Weekly transfer pricing roundup – 12 December

This week McDonald’s made a bold move by restructuring its operations amid a proby by the EU competition authority, India and the USA signed their first APA, and the OECD provided some more guidance on CBCr. See the articles below, happy reading.

McDonald’s to Move Non-U.S. Tax Base to the U.K. (The Wall Street Journal)

“McDonald’s Corp. on Thursday said a large portion of its non-U.S. income would be taxed in the U.K. following a restructuring that shifts operations away from Luxembourg amid a probe by the European Union competition authority over its tax arrangements.

McDonald’s said it had created a U.K.-based international holding company that would have “responsibility for the majority of royalties received from licensing the company’s global intellectual property rights outside the United States.” It added in a statement that the profits of the new international holding company would be subject to U.K. corporation tax.

The Luxembourg office will retain responsibility for restaurants in the country, but other functions will transfer to the U.K holding company, McDonald’s said.

The move comes as the European Commission, the EU’s executive arm, investigates the company’s tax affairs in Luxembourg. The commission, which opened the probe last December, alleges that a deal Luxembourg granted the fast-food chain in 2009 may have illegally reduced its tax burden and breached competition rules.

Brussels could order the fast food giant to pay back as much as €1.5 billion ($1.6 billion) in unpaid taxes between 2009 and 2015 to Luxembourg, according to an October statement by U.S. and European trade unions, which based its information largely on the company’s public financial statements.

McDonald’s says it received no special treatment and paid all taxes it owes. On Thursday, the company said it paid more than $2.5 billion in corporate taxes in the EU between 2011 and 2015…”

India, US strike 1st bilateral advance pricing agreement: Government (The Economic Times)

“India and the US have reached a deal for the first bilateral advance pricing agreement, a move that will enable American firms to ascertain tax liabilities beforehand, Finance Minister Arun Jaitley said today…”

OECD Releases Updated Guidance on Implementation of Country-by-Country Reporting (Thomson Reuters)

“On December 5, 2016, the OECD released updated guidance on  the implementation of country-by-country (CbC) reporting under BEPS Action 13. The OECD also released a database containing information on CbC reporting implementation by various countries to date.

The December 5th guidance updates the Q&A guidance issued by the OECD on June 29, 2016 and October 12, 2016, which address the following CbC reporting issues:

  • Transitional filing options for multinational enterprises (MNEs) (“parent surrogate filing”).
  • The application of CbC reporting to investment funds.
  • The application of CbC reporting to partnerships.
  • The impact of currency fluctuations on the agreed €750 million CbC reporting filing threshold…”

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