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Report on recent US international tax developments – 21 November 2018

The United States and Singapore signed a tax information exchange agreement (TIEA) and a new Foreign Account Tax Compliance Act (FATCA) Model I Intergovernmental Agreement (IGA) on 13 November 2018. The TIEA covers all US federal taxes as well as Income Tax, Property Tax, Goods and Services Tax and Stamp Duty in Singapore. The new reciprocal FATCA IGA will supersede the current 2014 non-reciprocal IGA when it enters into force.

There were a number of Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) developments in recent days. On 15 November the OECD released an update to the 2017 Progress report on Preferential Tax Regimes conducted in connection with Action 5 of the BEPS Project. The updated results cover 53 regimes, bringing the number of regimes reviewed, or under review, to 246. The assessments were undertaken by the Forum on Harmful Tax Practices.

On the same date, the Inclusive Framework on BEPS released a Substantial Activities Requirement for “no or only nominal tax” jurisdictions (the Standard). The document sets out the background and rationale for the resumption of the substantial activities requirement, a requirement first set out in an OECD 1998 report. It also sets out the technical guidance governing the application of that requirement.

Finally, the OECD in mid-November announced that it is now gathering input on the implementation of the BEPS Action 14 minimum standard in relation to the review of the seventh batch of jurisdictions (Brazil, Bulgaria, China, Hong Kong, Indonesia, Papua New Guinea, Russian Federation and Saudi Arabia). The OECD is inviting taxpayers to submit their input related to their experiences in these jurisdictions via electronic questionnaire by 13 December 2018. This exercise is part of the process of the mutual agreement procedure (MAP) peer review and monitoring process that the OECD launched in December 2016 under Action 14 of the BEPS project in relation to more effective dispute resolution mechanisms.

EYG no. 012067-18Gbl

Download this Tax Alert as a PDF file.

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