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International: Amount B back in the spotlight as OECD opens consultation on Pillar One’s Amount B

by 2 Mins Read

Amount B was introduced as a “fixed return” on “baseline marketing and distribution activities” in the October 2020 Blueprint of Pillar One, and was seen as a critical component of the Pillar One deal. Nevertheless, over the past two years, in respect of Pillar One developments, the focus of the OECD Inclusive Framework members has been primarily on Amount A. However, on 8 December 2022, the OECD finally released the long-awaited consultation document and hosted a webinar on the proposed design of Amount B, putting Amount B back into the international tax spotlight. The OECD has now requested input from stakeholders on the technical design of Amount B, with comments to be received no later than 25 January 2023.

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European Union: Preliminary Agreement Reached on EU’s Pillar 2 Directive

by , and 3 Mins Read

In a somewhat surprise move, it appears EU Member States have managed to reach preliminary agreement on a minimum level of taxation for largest corporations, also known as the Pillar 2 Directive. The Committee of Permanent Representatives reached the required unanimous support on 12 December 2022. While it is being reported that Poland has reiterated its previous concerns, we do not expect Poland to use its veto this time. With Hungary lifting its veto, this development may mean that the EU will be the frontrunner in implementation of Pillar 2, requiring EU Member States to transpose the Pillar 2 Directive into domestic laws by the end of 2023.

In

UAE: Key highlights of the corporate tax law

by , and 5 Mins Read

The issuance of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses on 9 December 2022 provides businesses operating in the UAE with a framework for understanding how the corporate tax regime will impact their business model. The Corporate Tax law is broadly in line with the public consultation document that was issued in April 2022, however, one of the notable changes is the release of the conditions to be satisfied by UAE Free Zone entities to be eligible for the 0% rate (rather than being taxed at the headline 9% rate).

In AML & Financial Services Regulatory

Global: Crypto Boot Camp 2022

by , , , , , , , , , , , , , , , , , , , , , and 3 Mins Read

This virtual seminar series provides insights on how the regulatory landscape is changing and discuss the future of crypto within the financial services sector. Recordings of the following sessions are now available — The Crypto Ecosystem; Integrating Crypto into Established Financial Services (Part 1: Funds and Listings and Part 2: Practical Considerations); Crypto Risk: Significant Legal and Regulatory Risks; A Deep Dive into NFTs; and DeFi (Decentralized Finance).

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United Kingdom/Brazil: New double tax treaty

by , and 10 Mins Read

On 7 September 2022, Brazil and the UK issued a joint declaration announcing the intention to start negotiating a double tax convention. This announcement came off the back of a number of years of discussion to progress both policy and technical issues – hence the treaty was able to be signed on 29 November 2022, within three months of that announcement. The treaty has not yet entered into force – this will happen upon completion of the legal procedures required by both countries, but it is not yet clear how long this will take.

In AML & Financial Services Regulatory

International: Public’s access to information on beneficial ownership deemed invalid by the CJEU

by , , , , , and 10 Mins Read

On 22 November 2022, the Court of Justice of the European Union, sitting as the Grand Chamber, rendered a landmark decision on the validity of the Luxembourg provisions of the law of 13 January 2019, establishing the register of beneficial owners and implementing the EU anti-money laundering directives. According to the CJEU, the provision, whereby the information on the beneficial ownership of companies incorporated within the territory of the member states is accessible in all cases to any member of the general public, is invalid.

In

South Africa: SARS’ right to intervene in review applications stemming from criminal proceedings

by 5 Mins Read

This article explores the scope of the South African Revenue Service’s (SARS) direct and substantial interest in the case of “Commissioner: South Africa Revenue Service: In re: Cyril and Another v Additional Magistrate, Magistrates Court for Region of Alexander.” This case confirms that SARS has a direct and substantial interest in the evidence admitted in a review application stemming from criminal proceedings under the Customs and Excise Act. It further confirms that there is no time limit for intervention applications.

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Mexico: Mexico and the OECD Multilateral Instrument (MLI)

by 4 Mins Read

In October 2022, the Multilateral Instrument was ratified by the Mexican Senate and could enter into force as soon as February 2023. As of the entry into force of this instrument, the Mexican Double Tax Conventions (DTCs) in effect will be automatically modified, without having to enter into the specific negotiation processes with each one of the signatory states. The instrument is, perhaps, the most impressive result of the BEPS Project, as it permits updating DTCs and allows jurisdictions to incorporate BEPS actions into their current DTCs without the need to resort to bilateral negotiations.

In

Canada: Canada Introduces New Reporting Obligations Applicable to Digital Platform Operators

by 4 Mins Read

The Department of Finance released draft legislation on 3 November 2022 introducing new reporting obligations applicable to certain digital platform operators. These rules are intended to implement the OECD’s Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy originally released in July 2020. These new Canadian measures are proposed to come into force on 1 January 2024.

In Environment

United Kingdom: Destination Net Zero: Taxation of voluntary carbon credits

by and 11 Mins Read

Multinational groups are increasingly likely to use voluntary carbon credits as part of their efforts to decarbonize their businesses and achieve their climate goals. There are a number of tax complexities and risks depending on how voluntary carbon credits are going to be acquired and used by companies and further guidance from HMRC would be welcomed, particularly as the market grows and becomes more regulated. Where multinational groups are taking a strategic approach to their offset activity, tax functions should play an active role in design and implementing structured arrangements.

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