17/11/2023
Autumn Statement
A reminder that the Chancellor of the Exchequer, Jeremy Hunt MP, will deliver his Autumn Statement to the House of Commons on Wednesday 22 November 2023. Please visit our Autumn Statement page for our insights and commentary on the day.
There will be an EMEA Dbriefs webcast on Thursday 23 November 2023 at 16.00 GMT/17.00 CET, during which our panel of speakers will analyse the Autumn Statement’s tax announcements.
HMRC publish guidance on reporting rules for digital platforms
HMRC has published new guidance, contained within HMRC’s International Exchange of Information Manual (IEIM), concerning the UK’s implementation of the OECD’s model reporting rules for digital platforms. The rules will require in-scope UK digital platforms to collect, and report to HMRC annually, information on the income of sellers using their platforms to provide personal services, sell tangible goods, and rent out immoveable property or transport. The UK rules will apply with effect from 1 January 2024, with the first reporting of data in January 2025. Similar rules are being implemented by EU member states with effect from 1 January 2023 (with the first reporting of data in January 2024) under the Directive on Administrative Cooperation (DAC7), and so, where relevant, UK-based platforms within the scope of EU rules will need to consider their reporting obligations for 2023.
HM Treasury ministerial changes
There have been a number of changes to the Treasury ministerial team as part of this week’s reshuffle. The Chancellor of the Exchequer, Jeremy Hunt MP, remains in place. Laura Trott MBE MP has replaced John Glen MP as the Chief Secretary to the Treasury. Nigel Huddleston MP has been appointed Financial Secretary to the Treasury in place of Victoria Atkins MP, and Bim Afolami MP has been appointed Economic Secretary to the Treasury in place of Andrew Griffith MP.
OECD publishes updated mutual agreement procedure statistics
The OECD has released the latest in its annual series of mutual agreement procedure (MAP) statistics, looking at the effectiveness and timeliness of dispute resolution mechanisms within double tax treaties for the calendar year 2022, and highlighting the continued importance of MAP as a mechanism to relieve double taxation. For transfer pricing cases (including profit attribution to permanent establishments), the number of new cases submitted in 2022 remained largely the same, with an average time to resolve a case of 28.9 months (down from 32.3 months in 2021). When also including non-transfer pricing cases, the average time to close a MAP case also decreased, from 26 months in 2021 to 25.3 months. The OECD notes that the reduction towards its 24-month target is positive, but that there is more work to be done by jurisdictions to improve MAP timescales. Individual statistics for cases involving the United Kingdom are available here. The number of UK transfer pricing MAPs closed in 2022 was 117, and 120 new cases were submitted, demonstrating that the UK remains a key MAP partner in respect of transfer pricing cases. The average time taken to close post-2016 cases in the UK in 2022 was 27.0 months, positioning HMRC as one of the more efficient tax authorities in terms of resolving transfer pricing disputes.
OECD consultation on permanent establishments and extractive activities
The OECD has published a new discussion draft on proposed changes relating to the application of the permanent establishment article (Article 5) of the OECD Model Tax Convention on Income and on Capital to extractive activities. The OECD has undertaken work on the Commentary on Article 5 of the Model Tax Convention to develop alternative model treaty clauses on the permanent establishment treatment of the exploration and exploitation of extractible natural resources, particularly those offshore. The OECD invites interested parties to submit comments on the discussion draft by 4 January 2024.
Countries pledge to implement OECD cryptoasset tax transparency standard by 2027
The UK and 47 other jurisdictions have issued a joint statement confirming their intention to work towards swiftly transposing the OECD’s recently-developed Crypto-Asset Reporting Framework (CARF) into domestic law. Under the CARF standard, cryptoasset trading platforms will need to gather and share tax-relevant information on cryptoassets with tax authorities, enabling them to exchange information automatically with other tax authorities to enforce tax compliance. The signatory countries intend to implement domestic legislation, and activate the required exchange agreements, in time for first exchanges to commence by 2027. The statement also commits relevant jurisdictions, including the UK, to implement related amendments, approved by the OECD alongside the CARF, to the existing Common Reporting Standard (CRS) for the exchange of financial account information.
The Philippines and Kuwait join the OECD/G20 BEPS Inclusive Framework
The OECD has announced that the Philippines and Kuwait have become the latest members to join the OECD/G20 Inclusive Framework on BEPS, becoming the 144th and 145th members, respectively. The countries of the Inclusive Framework are, amongst other things, committed to implementing and maintaining BEPS minimum standards in the areas of dispute resolution, treaty abuse, country-by-country reporting to tax authorities, and harmful tax practices. The full list of members can be found here. Both countries have also joined the list of Inclusive Framework countries committed to the two-pillar plan to address the tax challenges arising from the digitalisation and globalisation of the economy.
Single Trade Window – overview and user testing
HMRC have released a policy paper providing an overview of the Single Trade Window. The Single Trade Window “will provide a gateway between businesses and UK border processes and systems, allowing users to meet their import, export and transit obligations by submitting information once, and in one place”. It is anticipated that it will be introduced in 2024. HMRC would like to include border users in the design and testing of the new service, and “are looking for volunteers to get involved with the private beta phase to test the service’s suitability for user needs”. Those interested can register by emailing STWbcrteam@hmrc.gov.uk. (Deloitte contact: Sam Kiely)
VAT and DIY housebuilders’ scheme: digitisation, extension of time limit – Statutory Instrument
Under the DIY housebuilders’ scheme, VAT refunds can be claimed for certain goods and services used for building or converting a home. As announced in Spring Budget 2023, the scheme is being amended to allow claimants to file refund claims electronically and to extend the time limit for making claims from three to six months from the completion date of the build. Other changes amend the list of documents that must be submitted when a claim is made, including a new requirement for evidence where a building has been converted from a derelict building or shell, and provide that a claim is to be made on a form specified by HMRC notice. The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (SI 2023/1201), with an accompanying tax information and impact note, implement these measures, which will come into force on 5 December 2023 for claims made on or after that date. (Contact: Ben Tennant)