Summary: 1. Cases • Cadila Healthcare - Ahmedabad Income Tax Appellate Tribunal - Optional convertible loan - No interest if the loan is converted - Based on comparables, zero interest was held to satisfy the arm’s length standard • U.S. Technology Resources - Cochin Income Tax Appellate Tribunal - Outbound service fees: “fees for included services” under India / U.S. treaty? - Advice in regard to management and financial decision making - Held to be “technical services” which “make available” technical knowledge, etc. • Hede Consultancy Company - Applicability of judicial anti-avoidance doctrine to tax planning strategy For information: K.R. Sekar (Bangalore): krsekar@deloitte.com 2. China • Jiangsu case - Interest paid to Hong Kong lender denied benefit of 7% withholding tax rate under China / Hong Kong double tax arrangement, due to lack of “beneficial ownership” • Bulletins - Bulletin 62: income from technology transfers - Bulletin 75: import tax policy for China (Shanghai) Pilot Free Trade Zone For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 3. BEPS • Ireland - Underwhelming change to corporate residence - For information: Conor Hynes (Dublin): chynes@deloitte.ie • New Zealand - Report foreshadows unilateral actions - For information: Teresa Farac (Auckland): tfarac@deloitte.co.nz • EU - Special expert group: digital economy - UK’s patent box regime • Trouping the color - Be careful what you publish 4. Article 7 • Japan: report on plan to align domestic treatment of PEs with “authorized OECD approach” For information: Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp 5. In brief • Hong Kong / Canada treaty - Enters into force • Australia - Draft bill to repeal Minerals Resource Rent Tax (MRRT) - For information: Harold Payne (Perth): hpayne@deloitte.com.au • Malaysia: Budget - GST: 6% rate, effective from 1 April 2015 - Corporate income tax: rate will reduce by 1% to 24% (year of assessment 2016) - Real property gains tax: revamping of rates scale - For information: Tan Eng Yew (Kuala Lumpur): etan@deloitte.com
