Draft tax law includes BEPS measures incl. country-by-country reporting requirements
Global Tax Update:June 2016/Germany
On 1 June 2016, Germany’s Ministry of Finance issued a draft tax law that includes certain measures based on the recommendations in the final reports issued under the OECD BEPS initiative and the amendments to the EU administrative cooperation directive to introduce country-by-country reporting. (Global Tax Update:June 2016/Germany)
The draft law also includes certain non-BEPS-related measures in response to judicial developments in cases where Germany’s Federal Tax Court (BFH) decision went against the views of the tax authorities. The measures in the draft law generally were anticipated.
Notable proposed changes are;
● CbC reporting
● Master file reporting obligation
● Treaty override provision for the application of the arm’s length principle
● Trade tax on income subject to controlled foreign company (CFC) rules
● Trade tax on certain dividends distributed by a nonresident subsidiary
● Participation exemption for finance companies and financial institutions
● Domestic switch-over and subject-to-tax clauses
Deloitte Tohmatsu Tax Co. provides Japanese companies are considering developing business overseas with one-stop international tax services in relation to foreign investment to support their globally appropriate, optimal tax risk/cost management that is aligned with their business operations through Deloitte’s global network.
Transfer Pricing has been one of the key focuses of the Japanese Tax Authorities for many years. We recommend that clients have robust documentation in place setting out their transfer pricing policy for all intragroup transactions involving Japan.