Below are just a few of the developments covered in Bloomberg BNA's international tax publications this week:
The European Commission says Ireland’s transfer pricing tax arrangements with Apple Inc. defy the arm’s-length principle established by the Organization for Economic Cooperation and Development, allowing Apple to shift profits and pay a tax rate less than other companies based in the country.
G20 finance ministers unanimously welcomed the release of the OECD’s Action Plan on Base Erosion and Profit Shifting, hailed as “the most prominent step towards modernization of the international tax system in 100 years.” The BEPS project has achieved exceptional coverage with the support of 44 countries, and has been widely praised for its global initiative to close tax loopholes across countries. For a quick tour of the deliverables released, see our previous blog post here.
Despite the U.S. Treasury Department’s attempts to curb corporate inversions, Burger King Worldwide Inc. is going ahead as planned to buy Canada’s Tim Hortons Inc. in a merger supposedly driven by long term growth and not tax benefits. President Obama has accused companies in similar deals of “gaming the system,” and Treasury is moving to block the use of exploitative tax arrangements involving intracompany “hopscotch” loans, spin-offs and earnings stripping practices. For more insight into the inversions debate, see our previous blog post here.
Swiss bank UBS AG has lost its fight appealing a 1.1 billion euro ($1.4 billion) bail order for money laundering charges linked to tax evasion, stating that it was “very disappointed at the decision” of what it calls a “highly politicized process.” French investigators have also been looking into HSBC Holdings Plc. to determine whether its units encouraged tax evasion practices.
Israel approved a deal with American chip maker Intel Corp. offering unprecedented tax breaks for the company and a five-year benefits package worth $300 million in return for Intel’s $6 billion commitment to upgrade its factory based in Kiryat Gat. The investment will be a “strategic asset” according to Finance Minister Yair Lapid, having beaten Ireland in winning over the technology company to continue its operations in Israel.
For more information on these developments and other international tax news, sign up for a free trial of the Premier International Tax Library.
Vanessa Yu, Editor
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