More facts of the European Commission's state assistance investigation against Amazon have emerged, while Amgen is being sued by a pension fund over a tax issue with the Internal Revenue Service.
Brazil and the United Kingdom have a long-standing trading relationship. Brazil-UK commerce was worth £6.5 billion (R$40.5 billion) in 2022, according to data published by the UK Department for International Trade in January 20 2023.
Brazil and the United Kingdom signed a double tax treaty (DTT) on November 29, 2022, with the goal of enhancing the flow of economic interactions and providing legal clarity for all parties involved.
TP and PE
The DTT states in Article 5(3)b that workers of an entity may qualify as a permanent establishment if such activities are carried out in the other contracting state for a period (or periods) of 183 days within any 12-month window beginning or ending in the tax year concerned.
Brazil is an important partner of the OECD (and aspires to become a member), which involves significant changes in various Brazilian legislation, particularly in taxation. The DTT is Brazil's first tax treaty to implement the arm's-length principle, which means transactions subject to transfer pricing (TP) laws in the framework of Article 9 (related firms).
Yesterday, March 16, the European Union's Court of Justice heard the European Commission's appeal in its tax dispute with American internet company Amazon.
If it loses the case, Amazon might be hit with a €250 million ($265 million) payment from Luxembourg.
According to the European Commission, the American corporation used the 'Project Goldcrest' Luxembourg tax structure. According to the Commission, Luxembourg gave Amazon a competitive advantage by allowing it to route European profits to a holding company that paid no taxes on over three quarters of those profits.
According to the Commission, Amazon invested in Luxembourg in exchange. The company's legal team contests the Commission's assessment that its Luxembourg tax arrangement violates EU state assistance law.
In 2021, the European General Court decided against the Commission.
Amgen is being sued over a $10 billion tax bill.
According to union pension fund Roofers Local No.149, US pharmaceutical corporation Amgen failed to tell investors that the company may be saddled with a bill of more than $10 billion in unpaid taxes and penalties in a dispute with the Internal Revenue Service (IRS).
Roofers stated on Tuesday, March 14. "Defendants failed to take any substantial accrual or otherwise reveal the astounding sum of overdue taxes and penalties requested by the US government," he said.
Roofers claims that the company's stock price dropped by 6.5% on August 4, 2021 and 4.3% on April 28, 2022. The pension fund claims this is due to Amgen's failure to disclose its prospective tax liabilities.
The case also names CEO Robert Bradway and CFO Peter Griffith as defendants. Amgen is investigating the allegations levelled against it.
Yet, the tax disagreement that prompted the lawsuit remains unresolved. Amgen is facing a $10.7 billion tax and penalty demand from the IRS, which says the corporation underreported its US taxable income by roughly $24 billion between 2010 and 2015.
According to the IRS, Amgen did so by transferring profits to a Puerto Rican manufacturing subsidiary. The corporation, though, denies any wrongdoing.
Roofers Local No. 149 Pension Fund v Amgen is a case filed in the United States District Court for the Southern District of New York, with the case number 23-02138.
Italy is working on business tax reform.
Yesterday, March 16, the Italian government revealed its desire to revamp the tax system in order to lower corporate tax and crack down on tax cheating.
By 2027, Prime Minister Giorgia Meloni aims to revamp the tax code, instituting a new single flat income tax rate and lowering the corporate tax rate from 24% to 15%. She also wants to fix tax loopholes and eliminate 600 tax deductions.
The Italian government intends to reduce tax evasion and bridge the so-called tax gap in order to collect up to €8 billion ($8.49 billion) more tax revenue in 2024 than the tax authority did in 2019. Nonetheless, tax evasion is predicted to cost the Italian government €90 billion every year.
If the reforms are implemented, it will be the most significant change to the Italian tax system since 1971, when the current regime was founded.
The UK CbCR regulations will be implemented on April 1st.
The UK regulation requiring master and local files as part of country-by-country reporting for large corporations will go into effect on April 1.
As part of the new CbCR, the UK government will also compel enterprises to produce a supporting summary audit trail. This is meant to increase the transparency and consistency of transfer pricing documents, as well as to make the risk assessment and enquiry process easier for the UK tax authority.
The filing requirements will provide HM Revenue and Customs with greater company financial information.
By fLEXI tEAM