Summary: 1. Cases • Thailand: Thai Tank Terminal - Supreme Court - Monthly fixed fee under Offshore Services Agreement with Dutch parent: royalty or service fee? - Court held the fee to be a service fee, because + Services were actually performed + Any information provided was not confidential + Know-how was separately provided (and remunerated) in another contract • Thailand: Philips Electronics - Supreme Court - Variable fee (0.5% of sales) under Marketing Services Agreement with Dutch parent: royalty or service fee? - Court held the fee to be a royalty, because + Items to be provided were confidential trade secrets + No significant marketing services (activities) were performed • Thailand: Esso Thailand - Supreme Court - Master Services Agreement with Belgian affiliate - Allocation of costs in respect of group’s accounting system: royalty or service fee? - Costs were software license fees paid to external vendor - Belgian affiliate was not a licensee or sub-licensee - Court held the cost allocation payments to be royalties - Possible reasons + Look-through approach: the cost allocation payments can be traced to software license fees, and such fees are regarded (in Thailand) as royalties + Default approach: Belgian affiliate did not provide services to the Thai company (because it was not a licensee or sub-licensee) and the default characterization is “royalties” • For information: Wanna Suteerapornchai (Bangkok): wsuteerapornchai@deloitte.com Darika Soponawat (Bangkok): dsoponawat@deloitte.com 2. UN • UN Committee of Tax Experts: annual meeting this week • For papers presented at meeting: go to www.deloitte.com/ap/dbriefs/bytes 3. BEPS • OECD: Agenda for transfer pricing (TP) consultation on 12 and 13 November 2013 - Packed agenda + Intangibles + TP documentation, including country-by-country reporting + BEPS: other TP topics • OECD: PE avoidance request - Focus Group on BEPS Action 7 has requested descriptions of PE avoidance strategies - Suggests that Action 7 will not be restricted to commissionaire structures and the use of Article 5(4) exceptions 4. In brief • Vietnam / Serbia treaty enters into force • India: Shell and Vodafone joint case (issuing shares at undervalue) - Hearing this week in Bombay High Court - For information: Vipul Jhaveri (Mumbai): vjhaveri@deloitte.com • Korea - Public ruling in regard to characterization of “Johap” - For information: Gyung Ho Kim (Seoul): gykim@deloitte.com • Malaysia: Budget on 25 October 2013 - GST? - For information: Tan Eng Yew (Kuala Lumpur): etan@deloitte.com
