China APA structure revised
The State Administration of Taxation has issued guidelines on the administration of advance pricing agreements, according to KPMG.
The rules require more detailed preparation from taxpayers prior to the formal application acceptance but still follow the six stage application process as the 2009 arrangement, including pre-filing meeting, intention, analysis and appraisal, formal application, negotiation and signing, and supervision of implementation.
Announcement 64 will be effective from December 1 2016. Any APA applications that have not been formally accepted before that date will be considered under the new rules.
Indonesia to attract multinationals with lower tax rate
Indonesian President Joko Widodo has said the next step to attract foreign direct investment to his country is to lower tax rates and simplify the tax system.
In an interview with the Wall Street Journal, Widodo said he is considering lowering Indonesia’s tax rate to 17% to compete with neighbouring financial-hub Singapore. He also suggested making one of Indonesia’s islands a tax haven with minimal tax imposed on individuals and companies there.
Indonesia’s government and president are keen to present a multinational-friendly tax environment however, it has struggled to reach its tax audit targets in recent years and in response the authorities have targeted multinationals in an attempt to increase revenue.
UK accountants angry at “draconian” measures
The Chartered Institute of Taxation has described proposed penalties for advisers arranging tax avoidance schemes as “draconian and broad”, reports the Financial Times.
The proposals, first introduced by former chancellor George Osborne, would see advisers facing fines of up-to 100% of the avoided tax if found guilty of constructing and advising on schemes for individuals and companies to avoid tax.
The Institute of Chartered Accountants in England and Wales and the Law Society have also spoken out against the proposals.