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Global Anti-avoidance multinational multinational initiative to greater heights again

Date:2014-10-7
With the increasing cooperation between countries, continue to promote the reform of the national tax authorities, since Recently, the global anti-avoidance action again set off a wave of cross-border boom.

Recently, the global anti-avoidance areas of transnational news continued. America this week introduced the first targeted anti-tax inverted package of measures to crack down on the company moved its headquarters to the United States and overseas tax avoidance behavior, opened a new chapter in the fight against cross-border tax avoidance actions. Meanwhile, the European Union and Australia and other countries and regions have begun to increase cross-border tax avoidance supervision of large enterprises. On the other hand, the just-concluded Group of Twenty (G20) finance ministers and central bank governors meeting formally approved the "tax base erosion and profit transfer (BEPS)" Project 2014 results, industry sources said this action is the last hundred years the first comprehensive reshaping international tax rules system.
Multinational attack
As the international situation is becoming increasingly grim taxation, tax-related information to improve transparency, increase cross-border tax evasion crackdown voice getting high. This year, the global action to combat cross-border tax evasion escalating recently but there is a number of countries and regions to increase the intensity of anti-avoidance from the administrative, legal and enforcement levels.
US Treasury 22 announced a series of new measures to curb US companies to obtain offshore income in the case of non-payment of corporate taxes in the United States, so that such companies is difficult to split the revenue upside down and in its overseas branches. The so-called tax inversion refers to the United States under the current tax system, the United States the company after the acquisition of overseas companies, will relocate its headquarters abroad, became the first foreign company to circumvent domestic higher corporate taxes. Many companies use this channel, cross-border mergers and acquisitions by the company's headquarters to lower taxes or almost zero country.
According to the Associated Press, the introduction of the new measures include the following: First, the prohibition of "hopscotch" loans, which refers to the new foreign corporation to provide loan companies in the United States, which will transfer income. Secondly, a tightening regulations apply, the regulations of the shares held by shareholders of the US company after the merger the new multinational companies should not exceed 80%, otherwise it will be treated as US companies, foreign companies and thus can not enjoy tax benefits. These new measures include a ban on US companies before the merger were high payout to reduce the size of specific behaviors, such as writing itself, and therefore make it difficult to deal with 80% of US companies limit. In addition, the new regulations for foreign companies also use foreign investment, loans and other activities to make strict limits, the maximum extent to avoid "false foreign" loophole.
It is reported that since the introduction of the new measures with effect from the date immediately. A US Treasury official said that before 22 completed M & A transactions will not be affected, after this transaction will be subject to the new measures. This means that new measures might cause problems on the part of companies are planning to cross-border mergers and acquisitions.
The United States is one of the countries with the highest burden of global business, the federal corporate tax rate of about 35%. According to statistics, since the early 80s of the last century has been about 50 cases from the tax inversion, but in the past decade, there are dozens of US companies to their tax return migration to overseas, most of which occurred in 2008 years later. Recent similar moves large enterprises, including the outgoing and the fast-food chain Burger King, the UK's largest corporate coffee chain Tim Horton Starr into the merger agreement, wishing to relocate its headquarters in Canada.
US President Barack Obama issued a statement on the 22nd of this decision Treasury expressed support, saying the Treasury Department believe that the latest measures will hit corporate inversion using tax loopholes enthusiasm. Obama also said that in the next few weeks to several months, the United States will proceed to develop a more equitable tax laws to help American businesses grow and create more jobs.
In June, the European Commission announced on Apple, Starbucks and Fiat three multinational companies in Ireland, Luxembourg and the Netherlands to investigate branches, and nine European countries to investigate the so-called "patent box" arrangements. The EU also said that this is only the first step in the investigation, the future will expand the scope of the survey companies and countries. This action seeks to the outside world that the EU's determination to combat cross-border tax evasion.
According to Australian media reports in July, the Australian government is planning to reform the tax system, blocked by multinational companies to shift profits and losses to minimize the tax liability of regulatory loopholes and recover billions of Australian dollars in tax. The reforms include measures to limit corporate debt to capital ratio fell from 75% to 60%, exceeding the threshold will be subject to the Australian Taxation Office's investigation; limiting payments and interest related to tax rates to prevent companies using the "non-securities investment dividends, "the exemption to the relevant funds as dividends rather than debt reimbursement. It is reported that this reform proposal is expected to become law in the near future.
Increasing international co-operation
Economic and trade globalization increasingly convenient cross-border capital flows, coupled with "tax havens" and other low-tax, zero tax rate "depression" exists, the fight against transnational tax avoidance increasing difficulty. In order to fill the gaps in the global tax system, in addition to the countries in the fight against tax avoidance actions were outside the international cooperation has also been strengthened.
G20 finance ministers and central bank governors meeting on the 20th formally adopted the recommendations for improvement BEPS report. BEPS action was endorsed by the G20 leaders, and commissioned the OECD (OECD) to promote international tax reform program is under the framework of G20 countries to join the fight against international tax evasion, jointly establish a favorable global economic growth, international tax system of rules and cooperation mechanisms important initiatives. OECD Secretary-General Angel Gurria said the program aims to fill the multinational international tax system for tax avoidance loopholes in international tax system modernization for centuries the most important step.
The results of the latest release include the challenges of the digital economy, and prevent the abuse of tax treaties, transfer pricing and prevent harmful tax competition and other intangible assets of seven. This is the second in September 2013 G20 summit in St. Petersburg agreed to work together to combat cross-border tax evasion since the formation of the first fruits. BE PS G20 determined in accordance with the Plan of Action programs and the implementation schedule, a total of 15 full action plan, will be completed before the end of 2015. BEPS the latest results of the meeting examined and approved, will be presented in November at the G20 summit held in Australia endorsement.
The current international tax rules are set up in 1923 after the First World War, and has been running for nearly a hundred years, its core is between countries of origin and resident of the State income tax allocation of rights. Experts point out that this set of international tax rules apply mainly to the traditional economy, solve the double taxation of multinational corporations operating income allocation between international and problems. However, the advent of the digital economy, the international tax order challenges, all cross-border economic transactions can be carried out basic tax planning, tax base erosion, profits are transferred, the transfer destination is a low-tax places and tax havens.
Currently, at least more than 50% of global profits involved in international trade, particularly the huge group of cross-border business transactions related amounts. According to Gurria, in the past five years, the global action to combat tax avoidance information from 24 countries, voluntary disclosure program identified 37 billion euros (US $ 53 billion) loss of tax revenue, the future will disclose more. Let the tax base erosion and profit transfer tax fairness challenges, international taxation order is seriously threatened. Therefore, the international community must work together to reform the existing system of international tax rules to adapt to the rapid development of economic globalization.
In fact, global taxation and public regulatory cooperation and exchange of information is constantly advancing. In February this year, the OECD published a new international tax information for first half of the automatic exchange of global standard content. In May, the OECD annual ministerial council meeting, 47 countries signed the "Declaration of automatic exchange of information on tax matters." July, the OECD adopted a full version of the international standards of the International automatic exchange of tax information, the standard is expected to take effect in 2017. In August, China officially became the first 56 signatories "Multilateral Convention on Mutual Assistance tax collection", bringing the G20 member states have all signed the convention.
In addition, the United States, "Foreign Account Tax Compliance Act" on July 1 this year, came into effect. Currently include the United States, Britain, France, Germany, Italy, etc., 100 countries and more than 80,000 financial institutions in the United States register with the government, agree to abide by the bill. Cayman Islands, Bermuda and Jersey and other "tax havens" has been added to the system. Analysts say this indicates the direction of future changes in tax collection and international order.
Still need to expand global operations
In countries increased regulatory and tax avoidance crackdown on anti-avoidance continue to strengthen international cooperation in the context of global multinationals tax evasion and avoidance space is shrinking. However, the anti-avoidance systems and implementation level remains inadequate. In addition, economic globalization, the further development of electronic information in the background, avoidance means multinationals are constantly, but also to the global tax collection has brought new challenges for future action to combat tax evasion still need to be further expanded.
On the one hand, the anti-avoidance practice of States has yet to be perfected. The Obama administration believes that despite the latest anti-avoidance measures to increase the cost and difficulty of business overseas acquisitions, but did not cancel all the advantages of an inverted tax, administrative means alone is difficult to completely prevent cross-border tax avoidance, tax must be more strictly defined inverted to pass legislation increased supervision from a legal perspective. But the two parties in the United States on the content and timetable of the legislation, and there are still big differences on the issue of reform of the national tax law associated with this. And to join the BEPS and "Multilateral Convention on Mutual Assistance tax collection" of China, since the lack of relevant laws, inadequate identification of flexible space rules, anti-avoidance action there is a big challenge. In addition, the Australian Taxation Alliance justice for their people's survey shows that 90% of respondents were dissatisfied with their corporate tax avoidance, called for increased transparency in corporate tax, and called on the government to take strong measures to combat the transfer of profits and other acts.
On the other hand, there are also international level cooperation to further strengthen and improve the space. Despite the BE PS latest report made a historic achievement, but failed to make the final tax solutions. The report notes that the "digital economy because of its extensive penetration of various economic sectors, highly dependent on intangible assets, as well as to accelerate the integration of corporate influence in global value chains become BEPS hardest hit", "It is difficult for the individual to develop their policy to address the problem BEPS digital economy. "In addition to the problem of the digital economy, the vital interests of the countries involved in the differences in the digital economy makes demands of countries and hope to achieve the objective differences, it is difficult to reach a consensus. The OECD's international tax information automatic exchange of global standards, Tax Justice Alliance also believes that it is still the UK there are some loopholes, it will have a negative impact in developing countries, and to make tax havens and their customers to bypass the new rules, while also facing execution costly, higher operating costs.
In addition, some experts pointed out that the traditional avoidance measures have attracted attention in the States, but in how quickly the development of new e-commerce, there is still loopholes in tax collection, the relevant regulatory and legal still lagged far behind, it also gives the anti-avoidance action brought a great deal of difficulty. In addition, many countries affiliated or subsidiary to "tax havens" are developed, so "tax havens" is difficult to completely disappear.
With the changing international environment, tax collection, the future of the countries in the reform of the tax system, improve the anti-avoidance practices in the process, will also face more severe challenges. International Tax Division State Administration of Taxation, said Liu Zhong body, changes in the tax system alone can not solve the problem of individual countries, we must rely on the joint action by the international community, in order to produce common for most countries to comply with the norms and rules of the system.
Liao Zhong body, said: "Prior to the continuation of the past century international tax rules, which are mostly dominated by developed countries, reflecting the interests and demands of the developed countries, developing countries do not say a lack of participation in this round of international tax reform, China and. emerging economies have been at a new stage of development and level, we need to also have the ability to participate. "
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