Although over 100 countries have signed the Multilateral Instrument, courts around the world have diverged in their application of the Principal Purpose Test, says Christos A. Theophilou of STI Taxand.
As Global Capability Centres grow in India, navigating through the right setup strategy (direct ownership or Built Operate Transfer) and understanding Indian tax implications is crucial for an MNE’s business structuring and predictability, say Khaitan & Co. practitioners.
The IRS has staked out its position on §246(b) disallowing some of a taxpayer’s FDII and GILTI deductions in GLAM 2024-002, but the statute is poorly drafted and courts will need to weigh in to resolve open issues, say Baker McKenzie practitioners.
Differing approaches to financial segmentation between taxpayers and governments may cause wildly different Amount B returns, or a different conclusion on being in-scope at all, so documentation of reasonable allocation standards is key to avoiding government rebuttals, say Baker McKenzie practitioners.
The adoption of anti-treaty shopping measures like the PPT in Latin American jurisdictions complicates the analysis of whether treaty benefits will continue to be available for holding companies, and the scope of protection for a grandfathered holding structure remains unclear, say KPMG practitioners.
As the IRS has seen more success in transfer pricing enforcement cases, taxpayers should re-evaluate their current transfer pricing documentation and defense strategy and determine whether a proactive approach through the APA or ICAP program could reduce its global transfer pricing exposure, says a Grant Thornton practitioner.
Companies should strategize identifying and understanding the appropriate tax incentives established under The Inflation Reduction Act, CHIPS Act, and the US Foreign-Trade Zones Program in order to promote their financial goals, say KPMG practitioners.
The Dutch tax authorities’ 2023 Mutual Agreement Procedures report demonstrates the rising demand for international dispute resolutions but also for more advance certainty as more bilateral and multilateral advance pricing agreements have been resolved, says a KPMG Meijburg & Co practitioner.
The impact of higher TP amounts in dispute in recent years is likely to result in uncertain tax positions in the financial reporting context and command C-suite attention to TP issues, says a Grant Thornton practitioner.
Italy’s Investment Management Exemption regime will help foreign investment vehicles avoid PE risk and attract non-resident investors to Italy, say CMS practitioners.
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