International

Tax News

Edition 107 March 2022

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Welcome

Keeping up with the constant flow of international tax developments

worldwide can be a real challenge for multinational companies.

Glossary

OECD/EU

Bernard Moens

Global Leader International Tax Services Network

+1 703 362 7644

COVID-19 can cause potentially significant people, social and economic implications for

organisations. This link provides information on how you can prepare your organisation and respond.

Responding to the potential business impacts of COVID-19

In this issue

Legislation

Canada proposes mandatory

disclosure legislation

On February 4, 2022, the Department of

Finance released draft legislative proposals

to enhance Canada’s mandatory disclosure

rules for reportable transactions, notifiable

legislation.

Reportable transactions:

Current rules in the Income Tax Act (ITA)

require reporting a transaction if it is

considered an 'avoidance transaction' as that

term is defined for purposes of the general

anti-avoidance rule, and it meets at least two

of three defined hallmarks (contingent fee

arrangement, confidentiality protection, or

contractual protection).

standard commercial tax risk insurance),

so that these protections would not

trigger a reporting requirement

• amend the definition of 'avoidance

transaction' for these purposes, so that a

transaction can be considered an

avoidance transaction if it can

reasonably be concluded that one of the

the transaction for the benefit of the taxpayer)

The proposals introduce a requirement to

report pertinent information on a new

category of specific transactions (known as

'notifiable transactions') to the CRA on a

timely basis. The Minister of National

Revenue, with the concurrence of the

to designate a transaction or series of

transactions. A notifiable transaction is a

transaction or series of transactions that is

the same as, or substantially similar to, a

designated transaction or series of

obtain the same or similar types of tax

consequences and are either factually similar

or based on the same or similar tax strategy.

Notifiable transactions would include both

transactions that the CRA has found to be

abusive and transactions identified as

transactions of interest. The description of a

notifiable transaction is expected to set out

would require a corporate taxpayer meeting

the following conditions to report particular

uncertain tax treatments to the CRA:

• the corporation is required to file a

Canadian income tax return, and has at

least $50 million in assets at the end of

the taxation year

• the corporation, or a group of which the

corporation is a member, has audited

financial statements prepared in

related to the corporation’s Canadian

income tax reflected in the audited

financial statements.

A corporation would be required to report

information on uncertain tax treatments at the

same time that the reporting corporation’s

Canadian income tax return is due.

See our PwC Tax Insight for more information

on the proposals.

expand the types of transactions

that could be reportable to the CRA.

It will place a heavy burden on

taxpayers and promoters or advisers

to comply with these new disclosure

obligations if they are involved in

transactions designated as

reassessment period for such

transactions could still be deferred

until reporting occurs.

Legislation

Spain approves corporate income tax and

non-resident income tax modifications

Law 5/2022, of 9 March, which amends Law 27/

2014, of 27 November, on corporate income tax and

the revised text of the non-resident income tax law in

relation to hybrid mismatches, was published in the

line with European law, following the ruling of the

Legislation

Tax measures proposed in the 2022-23

Hong Kong Budget

In the 2022-23 Hong Kong Budget delivered

February 23, the Financial Secretary proposed,

among others, the following profits tax measures:

See our PwC Insight for more information.

Administrative

Singapore explores a new minimum

effective tax rate regime

The Finance Minister announced that Singapore will

study the feasibility of introducing a 15% minimum

effective tax rate (METR) regime. This is in response

to the Global Anti-Base Erosion Model Rules (the

Framework to address the tax challenges arising

from the digitalisation of the economy (Pillar Two).

the proposed Top-up Tax under the GloBE rules

The METR, which would apply to multinational

enterprise groups with annual revenues of at least

€750 million, has therefore been tabled for

consideration and will undergo industry consultation.

Administrative

Spain addresses teleworking and

the creation of a permanent

The Spanish Directorate General for Taxation

(Spanish DGT) recently issued a binding

ruling on international teleworking and the

establishment (PE) in Spain. In the binding

ruling (V0066-22), dated 18 January, the

Spanish DGT ruled on the existence or not of

a PE of British company due to the fact than

an employee carried out its work in Spanish

territory during the COVID-19 lockdown and

decided to remain in Spain for personal

reasons once the COVID-19 measures

adopted in Spain were finalized.

The Spanish DGT noted for there to be a

fixed place of business in the event that the

activity is carried out from the employee's

private home, two circumstances must be

business is not at the disposal of the

company: i) that the permanence was at the

employee's personal choice and not ordered

United Kingdom at his or her disposal; and iii)

that the company does not bear any costs or

pay any special remuneration to the

employee for teleworking.

Spanish DGT noted that specific facts and

considered on a case-by-case basis, and it

avoided making a general statememt for

similar situations.

Administrative

Spain issues new partipcation

exemption regime ruling

The Spanish Directorate General for Taxation

(Spanish DGT) recently issued a binding

rulling on the application of the exemption

regime envisaged in Article 21 of the

are met.

Through this recent binding ruling, the

dividends distributed by, or capital gains

from, an ETVE (which stem from participation

exemption-qualifying income) obtained by

obtained in Spanish territory (i.e., non

taxable), provided that certain requirements

are met.

The Spanish DGT concluded that profits

distributed to non-resident shareholders by

Spanish entities subject to the ETVE Regime

Contact us

For your global contact and more information on PwC’s international tax services, please contact:

Bernard Moens

Global Leader International Tax Services Network

+1 703 362 7644