Business, Economy & Banking Current Affairs - 2019
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Both India and the US will sign an agreement to facilitate the exchange of country-by-country (CbC) reports filed by the ultimate parent corporations based in either of the countries.
Base Erosion and Profit Shifting (BEPS) has been at the focus of OECD to address Tax evasion. Multinational companies were accused of gaming tax systems to maximise profits, while potentially depriving tax authorities of revenue.
To address this issue one of the measures adopted by OECD is Country-By-Country Reports. The Country-By-Country Reports requires multinational companies to provide information about:
- The name of each country where it operates.
- The names of all its subsidiaries and affiliates in these countries.
- The performance of each subsidiary and affiliate, without exception.
- The tax charge in its accounts of each subsidiary and affiliate in each country.
- Details of the cost and net book value of its fixed assets in each country.
- Details of its gross and net assets for each country.
Section 286 of the Income-tax Act, 1961 requires Indian subsidiaries of multinational companies to provide details of key financial statements from other jurisdictions where they operate. This provides the I-T Department with a better operational view of such companies, primarily with regards to revenue and income tax paid.
The proposed agreement will enable both India and the US to exchange CbC Reports filed by the ultimate parent entities of International Groups in the respective jurisdictions. As a result, Indian constituent entities of international groups headquartered in the USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India and vice versa.
The assessment by EU Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) carried out based on data from almost half a million customs seizures by international enforcement agencies highlights the following:
- Global sales of counterfeit and pirated goods have increased to USD 522 billion a year, amounting to a whopping 3.3 per cent of world trade.
- The share of counterfeit goods has witnessed a considerable rise since its previous 2016 estimate of 2.5 per cent of global trade.
- Counterfeit goods represented 121 billion Euros worth of imports into the European Union alone which amounted for a massive 6.8 per cent of total imports into the bloc, up from five per cent in 2016.
- Counterfeiting and piracy posed a major threat to innovation and economic growth, at both EU and global level.
- Companies which were most affected by counterfeiting and piracy were mainly based in developed OECD nations like the United States, Japan, South Korea and EU states.
- Even businesses in China, Brazil and Hong Kong are being increasingly hit.
- Countries exporting the most counterfeit and pirated goods were China, Hong Kong, United Arab Emirates, Turkey, Singapore, Thailand, India and Malaysia.
The EUIPO has expressed deep concerns about the rise in the counterfeit and pirated goods and called for coordinated action, at all levels, to fully tackle the menace of piracy and counterfeit products.
Tags: Brazil • China • Counterfeit Goods • EU Intellectual Property Office • EUIPO • European Union • Hong Kong • India • Japan • Malaysia • OECD • Organisation for Economic Co-operation and Development • Pirated Goods • Singapore • South Korea • Thailand • Turkey • United Arab Emirates • United States