Weekly transfer pricing roundup – 10 July 2017

The new transfer pricing guidelines will be released today. Now if that didn’t bring a smile to your face, I am not sure what will on a Monday morning. Last week, Barbados joined the inclusive framework as the 101st jurisdiction and Mauritius signed the multilateral convention to tackle tax avoidance by multinational enterprise. Hopefully, Mauritius won’t take too long to implement this in their law but this BEPS thing is moving along faster and faster. It feels like yesterday when we received thousands of pages to read from the OECD and actual implementation was still years away. Now, in six months time most larger MNEs will have to file CbC reporting, master files and local files. There are still some teething problems but the train has left the station.

There are still some topics that are not finalised, but the OECD has not slowed down to get them ready. The OECD released public comments on its discussion draft on implementation guidance on Hard-to-Value Intangibles. Lastly, the OECD also released an Inclusive Framework on BEPS progress report. The report sets out the progress that the Inclusive Framework and its members have made since the establishment of the Framework at its inaugural meeting in June 2016, and outlines how countries are progressing in the implementation of the BEPS package and in particular, the minimum standards.

U.S. government seeks to intervene in Apple’s EU tax appeal: source (Reuters)

“The U.S. government has sought to intervene in Apple’s (AAPL.O) appeal against an EU order to pay back up to 13 billion euros ($14.8 billion) in Irish taxes, a source familiar with the matter said on Tuesday.

iPhone maker Apple took its case to the Luxembourg-based General Court, Europe’s second-highest, in December after the European Commission issued the record tax demand saying the U.S. company won sweetheart tax deals from the Irish government which amounted to illegal subsidies…

The General Court is expected to hear the case in late 2018, another source with knowledge of the matter said…”

It was only a question of when the U.S. would get involved, considering the money at stake. From a pure tax perspective there may be an argument that the U.S. would not have taxed this profit until it is brought back into the U.S. but at the same time the U.S. cannot just sit there and watch its companies getting investigated. As you know, Apple isn’t the only one under scrutiny in Europe. Even thought the U.S. was considering to intervene before Trump, the current political landscape shows that countries are looking at things much more patriotic and the technical tax analysis takes a backseat.

Acacia Mining serves notices of arbitration to settle Tanzania dispute (CityAM)

“The gold miner and the government have been in talks to reach a solution to issues relating to a ban on the export of gold and copper concentrates.

Acacia was accused of hiding exports and underpaying the government by tens of billions of dollars over the two decades it has worked in the region, but it denies any wrongdoing.

Acacia today served notices of arbitration on behalf of Bulyanhulu Gold Mine Limited (BGML) and Pangea Minerals Limited (PML) in accordance with the agreed dispute resolution process…”

Tanzania amended its mining and tax laws to make it mandatory for the state to own at least 16 percent of mining projects, while also raising export royalties (now 6%). Therefore, mining firms are going to feel some heat from the Tanzanian government.

If you want to read more about this, especially around Acacia mining, also see this article from The Guardian

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