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August 15, 2024 Global Tax Policy and Controversy Watch | August 2024 edition In the spotlight G20 Finance Ministers affirm commitment to BEPS 2.0 and enhanced global tax cooperation The communiqué released at the conclusion of the 25-26 July 2024 meeting of the G20 Finance Ministers and Central Bank Governors welcomes progress on Pillars One and Two and reaffirms their commitment to swift implementation. The G20 Finance Ministers also agreed on a stand-alone tax declaration reflecting the work on international tax cooperation to date, the importance of that cooperation and their commitment to continue to carry it forward. Key highlights OECD releases sixth edition of Corporate Tax Statistics publication The Organisation for Economic Co-operation and Development (OECD) released the sixth edition of its annual Corporate Tax Statistics publication together with an updated database. The database includes a new dataset on income-based tax incentives for research and development and innovation, as well as updated information on controlled foreign company rules and interest limitation rules. EU seeks input on ATAD and public CbCR reporting formats The European Commission has initiated an evaluation of the effectiveness of the Anti-tax Avoidance Directive, with a focus on its implementation across EU Member States and its alignment with the recent Minimum Tax Directive. The Commission also has released a draft implementing regulation for public country-by-country reporting, which proposes standardized reporting formats and templates to enhance accessibility and comparability of data. Stakeholders may submit comments to the Commission on each of these matters. Australian 15% global minimum tax law introduced into Parliament Legislation has been introduced to implement an Income Inclusion Rule (IIR) and a domestic minimum tax applying to years starting from 1 January 2024, as well as an Undertaxed Profits Rule (UTPR) applying to years starting from 1 January 2025. Canada sets entry-into-force date for Digital Services Tax Act An Order in Council has been posted on the Canadian government's website fixing the day Canada's Digital Services Tax Act came into force as 28 June 2024. The order was issued by the Governor General in Council, based on the recommendation of the Minister of Finance. How trade technologies can help reduce controversy risk The pace of innovation means that technology is affecting all aspects of the global supply chain. In many businesses, trade technologies and automation are transforming the trade function, offering steep improvements in productivity and control. News items Argentina implements tax amnesty On 16 July 2024, Argentina published a resolution that establishes the operational aspects for implementing the Exceptional Regularisation Regime of Tax, Customs and Social Security Obligations, which is a tax amnesty. The total cancellation of any tax debt included in the regime will result in forgiveness of 100% of applicable fines, termination of criminal action on those obligations and forgiveness of up to 70% of compensatory and/or punitive interest, depending on the date of application for the regime and the chosen payment method. Dubai Customs publishes policy on voluntary disclosures Dubai Customs has issued Customs Policy No. (58/2024) on the Voluntary Disclosure System (VDS), allowing importers and exporters in Dubai to rectify previous mistakes in their customs declarations, facilitating adherence to procedural norms and simplifying the process of settling any customs duties due. The VDS offers Dubai importers and exporters the opportunity to receive a partial or complete waiver of customs penalties for infractions that are self-reported before being identified by Customs. The German Ministry of Finance has issued an updated administrative regulation dealing with bilateral and multilateral Advance Mutual Agreements. The updated regulation only partially clarifies the existing practical application issues, however. India releases Union Budget 2024 The Finance Minister of India presented the Finance Bill for the fiscal year 2024/25 in the Indian Parliament on 23 July 2024, proposing changes to tax laws effective from 1 April 2024. The proposed changes include a reduced corporate rate for nonresident taxpayers, holding period changes for capital assets and a one-time tax settlement option. Israel to adopt local minimum tax regime from 2026 The Israeli Minister of Finance provided an official statement expressing the intention to adopt a local qualifying domestic minimum top-up tax (QDMTT) from 2026 onward. Implementation of an IIR and UTPR will be examined following the introduction of the QDMTT. Luxembourg proposes reduction in corporate income tax rates and other changes The proposed changes for corporate taxpayers include a reduction in the corporate income tax rates, modernization of the procedural framework for private asset management companies and subscription tax exemption for certain Exchange Traded Undertakings for Collective Investment in Transferable Securities. Peruvian Tax Authority incorporates new scenarios as high-risk schemes under GAAR The Peruvian Tax Authority has published an updated version of the list of high-risk schemes for tax planning that could be challenged under the Peruvian General Anti-Avoidance Rule (GAAR). The updated list contains the 13 situations from the second version of the list and 11 new situations that are considered high-risk. Taxpayers engaging in these transactions could be subject to challenge under Peru's GAAR. Singapore updates key sections of its Transfer Pricing Guidelines The Inland Revenue Authority of Singapore has published the 7th Edition of its Transfer Pricing Guidelines. The new edition provides updates and additional guidance in several areas, including transfer pricing documentation, financial services transfer pricing, transfer pricing audits and the 5% transfer pricing surcharge. Taxpayers should review these developments carefully to examine how the changes may affect their intercompany financing transfer pricing policies and compliance. US Supreme Court overrules Chevron deference to agency regulations In Loper Bright Enterprises v. Raimondo, a majority of the US Supreme Court overturned the 40-year precedent in Chevron, which had been a mainstay precedent instructing courts to defer to the decisions of federal agencies when a statute is ambiguous. In place of the so-called Chevron deference, the majority opinion in Loper Bright held that courts must exercise their independent judgment when interpreting statutory language.
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