Download PDF - Wipfli

More documents

Recommendations

Info

India Update continued Safe harbour provisions 'Safe harbour' refers to circumstances in which the tax authorities will accept the transfer price declared by the assessee. The principle is that, where the application of the most appropriate method results in more than one price, a price which differs from the average of such prices within a permissible range may be taken as the ALP. The allowable variation will be such percentage as may be notified by the Central Government. As of now, no percentage has been notified. Penalties for non-compliance Assessees with international transactions of the value exceeding Rs.1 crore are statutorily required to maintain and submit the prescribed documents with regard to the international transactions entered into by them. A report from a Chartered Accountant, as prescribed in Form 3CEB, also needs to be provided before the due date for filing the return of income. Non-compliance with these statutory requirements attracts a levy of penalties under the law. Nature of Default Failure to maintain prescribed information / documents Penalty Prescribed 2% of value of international transaction Advance Pricing Agreement (APA) An APA is an arrangement between the taxpayer and the taxing authority whereby the two parties agree on the transfer pricing policy for specified transactions of the taxpayer over a given period of time. Such a ruling would be binding on the taxpayer and the tax authorities. The scheme is intended to bring certainty in the tax liability of the transacting parties but, as the concept is not yet in the current law, the provisions are still at the conceptual stage. In summary, Transfer Pricing Law in India is in an evolving stage and, considering the practical issues, there is considerable scope for litigation in this area. Hopefully, in the near future, the law would become streamlined by means of amendments to remove the difficulties in application and also by way of judicial pronouncements. For more information please contact: S. Santhanakrishnan PKF Sridhar & Santhanam T: +91 44 2811 2895 E: sk@pkfindia.in W: www.pkfindia.in Failure to provide information / documents during audit In case of adjustment to taxpayer’s income by AO consequent to determination of ALP and assessee not being able to explain the genuineness (leading to inference of concealment) Failure to provide certificate in Form 3CEB 2% of value of international transaction 100 – 300% of the tax on adjustment amount Rs 1,000,000 The penalty can be waived if the assessee can prove that the default is due to a reasonable cause. 19 // PKF International Tax Alert All Regions Issue 8 November 2011
Ireland Update Domestic Tax Changes Relevant Contracts Tax Relevant Contracts Tax (RCT) applies to payments made by a principal to a subcontractor under a “relevant contract”. A “relevant contract”is a contract to carry out relevant operations in the construction, forestry or meat processing industry. RCT applies to both resident and non-resident contractors operating in the construction, forestry or meat processing industry in Ireland. Tax of 35% is deducted by a principal contractor on payments to a subcontractor unless the principal contractor has received a relevant payments card for the subcontractor. Where tax is deducted, the principal contractor gives the subcontractor a certificate, which the subcontractor uses to claim credit for, or repayment of, the tax withheld. A new electronic system for RCT is being introduced by the Irish Revenue Commissioners on 1st January 2012. All principals in the construction, forestry and meat processing industry will be obliged to submit information, data and payments to Revenue electronically. From 1st January 2012, all relevant contracts, including those that are ongoing at the end of December 2011, must be registered online. Principals must notify all payments on relevant contracts to the Irish Revenue Commissioners online from 1st January 2012. It will not be possible to notify a payment on-line unless the contract has been registered. Each time a payment is to be made by a principal to a subcontractor, the principal must notify the Irish Revenue Commissioners (by electronic means) of their intention to make a payment and the gross amount of the payment. The Irish Revenue Commissioners will set out the rate of tax and the amount to be deducted from the payment. This is a significant change from the previous RCT system when a principal paid a subcontractor with the use of the annual Relevant Payments Card. Levy on Pension Schemes An annual levy of 0.6% on the market value of assets in pension schemes has been introduced. The levy is charged at 0.6% on the aggregate of the market value of the assets of the pension scheme at the 30th June in each year (alternative valuation dates may apply depending on the particular pension scheme). The levy is payable to the Irish Revenue Commissioners on the 25th September in each year. For more information please contact: Catherine McGovern PKF Tax Consulting Ltd E: c.mcgovern@pkf.ie The new system will have three tax deduction rates: 0%, 20% and 35%. Subcontractors who satisfy the current criteria for a C2 card (tax affairs up to date) will qualify for the 0% rate. In certain cases, a subcontractor will be pay the 35% rate. These are likely to be subcontractors who are not registered with the Irish Revenue Commissioners or where there are serious compliance issues to be addressed. All other subcontractors will be eligible for the standard 20% rate. 20 // PKF International Tax Alert All Regions Issue 8 November 2011
Page 1 and 2: International Tax Alert Issue eight
Page 3 and 4: Malaysia 26 Lee Yiing Ting summaris
Page 5 and 6: Austria Update Publication of finan
Page 7 and 8: Australia Update continued the exis
Page 9 and 10: Australia Update continued Under th
Page 11 and 12: Canada Update New Canadian treaty-b
Page 13 and 14: Canada Update continued ■ ■ ■
Page 15 and 16: Cyprus Update Tax treaty update Cyp
Page 17 and 18: Ghana Update Highlights of the tax
Page 19: India Update An introduction to Tra
Page 23 and 24: Kenya Update continued at 0%. This
Page 25 and 26: Lebanon Update continued free zones
Page 27 and 28: Malaysia Update Below is a summary
Page 29 and 30: The Netherlands Update This article
Page 31 and 32: The Netherlands Update continued 8
Page 33 and 34: Pakistan Update continued Federal E
Page 35 and 36: Romania Update There have been some
Page 37 and 38: Slovak Update Impact on income tax
Page 39 and 40: Slovenia Update Tax changes in 2011
Page 41 and 42: South Africa Update continued ■ a
Page 43 and 44: Spain Update There have been severa
Page 45 and 46: Uganda Update Introduction of Trans
Page 47 and 48: United Kingdom Update Changes propo
Page 49 and 50: USA Update Update on Reporting of S
Page 51 and 52: USA Update continued of any asset,
Page 53 and 54: USA Update continued LLC to be tran
Page 55: IMPORTANT DISCLAIMER: This publicat

Download PDF - Wipfli

Create successful ePaper yourself

Delete template?

Save as template?