Summary: 1. Cases - Philippines: Deutsche Bank • Supreme Court • Philippines branch remitted profits to German head office, withholding 15% branch profit remittance tax (domestic law rate) • Philippines / Germany treaty limits the rate to 10% • Branch did not comply with domestic law administrative procedure for treaty benefits • Taxpayer sought refund of 5% tax • Court: Non-compliance with administrative procedure does not disentitle taxpayer to treaty benefits, as treaty is superior law • Also, Court held that taxpayer did not breach administrative procedure, because branch withheld at domestic law rate For information: Fredieric Landicho (Taguig): flandicho@deloitte.com 2. Treaties - China / Switzerland • New treaty signed on 25 September • Protocol contains a provision on Business Tax and VAT • Treaty and protocol signed in "Peking"! - Australia / India • 2011 protocol has entered into force - China / Bahrain • Protocol signed on 16 September 3. BEPS - Singapore conference • OECD: There are situations where the arm's length principle does not give rise to a "coherent" tax policy, because it leads to double non-taxation • IMF: It may be too early to completely reject formulary apportionment - San Francisco conference • U.S. Treasury officials i. Opposed to "virtual PE" proposal of French government ii. BEPS Project should not drift into broader question of reviewing source vs. residence taxation - New York conference • Pascal Saint-Amans (OECD) i. "Agnostic" view of the sanctity of the arm's length principle ii. Scoping papers for Actions 9 and 10 will be issued "soon" 4. Taiwan: Free Economic Pilot Zone - First stage approved by Executive Yuan on 8 August 2013 - Targeting high-end services: logistics, international medical services, and value-added agricultural processing - Tax exemption and 10% tax rate offered for qualifying income For information: Cheli Liaw (Taipei): cheliliaw@deloitte.com.tw 5. In brief - China • Bulletin 52: VAT exemption on exported services • For information: Vicky Wang (Shanghai) or Ye Hong (Shanghai) - OECD • Public consultation on intangibles discussion paper: Paris on 12 and 13 November - Japan • Prime Minister Abe is expected to announce final decision next week on timing of consumption tax increases • Media speculation that he will also announce corporate income tax rate reductions For information: Jun Takahara (Tokyo): jun.takahara@tohmatsu.co.jp
