On 22 December 2021, the European Commission issued a proposal for a directive implementing the Pillar Two GloBE rules uniformly across the European Union. These rules are part of the OECD's proposal for a two-pillar system to address tax challenges arising from the digitalisation and globalisation of the economy.
Austria’s government proposes a taxation of cryptocurrencies at a 27.5% tax rate. In the United Kingdom, large businesses will be required to prepare transfer pricing documentation. You can find more detailed information on these issues and other important news on international taxation in our article.
Where is the trend of tax audits for cross-border payments heading? Definitely to proving the fulfilment of the conditions for the application of preferential tax regimes, not only formally but also in practice. This is not an isolated trend. Globally, various instruments and measures of tax administrations have focused on achieving one thing in the last few years – preventing tax evasion and situations in which income is taxed in countries with lower or zero tax rates. And the easiest way to achieve this involves audits in companies, which pay the respective income abroad.
In Italy, new tax rules for intellectual property have been in force since October. Belgium will introduce a new form of special tax regime for foreign workers next year. The US Congress will start with the approval process of the Build Back Better Act. Read more in the latest international taxation news.
In its recent ruling (file no. I R 4/17 published on 21 October 2021), Federal Fiscal Court (BFH) provides clarification regarding interest rate agreed within the intragroup loan financing.
A request for international cooperation, in other words, an international letter of request, is one of a range of instruments that the tax administrator can use in tax proceedings to assess tax correctly. Recently, the number of cases in which the tax administrator used this instrument in the inspection of cross-border transactions has been increasing. However, let us look at this instrument from the perspective of a taxable entity.
The EU has announced initiatives in the field of tax policy planned for the end of 2021 and beyond. Here is a short summary.
Germany will allow partnerships to tax income as corporations through corporate tax. The Finnish Supreme Administrative Court has issued a ruling regulating the rules restricting the tax deductibility of interest expenses. The European Union has included Hong Kong in the list of non-cooperative tax jurisdictions in Annex II, together with a commitment to adjust the tax exemption regime for foreign income. This and more can be found in current news from the field of international taxation.
The OECD kept its promise and issued a Statement on 8 October 2021 involving a draft implementation plan of the two-pillar solution to address the tax challenges arising from the digitalisation and globalisation of the economy. An information brochure including answers to frequently asked questions was issued along with the Statement. The global convention was subsequently endorsed by the G20 representatives during their summit.
