1. Treaties ‒ China / Ecuador: signed 21 January 2013 ‒ India / Sri Lanka: signed 22 January 2013 ‒ Vietnam / Morocco: effective 1 January 2013 ‒ Indonesia / Morocco: effective 1 January 2013 ‒ China / Ethiopia: effective 1 January 2013 2. Cases ‒ India: Chiron Behring • Can a German partnership claim treaty benefits under the India / Germany treaty? ‒ UK: Prudential • Legal professional privilege does not extend to accountants who provide tax advice ‒ U.S.: Amazon • Ongoing case • Calculation of buy-in payment under cost sharing agreement 3. Malaysia: employee share schemes ‒ Public ruling issued 4. India ‒ Exports of computer software • Circular issued ‒ Silicon Valley Tax Director Group • Letter to U.S. and Indian tax authorities, expressing concerns about transfer pricing disputes in India 5. Transfer Pricing: BRICS schism? ‒ BRICS countries agree to develop international tax and transfer pricing standards that take into account “the aspirations of developing countries in general and BRICS countries in particular”

 18 January 2013 | File Type: video/mp4 | Duration: Unknown

1. India: GAAR – Deferred for 2 years 2. Treaties – Singapore / Vietnam • Protocol: sale of shares in “land-rich” companies – Hong Kong / Italy • Hong Kong now has 27 treaties – Germany / Mauritius • Note the provisions to protect against treaty shopping – Thailand / Taiwan • Treaty signed in 1999, finally effective • 5% dividend rate (a first for Thailand) • Impact on Thailand / Mauritius treaty (MFN provision) 3. Cases – Singapore: AQQ case • First case on GAAR (section 33) • Section 33 applies, but tax authorities make wrong adjustment! – India: Booz Allen case • When does liability arise for withholding tax on fees for technical services? • Payment required Reserve Bank approval: unless and until approval given, no withholding tax liability 4. Korea: Pension Fund investors in Korea Private Equity Funds – Effective 1 January 2013: “look through” to the underlying income, then apply relevant treaty to the underlying income – In many cases, this change should lead to nil Korean tax 5. China: Qualified Foreign Institutional Investors (QFIIs) – 10% tax on capital gains expected to be confirmed – Exemption under a relevant treaty? 6. Westminster Grill – Big 4 firms invited to a discussion with UK Parliamentary Committee on “tax avoidance”

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