Transfer Pricing News Stories

Korean tax authorities investigates Starbucks' pricing of coffee beans

Korean tax authorities investigates Starbucks’ pricing of coffee beans

Starbucks Korea is now being investigated for overpricing goods and services imported from abroad. Officials from the National Tax Service have seized accounting records and data held at Starbucks’ Korean head office in Seoul. Subject of the investigation is transfer pricing of coffee beans and others products for sale at its more than 1,370 local shops. In 2019 Starbucks Korea reported sales of over 1.87 trillion won ($1.53 billion) and net profits of 132.8 billion won ...
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US Investigations into Digital Service Taxes

US Investigations into Digital Service Taxes

Washington, DC – The United States Trade Representative announced today that his office is beginning investigations into digital services taxes that have been adopted or are being considered by a number of our trading partners. The investigations will be conducted under Section 301 of the 1974 Trade Act. This provision gives the USTR broad authority to investigate and respond to a foreign country’s action which may be unfair or discriminatory and negatively affect U.S. Commerce. “President Trump is concerned that many of our trading partners are adopting tax schemes designed ...
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Mining Group Rio Tinto in new $86 million Dispute with ATO over pricing of Aluminium

In March 2020 the Australian Taxation Office issued an tax assessment regarding transfer pricing to Rio Tinto’s aluminium division according to which additional taxes in an amount of $86.1 million must be paid for fiscal years 2010 – 2016. According to the assessment Rio’s Australian subsidiaries did not charge an arm’s length price for the aluminium they sold to Rio’s Singapore marketing hub. This new aluminum case is separate to Rio’s long-running $447 million dispute with the ATO over the transfer pricing of Australian iron ore. Rio intents to object ...
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Fiat Chrysler reaches a EUR 2.5 billion settelment with the Italien tax authorities

Fiat Chrysler reaches a EUR 2.5 billion settelment with the Italien tax authorities

Fiat Chrysler has reached a settlement with the Italian tax agency over taxable gains related to a transfer of the U.S. Chrysler business from Fiat SpA Italy to Fiat Chrysler Automobiles NV (Netherlands). The Italian tax agency claimed that the value of the U.S. Chrysler business had been underestimated and issued a preliminary assessment with an additional taxable gain of 5.1 billion euros. The agency had valued Chrysler at 12.5 billion euros, while Fiat SpA had declared it to be worth less than 7.5 billion. Under the terms of the ...
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Google - Taxes and Transfer Pricing

Google – Taxes and Transfer Pricing

Google’s tax affairs are back in the spotlight after filings in the Netherlands have showed that billions of dollars were moved to Bermuda in 2016 using the “double Irish Dutch sandwich”. According to the Washington Post, Google’s cash transfers to Bermuda reached $27b in 2016. Google uses the double Irish Dutch sandwich structure to shield the majority of it’s international profits from taxation. The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda-mailbox owned by another company registered ...
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Malaysian Energy Group - TENAGA Nasional Bhd - has been issued a RM 4.000.000.000 tax bill by the Revenue Board of Malaysia

Malaysian Energy Group – TENAGA Nasional Bhd – has been issued a RM 4.000.000.000 tax bill by the Revenue Board of Malaysia

Malaysian Energy Group – TENAGA Nasional Bhd – has begun legal proceedings against the Inland Revenue Board of Malaysia. In November 2019, the Inland Revenue Board issued a tax assessment  according to which taxes of RM3.98 bil (or USD 1 billion) is owed for years 2015-2017. After reciving the assessment, TENAGA responded “Based on the legal advice obtained from our tax solicitors, TNB has a good basis to contend that there is no legal and factual basis for IRB to issue the said notices”  “Accordingly, TNB will be appealing against the ...
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Microsoft - Taxes and Transfer Pricing

Microsoft – Taxes and Transfer Pricing

Microsoft’s tax affairs have been in the spotlight of tax authorities all over the World during the last decade. Why? The setup used by Microsoft involves shifting profits from sales in the US, Europe and Asia to regional operating centers placed in low tax jurisdictions (Bermuda, Luxembourg, Ireland, Singapore and Puerto Rico). The following text has been provided by Microsoft in a US filing concerning effective tax and global allocation of income: “Our effective tax rate for the three months ended September 30, 2017 and 2016 was 18% and 17%, respectively. Our ...
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US response to OECDs Unified Approach

US response to OECDs Unified Approach

Letter from the US treasury to the OECD concerning the proposed Unified Approach on taxation of the Digital Economy, and the reply to the letter from the OECD. treasury-letter-oecd-digital-services-tax Letter-from-OECD-Secretary-General-Angel-Gurria-for-the-attention-of-The-Honorable-Steven-T-Mnuchin-Secretary-of-the-Treasury-United-States ...
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Netflix under investigation for alleged tax evasion in Italy

Netflix under investigation for alleged tax evasion in Italy

Public prosecutors in Italy have opened a preliminary probe into the taxation of Netflix on the basis that servers and cables constitute a digital infrastructure that makes revenues taxable under Italian law. Italian media, Corriere della Sera, says that the prosecutors are working with Italy’s fiscal police to determine whether revenues from Netflix’s estimated 1.4 million Italian subscribers are subject to Italian taxation, even though Netflix operates out of the Netherlands. Italian prosecutors have recently also probed into the taxation of other U.S. tech giants such as Apple, Amazon and ...
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British American Tobacco hit by £902 million tax assessments in the Netherlands

British American Tobacco hit by £902 million tax assessments in the Netherlands

According to the 2018 financial statement, British American Tobacco group has been hit by a £902 million tax assessments in the Netherlands. “The Dutch tax authority has issued a number of assessments on various issues across the years 2003-2016 in relation to various intra-group transactions. The assessments amount to an  aggregate net liability across these periods of £902 million covering tax, interest and penalties. The Group has appealed against the assessments in full. The Group believes that its companies have meritorious defences in law and fact in each of the above matters ...
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The L'Oréal group announced additional payment of 320 million euros in corporate tax to the French tax authorities to "settle a dispute"

The L’Oréal group announced additional payment of 320 million euros in corporate tax to the French tax authorities to “settle a dispute”

The French cosmetic group L’Oréal announced in September 2019 that it would pay 320 million euros to the French tax authorities to “settle a dispute” related to the payment of corporate tax for three of its subsidiaries for fiscal years 2014 and 2018. In detail, the charge was 47 million euros for Lancôme Parfums et Beauté, 115 million euros for Active International Cosmetics and 158 million euros for Prestige and Collections International ...
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Telenor will have to pay additional taxes of 2.5 billion Norwegian crowns

Telenor will have to pay additional taxes of 2.5 billion Norwegian crowns

Telenor Norway has received a tax assessment according to which the company will have to pay additional taxes in Norway of 2.5 billion Norwegian crowns for tax year 2013. A deduction expenced in 2013 for a loss suffered in 2012 due to settlement of bank guarantees given in respect of external funding in its Indian subsidiary Unitech Wireless has been disallowed for tax purposes by the Norwegian Tax Authorities Telenor decided to enter the market in India in 2008. In 2012, the Supreme Court of India revoked the licenses of ...
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The Australian Taxation Office and Mining Giant BHP have settled yet another Transfer Pricing Dispute

The Australian Taxation Office and Mining Giant BHP have settled yet another Transfer Pricing Dispute

BHP Group has agreed to pay the state of Western Australia A$250 million to end a dispute over royalties paid on iron ore shipments sold through its Singapore marketing hub. The State government found in January that the world’s biggest miner had underpaid royalties on iron ore shipments sold via Singapore stretching back over more than a decade. BHP reached a deal to pay A$529 million in additional taxes to the Australian government late last year to settle a long-running tax dispute over the miner’s Singapore hub on its income ...
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The Kering Group - owner of Gucci, Bottega Veneta, Saint Laurent and Pomellato - has settled an Italian Tax Case for an Amount of 1.250 Billion Euro

The Kering Group – owner of Gucci, Bottega Veneta, Saint Laurent and Pomellato – has settled an Italian Tax Case for an Amount of 1.250 Billion Euro

The Kering group – owner of Gucci, Bottega Veneta, Saint Laurent and Pomellato –  has settled a case with the Italian tax agency for an amount of euro 1.250 billion in taxes and penalties relating to fiscal years 2011-2017. The case was started by the Italian tax police in 2017 and resulted in a recommendation to charge the president and chief executive officer of the Italian company Guccio Gucci S.p.A. with the crimes of tax evasion and failure to file Italian income tax return. Guccio Gucci S.p.A., the Italian operating ...
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European Commission decision to open state-aid investigation into Luxembourg deduction of deemed interest on interest free loans - The Huhtamaki

European Commission decision to open state-aid investigation into Luxembourg deduction of deemed interest on interest free loans – The Huhtamaki

The European Commission has published a non-confidential version of the decision to open a state aid investigation into tax rulings granted by the Luxembourg tax authorities to the Huhtamaki Group in relation to the treatment of interest-free loans granted by an Irish group company to a Luxembourg group company, Huhtalux S.a.r.l. The investigation will focus on three rulings obtained by a Luxembourg subsidiary of a group from the Luxembourg tax administration in 2009, 2012 and 2013. The Luxembourg subsidiary which carried out intra-group financing activities was granted interest-free loans from an ...
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EU report on financial crimes, tax evasion and tax avoidance

In March 2018 a special EU committee on financial crimes, tax evasion and tax avoidance (TAX3) was established. Now, one year later, The EU Parliament has approved a controversial report from the committee. According to the report close to 40 % of MNEs’ profits are shifted to tax havens globally each year with some European Union countries appearing to be the prime losers of profit shifting, as 35 % of shifted profits come from EU countries. About 80 % of the profits shifted from EU Member States are channelled to ...
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EU list of Non-Cooperative Tax Jurisdictions - Tax Havens

EU list of Non-Cooperative Tax Jurisdictions – Tax Havens

12 March 2019 the EU Council added ten jurisdictions to the list of Non-Cooperative Tax Jurisdictions – Tax Havens. Non-Cooperative Tax Jurisdictions are those that refused to engage with the EU or to address tax good governance shortcomings. See the full 2019 document with the Council’s conclusions on the revised EU list of noncooperative jurisdictions for tax purposes here. As of March 2019 the EU list of Non-Cooperative Tax Jurisdictions includes 15 countries: American Samoa Barbados Guam Samoa Trinidad and Tobago US Virgin Islands Aruba Belize Bermuda Dominica Fiji Marshall ...
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The Australian Taxation Office and Bupa Health Insurance reaches $157m settlement after decade-long dispute

Bupa reaches $157m settlement with the Australian tax office after decade-long dispute The settlement was the result of a decade-long dispute with the ATO over a “number of different matters”, included transfer pricing issues with acquisitions in Australia in 2007 and 2008. Bupa’s tax affairs came under scrutiny last year in a report by the Tax Justice Network. The report alleged that Bupa frequently used related party loans and debts from a corporate restructure, among other things, to reduce its profits in Australia. According to the report, Bupa posted a ...
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Commission opens in-depth investigation into tax treatment of Huhtamäki in Luxembourg

Commission opens in-depth investigation into tax treatment of Huhtamäki in Luxembourg

The European Commission has now opened an in-depth investigation to examine whether tax rulings granted by Luxembourg to Finnish food and drink packaging company Huhtamäki may have given the company an unfair advantage over its competitors, in breach of EU State Aid rules. Margrethe Vestager, Commissioner in charge of competition policy, said: “Member States should not allow companies to set up arrangements that unduly reduce their taxable profits and give them an unfair advantage over their competitors. The Commission will carefully investigate Huhtamäki’s tax treatment in Luxembourg to assess whether ...
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Glencore in $680 million Transfer Pricing Dispute with HMRC

Glencore in $680 million Transfer Pricing Dispute with HMRC

In a publication of preliminary results for 2018 mining giant Glencore reports a major tax assessment issued by HMRC in December 2018. “UK Tax Audit In December 2018, HMRC issued formal transfer pricing, permanent establishment and diverted profits tax assessments for the 2008 – 2017 tax years, amounting to $680 million. The Group intends to appeal and vigorously contest these assessments, following, over the years, various legal opinions received and detailed analysis conducted, supporting its positions and policies applied, and therefore the Group has not provided for the amount assessed ...
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France vs. Apple, Feb. 2019, Settlement on Payment of 571 million Euros in Back Taxes

France vs. Apple, Feb. 2019, Settlement on Payment of 571 million Euros in Back Taxes

Apple has agreed to paid an additional 571 million euros to France in a settlement with the tax authorities. According to the French news agency, l’expansion l’Express – “For several months now, secret negotiations on this subject have been taking place between Apple and the French International Audit Department (DVNI). But it is not until the end of December 2018 that a confidential agreement was reached. The subject of the negotiations has been the limited revenues and the low taxes paid by Apple in France for the last ten years.” ...
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Flir Systems Inc in SEK 2.8 billion transfer pricing dispute with Swedish Tax Authorities.

Flir Systems Inc in SEK 2.8 billion transfer pricing dispute with Swedish Tax Authorities.

Flir Systems Inc, a global leader in infrared Cameras, is involved in a SEK 2.8 billion transfer pricing dispute with the Swedish Tax Authorities. In a recent 10Q filings Flir Systems Inc. provides information on the dispute: “…the United States Internal Revenue Service (“IRS”) and other tax authorities regularly examine our income tax returns. Our financial condition and results of operations could be adversely impacted if any assessments resulting from the examination of our income tax returns by the IRS or other taxing authorities are not resolved in our favor ...
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Blizzard Gaming involved in major Tranfer Pricing disputes

Blizzard Gaming involved in major Tranfer Pricing disputes

US Gaming Giant, Activision Blizzard Inc. – known for games such as World of Warcraft and Diablo – is and has been involved in several major transfer pricing disputes – with the US, French, UK, and Swedish tax authorities. In a 10Q filing with the US Securities and Exchange Commission from November 2018 the following information was provided by the company on pending tax cases. “Activision Blizzard’s 2009 through 2016 tax years remain open to examination by certain major taxing jurisdictions to which we are subject. During February 2018, the ...
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The European Commission opens in-depth investigation into tax treatment of Nike and Converse in the Netherlands

The European Commission opens in-depth investigation into tax treatment of Nike and Converse in the Netherlands

The European Commission has opened an in-depth investigation to examine whether tax rulings granted by the Netherlands to Nike may have given the company an unfair advantage over its competitors, in breach of EU State aid rules. Margrethe Vestager, Commissioner in charge of competition policy, said: “Member States should not allow companies to set up complex structures that unduly reduce their taxable profits and give them an unfair advantage over competitors. The Commission will investigate carefully the tax treatment of Nike in the Netherlands, to assess whether it is in ...
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Wheaton Precious Metals Reaches Settlement on Canadian Tax Dispute Regarding Foreign Income

Wheaton Precious Metals Reaches Settlement on Canadian Tax Dispute Regarding Foreign Income

Wheaton Precious Metals Corp. has reached a settlement with the Canada Revenue Agency which provides for a final resolution of Wheaton’s tax appeal in connection with the reassessment under transfer pricing rules of the 2005 to 2010 taxation years related to income generated by the Company’s wholly-owned foreign subsidiaries, Wheaton International, outside of Canada. Wheaton is the leading company in the precious metals streaming business, essentially providing up-front financing to mining companies looking to build mines. In return, it earns the right to buy silver and gold output from those ...
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Analog Devices hit by $52m tax demand in Ireland

Analog Devices hit by $52m tax demand in Ireland

Analog Devices has been issued a $52m tax demand from the Revenue Commissioners in Ireland. The assessment is related to inter-company transfers back in 2013, where – according to the tax authorities – the Irish entity has failed to conform to OECD transfer pricing guidelines. Analog Devices specialises in data converters and chips that translate a button press or sound – into electronic signals. The company was established in Ireland in 1977, where today about 1,200 people is employed at its original and main hub in Limerick, in addition to its ...
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The Australian Taxation Office and Mining Giant BHP have settled an ongoing Transfer Pricing Dispute

The Australian Taxation Office and Mining Giant BHP have settled an ongoing Transfer Pricing Dispute

The Australian Taxation Office has agreed on a settlement with BHP Mining Group to resolve a transfer pricing dispute relating to transfer pricing treatment of commodities sold to a Singapore marketing hub. BHP had originally been assessed with over AUD 1 billion in additional taxes. According to the settlement BHP will pay additional tax of AUD 529 million to resolve the dispute, covering the years 2003–18. According to the settlement BHP Group will also increase its ownership of BHP Billiton Marketing AG, the company conducting BHP’s Singapore marketing business, from ...
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Preferential Tax Regimes - Harmful Tax Practices

Preferential Tax Regimes – Harmful Tax Practices

On 13 November 2018, the Inclusive Framework on BEPS approved updates to the results of reviews of preferential tax regimes conducted in connection with BEPS Action 5. The data below presents the conclusions of the work on regime reviews. The results are a consolidated update of the regimes reported in Harmful Tax Practices – 2017 Progress Report on Preferential Regimes. Countries with harmfull tax practices – preferential tax regimes – are defined based on the following factors: Where no or low effective tax rates (or negotiable tax rates or bases) ...
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Marketing and Procurement Hubs - Tax Avoidance

Marketing and Procurement Hubs – Tax Avoidance

The Australian Taxation Office has issued new guidance for multinational groups using offshore marketing- and procurment hubs for tax avoidance purposes. The guidance adresses tax schemes where MNEs uses offshore hubs to shift profits and thereby avoid Australian taxes. Offshore hub arrangements are catagorised by the ATO as white, green, blue, yellow, amber, or red – based on the risk assesment for tax purposes of the transfer pricing setup. The new guidance is a result of recent Australian investigations and hearings into tax avoidance schemes used by Multinational Groups. Tax ...
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Pharma and Tax Avoidance, Report from Oxfam

Pharma and Tax Avoidance, Report from Oxfam

New Oxfam research shows that four pharmaceutical corporations — Abbott, Johnson & Johnson, Merck, and Pfizer — systematically allocate super profits in overseas tax havens. In eight advanced economies, pharmaceutical profits averaged 7 percent, while in seven developing countries they averaged 5 percent. In comparison, profits margins averaged 31 percent in countries with low or no corporate tax rates – Belgium, Ireland, Netherlands and Singapore. The report exposes how pharmaceutical corporations uses sophisticated tax planning to avoid taxes. cr-prescription-for-poverty-pharma-180918-en ...
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European Commission concludes on investigation into Luxembourg's tax treatment of McDonald's under EU state aid regulations, September 2018

European Commission concludes on investigation into Luxembourg’s tax treatment of McDonald’s under EU state aid regulations, September 2018

Following an investigation into Luxembourg’s tax treatment of McDonald’s under EU state aid regulations since 2015, the EU Commission concluded that the tax rulings granted by Luxembourg to McDonald’s in 2009 did not provide illegal state aid. According to the Commission, the law allowing McDonald’s to escape taxation on franchise income in Luxembourg – and the US – did not amount to an illegal selective advantage under EU law. The double non-taxation of McDonald’s franchise income was due to a mismatch between the laws of the United States and Luxembourg ...
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Major US MNE's in Ireland

Major US MNE’s in Ireland

Major US MNE’s with regional Headquarters in Ireland for European business activities. The corporation tax rate in Ireland is only 12.5%. However to further sweeten the deal for MNE’s, Ireland has been known to offer special tax deals to MNE’s resulting in much lower effective tax rates. Ireland provides MNEs with both low tax centers for European activities and conduit holding companies serving as hubs for transferring profits and capital to low tax jurisdictions such as Cyprus and Bermuda. Especially MNEs within the IT sector have been known to use ...
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European Commission's investigations into member state transfer pricing and tax ruling practices

European Commission’s investigations into member state transfer pricing and tax ruling practices

Since June 2013, the European Commission has been investigating tax ruling practices of EU Member States. A Task Force was set up in summer 2013 to follow up on allegations of favourable tax treatment of certain companies, in particular in the form of unilateral tax rulings. The Treaty on the Functioning of the European Union (“TFEU”) provides that “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods ...
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/ Disputes and Settlements
US vs Boston Scientific, June 2018, IRS and Boston Scientific finalize a $608m settlement

US vs Boston Scientific, June 2018, IRS and Boston Scientific finalize a $608m settlement

Boston Scientific and the U.S. Internal Revenue Service have finalized a settlement of $610 million in taxes and interest dating back to the $26 billion acquisition of Guidant in 2006. Boston will pay $303 million in taxes and $305 million in interest to the IRS within the next three months. In 2016, Boston Scientific agreed to pay the IRS $275 million plus interest in a dispute over transfer pricing, plus charges related to a 2006 deal in which Abbott bought Guidant’s stent business from Boston Scientific ...
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Apple - Taxes and Transfer Pricing

Apple – Taxes and Transfer Pricing

Apple’s tax affairs have been in the spotlight of tax authorities for decades – and still are! Settlements have been entered with numerous European Countries, among others – Italy, the UK and France. Apple has also been investigated by the EU and a State Aid ruling was issued in August 2016. According to the ruling “Ireland granted illegal tax benefits to Apple” and the European Commission ordered Apple to pay €13 billion, plus interest, in unpaid Irish taxes from 2004–14 to the Irish state. U.S. Senate scrutiny of Apple Inc.’s ...
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Tax avoidance in Australia

Tax avoidance in Australia

In May 2018 the final report on corporate tax avoidance in Australia was published by the Australian Senate. The report contains the findings, conclusions and recommendations based on 4 years of hearings and investigations into tax avoidance practices by multinationals in Australia. Australian-final-report-on-tax-avoidance ...
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EU Transparency on Income Allocation and Tax Arrangements - DAC 1 to 6

EU Transparency on Income Allocation and Tax Arrangements – DAC 1 to 6

Tax authorities in the EU have agreed to cooperate more closely and exchange information so as to be able to apply their taxes correctly and combat tax fraud and tax evasion. Exchange of Information within the EU is based on Council Directive 2011/16/EU. The Directive and the later amendments in DAC 2 – 6 provides for exchange of information in three forms: spontaneous, automatic and on request. Spontaneous exchange of information takes place if a country discovers information on possible tax evasion relevant to another country, which is either the country of the income ...
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Nokia paid 202 million euro to settle a long running dispute with the tax authorities in India

Nokia paid 202 million euro to settle a long running dispute with the tax authorities in India

Under the Mutual Agreement Procedure (MAP), Finland and India have settled a long running tax dispute involving Nokia. The tax authorities in India issued a tax assessment to Nokia for violating withholding tax regulations in India while making royalty payments to its parent company in Finland. An additional assessment was then issued by the tax authorities in India to the parent company in Finland for the same transaction as – according to the tax authorities – the company had a permanent establishment in India. According to the MAP settlement Nokia ...
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Amazon has settled a 200 million Euro tax dispute with France

Amazon has settled a 200 million Euro tax dispute with France

The dispute between Amazon and the French tax authorities relates to transfer pricing in fiscal years 2006 to 2010. Amazon has been accused of tax avoidance in the EU by channeling all local sales through Luxembourg. This set up has been changed in France, where Amazon in 2015 established a branch where all retail sales, charges and profits in France are booked. In October 2017 the EU commission decided that Luxembourg’s arrangement with Amazon is in conflict with EU State Aid regulations and ordered Luxembourg to recover 250 million euros ...
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UK vs. Apple, Jan. 2018, Payment of £136 million

UK vs. Apple, Jan. 2018, Payment of £136 million

Apple has paid an additional £136m taxes in a settlement with the UK. The settlement is revealed in Apple Europe’s 2017 accounts. “Following an extensive audit by Her Majesty’s Revenue and Customs (HMRC) the Company agreed to pay a corporate income tax adjustment of £136m covering prior years up to September 26, 2015. This payment of additional tax and interest reflects the Company’s increased activity and is recognized in the current financial period which ended on 1 April 2017. As a result of this adjustment the Company’s corporate income tax ...
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Africa - Mining and Transfer Pricing

Africa – Mining and Transfer Pricing

Most Sub Saharan African jurisdictions see the area of mineral transfers/sales as the main transfer pricing risk, but only few have systems in place to check if prices applied to minerals transferred to related parties comply with the arm’s length principle. Studies highlights a strong need for capacity strengthening in the area of transfer pricing throughout the African continent and for enhancing the knowledge of mining industry within tax authorities. South Africa has, for many years, been the leader in transfer pricing audits among the African countries. But emerging countries such as Nigeria, Ghana, Kenya, ...
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OECD’s interactive map of tax jurisdictions

Try OECD’s interactive map of tax jurisdictions here: ...
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EU blacklist of non-cooperative tax jurisdictions

EU blacklist of non-cooperative tax jurisdictions

On December 5, 2017, the EU published it’s blacklist of non-cooperative tax jurisdictions (tax havens). 1. American Samoa American Samoa does not apply any automatic exchange of financial information, has not signed and ratified, including through the jurisdiction they are dependent on, the OECD Multilateral Convention on Mutual Administrative Assistance as amended, does not apply the BEPS minimum standards and did not commit to addressing these issues by 31 December 2018. 2. Bahrain Bahrain does not cover all EU Member States for the purpose of automatic exchange of information, has ...
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Canada vs Cameco, November 2017, Pending case – C$2.2bn in taxes

Several mining companies are beeing audited by the Canadian Revenue Agency for aggressive tax planning and tax evasion schemes. Among the high-profile companies that have filed pleadings with the Canadian Tax Court are Cameco, Silver Wheaton, Burlington Resources, Conoco Funding Company and Suncor Energy. The CRA says, the companies inappropriately ran international transactions through subsidiary companies in low-tax foreign jurisdictions. In the Cameco case the Revenue Agency has audited years 2003 to 2015 and challenged Cameco Canada’s arrangements with a Swiss subsidiary. Cameco sells uranium to its marketing subsidiary in ...
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/ Disputes and Settlements
Canada vs. AGF Management Ltd, Nov. 2017, Dispute settlement $71.9-million in back taxes

Canada vs. AGF Management Ltd, Nov. 2017, Dispute settlement $71.9-million in back taxes

Mutual-fund seller AGF Management Ltd. has settled a federal tax case over income shifted from Canada to an overseas subsidiary. The company has recently disclosed that the Canada Revenue Agency sought a total of $71.9-million in back taxes, interest and penalties related to the period spanning 2005-10. An agreement has since been reached, but the terms were not disclosed. In its latest quarterly report, AGF said the disagreement over taxes owed relates to transfer pricing with a foreign jurisdiction. The AGF disclosures do not mention whether the issues relate to ...
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OECD: Report on harmful tax practices, 16 October 2017

OECD: Report on harmful tax practices, 16 October 2017

The OECD report on harmful tax incentives provides details on reviews of 164 preferential tax regimes. Some preferential tax regimes are considered harmful – where these encourage the erosion of other jurisdictions’ tax bases. All 102 members of the BEPS Inclusive Framework have committed to ensuring that any regimes offered meet the criteria that have been agreed as part of BEPS Action 5. Crucially, this includes a requirement that taxpayers benefiting from a regime must themselves undertake the core business activity, ensuring the alignment of taxation with genuine business substance ...
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South Africa vs. Kumba Iron Ore, 2017, Settlement 2.5bn

A transfer pricing dispute between South African Revenue Service and Sishen Iron Ore, a subsidiary of Kumba Iron Ore, has now been resolved in a settlement of ZAR 2.5bn. The case concerned disallowance of sales commissions paid to offshore sales and marketing subsidiaries in Amsterdam, Luxembourg and Hong Kong. Since 2012, Kumba Iron Ore’s international marketing has been integrated with the larger Anglo American group’s Singapore-based marketing hub. The settlement follows a similar investigations into the transfer pricing activities of Evraz Highveld Steel, which resulted in a R685 million tax claim ...
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South Africa vs. Sasol, Oct. 2017, $878 million tax case

A tax dispute over a potential 11.6 billion rand ($878 million) charge between South Africa -based international chemicals and energy company Sasol and the Revenue Service will play out in South Africa’s Supreme Court of Appeal within the next 12 months. June 30. 2017 a R1.2-billion tax liability was approved by the Tax Court in a case against Sasol by SARS relating to the company’s international crude oil procurement activities between 2005 and 2012. The Tax Court further reported that the final tax amount along with other tax principles raised ...
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Australian Parliament Hearings - Tax Avoidance

Australian Parliament Hearings – Tax Avoidance

In a public hearing held 22 August 2017 in Sydney Australia by the Economics References Committee, tech companies IBM, Microsoft, and Apple were called to the witnesses stand to explain about tax avoidance schemes – use of “regional headquarters” in low tax jurisdictions (Singapore, Ireland and the Netherlands) to avoid or reduce taxes. Follow the ongoing Australian hearings into corporate tax avoidance on this site: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Corporatetax45th Transcript from the hearing: Tax Avoidance, Australian Senate Hearing, 22 August 2017 ...
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German royalty barrier to counter IP box-regimes

German royalty barrier to counter IP box-regimes

Some countries in Europe offer so-called IP or Patent boxes. To counter such tax practices, effective from 31 December 2017, Germany has introduced a new royalty barrier in ‘Law against Harmful Tax Practices in Connection with the Assignment of Rights. The law limits tax deductibility of expenses for the assignment of rights in order to prevent royalty income from not being taxed or taxed at a low rate and taxes income in the country where value is/was created. Deduction of expenses for the assignment of rights is restricted, where the ...
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US vs. Cameco, July 2017, Settlement of $122th.

Canadian mining company, Cameco Corp, has settled a tax dispute and will pay the IRS $122,000 for income years 2009-2012. Cameco’s dispute with tax authorities relates to its offshore marketing structure and transfer pricing. Cameco sells uranium to its marketing subsidiary in Switzerland, which re-sells it to buyers, incurring less tax than the company would through its Canadian office. Cameco says it has a marketing subsidiary in Switzerland because most customers are located outside Canada ...
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Tanzania vs. Acacia Mining Plc, July 2017, $150 billion tax bill

Tanzania vs. Acacia Mining Plc, July 2017, $150 billion tax bill

The London-based gold mining firm, Acacia Mining Plc, the largest mining company operating in Tanzania, was in July 2017 issued a $190 billion tax bill. The bill is split into $40 billion in unpaid taxes and an additional $150 billion in interest and penalties. The case is based on the findings of government-appointed committees. Following the release of a government-ordered audit of the mining industry, Acacia Mining was  accused of operating illegally in the country and tax evasion. The charge covers alleged under-declared export revenues from the Bulyanhulu and Buzwagi mines over periods between ...
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Uncovering Low Tax Jurisdictions and Conduit Jurisdictions

Uncovering Low Tax Jurisdictions and Conduit Jurisdictions

By Javier Garcia-Bernardo, Jan Fichtner, Frank W. Takes, & Eelke M. Heemskerk Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identifcation of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected ...
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Indonesia vs Google, June 2017, Settlement PE

In June 2017, the Indonesian government announced that it had settled a lengthy tax dispute with Google for 2016. While the settlement sum has not been disclosed, it is perceived as setting a new tone in the interpretation of permanent establishment status for tech companies ...
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Signing of the Multilateral Convention to prevent Base Erotion and Profit Shifting "Multilateral Instrument"

Signing of the Multilateral Convention to prevent Base Erotion and Profit Shifting “Multilateral Instrument”

On 7 June 2017, over 70 Ministers and other high-level representatives participated in the signing ceremony of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“Multilateral Instrument” or “MLI”). Signatories include jurisdictions from all continents and all levels of development. A number of jurisdictions have also expressed their intention to sign the MLI as soon as possible and other jurisdictions are also actively working towards signature. multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-BEPS ...
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Google paid 306 million Euro in an Italian tax settlement

Google paid 306 million Euro in an Italian tax settlement

Google has agreed to pay 306 million Euro to the Italian authorities in a transfer pricing dispute related to years 2009 – 2013. The dispute was one of several initiated due to the billions of dollars in sales to European consumers and Googles lack of tax payments in Europe. Google has already settled with the UK, paying 130 million in back taxes in 2016 to end an long lasting audit. Other disputes still remain elsewhere in Europe. The settlement follows an agreement reached in 2015, where Apple paid 300 million ...
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Australia vs Rio Tinto and BHP Billiton, April 2017 – Going to Court

Singapore marketing hubs are being used by large multinational companies — and billions of dollars in related-party transactions that are being funnelled through the hubs each year. The Australian Tax Office has issued claims of substantial unpaid taxes to mining giants Rio Tinto and BHP Billiton. BHP Billiton and Rio Tinto have revealed through the Senate inquiry they have been issued amended assessments for tax, interest and penalties of $522 million and $107 million respectively. These claims will be challenged in court. The cases centres on the use of commodity ...
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Oxfam's list of Tax Havens, December 2016

Oxfam’s list of Tax Havens, December 2016

Oxfam’s list of Tax Havens, in order of significance are: (1) Bermuda (2) the Cayman Islands (3) the Netherlands (4) Switzerland (5) Singapore (6) Ireland (7) Luxembourg (8) Curaçao (9) Hong Kong (10) Cyprus (11) Bahamas (12) Jersey (13) Barbados, (14) Mauritius and (15) the British Virgin Islands. Most notably is The Netherlands placement as no. 3 on the list. Oxfam researchers compiled the list by assessing the extent to which countries employ the most damaging tax policies, such as zero corporate tax rates, the provision of unfair and unproductive ...
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TAX BATTLES - The dangerous global Race to the Bottom on Corporate Tax

TAX BATTLES – The dangerous global Race to the Bottom on Corporate Tax

This report from www.oxfam.org examines tax competition, and the resultant race to the bottom in the taxation of global corporations. Using new research, this report exposes the world’s corporate tax havens – the 15 countries which facilitate the most extreme forms of tax dodging. The report looks at the harm caused by falling corporate tax rates and tax giveaways in countries across the world. Finally, the report identifies clear actions governments can take to act in the interest of their citizens and put an end to tax havens and the ...
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/ Disputes and Settlements
Developments in Canada - Tax Controversy and Settlements

Developments in Canada – Tax Controversy and Settlements

Developments in Canada In January 2016, the Federal Court of Appeal affirmed the decision of the Tax Court of Canada in Marzen Artistic Aluminum Ltd. v. The Queen, 2016 FCA 34, upholding most of the CRA’s transfer pricing adjustments and the imposition of transfer pricing penalties. The case, however, provided little insight into the meaning of “reasonable efforts” in the context of transfer pricing documentation, given that the taxpayer did not prepare contemporaneous documentation. The Tax Court is scheduled to hear its first recharacterization case later in 2016 (Cameco v ...
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US Treasury response to European Commission for recent State Aid Actions, 2016

US Treasury response to European Commission for recent State Aid Actions, 2016

The US Treasury in 2016 strongly criticized the European Commission for it’s state aid actions relating to US Corporations; Apple, Starbucks, Amazon, and McDonald’s. US Treasury white paper of August 2016 US White-Paper-EC-State-Aid August 24, 2016 US Treasury letter of February 2016 US Treasury letter of February 2016 EC state aid rulings ...
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IRS vs Boston Scientific and Guidant, Settlement of $1billion dispute

Just days before trial, Boston Scientific Corp. has agreed to pay the Internal Revenue Service $275 million plus interest to settle more than $1 billion in disputed taxes dating back more than a decade. Boston Scientific has long disputed the IRS’ assertions that the company and its Guidant subsidiary have underpaid corporate taxes by as much as $1.16 billion. The dispute centers on “transfer pricing” and the amount of taxes owed to the United States for intellectual property transferred among its domestic and foreign subsidiaries. The primary issue for all ...
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Belgium,March 2016: New list of “tax havens” published for 2016

According to a royal decrete dividends received deduction is not available in Belgium where the recieving company is resident in a country defined to be a “tax haven” A tax haven is defined as a country where: (1) the nominal rate of the corporate income tax is less than 15%; or (2) the effective corporate tax burden is less than 15%. The Belgien list of “tax haven” jurisdictions for 2016 contains the following countries: Abu Dhabi, Ajman, Andorra, Bosnia and Herzegovina, Dubai, Gibraltar, Guernsey, Jersey, Kyrgyzstan, Kuwait, Kosovo, Liechtenstein, Macao, ...
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India vs. Li & Fung (Trading) Ltd. March 2016, ITTA

India vs. Li & Fung (Trading) Ltd. March 2016, ITTA

Li & Fung (Trading) Ltd., Hong Kong, entered into contracts with its global third party customers for provision of sourcing services with respect to products to be sourced by such global customers directly from third party vendors in India. For the sourcing services, the Hong Kong company received a 5% commission of the FOB value of goods sourced. The company in India was providing sourcing support services to the Hong Kong group company, and remunerated at cost plus 5 percent mark-up for provision of these services. The tax administration found that the the company in India should ...
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Italy vs. Apple, December 2015, Settlement on Payment of 347 million Dollars in Back Taxes

Italy vs. Apple, December 2015, Settlement on Payment of 347 million Dollars in Back Taxes

Apple has agreed to paid an additional 347 million dollars to Italy in a settlement with the tax authorities. A spokesperson for the Italian tax office says that Apple is paying the sum to end the investigation, and that it is in line with what the agency had asked for — although substantially less than the €880 million Apple has been accused of withholding for sales booked in Italy. A similar agreement has later been entered into by Apple in the UK and Apple in France ...
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European Commission opens formal investigation into Luxembourg's tax treatment of McDonald's under EU state aid regulations, December 2015

European Commission opens formal investigation into Luxembourg’s tax treatment of McDonald’s under EU state aid regulations, December 2015

The European Commission has formally opened an investigation into Luxembourg’s tax treatment of McDonald’s. Tax ruling granted by Luxembourg may have granted McDonald’s an advantageous tax treatment in breach of EU State aid rules On the basis of two tax rulings given by the Luxembourg authorities in 2009, McDonald’s Europe Franchising has paid no corporate tax in Luxembourg since then despite recording large profits (more than €250 million in 2013). These profits are derived from royalties paid by franchisees operating restaurants in Europe and Russia for the right to use ...
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European Commission opens investigation of transfer pricing arrangements on corporate taxation of Amazon in Luxembourg, October 2014

European Commission opens investigation of transfer pricing arrangements on corporate taxation of Amazon in Luxembourg, October 2014

The European Commission has opened an in-depth investigation to examine whether the decision by Luxembourg’s tax authorities with regard to the corporate income tax to be paid by Amazon in Luxembourg comply with the EU rules on state aid. The opening of an in-depth investigation gives interested third parties and the Member States concerned an opportunity to submit comments. It does not prejudge the outcome of the investigation. The tax ruling in favour of Amazon under investigation dates back to 2003 and is still in force. It applies to Amazon’s ...
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US Senate Hearings on Offshore Profit Shifting and Abusive Tax Schemes 

US Senate Hearings on Offshore Profit Shifting and Abusive Tax Schemes 

See the documents from the US Senate hearings on offshore profit shifting and abusive tax schemes https://www.hsgac.senate.gov/subcommittees/investigations/issues/tax-havens-and-abusive-tax-schemes Offshore Profit Shifting and the U.S. Tax Code – Part 1 (Microsoft & Hewlett-Packard) and Part 2 (Apple Inc.), Carl Levin’s opening statements. Profit Shifting Part 1, September 2012 OPENING, LEVIN-Carl US Senate hearing on Profit Shifting, May 2013, OPENING LEVIN-Carl ...
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