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International Tax Review Asia Tax Forum 2012 International Tax Developments: The Cross-Border Issues Making a Difference. Steve Towers /David Weisner/Kristy Ton May 9 – 10, 2012. Agenda. What hope for tax reform in the US? OECD developments: beneficial ownership, PE, intangibles

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Steve towers david weisner kristy ton may 9 10 2012

International Tax Review Asia Tax Forum 2012International Tax Developments:The Cross-Border Issues Making a Difference

Steve Towers /David Weisner/Kristy Ton

May 9 – 10, 2012


Agenda

Agenda

What hope for tax reform in the US?

OECD developments: beneficial ownership, PE, intangibles

2011 Update to the UN Model Treaty and Commentary

FATCA – It’s getter closer. What taxpayers need to know

Recent international tax cases: the global top 10

Q & A


2012 elections economy is driving election outcomes

2012 ElectionsEconomy is driving election outcomes

  • Economic issues driving 2012 elections

    • Only Roosevelt re-elected (1936) with unemployment rate >8.3%

    • Only Eisenhower re-elected (1956) with GDP growth <2%

Top Five Issues of Concern to Voters

45%

% of Adults Surveyed

20%

10%

Source: NBC/WSJ Survey, March 3, 2012


2012 elections obama s performance on the economy is up

2012 ElectionsObama’s performance on the economy is up

Obama Performance on the Economy

  • Obama approval rating on the economy has improved

    • Obama had a negative 18 point rating in the fall

    • It’s currently a negative 7 point rating

% of Adults Surveyed

Source: NBC/WSJ Survey, April 2012


2012 elections obama s approval ratings have improved significantly

2012 ElectionsObama’s approval ratings have improved significantly

  • Politicians usually in trouble with disapprovals > approvals

  • Last August, Obama was looking like a “dead duck” (-10.2%)

  • Today, he has a positive 1.2% rating

Obama Approval/Disapproval Average Ratings

53.2

48.3

47.1

43.0


2012 elections obama s re election looks likely today but it s a 50 50 race

2012 ElectionsObama’s re-election looks likely today, but it’s a 50/50 race

  • Romney out-polled Obama slightly last October (+0.5%)

  • Now Obama is out-polling Romney (+3.1%)

  • Charlie Cook’s assessment: Obama wins…50/50 race

Obama vs. Romney, Average Polling Data

47.5

46.1

45.6

44.4


2012 elections election dynamics in congress

2012 ElectionsElection dynamics in Congress

  • Leadership in both Houses suffer with weak majorities

  • Huge ideological struggle for elections

    • Republican strategy: cut spending, no tax increases, rollback regulation

    • Democratic strategy: grow jobs, protect entitlements, tax the wealthy

  • Conventional wisdom/political analysts projections:

    • House: Republican majority shrinks by 15 to 20 seats, but remains under GOP control

    • Senate: Democrats lose 3 to 5 seats, but Republican majority 50/50 competitive chance

* 3 vacancies


2012 elections election dynamics in congress1

2012 ElectionsElection dynamics in Congress

  • 51.8% likely Obama wins (average of last eight polls)

  • 60% likely GOP maintains majority in the House

  • 50% likely that GOP takes majority in the Senate


2012 elections impact on us tax legislative reforms

2012 Elections Impact on US Tax Legislative Reforms

  • GOP supports a territorial system with a low corporate tax rate, which Democrats oppose

  • Other issues which may impact tax reform, i.e. long-term budget deficits, unemployment, environmental.

  • If Obama wins and Congress is split or under GOP control

    • Obama will propose Tier 3 and protect it against a Republican attack

    • Congressional GOP will press Obama for a territorial system with a low corporate rate

  • If Romney wins and Congress is split or under Democratic control

    • Romney will drive for a territorial tax system with a low corporate rate that Senate Democrats and GOP House Members will support

    • But, Romney will kill Tier 3

  • Unified control by one party, is unlikely

Note: LEV III reduces emissions from LD vehicles for MY17-25 by 70%. Tier 3 will nationalize LEV III and cut sulfur content in gasoline from an average of 30ppm to 10ppm


Deficits and debt impact of alternative scenarios on deficits as percent of gdp

Deficits and DebtImpact of alternative scenarios on deficits as percent of GDP

Deficit Projections Under Alternative Scenarios

  • Budget Control Act set a course to reduce the deficits, assuming expiring provisions are not extended

  • If all the expiring provisions are extended, the deficits explode by factor of 4

-1.2%

-3.0%

Percent of GDP

Deficit Averaged -2.8% Annually

FY 1971-2011

-5.9%

-8.7%

Source: CBO


Deficits and debt impact of alternative scenarios on debt as percent of gdp

Deficits and DebtImpact of alternative scenarios on debt as percent of GDP

Debt Projections Under Alternative Scenarios

  • Budget Control Act reduces debt/GDP ratio by 16%,assuming expiring provisions are not extended

    • Assumption is flawed

    • Debt/GDP ratio explodes from 73% to 93% if provisions are extended

  • Impact: enormous pressure to increase taxes

Debt Averaged 37% Annually

FY 1971-2011

93.2%

Percent of GDP

76.3.%

73.3%

61.3%

Source: CBO


Tax reform

Tax Reform

  • Tax reform will be discussed in context of deficit reduction and will be controversial

    • Obama/Democrats see it as a revenue raiser

    • Republicans see it as a way to cut tax rates and make the code more tax efficient

  • Ways & Means Chairman Camp pushing his tax reform package

    • Cuts the corporate rate to 25%

    • Converts the global system to a territorial system

    • Deems past foreign income subject to deferral repatriated and taxed at 5.25%

    • Subjects intangibles to a 15% tax

  • Business groups undecided on Camp proposal

  • Tax reform likely will not be enacted before the November 2012 elections (more likely will not be settled until 2013 or later). However, Congress will need to address high-profile tax issues by year-end, including scheduled expiration of Bush 2001/2003 individual tax cuts and status of tax extenders such as CFC look-through.

  • DANGER: deficit reduction in context of tax reform needs to raise revenue


Tax reform deficit reduction will require increased revenue

20.9%

15.3%

12.0%

12.2%

7.7%

10.4%

Tax Reform Deficit reduction will require increased revenue

Revenues and Spending Under Budget Control Act, 2011-2021

Percentage of GDP

Source: CBO


President obama business tax reform framework

President Obama Business Tax Reform Framework

  • President Obama’s Framework issued in February 2012 contained five key elements of business tax reform:

    • Broaden the base and reduce corporate tax rate from 35% to 28%.

    • Strengthen American manufacturing & innovation

      • Increase domestic manufacturing income deduction to 10.7%, effectively reducing corporate tax rate on manufacturing income to 25%

      • Expand, simplify and make permanent R&E tax credit

      • Extend, consolidate, and enhance clean energy tax incentives

    • Strengthen international tax system – limit deferral of foreign earnings by imposing minimum tax on foreign earnings, tax excess IP returns and limit interest deduction on overseas investment.

    • Simplify and cut taxes for small businesses.

    • Eliminate or making permanent temporary tax provisions.


House ways means chairman dave camp international tax reform discussion draft

House Ways & Means Chairman Dave CampInternational Tax Reform Discussion Draft

  • Reduce corporate tax rate to 25% (base broadening provisions to be determined).

  • Shift to territorial based system

    • 95% dividend received deduction (DRD)

    • Subpart F inclusions on all accumulated E&P with 85% DRD.

    • Previously untaxed earnings are taxed twice:

      • As deemed repatriation of all accumulated E&P (85% DRD)

      • Again when actually repatriated (95% DRD)

    • Subpart F provisions maintained for FBCSI and FBCSvI (954(d)& 954(e); three alternatives for new subpart F categories to address base erosion – excess returns, low-tax foreign income (ETR < 10%), carrot & stick option

    • Previously tax income rules repealed.

    • FTCs repealed except for passive income (but not on exempted income).


Territorial tax system enzi vs camp

Territorial Tax System – Enzi vs. Camp

  • On February 9, 2012, Senator Michael Enzi introduced an international tax reform bill (“U.S. Job Creation & International Tax Reform Act of 2012”) that adopts a territorial tax system and makes significant changes to the subpart F and foreign tax credit (“FTC”) regime.

  • The bill has some similarities to the October 26, 2011, Discussion Draft release by House Ways and Means Committee Chairman Dave Camp (although it does not include a provision to lower the top corporate tax rate).


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System – Enzi vs. CampComparison of key provisions of the participation exemption system


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System – Enzi vs. Camp (Cont’d)Comparison of key provisions of the participation exemption system


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System – Enzi vs. Camp (Cont’d)Comparison of key provisions of the participation exemption system


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System – Enzi vs. Camp (Cont’d)Comparison of key transitional provisions


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax ReformComparison of key modifications to Subpart F


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of key modifications to Foreign Tax Credits


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax ReformComparison of key modifications to Foreign Tax Credits (Cont’d)


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of key modifications to Foreign Tax Credits (Cont’d)


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of miscellaneous proposals


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of miscellaneous proposals (Cont’d)


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of miscellaneous proposals (Cont’d)


Steve towers david weisner kristy ton may 9 10 2012

Territorial Tax System vs. Obama’s Int’l Tax Reform Comparison of miscellaneous proposals (Cont’d)


Tax reform comparison of tax reform proposals

Tax Reform Comparison of Tax Reform Proposals


Agenda1

Agenda

What hope for tax reform in the US?

OECD developments: beneficial ownership, PE, intangibles

2011 Update to the UN Model Treaty and Commentary

FATCA – It’s getter closer. What taxpayers need to know

Recent international tax cases: the global top 10

Q & A


Oecd developments permanent establishment

OECD developments : permanent establishment

  • 12 October 2011 : proposed changes to Commentary on Art. 5 issued for public comment (by 10 February 2012)

  • Sub-group of Working Party 1

  • Final changes to be included in next update of the Model Convention & Commentary (scheduled 2014)

  • Included

    • “At the disposal” : principles & factors

    • Contract manufacturing (but no reference to toll manufacturing)

    • Home office

    • Secondment : cross-reference to Commentary on Art. 15(2) (but no reference to Art. 5(3)(b), UN model treaty)

    • Examples elaborating on existing Commentary

  • Not Included

    • Logistics company’s warehouse

    • Cloud computing

    • Situations in which subsidiary’s employees could be deemed to be employees of parent (Rolls Royce)

    • Express rejection of “Sidney Robert’s view” re agency PE1

  • ¹ Sidney I. Roberts, “The Agency Element of Permanent Establishment : The OECD Commentaries from the Civil Law View”, 1993/ 9&10 Intertax.


Oecd developments beneficial ownership

OECD developments : beneficial ownership

  • Current OECD Commentary on Arts. 10 (dividends), 11 (interest),and 12 (royalties) explains the meaning of “beneficial owner” interms of two alternative disqualifying conditions

    • Agency or nominee

    • Conduit company acting like mere fiduciary or administrator

  • First disqualifying condition (agency or nominee): introduced into Commentary in 1977

  • 1986: OECD Report: “Double Taxation Conventions and the Use of Conduit Companies”

  • Second disqualifying condition (conduit company acting like a mere fiduciary or administrator): introduced into Commentary in 2003

  • 29 April 2011: proposed changes to Commentary issued for public comment (by 15 July 2011)


  • Proposed changes

    4 key notions

    Not narrow technical sense

    First disqualifying condition

    Second disqualifying condition

    Look through

    8 key notions

    Not narrow technical sense (amended)

    Domestic law meaning relevant(if consistent)

    First disqualifying condition

    Second disqualifying condition

    Look through

    Full right to use and enjoy the income unconstrained by a contractual or legal obligation

    Cross-reference to anti-avoidance rules

    Contextual meaning

    Proposed changes

    • In summary

    Existing Commentary

    New Commentary (after proposed changes)

    1

    2

    3

    2

    4

    3

    4

    5

    1A

    1B

    6

    7


    Proposed changes cont d

    Proposed changes (cont’d)

    Full right to use and enjoy the income unconstrained by a contractual or legal obligation

    “In these various examples (agent, nominee, conduit company acting as a fiduciary or administrator), the recipient of the dividend is not the ‘beneficial owner’ because that recipient does not have the full right to use and enjoythe dividend that it receives and this dividend is not its own; the powers of the recipient over that dividend are indeed constrainedin that the recipient is obliged (because of a contractual, fiduciary or other duty) to pass the payment received to another person. The recipient of a dividend is the ‘beneficial owner’ of that dividend where he has the full right to use and enjoythe dividend unconstrained by a contractual or legal obligationto pass the payment received to another person. Such an obligation will normally derive from relevant legal documentsbut may also be found to exist on the basis of facts and circumstances showing that, in substance, the recipient clearly does not have the full right to use and enjoy the dividends; also, the use and enjoyment of a dividend must be distinguished from the legal ownership, as well as the use and enjoyment, of the shares on which the dividend is paid.” (proposed new paragraph 12.4 to Commentary on Art. 10, all new text; bolding added)

    5

    Sentence #1

    Sentence #2

    Sentence #3


    Oecd developments intangibles

    OECD developments : intangibles

    • Working Party 6 : Transfer Pricing Aspects of Intangibles

      • Leading to a revision of Chapters VI and VIII of the OECD Transfer Pricing Guidelines

  • Meeting with Business representatives, 7-9 November 2011:

    • Definitional approach

    • Goodwill and going concern

    • Brands and brand value

    • Ownership issues

    • Synergies

  • Future


  • What is the relevance of the oecd commentary in asia pacific

    What is the relevance of the OECD Commentary in Asia Pacific?

    • Only substantive, multi-lateral double tax treaty guidance available

      • UN Commentary? 90% the same as OECD Commentary

  • Views of non-members are included in OECD Commentary, including : China, Hong Kong, India, Indonesia, Malaysia, Philippines, Thailand & Vietnam. With the exception of India, areas of disagreement are relatively few

  • OECD members disagree with, or don’t apply, OECD Commentary, at times

    • Disagreements vs. interpretation issues

    • Substance over form / GAAR

    • Consider : Zimmer, Dell, Roche


  • Relevance of oecd commentary in asia pacific

    Relevance of OECD Commentary in Asia Pacific

    • OECD Commentary to Art. 5

    • Disagreements

    • 1 Note: Other Asia Pacific jurisdictions are : Australia, China, Hong Kong, Indonesia, Japan, Korea, New Zealand, Philippines, Thailand. (OECD members & non-members)

    • ² Or position reserved


    Relevance of oecd commentary in asia pacific1

    Relevance of OECD Commentary in Asia Pacific

    • OECD Commentary to Art. 5 (cont’d)

    • Disagreements

    • 1 Note: Other Asia Pacific jurisdictions are : Australia, China, Hong Kong, Indonesia, Japan, Korea, New Zealand, Philippines, Thailand. (OECD members & non-members)

    • ² Or position reserved


    Relevance of oecd commentary in asia pacific2

    Relevance of OECD Commentary in Asia Pacific

    • OECD Commentary to Art. 5 (cont’d)

    • Disagreements

    • 1 Note: Other Asia Pacific jurisdictions are : Australia, China, Hong Kong, Indonesia, Japan, Korea, New Zealand, Philippines, Thailand. (OECD members & non-members)

    • ² Or position reserved


    Relevance of oecd commentary in asia pacific3

    Relevance of OECD Commentary in Asia Pacific

    • OECD Commentary to Art. 12

    • Disagreements

    • 1 Note: Other Asia Pacific jurisdictions are : Australia, Hong Kong, Indonesia, Japan, Korea, New Zealand, Philippines, Thailand, Vietnam (OECD members & non-members)

    • ² Or position reserved


    Agenda2

    Agenda

    What hope for tax reform in the US?

    OECD developments: beneficial ownership, PE, intangibles

    2011 Update to the UN Model Treaty and Commentary

    FATCA – It’s getter closer. What taxpayers need to know

    Recent international tax cases: the global top 10

    Q & A


    2011 update to the un model treaty commentary

    2011 Update to the UN Model Treaty & Commentary

    • 2011 Update to UN Model double tax treaty & Commentary launched on 15 March 2012 (first update for 10 years)

    • Significant changes to the Commentary on Art.1

    • Although the OECD Commentary to Art. 1 does discuss (and generally endorses) the use of domestic law or treaty-based anti-avoidance rules to combat treaty “abuse”, the 2011 Update adds significant original content to the UN Commentary on this issue


    Un commentary to art 1 examples of improper use of tax treaties

    UN Commentary to Art. 1 : Examples of improper use of tax treaties

    * Straightforward idea


    Agenda3

    Agenda

    What hope for tax reform in the US?

    OECD developments: beneficial ownership, PE, intangibles

    2011 Update to the UN Model Treaty and Commentary

    FATCA – It’s getter closer. What taxpayers need to know

    Recent international tax cases: the global top 10

    Q & A


    Fatca background

    FATCA Background

    • “Foreign Account Tax Compliance Act” or “FATCA” was signed into law on March 18, 2010 as a revenue raiser for the “Hiring Incentives to Restore Employment Act” or “HIRE”

    • Various effective dates. FATCA withholding on U.S. source income begins on January 1, 2014.

    • Objective is to combat offshore tax evasion by U.S. persons who invest

      • Directly through financial accounts maintained offshore

      • Indirectly through ownership of foreign entities

  • FATCA works by requiring foreign financial institutions (“FFIs”) and non-financial foreign entities (“NFFEs”) to provide this information

    • FATCA’s lever is a NEW 30% withholding tax levied on “withholdable payments” to non-participating FFIs and NFFEs


  • Fatca background withholding as an enforcement tool

    FATCA Background: Withholding as an Enforcement Tool

    • 30 Percent FATCA withholding

      • Imposed on “withholdable payments”, including

        • U.S. source income from securities

        • Interest on bank deposit accounts maintained in the United States or in a foreign branch of a U.S. bank

        • Gross proceeds from the sale/redemption of U.S. securities

      • When made to foreign financial institutions (FFIs) or non-financial foreign entities (NFFEs)

        • Does not apply to payments made to individuals

      • Unless

        • the FFI enters into an agreement with the IRS (a participating FFI)

        • the NFFE discloses the identity of its U.S. owners or certifies to non-US ownership to the withholding agent


    Steve towers david weisner kristy ton may 9 10 2012

    The Role of Withholding Under Present US Tax Law

    30 Percent U.S. Non-resident tax

    • Is a flat rate tax that imposed on foreign persons

    • Applies to U.S. source dividends, interest, royalties and other “income”, unless a reduced rate or an exemption applies

    • Does not apply to gross proceeds or gains from the sale of securities

    • Does not apply if FATCA withholding applies

      28 Percent backup withholding

    • Applies to noncompliant U.S. non-exempt recipients

    • Can apply to any payments that are reportable on Forms 1099

      • U.S. source and foreign source income

      • Gross proceeds from the sale/redemption of securities

    • Is a credit against the federal tax liability of U.S. taxpayers


    Steve towers david weisner kristy ton may 9 10 2012

    Illustration of Application of Passthru Payment Rule

    Foreign

    Bank

    • FATCA may apply for US indirect investments.

    • Foreign Bank makes investment in Participating FFI, which in turn invests in various US and non-US portfolio investments that generate US and non-US source investment income, respectively, and eventually proceeds from the exit.

    • If Foreign Bank does not enter in an agreement with the IRS, 30% tax would be withheld on payments from Participating FFI to Foreign Bank “related” to US investments of the Participating FFI determined as a function of US/total assets ratio of the Participating FFI.

    Income from FFI of US$ 10M

    US Withholding Tax of US$ 1.8M(US$ 10M x 60% x 30%)

    Participating

    FFI

    US

    Portfolio

    Investments

    Non-US

    Portfolio

    Investments

    Passthru Payment Percentage = 60%


    Steve towers david weisner kristy ton may 9 10 2012

    Initial Guidance on Passthru Payments

    • Why?

      • The primary purpose behind the passthru payment concept is to prevent an FFI to be used as a blocker for US persons trying to avoid US tax by making indirect investments in US assets.

      • The IRS also noted that the passthru payment rule is to encourage FFIs to enter into FFI agreements (i.e., a passthru payment paid to a PFFI is not subject to FATCA’s withholding requirement, whereas a passthru payment paid to a non-participating FFI would be subject to FATCA withholding).

    • What is it?

      • A passthru payment is defined in the statute and it includes withholdable payments from direct US investment and other payments from an indirect US investment through a PFFI.

    Direct US Investment

    Indirect US Investment

    Passthru Payment Percentage

    Withholdable Payment

    Non-withholdable Payment


    Steve towers david weisner kristy ton may 9 10 2012

    Foreign Financial Institution (FFI) Defined

    Under FATCA, the term FFI is quite broad

    Includes any foreign entity that

    • Accepts deposits in the ordinary course of a banking or similar business

    • Is in the business of holding financial assets for the account of others

    • Is engaged primarily in the business of investing, reinvesting, or trading in securities, partnership interests, commodities, or any interest in such securities.

      FFI Examples: non-U.S. banks, custodian banks, securities brokers and dealers, hedge funds, collective and family investment vehicles.

    • Includes personal investment corporation (“PIC”) holding solely passive assets – the PIC is an FFI.


    Steve towers david weisner kristy ton may 9 10 2012

    Non-Financial Foreign Entity (NFFE) Defined

    An NFFE that has one or more “substantial” U.S. owners (other than exempt U.S. owners) is considered a U.S. owned NFFE

    Substantial ownership means more than 10 percent of:

    • Vote or value of a corporation’s stock

    • Profit or capital interest in a partnership

    • Beneficial interest in a trust if any grantor is a non-exempt US person

    • Example: A closely-held manufacturing company

      Exempt U.S. owners include

    • A corporation the stock of which is regularly traded on an established securities market and any of its affiliates

    • Any tax-exempt organization under IRC section 501(a) or an individual retirement plan

    • Any bank, any REIT or any RIC

    • Any common trust fund, charitable lead or remainder trust


    Steve towers david weisner kristy ton may 9 10 2012

    New Way to Categorize Client Accounts

    Need to determine whether to treat

    • An individual account holder as a U.S. person or a foreign person

    • An entity account holder as

      • a U.S. person

      • A foreign financial institution (FFI)

      • An excepted foreign organization (e.g., a foreign government)

      • A non-financial foreign entity (NFFE)

    • An FFI as

      • A participating FFI

      • A deemed-compliant FFI or

      • Non-participating FFI

    • An NFFE as

      • A U.S. owned NFFE (having a substantial US owner)

      • An excluded NFFE

      • A recalcitrant account

        Observation: Presents a new and completely different way to categorize client accounts and service providers


    Steve towers david weisner kristy ton may 9 10 2012

    Indicia of Potential U.S. Status

    • Searches for U.S. indicia are used to identify U.S. persons that own accounts

    • An account holder has indicia of U.S. status if he:

      • Is a U.S. citizen or resident

      • Was born in the U.S.

      • Has a U.S. residence or mailing address;

      • Has a U.S. telephone number

      • Has provided standing instructions to transfer funds to a U.S. based account

      • Has granted power of attorney over the account to a person with a U.S. address

      • Has a “care of” or hold mail address that is the sole address of account holder


    Steve towers david weisner kristy ton may 9 10 2012

    Account due diligence rules for FFIs


    Steve towers david weisner kristy ton may 9 10 2012

    Account due diligence rules to identify U.S. account holders

    Individual Accounts (only applies to FFIs, not USFIs)

    New individual accounts

    • Review all of the information provided at the opening of the account, including identifying information collected under AML/KYC rules

      If an indicator of U.S. ownership is found, obtain additional documentation or treat the account as held by a recalcitrant account holder


    Steve towers david weisner kristy ton may 9 10 2012

    Account due diligence rules to identify U.S. account holders

    Entity Accounts

    Pre-existing entity accounts

    • $250,000 or less – Excluded from review, until account balance exceeds $1,000,000. Must collect documentation sufficient to establish account holder’s FATCA status (e.g., U.S. entity, Participating FFI, Active non-financial foreign entity (NFFE), Passive NFFE)

    • Passive NFFEs – Must identify substantial U.S. owners

      • Balance more than $1,000,000 – Must obtain information regarding substantial U.S. owners

      • Balance not more than $1,000,000 – May rely on information collected for AML

        New individual accounts

    • Must collect documentation sufficient to establish account holder’s FATCA status (e.g., U.S. entity, Participating FFI, Active non-financial foreign entity (NFFE), Passive NFFE)

    • Review all of the information provided at the opening of the account, including identifying information collected under AML/KYC rules


    Steve towers david weisner kristy ton may 9 10 2012

    Client Management Issues for FATCA Compliance

    • Certain products and services may no longer be available to certain clients

    • New clients must provide extensive personal information beyond current requirements (Relationship Manager’s role expanded)

    • Clients must waive privacy rights and grant permission for personal and account information to be reported to the IRS

    • Recalcitrant accounts may require closure against client wishes


    Steve towers david weisner kristy ton may 9 10 2012

    Reporting requirements – a phased approach

    1 In the case of a U.S.-owned foreign entity, the information must be reported for the entity as well as the name, address, and TIN for each substantial U.S. owner.


    Steve towers david weisner kristy ton may 9 10 2012

    Timelines – phased implementation

    FFIs and USFIs each have their own timeline

    Phased implementation starting in 2013, and ending no earlier than 2017

    Some systems and procedures need to be ready on Jan 1, 2013

    Major key dates:

    • January 1, 2013 – USFIs need new account procedures in place

    • July 1, 2013 – Participating FFIs should have signed agreement in place with the IRS

    • January 1, 2014 – FATCA withholding commences on withholdable payments

    • July 1, 2014 – Need to certify due diligence is complete on high value accounts

    • September 30, 2014 – First FATCA account reporting is due

    • January 1, 2017 – FATCA withholding scheduled to commence on foreign passthru payments


    Legal issues for implementation

    Legal Issues for Implementation

    • FFI is required to seek a waiver of applicable bank secrecy, confidentiality, data collection or other information disclosure prohibitions from the U.S. account holder that might otherwise prohibit or limit FATCA reporting, and close accounts in certain circumstances.

    • Local Privacy Laws

    • Conflict with Local Laws

    • Burden on FFI

    • Account Opening Documentation

    • Transactional Documentation


    Impact to mncs nffes

    Impact to MNCs (NFFEs)

    • Impact on the Treasury Function

    • “Stealth” Foreign Financial Institutions that might be part of

    • Consolidated Group

    • Impact to Accounts Payable and other Departments

      • Legal Documentation Changes


    Loans gross up

    Loans: Gross-Up

    • “The Borrower shall not be required to make an increased payment to a Finance Party under paragraph (a) above for (i) a Tax Deduction imposed by reason of such Finance Party’s failure to comply with any certification, identification, information, documentation or other reporting requirement if such compliance is required by law, regulation, administrative practice or an applicable treaty as a precondition to exemption from, or reduction in the rate of, deduction or withholding of any Tax Deduction, (ii) a Tax Deduction imposed by reason of such Finance Party’s failure to comply with Clause 14.7 or (iii) any U.S. federal income withholding tax imposed under FATCA.”


    Steve towers david weisner kristy ton may 9 10 2012

    ISDA

    • “Foreign Account Tax Compliance Act. (a) For purposes of any Payer Tax Representation, the words “any Tax from any payment” shall not include any tax imposed under Sections 1471 and 1472 of the Internal Revenue Code of 1986, as amended (or the United States Treasury regulations or other guidance issued or any agreements entered into thereunder) (“FATCA Withholding Tax”); (b) for the avoidance of doubt the parties agree that for purposes of Section 2(d)(i) the deduction or withholding of FATCA Withholding Tax is required by applicable law; and (c) the definition of “Indemnifiable Tax” shall not include any FATCA Withholding Tax.”


    Offering circular

    Offering Circular

    • “We intend to structure our investments so that we will not be required to withhold 30% FATCA withholding tax earlier than 2017 although no assurances can be given in this regard. Pursuant to the FFI Agreement we intend to enter into, beginning no earlier than 2017, we will be required to withhold 30% FATCA withholding tax on certain dividends that we pay to foreign financial institutions that have not entered into an FFI Agreement (including Name of Depository) if it does not enter into an FFI Agreement) or to Shareholders that do not verify their status under the FATCA rules, to the extent such dividends are foreign passthru payments.”


    Offering circular1

    Offering Circular

    • “The application of FATCA to an investment in our Shares will

    • depend on:

      • whether the foreign financial institutions through which you hold our Shares, including (name of depository) and any broker, have entered an FFI Agreement, which is outside of our control; and

      • whether you verify your status under the FATCA rules to us or to the foreign financial institution through which you hold our Shares.”


    Treasury irs guidance needed

    Treasury/IRS Guidance Needed

    • Statutory provisions are not self-implementing

      • Guidance is expected to be published in waves

      • IRS must draft an agreement for foreign financial institutions

      • Expect revisions to Form W-8 series

    • Preliminary guidance published 8/27/2010 in Notice 2010-60

    • Additional guidance published 04/09/2011 in Notice 2011-34

    • Further guidance published 07/14/2011 in Notice 2011-53

    • Proposed regulations published on 02/08/2012

    • Written or electronic comments sent by April 30, 2012.

    • Public hearing scheduled for May 15, 2012.

    • Final regulations need to be published

    • Any delay in Treasury/IRS guidance

      • puts pressure on the effective date and

      • narrows the window for building needed systems and procedures


    Agenda4

    Agenda

    What hope for tax reform in the US?

    OECD developments: beneficial ownership, PE, intangibles

    2011 Update to the UN Model Treaty and Commentary

    FATCA – It’s getter closer. What taxpayers need to know

    Recent international tax cases: the global top 10

    Q & A


    10 ford uk

    #10 Ford (UK)

    • Use of non-discrimination article in UK/US treaty to achieve transfer of tax losses between 2 UK companies, even though they did not have a common UK holding company (which UK tax law required at that time).

    • Art. 24(5), OECD model treaty:

      “Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.” [Emphases added]

    US Co

    US

    UK Co 2

    UK

    UK Co 1

    Losses

    Profits


    9 george anson uk

    #9 George Anson (UK)

    • Delaware LLC characterised as a company for UK tax purposes (lower tribunal had characterised it as a partnership)

    • Property interest in LLC’s assets vs. non-discretionary entitlement to dividends

    George Anson

    Div.

    UK

    US

    LLC

    Profits


    8 li fung hong kong

    #8 Li & Fung (Hong Kong)

    • Customers contract with HK Co for the provision of “supply chain” and “logistics” services (eg. locating suppliers, placing orders with suppliers (on behalf of customers), quality control inspections, arranging for shipment, etc.) Fee = 6% of sales price.

    • Many of the services are performed (outside HK) by foreign affiliates of HK Co. Fee = 4% of sales price.

    • HK Co argued that its 6% fee income was sourced outside HK and thus is tax-exempt.

    • Court of Appeal : HK Co wins

    • Follows ING Baring case (Court of Final Appeal, 2007): in determining the source of profits, the focus should be on the important profit-producing activities, and not on any antecedent or incidental activities.

    HK Co

    Service contract (A)

    HK

    Offshore

    Service contract (B)

    $

    $

    Customers

    Foreign

    Affiliates


    7 fabrikant columbia sportswear india

    #7 Fabrikant / Columbia Sportswear (India)

    • Art. 5(3)(d), India/US treaty: exception from PE status for “the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise …..for the enterprise”

    • Both US companies have a purchasing office in India, Columbia Sportswear to purchase sports clothes and Fabrikant to purchase diamonds

    • Columbia Sportswear: PE. Fabrikant : No PE.

    US Co

    US

    India

    Office

    Sale

    Suppliers


    6 share buy back case india

    #6 Share buy-back case (India)

    • India Co undertook share buy-back with Mauritius Co.

    • Share buy-back is not subject to dividend distribution tax (DDT), but is subject to the tax on capital gains.

    • Ruling sought that Mauritius Co is exempt under Art. 13, India / Mauritius treaty.

    • AAR : This is a “colourable device” (ie. sham or tax avoidance transaction). Thus, its tax treatment should be based on substance, not form. In substance, this is a dividend payment, and thus India Co would be liable for DDT.

    US Co

    Mauritius Co

    Sing Co

    Share buy-back

    25%

    49%

    2%

    Offshore

    India

    India Co

    [publicly listed]


    5 total return swap case switzerland

    #5 Total Return Swap case¹ (Switzerland)

    • Danish Bank entered into several TRSs (involving shares in Swiss companies) with counterparties in the EU and the US.

    • As a hedge, Danish Bank acquired the corresponding amount of the underlying Swiss shares.

    • Swiss domestic tax law : 35% DWT

    • Switzerland / Denmark treaty (at the relevant time), Art. 10:

      • 0% DWT

      • No “beneficial ownership” condition

    TRS

    Bank

    Counter-parties

    Third countries

    Denmark

    Switzerland

    Div.

    Swiss

    Companies

    • Total Return Swap (TRS)

      • Short-term (3-6 months)

      • Bank pays amount equivalent to:

        • Appreciation in share portfolio

        • Dividends from share portfolio

      • Counterparty pays amount equivalent to:

        • Depreciation in share portfolio

        • LIBOR plus margin on principal

    • ¹ Case A-6537 / 2010


    5 total return swap case switzerland cont d

    #5 Total Return Swap case (Switzerland) (cont’d)

    • Argued by Swiss tax authorities : 0%

    • DWT rate should not apply because

      • Danish Bank not “beneficial owner” of dividends (and “beneficial ownership” condition should be “read into” Art. 10)

      • Danish Bank is committing “treaty abuse”

    TRS

    Bank

    Counter-parties

    Third countries

    Denmark

    Switzerland

    Div.

    Swiss

    Companies

    • Total Return Swap (TRS)

      • Short-term (3-6 months)

      • Bank pays amount equivalent to:

        • Appreciation in share portfolio

        • Dividends from share portfolio

      • Counterparty pays amount equivalent to:

        • Depreciation in share portfolio

        • LIBOR plus margin on principal


    5 total return swap case switzerland cont d1

    #5 Total Return Swap case (Switzerland) (cont’d)

    • Federal Administrative Tribunal:

    • “Beneficial ownership” condition might possibly be “read into” Art. 10 – Tribunal did not have to decide this point, as it concluded that Danish Bank is the “beneficial owner” of the dividends

    • Danish Bank satisfies the “beneficial ownership” condition, because :

      • Lack of interdependence between the dividends paid by the Swiss companies and the Danish Bank’s obligations under the TRS:

        • The Danish Bank was not obligated to acquire the shares in the Swiss companies – it decided to do so in order to hedge its position

        • Regardless of whether the Danish Bank received the dividends from the Swiss companies, it was obligated to make the relevant payments under the TRS

    TRS

    Bank

    Counter-parties

    Third countries

    Denmark

    Switzerland

    Div.

    Swiss

    Companies

    • Total Return Swap (TRS)

      • Short-term (3-6 months)

      • Bank pays amount equivalent to:

        • Appreciation in share portfolio

        • Dividends from share portfolio

      • Counterparty pays amount equivalent to:

        • Depreciation in share portfolio

        • LIBOR plus margin on principal


    5 total return swap case switzerland cont d2

    #5 Total Return Swap case (Switzerland) (cont’d)

    • Federal Administrative Tribunal:

    • Danish Bank does not commit “treaty abuse”, because :

      • If there is no explicit “treaty abuse” provision in the treaty, then “treaty abuse” occurs only if the company engages in no genuine economic or commercial activity

      • The Danish Bank has premises, employees and a wide commercial activity, and thus there is no “treaty abuse”.

    • Thus, 0% DWT rate applies

    TRS

    Bank

    Counter-parties

    Third countries

    Denmark

    Switzerland

    Div.

    Swiss

    Companies

    • Total Return Swap (TRS)

      • Short-term (3-6 months)

      • Bank pays amount equivalent to:

        • Appreciation in share portfolio

        • Dividends from share portfolio

      • Counterparty pays amount equivalent to:

        • Depreciation in share portfolio

        • LIBOR plus margin on principal


    4 rolls royce india

    #4 Rolls Royce (India)

    • Facts

    • Rolls Royce Plc (Rolls Royce UK) was tax resident in the UK. It sold certain parts and equipment to customers in India

    • Rolls Royce India Limited (Rolls Royce India), a wholly owned subsidiary of Rolls Royce UK, was also tax resident in the UK. It provided various services to Rolls Royce UK through its office in India for cost-plus remuneration

    • Services provided by office of Rolls Royce India to Rolls Royce UK included marketing, negotiating, and facilitating the selling of products

    • Issues

    • PE under Art. 5, UK/India treaty?

    • Calculating profit attributable to PE

    Rolls Royce Plc., UK

    100%

    Sale of spares / equipment

    Services

    Rolls Royce India Limited, UK

    Offshore

    India

    Office

    Customers


    4 rolls royce india cont d

    #4 Rolls Royce (India) (cont’d)

    • High Court judgment

    • Art. 5(1)

      • Individuals who are formally employed by Rolls Royce India act as if they are employees of Rolls Royce UK. They should thus be treated as employees of Rolls Royce UK. Therefore, the office of Rolls Royce India (which is used every day by those individuals) is “at the disposal” of Rolls Royce UK

      • Activities conducted by those individuals are not preparatory or auxiliary, but a core activity

    Rolls Royce Plc., UK

    100%

    Sale of spares / equipment

    Services

    Rolls Royce India Limited, UK

    Offshore

    India

    Office

    Customers


    3 velcro canada

    #3 Velcro (Canada)

    • Original Situation

    • Restructure

    • Post-Restructure Situation

    X Co

    X Co

    X Co

    Netherlands

    Antilles

    Netherlands

    Antilles

    Lic.

    Roys.

    Lic.

    Roys.

    (90% x A)

    X Co

    Netherlands

    (Under Assignment Agreement)

    Canada

    Y Co

    Y Co

    Canada Co

    Netherlands

    Lic.

    Roys.

    Canada

    Sub-Lic.

    Roys. (A)

    Canada Co

    (Original Licence Agreement)

    Netherlands

    • X Co migrates tax residence from Netherlands to Netherlands Antilles

    • X Co assigns licence agreement to Y Co (subsidiary of X Co)

    Canada

    Canada Co


    3 velcro canada cont d

    #3 Velcro (Canada) (cont’d)

    • Purpose of assignment was to transfer the management of licensing royalty streams to Y Co.

    • Amaco Management Services BV, an arm’s length corporation, conducted in large part the management of Y Co.

    • Y Co’s main activities:

      • holding shares in subsidiaries

      • providing loans to subsidiaries

      • managing royalty streams

    • When Y Co receives royalties from Canada Co, these receipts were intermingled into Y Co’s other accounts and used for a variety of Y Co’s purposes, at Y Co’s sole discretion – for example:

      • making of loans

      • payment of operational expenses

      • payment of professional fees

    • Y Co was contractually obliged to pay X Co its royalties (ie. 90% of the royalties received from Canada Co) 30 days after the receipt of the Canada Co royalties.

    • Post-Restructure Situation

    X Co

    Netherlands

    Antilles

    Lic.

    Roys.

    (90% x A)

    (Under Assignment Agreement)

    Y Co

    Sub-Lic.

    Roys. (A)

    (Original Licence Agreement)

    Netherlands

    Canada

    Canada Co


    3 velcro canada cont d1

    #3 Velcro (Canada) (cont’d)

    • Court decision

    • Applied the rule from Prevost case:

      • “When corporate entities are concerned, one does not pierce the corporate veil unless the corporation is a conduit for another person and has absolutely no discretion as to the use or application of funds put through it as conduit…” [emphasis added]

    • From Prevost, there are four elements in considering beneficial ownership:

      • possession

      • use

      • risk

      • control

    • Y Co has each of those four elements

    • Although Y Co has limited discretion, it does have some discretion. It is not the case that, per Prevost, it has “absolutely no discretion”. Thus, Y Co is the beneficial owner of the royalties paid by Canada Co, for the purposes of the Canada / Netherlands treaty.

    • Post-Restructure Situation

    X Co

    Netherlands

    Antilles

    Lic.

    Roys.

    (90% x A)

    (Under Assignment Agreement)

    Y Co

    Sub-Lic.

    Roys. (A)

    (Original Licence Agreement)

    Netherlands

    Canada

    Canada Co


    2 vodafone india

    #2 Vodafone (India)

    HTIL

    (Cayman)

    SPA

    =

    =

    Loans

    Supreme Court

    • “Look at” the structure or transaction on an holistic basis and in context – ie. do not apply a “dissecting approach”:

      • If genuine commercial business structure or transaction: legal form is respected in determining tax liability

      • If sham or tax avoidance scheme: Revenue can apply “substance over form” and /or “piercing of corporate veil” principles to determine tax liability

  • Holding companies, including SPVs, are a common and acceptable structure in regard to company law, takeover code and income tax

  • AzadiBachaoAndolan case (capital gains exemption under Art. 13 of India / Mauritius treaty) endorsed

  • Vodafone

    (Netherlands)

    HTI BVI

    (BVI)

    Transfer of only share

    CGP

    Investments (Holdings) Ltd (Cayman)

    =

    Mauritius IHCs

    Offshore

    52%

    India

    3 GSPL

    (India)

    Direct & indirect

    Has the Option to acquire 15%

    Hutchison

    Essar Ltd

    (HEL) (India)

    • Key

      • Direction of shareholding or loan. Thus, A  B means that A owns shares in B or A has lent to B

      • Interposed entities omitted

    =


    1 roche vitamins europe ltd spain

    #1 Roche Vitamins Europe Ltd (Spain)

    • Spain / Switzerland treaty

    • Art. 5(1) :

      • “For the purposes of this Convention, the term ‘permanent establishment’ means a fixed place of business in which the business of the enterprise is wholly or partly carried on.”

    • Art. 5(4) :

      • “A person acting in a Contracting State on behalf of an enterprise of the other Contracting State – other than an agent of an independent status to whom paragraph 5 applies – shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.”

    • Art. 5(5):

      • “An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.”

    Swiss Co

    Marketing contract

    CM contract

    Switzerland

    Spain

    Spain Co

    • CM contract:

      • Spain Co manufactures & sells goods to Swiss Co

      • Cost plus 3.3%

      • Marketing contract:

      • Spain Co designated as Swiss Co’s agent to promote the sale of particular products and to “represent, protect and promote” the interests of Swiss Co. No authority to conclude contracts.

      • Fee = 2% of sales


    1 roche vitamins europe ltd spain cont d

    #1 Roche Vitamins Europe Ltd (Spain) (cont’d)

    • Supreme Court

      • Swiss Co has a PE in Spain, under both Art. 5(1) (fixed place of business : Spain Co’s premises) and Art. 5(4) (agency of Spain Co) of Spain / Switzerland treaty

      • Key aspect of facts : All the activity of Spain Co was directed, organised and managed by Swiss Co

    Swiss Co

    Marketing contract

    CM contract

    Switzerland

    Spain

    Spain Co

    • CM contract:

      • Spain Co manufactures & sells goods to Swiss Co

      • Cost plus 3.3%

      • Marketing contract:

      • Spain Co designated as Swiss Co’s agent to promote the sale of particular products and to “represent, protect and promote” the interests of Swiss Co. No authority to conclude contracts.

      • Fee = 2% of sales

    • ¹ Cited on earlier slide


    1 roche vitamins europe ltd spain cont d1

    #1 Roche Vitamins Europe Ltd (Spain) (cont’d)

    • How can this decision be rationalised?

    • Art. 5(1) : employees of Spain Co are de facto employees of Swiss Co?

    • Art. 5(4) : “Sidney Roberts” view of agency PE¹?

    • Application of “substance over form”?

    • OECD Commentary on Art. 5, para 10:

      • “The business of an enterprise is carried on by the entrepreneur or persons who are in a paid-employment relationship with the enterprise (personnel). This personnel includes employees and other persons receiving instructions from the enterprise (eg. dependent agents). The powers of such personnel in its relationship with third parties are irrelevant. It makes no difference whether or not the dependent agent is authorised to conclude contracts if he works at the fixed place of business….”

    Swiss Co

    Marketing contract

    CM contract

    Switzerland

    Spain

    Spain Co

    • CM contract:

      • Spain Co manufactures & sells goods to Swiss Co

      • Cost plus 3.3%

      • Marketing contract:

      • Spain Co designated as Swiss Co’s agent to promote the sale of particular products and to “represent, protect and promote” the interests of Swiss Co. No authority to conclude contracts.

      • Fee = 2% of sales

    • ¹ Cited on earlier slide


    Global top 10

    Global top 10

    #1Roche Vitamins Europe Ltd (Spain) : PE

    #2Vodafone (India) : Anti-avoidance

    #3Velcro (Canada) : Beneficial ownership

    #4Rolls Royce (India) : PE

    #5Total Return Swap case (Switzerland) : Beneficial ownership

    #6Share buy-back case (India) : Anti-avoidance

    #7Fabrikant / Columbia Sportswear (India) : PE

    #8Li & Fung (Hong Kong) : Source

    #9George Anson (UK) : Entity characterisation

    #10Ford (UK) : Non-discrimination article


    Steve towers david weisner kristy ton may 9 10 2012

    Questions & Answers


    Biographies

    Biographies

    Kristy P. Ton, CPA, JD, LLM

    Director of Tax – Asia Region

    Corning Inc.

    Email : [email protected]

    Kristy P. Ton is Director of Tax, Asia for Corning with whom she has worked since August 2006. As Director of Tax, she is responsible for all tax matters relating to Corning’s businesses in Asia. Kristy began her career at PricewaterhouseCoopers and prior to joining Corning, she was tax counsel at ConocoPhillips. Her primary area of practice is US international and local country tax planning with a focus on cross-border structuring for financing, reorganizations, mergers and acquisitions, and derivative transactions. Kristy has extensive experience and knowledge of local country tax and tax audits in areas relating to withholding taxes, determination of permanent establishment and benefits under income tax treaties. Geographic areas in which she has had responsibility include North Asia (Japan, Korea, Taiwan, China), Southeast Asia (Singapore, Indonesia, Malaysia, Thailand), Australia, India, Western Europe (UK, Ireland, Finland, Denmark, Sweden, Norway, Germany, Switzerland, Netherlands, Belgium, Luxembourg), and Central Eastern Europe(Czech Republic, Slovakia, Hungary).

    Kristy received a B.A. (cum laude) and a M.B.A. (cum laude) from the University of Dallas, a J.D. from Loyola University School of Law and a L.L.M. in Taxation from the University of Houston. She is a member of the Texas State Board of Public Accountancy and the Louisiana State Bar and a Board member of TEI – Asia Chapter.


    Biographies1

    Biographies

    David WeisnerUS Tax Counsel for Asia Pacific

    Citigroup

    Email : [email protected]

    David Weisner is based in Hong Kong and is US Tax Counsel for Asia Pacific for Citigroup. He handles the tax issues for variety of businesses throughout Asia Pacific. Prior to joining Citigroup in 2003, David worked at Fidelity Investments in Boston as international tax counsel.  Prior to Fidelity Investments, David worked for White & Case, a New York based law firm, and Deloitte & Touche, a big 4 accounting firm. David is a member of the Illinois Bar.

    David is President of the Asia Chapter of the Tax Executive Institute (TEI), on the executive committee of the Capital Market Tax Committee (CMTC), on the tax committee for the Hong Kong chapter of Alternative Investment Management Association (AIMA) and leads the FATCA subcommittee for the Hong Kong Association of Banks (HKAB).


    Biographies2

    Biographies

    Steve Towers

    Asia Pacific Leader – International TaxTel: +65 6216 3227

    Email: [email protected]

    Deloitte Singapore

    Steve Towers is the Asia Pacific leader of Deloitte’s international tax practice. He is a senior international tax partner with over 30 years of experience in international tax planning for multinational corporation (MNCs). Steve has worked in the Deloitte Touche Tohmatsu offices in Sydney, Melbourne, London, New York, and Singapore. He has substantial experience in advising MNCs on corporate structuring and restructuring, real estate investment structuring, mergers and acquisitions, hybrid instruments, transfer pricing, use of double tax treaties, permanent establishment issues, and tax aspects of supply chain planning. A large part of his current practice involves the leadership of Asia Pacific regional tax projects.

    Steve is a frequent public speaker on international tax issues affecting investment within Asia-Pacific. He has been listed (since 1998) in the current edition of “The World’s Leading Tax Advisors” (Euromoney).

    Steve is a member of the Institute of Chartered Accountants in Australia. He is a former Chairman of the International Fiscal Association (Singapore Branch). He is a member of the board of directors of the Tax Academy of Singapore.

    Steve has Bachelor of Economics and Bachelor of Laws degrees from the Australian National University, and a Master of Laws (first class honors) degree from the University of Sydney.


    Steve towers david weisner kristy ton may 9 10 2012

    About Deloitte

    Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/aboutfor a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.


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