Luxembourg Tax Alert 2016-12 | KPMG | LU

Luxembourg Tax Alert 2016-12

Luxembourg Tax Alert 2016-12

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Update 9 March - 12 May 2016

 

You will find below a summary of some of the most important tax developments that have happened since the release of our last newsletter at the OECD, EU, and country level, in the area of tax transparency and the fight against tax avoidance.

EU - Tax transparency

Public country-by-country reporting

On 12 April 2016, the European Commission released a proposal for a directive on public country-by-country reporting. The directive would require multinational groups with a total consolidated revenue of €750 million to report publicly if they are EU-parented or otherwise have EU subsidiaries or branches.

For more details, read our newsletter dated 15 April 2016.

OECD - BEPS measures

BEPS Action 13 - Country-by-Country Reporting (CbCR)

On 22 March 2016, the OECD released the standardised electronic format for the exchange of CbC reports between jurisdictions. First exchanges of CbC reports will start in 2018, with information on the year 2016.

 

BEPS Action 6

Comments on discussion draft on treaty residence of pension funds

On 1 April 2016, the OECD released the comments (PDF | 6.82MB) received with respect to proposed changes to the OECD Model Tax Convention concerning the treaty residence of pension funds.

Comments on discussion draft on treaty entitlement of non-CIV funds

On 22 April 2016, the OECD released the public comments (PDF | 8.43MB) received with respect to a discussion draft on treaty entitlement of non-CIV funds.

Local implementation - BEPS and tax transparency measures

BEPS Action 13 - Transfer Pricing Documentation and CbCR

The local implementation of CbCR and other transfer pricing disclosure requirements based on Action 13 of the BEPS Action Plan goes on.

KPMG Institutes has published a summary that provides an overview of countries that intend to adopt, or have already adopted, draft/final legislation or regulations implementing Action 13 documentation requirements. The information is presented in list and map forms.

 

Australia - anti-tax avoidance measures

On 26 March 2016, the Australian Taxation office released four alerts, warning multinationals that specified transactions will be heavily scrutinised for tax avoidance. The alerts deal with: i) thin capitalisation and inappropriate recognition and revaluation of internally generated intangible assets (read more); ii) arrangements used by taxpayers to avoid or limit the impact of Australia’s Multinational Anti-Avoidance Law (read more); iii) cross-border leasing arrangements involving mobile assets (read more); and iv) related party foreign currency denominated finance with related party cross-country interest rate swaps (read more).

 

Canada - 2016 budget

The Canada Revenue Agency issued a technical interpretation outlining the types of rulings that potentially may be shared with other countries under Canada's new commitment to exchange information on certain tax rulings (consistent with BEPS action 5). Read more

 

Luxembourg - automatic exchange of information on tax rulings

The Bill of Law (6972) transposing the provisions of Directive 2015/2376 of 8 December 2015 (“DAC3”) amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation was submitted for approval to the Luxembourg Parliament on 22 March 2016. The provisions, in line with DAC3, foresee the automatic exchange of information on advance cross-border rulings and advance pricing arrangements to the tax authorities of the EU Member States and to the European Commission, as from 1 January 2017.

 

United Kingdom – Finance Bill 2016 and Business Tax Roadmap

The UK government published the Finance Bill 2016 on 24 March 2016. The Bill includes measures in line with certain BEPS recommendations, including inter alia new measures against hybrid mismatch arrangements (BEPS Actions 2), and measures adopting the modified nexus approach for intellectual property regimes (BEPS Action 5). With respect to a new interest deductibility regime (BEPS Action 4), a period of formal consultation is expected to start by the end May 2016, with a view to publishing draft legislation at the end of 2016 for inclusion in Finance Bill 2017. Read more

Along with the budget, the UK government unveiled its Business Tax Roadmap on 16 March 2016 setting out the plans for business taxes to 2020 and beyond. The roadmap includes clarifications of the next steps on the implementation of the OECD BEPS recommendations.

For further information, please do not hesitate to contact us.
 

 

 

 

 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation

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