Summary: 1. Vietnam • Vietnam / Serbia treaty − Entered into force on 3 June 2013 − Applicable from 1 January 2014 • Holding company locations for Vietnamese “land-rich” companies − Protocol to Vietnam / Singapore treaty: will permit Vietnam taxation on sales of shares in “land-rich” Vietnamese companies − Possible alternative holding company locations + Belgium + Netherlands + Luxembourg • Foreign Contractor Withholding Tax (FCWT): imported machinery and equipment with warranty − Expansion of FCWT For information: - Tom McClelland (Ho Chi Minh City) tmcclelland@deloitte.com - Minh Bui (Hanoi) mbui@deloitte.com - Tuan Bui (Hanoi) tbui@deloitte.com 2. BEPS • UK House of Lords hearing − 11 June 2013 − Pascal Saint-Amans (OECD) + “Divorce” between intangibles ownership and location of activities + No wholesale abandonment of the existing transfer pricing orthodoxy, in favor of formulary apportionment • U.S. House Ways and Means Hearing − 13 June 2013 − Witnesses + Pascal Saint-Amans (OECD) + Ed Kleinbard + Paul Oosterhuis − Ed Kleinbard: “empty formalism” leads to stateless income − Paul Oosterhuis : advocates “more of a destination-based income tax” • UK Public Accounts Committee: report on “Tax Avoidance – Google” − 13 June 2013 − Scathing report on Google • OECD’s intangibles project − Next draft will focus on comparability factors (corporate synergies, local market conditions, location savings) − Next draft will also elaborate on the notion that mere legal ownership plus paying the cost of the R&D effort, without any control functions being exercised, does not entitle a company to “intangible related returns” 3. APAs & Mutual Agreement Procedure (MAP) • Japan / U.S.: MAP situation should be enhanced by mandatory binding arbitration in protocol • India / U.S.: Michael Danilack (U.S. competent authority) warned U.S. multinationals that applying for a unilateral APA with India might not result in the receipt of a full U.S. foreign tax credit for the Indian tax they agreed to pay 4. In brief • India: Vodafone − Conciliation process: constitutionally valid? • Malaysia: unit trust distributions − Public Ruling 5/2013 • New Zealand: thin capitalization − Discussion paper released for public comments (by 28 June 2013)
