ORBITAX INTERNATIONAL TAX RESEARCH AND COMPLIANCE EXPERT QUICK REFERENCE GUIDE INTRODUCTION Orbitax International Tax Research and Compliance Expert (ITRCE) is a comprehensive integrated online solution that is designed to speed-up international tax planning, research and compliance workflows. ITRCE s user friendly and intuitive architecture comprises of several features that are designed keeping in mind the five must-haves for every international tax practitioner Worldwide Tax Rates & Laws, Treaties & Analyses, Tax related News, Tax Forms for Compliance and Planning Calculators. ITRCE features: View all tax rates for over 120 countries including CTR, Cross Border, VAT and Individual rates and instantly generate tax rate memos reflecting your company s actual projections. Access worldwide tax treaties in English, summaries of the key treaty terms used, best WHT rates for several payment streams, and other related documents including OECD, UN, US and EU models and directives. Find country-specific tax laws, Compliance Checklists and Dynamic Analysis documents with embedded research and planning tools to perform calculations using your actual tax attributes. Stay up-to-date on the latest developments in regulations from various countries by reading ITE's comprehensive monthly newsletter. It includes sections covering Approved Changes, Proposed Changes, and Treaty Developments. Perform calculations with your inputs using NOL, Transfer Pricing, Thin Capitalization, Cross Border Transaction, Interest & Penalty, Withholding Tax Minimizer planning calculators. Find foreign tax forms translated into English with the ability to translate and compare your own documents including your actual filed tax return forms, audit notes, financial statements, etc. SYSTEM REQUIREMENTS To ensure complete access to all features and functions of International Tax Research and Compliance Expert, please use the following: Web Browsers Chrome, IE9 or higher, or Firefox Latest version of Adobe Reader 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.
ACCESS ITRCE FROM CHECKPOINT 1. You can access ITRCE from the left pane of the Tools tab - by selecting International Tax Tools. Note: You can also access ITRCE from the Search Pane in the International Practice Area. 2. Select Int l Tax Research Expert. Then click Continue to launch ITRCE in a new window. 2
3. The International Tax Research and Compliance Expert page opens in a new window. ITRCE s Library provides various tools and features for all your research, planning and compliance needs: Research Find key country-specific tax facts, worldwide tax treaties, tax law changes and updated rates tables for all countries supported by ITRCE. Planning - Perform calculations reflecting your company s actual attributes using the following calculators: Cross Border Transaction Calculator - find total tax cost of your cross border payments. Withholding Tax Minimizer - find best routes to structure your cross border transactions in order to reduce your WHT dues. Net Operating Loss Carry Forward Calculator determine how to best utilize your available NOLs. Thin Capitalization Calculator - determine how the how the local country s thin capitalization rules impact the total tax cost of making interest payments from the local entity to your company. Transfer Pricing Calculator - find how transfer pricing ratios are calculated for the required TP method in the local country and determine the variance between actual and targeted ratios. Charting & WW Tax Calculator: Determine the world wide tax for about 15 entities using this calculator. Compliance - Meet compliance obligations, both local and international, using the following features: Compliance Checklists - find key tax compliance facts including filing requirements, interest and penalties on late and incorrect returns, statutes of limitations, refunds, etc. applicable in the local country. Interest & Penalty Calculator - perform calculations for the infractions supported by ITRCE and generate Tax Memos for the same. Tax Forms in English - find key tax forms for all countries, including corporate tax return forms, treaty benefit claim forms, withholding tax reporting forms, registration forms, etc. Tax Calendar Find important compliance dates and other information for corporate tax, value added tax and transfer pricing for over 150 countries. 4. You can access these features in one of three ways: (1) from the menu bar across the top, (2) from the list of features on the right side of the Home page, (3) and from the drop-down menu What would you like to do today? 3
ACCESS ITRCE FROM ORBITAX 1. Log in to Orbitax Dashboard using your Username and Password at orbitax.com 2. You can also use your Checkpoint or Checkpoint World credentials to log into Orbitax. 3. From your Orbitax Dashboard, click ITRCE listed under My Solutions to launch ITRCE page in a new window. 4
Certified Rates Report RATES SEARCH 1. Select Certified Report from the Rates dropdown on the menu bar. 2. Select the close window option. 5
3. From the Certified Report screen, click Add Entity and select a few countries/entities and click Done. 6
4. You can see the selected countries/entities along with the statutory tax rates. Click to see the footnotes. 7
5. Click on Add Transaction and select the paying and receiving countries, also select a paying stream from the dropdown menu 8
6. Click Show report to see the certified report. 9
7. You can also Save the project to your desktop or create a New project or Load an existing project via the File drop down. You can also print or download the document in various formats. 8. Orbitax Tutorials has been added for interactive guidance on how to use the tool. 10
Corporate Rates Search Find current CTR Rates table for multiple countries 1. Select Corporate from the Rates dropdown on the menu bar. 11
2. From the Corporate screen, choose Search Current Rates By Multiple Countries option and click Select All. Watch the video on the right for how to use the tool. 12
3. Click Search. CTR current Rates table for all country(s) is displayed on the screen. Note: Besides an updated database of current CTR Rates, Orbitax also lets you research historical and/or future rates. To perform historical searches, select Search Historical or Future Rates from the Corporate screen. 13
Overview of the CTR Rates table Once ITRCE returns the results for your specified search criteria, use the CTR Rates table to access several other features to aid your research. 1. Click and icons corresponding to the required country within the table to view any applicable Footnotes and Progressive blocks. 2. Click icon corresponding to the required country under Tax Return Due Date column to view Important Compliance dates. 14
3. Click icon corresponding to the required country under Entity column. This will redirect you to News tab where you can view the recent tax law changes for that country. 4. Click Printer-Friendly Version to download the search results as a PDF or Doc file. You can then print/share your search results. 5. Click Export to Excel to export and download your search results as an.xlsx file. 6. Click icon under Rate Memo column corresponding to the required country to generate a CTR Tax Memo. This will redirect you to the Rate Memo screen where you can generate a CTR Tax Memo reflecting your actual Taxable Income projections in that country. 7. Click icon corresponding to the required country under Corporate Tax Return Form column. This will redirect you to the Forms tab where you can view, translate and compare CTR Return Forms for that country. 15
Cross Border Search Use the Cross Border feature to find withholding tax rates applicable in the required countries and the total tax costs for your anticipated cross border transactions. 1. Select Cross Border from the Rates dropdown menu to display Cross Border screen. To choose only one paying country, select the country from Choose a Country dropdown under Paying. Then, choose all countries from Choose Countries dropdown under Receiving and click on Search. A video has been added to show you how to use the tool. Note: For one receiving and all paying countries, click the activated switch icon placed between the paying and receiving fields. This will reverse the payment direction and you will be able to see multiple countries selected under Paying. 2. Choose the Payment Stream, Ownership % and Holding Period in the available fields under Conditions and click Search. 16
3. Click the displayed rates below Withholding Tax %, Taxable Portion % or Matching Credit % columns corresponding to the required payment transaction. This generates a pop-up with Best, Domestic and Treaty Rates for your anticipated transaction. 17
4. Click icon under Withholding Tax % column to switch to the Withholding Tax Minimizer tool to find the best route for your cross-border payment with reduced WHT tax dues. 6. Click icon corresponding to the required country under Paying or Receiving Entity columns. This will redirect you to News tab where you can view recent tax law changes for that country, if any. 5. Click icon under Tax Cost (Benefit) column to switch to the Transaction Calculator tool to calculate the total tax cost of your anticipated crossborder transaction. 7. Click icon under Tax Treaty column to switch to Treaties tab where you can access the translated Treaty document and related commentaries. 8. Click icon under Rate Memo column corresponding to the required cross-border transaction to generate a WHT Tax Memo. This will redirect you to Rate Memo screen. Note: Use Export to Excel/Printer-friendly Version options to download/print your search results. 18
VAT & Individual Rates Search Use the VAT Rates feature to find Value Added Taxes and other local taxes applicable in a country. 1. Select Rates from VAT dropdown menu. Note: To find Individual Rates select Individual from the Rates dropdown instead. 19
2. View the VAT Rates table for all the countries supported by ITRCE arranged in alphabetical order. Additionally, enter the required country name in Search Country field to locate the country-specific VAT Rates in the table. 3. Click icon corresponding to the required country within VAT Rates table to view any available Footnotes. 4. Navigate to the Export/Print Page options available at the top-right of the screen to export/print/save the VAT Rates table. 20
Track Any Recent Rate Changes 1. ITRCE s Rates tables are updated every four weeks. For a quick search on any recent changes in worldwide tax rates, click Recent Changes placed at the top-right of Corporate or Cross Border Rates screen. Watch the video on the right for information on how to use the tool. 2. This opens the link to Orbitax s date-stamped Tax Rate Changes online database page in a new window. 21
Advanced Search ITRCE s Advanced Search feature lets you find countries satisfying your company s tax search criteria. 1. Select Advanced Search from Rates dropdown menu to display Advanced Search screen. Here, select a paying country from Choose a country dropdown under Paying. Then, click Select All link from Choose a country dropdown under Receiving. 2. Click Check All under Payment Stream. Then, choose the required values from Holding % and. Holding Period dropdowns. 22
3. Under Search Criteria on the right, use the Relationship dropdown along with the two value fields placed next to each available search criteria to specify your condition. 4. Alternatively, choose an entity type that matches your key tax search criteria from Find Entities dropdown at the bottom of the page. Note: Choosing an entity type from Find Entities dropdown will reset values under Payment Stream and Search Criteria sections. 23
5. Scroll down to the bottom of the page and click Search. Click icon under Treaty column to switch to Treaties tab where you can access the translated Treaty document and related commentaries. Click Printer-Friendly Version to download the search results as a PDF or Doc file. You can then print/share your search results. Click Export to Excel (with formulas) to export and download your search results as an.xlsx file along with the formulas used by ITRCE for calculations. Click icon corresponding to the required country under Paying and Receiving Country columns. This will redirect you to News tab where you can view the recent tax law changes for that country, if any. Click icon under Treaty column to read any available Footnotes about the Treaty rates applicable to the corresponding payment transaction 24
Tax Rate Memos Use the Rate Memo screen to generate, print and download desired Tax Rate Memos. From the Rate Memo screen you can generate two types of memos: (a) Corporate Tax Memo and (b) Withholding Tax Memo. 1. Click Rate Memo from the Rates dropdown menu. The Rate Memo screen is displayed. Under Memo Types select Corporate Tax. 2. Select the required country from Choose Country dropdown and enter your actual projections in Taxable Income field. Note: ITRCE updates the rates fields on the screen with the rates applicable in the country you choose. 25
3. If you want to edit the default CTR Rates, enable the checkbox next to Change Default Corporate Tax Rates and make the desired changes in the rates fields. 4. Click View Memo. The Corporate Tax Memo is displayed on the screen. 5. To save/download/print the generated memo, scroll up and use Download/Print page option at the top of the screen. Note: You can download the memo as a PDF, a Doc or an HTML file. Note: To generate a WHT Memo follow the steps described above choosing WHT Memo type instead. 26
NEWS ITRCE's Newsletters covers worldwide tax law changes under Approved Changes, Proposed Changes, and Treaty Developments categories. Daily News Search ITRCE s News Library is updated on a daily basis. To search daily news about worldwide tax law changes: 1. Select News from the menu bar across the top and click Daily News at the top of the News screen, leading to the Daily News screen to be displayed. Note: Click to hide sidebar. 27
Search Newsletters by Country/Date 1. You can search Newsletters by country, date or both. To search news about tax law changes by country, select the required country from Choose a Country dropdown under Search Newsletters. Note: Use Advanced Search feature to search news about tax law changes in the local country within a given time period. 28
2. Alternatively, you can access the Newsletter using the following path: http://orbitax.com. Click on Tax Hub from the menu bar across the top to display the Daily Tax Newsletter. 3. Go to Play of the day placed at the right side of the page and click Start Tutorial. Tutorial will guide you through the topic of the day. 29
4. Tax related news found for the selected country is displayed on the screen with the most recent news articles at the top. Choose between Approved Changes, Proposed Changes and Treaty Developments sections to read more. Note: Save/download/print the displayed newsletter using Print Page option at the top of the screen. You can download the newsletter as a PDF, a Doc or an HTML file. 30
5. To subscribe the Newsletter, select Subscribe to Our Newsletter from Left Side-Bar. 6. Choose the countries you want to receive news for using the Select a country dropdown. Click Select all if you want to receive news about all the countries supported by ITRCE. 7. In the Email field, enter the email address you want to receive the newsletters at. 8. Finally, click Subscribe To Our Newsletter. 31
BEPS BEPS is a new tab that has been added and highlights the BEPS initiatives, country news, timeline and the action items. Country News 1. Click on Country News and select a country. 32
2. Click to view the news in detail. 33
3. Click Timeline to see the list of action items. 34
4. Click on any of the action items under the Action Items tab for detailed descriptions. 5. OECD direct links to articles are available on the bottom of each page. 35
6. To be up to date with the best practices and to have a full summary of the new BEPS initiatives click on the Best Practices Guide. The guide has documents on topics such as guidance on standard transfer pricing. Multi-Lateral Instruments (MLI) Action 15 under BEPS has been updated to include Multilateral Instrument (MLI) to implement treaty-related BEPS measures. It is a quick collective big bang approach to amend existing tax treaties between countries, for effective avoidance of BEPS strategies. The MLI was development together by almost 100 countries, which are part of OECD s Inclusive Framework. The first wave was signed by 70 countries, with 10 more countries committed to signature and more intending to do so. It will enter into force sometime in 2018. The MLI agreement would impact about 2000 bilateral treaties or 85% if the signatory treaty networks. Following broad areas are impacted by substantive provision of MLI: Anti-Treaty Shopping Rules Rules to counter the avoidance of PE status Rules concerning dispute resolution (with an option for mandatory arbitration) Rules aimed at neutralizing the effects of hybrid-mismatch arrangements. The MLI will impact existing and future structures in the following vital areas: Eligibility for treaty benefits Applicable withholding tax rates Determination of a tax nexus with a given country. For countries signing-up to the MLI, the existing tax treaties cannot be consolidated rather must be read in conjunction with the MLI. In order to be able to follow the covered agreement between countries, Orbitax has done the math for you by conveniently highlighting the areas affected in the articles. Follow the below steps to accomplish the task: 36
a. Click on Treaties tab. b. Select two countries from the left panel c. Click on the Treaty Status document under Tax Treaty Documents on left panel. 37
d. Check for the active treaty and if there is a provisional match or covered agreement. This determines which treaties are impacted by the MLI. e. Click on the treaty amended by the latest protocol 38
f. Locate the first note indicating which articles of the treaty are impacted by the Multi-Lateral Instrument. g. Click on any of the MLI articles and be directed to the section affected to determine the impact. The yellow highlighted note under Article 5 in the above screenshot contains link to the related MLI articles which would apply with respect to the particular section of the article. Click on the MLI article link to read it in conjunction with the existing treaty. 39
Thus, you can determine how the treaties are impacted by the MLI. A training video has been added on the right for further step-by-step instructions. Click on the icon to view the training video. ANALYSIS ITRCE s Analysis provides you with Dynamic Documents and Checklists wherein you can not only research various options available in the local countries to optimize your international business structure but also perform critical calculations from within the dynamic documents to better evaluate your tax costs and obligations. Using Analysis you can carry out the following tasks: Conduct research on local country tax laws and regulations for over 100 countries with emphasis on cross border tax issues such as types of businesses allowed, PEs status, worldwide tax cost of choosing different entity types, NOL utilization, applicable WHT rates, CFC, Thin Capitalization and Transfer Pricing rules in the local country, etc. Access embedded research and planning tools within the dynamic documents to calculate the impact of local country tax rules on your local and worldwide tax dues. Evaluate the impact of implementing tried and tested international tax planning strategies such as maximizing debt and minimizing WHT in the local country to optimize worldwide tax, etc. Generate Tax Memos reflecting your company s actual projections. 40
View and compare Compliance and -avoidance Checklists of all countries supported by ITRCE to meet your tax obligations. 1. Select Analysis from the menu bar across the top to display the Country Analysis. Here, choose a country from Select Country dropdown to view related analysis documents. A New Video has been added to demonstrate this. Click interactive tutorial Icon and guidance. for more information 2. Click Done. The following documents listed under Documents in the left navigation panel: 41
Country Chapter in-depth coverage of the local country tax laws along with embedded tools in this dynamic document Country Summary a summary of the key tax laws applicable in the local country along with relevant explanations Country Snapshot quick answers to local country tax laws related queries Compliance Checklist information about tax compliance obligations to be met in the local country Anti-Avoidance Checklist anti-avoidance rules applicable in the local country 3. Click on a document title under Documents to view the document. The document will be displayed on the right. Note: Download/print an open document from Country Analysis using Download/Print Page options at the top of the screen. Note: You can also select icon to hide or retain Left side-bar. 42
4. Click on a section s title from the Table of Contents to view that specific section in the document. 5. This displays the required section of the document. Locate the section heading to view Compare features for that section. Click icon to hide sidebar. 43
Country Chapter Country Chapter document under Country Analysis covers in-depth analyses, explanations and implementable tax strategies for local country s tax laws. It also contains various embedded research and planning tools within its dynamic content which can be used to calculate the impact of local country tax laws on your local and worldwide tax dues. Embedded tools included within a Country Chapter document: Create Legal Presence Transaction Calculator Net Operating Loss Carry-Forward Calculator Corporate Rate Search Advanced Rate Search Cross Border Rate Search Withholding Tax Minimizer Interest & Penalty Calculator Transfer Pricing Ratio Calculator Thin Capitalization Calculator WW Tax Planner Create Legal Presence Use this tool to find a suitable business entity type in order to create a domestic PE in the local country. 1. From Country Chapter, scroll down to section 1.2.2 to access the tool. The Country Chapter widget can be expanded and can be used for calculation. Training videos, along with new tabs like download and print page have been added. Note: You can also select icon to hide or retain Left side-bar. 44
2. The tool runs the calculation using your inputs and displays the results below. Decide on an entity type that suits your requirement using these results. 45
Advanced Rate Search To find entities that match your specific tax search criteria, access this embedded tool within the following sections of the Country Chapter document: 8.2.3.2 Standard Withholding Tax Rates by Receiving Country Find best WHT rate (i.e. lower of domestic, treaty and EU WHT rates) on 9 different cross border payment streams from the local country to multiple receiving countries. 9.3.1 Maximizing Foreign Tax Credits: Note: You can also access the Advanced Rate Search tool in the Rates tab. Cross Border Transaction Calculator 1. To calculate the total tax cost of your cross border transactions, scroll down to section 1.1.2.1 in the Country Chapter document. Select the Click to See Calculation. The calculation is seen in three expandable sections: Result Summary, Calculation Assumptions and Result Details. You can watch the video that has been added for your better understanding. 46
Note: Click icon to expand a particular section in the results. 47
Note: Alternatively, you can access the Transaction Calculator using the following path - ITRCE>Planning tab>calculator. 48
Corporate Rate Search Use this feature to find current/historical/future CTR Rates applicable in the local country and generate Corporate Tax Memos reflecting effective corporate tax rate on your net taxable income. This feature is embedded in the following two sections of Country Chapter: Section 8.1.1 Corporate Income Tax Section 8.2.2 Corporate/Profit Taxes For both the sections, Click on Click to See Current, Historic and Future Rates to view the effective corporate tax rates in the local country for the current, past and future years. Note: Alternatively, you can access the Corporate Rate Search tool using the following path - ITRCE>Rates tab>corporate 1. Click on the Search current rates by multiple countries. And select a country and click Search. 2. To modify your search click on Search historical or future rates by multiple countries. Select the country that you wish to view along with the number of years along with the tax rate type. Click Search when done. For further modifications to your search, click on Search historical or future rates for a single country. Select country, number of years and the rate type. Click Search once you finish the selecting the respective fields. 49
Cross Border Rate Search Use this tool to find WHT tax rates applicable on 9 different cross border payment streams from the local paying country to the receiving country. 1. From Country Chapter, scroll down to section 8.2.3.1 Withholding Tax Rate Determination. Click on Click to See the Possible WHT Rates by Country. 2. Click the Click here to change the receiving country option. Select the receiving country using the Select receiving country dropdown and specify the Holding % and Holding Period. Click Done to run the search. Watch the video on the right for how to use this tool. 50
3. The results are displayed below in a table. Click and icons within the WHT Rates table to view any applicable Footnotes and Progressive Blocks. Note: To find WHT tax rates applicable on payments from the local paying country to multiple countries, access Cross Border tool within Rates tab. 51
Withholding Tax Minimizer Use this tool to find the best possible route for your cross border payments in order to reduce WHT taxes. WHT Minimizer tool in different sections of Country Chapter document reflects a default Payment Stream that best suits the purpose of the calculations specific to that section. The tool is embedded in the following sections of the Country Chapter document and will help you structure your payments to: Minimize WHT taxes incase of no domestic PE (sec 1.1.2.2) Minimize WHT taxes incase of domestic PE (sec 8.2.3.3) Minimize WHT for Foreign Tax Credits (sec 9.3.2) Minimize Capital Gains taxes (sec 11.3.2) Note: Alternatively, you can access the Withholding Tax Minimizer tool using the following path - ITRCE>Planning tab> WHT Minimizer. 1. From Country Chapter, scroll down to section 1.1.2.2 titled Structuring Payments to Minimize WHT to access the tool. A New WHT Minimizer Video has been added on the right. Watch the video for how to use this tool. 52
2. Select the Click to See Calculation option. 53
Choose your Paying and Receiving countries using the two dropdowns. Click Select All entities from the Intermediary 1 dropdown. You can also select a second Intermediary entity using Intermediary 2 dropdown. Royalty Copyright is selected as the Payment Stream by default. Use the Payment Stream dropdown to select one of the 9 payment streams supported by ITRCE. 54
3. Click Search when done. The tool runs the calculation using your inputs and displays the Optimized Results below your Base Case. Note: In this example, the WHT rate for the Base Case is 33.3. The Optimized Results displays payment routes via intermediary countries such that it reduces the applicable WHT taxes that you would have paid for the base case. The best route suggested in this example gives you zero WHT dues. 55
Net Operating Loss Carry Forward Calculator Use this tool to determine how to best utilize your losses. The tool performs calculations based on your inputs to illustrate the loss carry back and carry forward rules in the local country. 1. From Country Chapter, scroll down to section 7.1 titled Computations of Loss Carryback and Carryforwards to access the tool. Note: A new video has been added on the right. Click Video to watch a demonstration on how to use the tool. 56
2. To view NOL Utilization rules for another country, click the Click to See Calculation option. Use the Country dropdown under Country and Year. 57
3. The table refreshes and displays the rules for the selected country under Limitations. Note: You can overwrite any of the NOL Utilization rules under Limitations by entering your desired values in the text boxes under the Overwrite column. 4. Under Input:Taxable Income (Loss), enter your company specific values in the text boxes below the appropriate year. 58
5. The results are displayed in teo tables: Calculation Summary and NOL Utilization Details. 6. To download/print the results access the Net Operating Loss Carryforwards Calculator tool using the following path - ITRCE>Planning tab> Net Operating Loss. 59
Thin Capitalization Calculator Use this tool to see how the local country s thin capitalization rules will impact the total tax cost of making interest payments from the local entity to your company. The tool calculates the maximum allowable interest payment using your inputs. 1. From Country Chapter, scroll down to section 13.2.1 titled Calculation of Maximum Allowable Debt to access the tool. 2. Click the Click to See Calculation option. Enter the appropriate value in the Interest Rate textbox under Basic Information. Note: To perform Thin Capitalization calculations for another country, use the Country dropdown under Basic Information. 60
3. The table displays Acceptable Debt to Equity Ratio values for the local country. Enter appropriate values in the text boxes provided in the table to calculate Maximum Allowable Interest Amount. Note: You can overwrite the existing values in the table. The results are displayed for Maximum Allowable Interest Amount based on your inputs. 61
Based on the Maximum Allowable Interest Amount determined from the calculation above, the tool performs further calculations to show the total tax cost of increasing or decreasing the interest payment from the local entity to your company. 4. Scroll down to section 13.2.2 titled Interest Deduction Strategies. 62
5. Click the Click here to change the calculation input option. 6. Enter values based on your scenario and click Calculate. Note: Click Add a Country to add a layer to your transaction. You can calculate up to four consecutive payment transactions using this tool. Note: You can set the Profitability of the entities using the Profitability dropdown. Choose between Profitable, Break Even, Loss or Custom status. 63
7. The results are displayed under three collapsible sections: Result Summary, Calculation Assumptions and Result Details. Note: Click icon to expand a particular section in the results. 8. To download/print the results access the Thin Capitalization Calculator tool using the following path - ITRCE>Planning tab> Thin Capitalization. 64
Transfer Pricing Ratio Calculator Use this tool to see how the transfer pricing ratios are calculated for the TP methods in the local country. The tool also shows how a change in the transfer pricing amount will impact the variance between the actual and target ratios. 1. From Country Chapter, scroll down to section 13.4.5 titled Calculation of Transfer Pricing Ratios and Variance between Target Ratios and Actual Ratios to access the tool. 2. Click the Click to See Calculation option. Use Current Transfer Pricing Method dropdown to select a TP method. 3. Enter the appropriate value in the Target Ratio text box under Ratio Details. 65
4. Enter appropriate amounts in the textboxes provided below Accounts in the table. 66
5. The Actual Ratio and Comparison Ratio results are displayed for selected TP Method based on your inputs. Comparison Ratio shows the variance between the actual and target ratios. 67
6. Scroll down and click click here to change the calculation input option to calculate how increasing or decreasing the TP will impact the total tax cost. The Anticipated Transaction popup is displayed. Here, enter values based on your scenario and click Calculate. 68
7. The results are displayed under three collapsible sections: Result Summary, Calculation Assumptions and Result Details. Note: Click icon to expand a particular section in the results. 8. To download/print the results access the Transfer Pricing Ratio Calculator tool using the following path - ITRCE>Planning tab> Transfer Pricing. 69
Interest & Penalty Calculator Use this tool to calculate interest and penalties applicable in the local country for different infraction types. 1. From Country Chapter, scroll down to section 14.5.1 titled Calculation of Interest & Penalties of Various Infractions to access the tool. Note: Alternatively, you can access the Interest & Penalty Calculator tool using the following path - ITRCE>Planning tab> Interest and Penalty 2. Select the required Infraction Types using the Calculation Type Name dropdown and enter appropriate values in Calculation For, Dispute Amount and Date of Dispute fields. 70
3. Scroll down to Interest Section and enter appropriate values in the textboxes under the Overwrite column. 4. Additionally, scroll down to enter appropriate values in the fields under Monetary Penalty, Tax Deductibility and Statue of Limitations. 71
5. The results are displayed under Interest and Monetary Damages sections. 72
WW Tax Planner Use this tool to calculate the World Wide Tax for as many as 15 entities. 1. You can access the WW Tax Planner tool through the Planning tab. 2. Click on Add Entity to start a new project. 73
3. You can add up to 15 entities and to select a country, click on the dropdown. 74
4. To change the Ownership, click on the drop down. You can change the percentage of the ownership by entering the numerical as per your requirement. Note: Watch WW Tax Planner video on the right for how to how to use this tool. 75
5. In the taxable income column enter the amount that needs to be calculated. Then click Calculate WW Tax. 76
6. You then receive a detailed report of the calculation of the three entities that was created. You can also see the calculation in the form of a chart by clicking the Show Entity Chart option. You have an option to download the chart by clicking the download option. 77
7. To see the Entity tree click on Show Entity tree. 8. To add a transaction to this calculation click on Add Transaction. 78
9. Then select a receiving entity and a paying entity amongst the three entities that were created and also choose a payment stream. 79
10. Enter the amount in the payment tab and click Calculate. 80
11. To run the calculation, click on the next to Transaction Details. 81
12. To see how each of the created entities has been affected by this calculation, click the next to Entity Details. You can see the total tax cost in the end. 82
13. You can download the calculation or the chart by clicking the download option. To see the complete transaction in the form of a chart, click on the Show Entity Chart option. 14. The entity chart shows you the interest payment that was made as per the calculation. You can download the chart by clicking the Download option. 83
Compliance Checklist Fasten your research on tax compliance rules applicable in local countries with ITRCE s comprehensive Compliance Checklists documents under Country Analysis. The checklist for a country covers the following compliance related information: 84
1. To access Compliance Checklist for a country, select Analysis from the menu bar. Then, select the required country using Select Country dropdown under Country Analysis. Watch the video on the right for how to use this tool. 85
2. Select the radio button next to Compliance Checklist under Documents from the left navigation panel. 3. Compliance Checklist document for the selected country is displayed on the screen. Note: Download/print the displayed Compliance Checklist using Download/Print Page options at the top. 4. Click on a section title in the Table of Contents panel to locate and display that section of the document. 86
5. This will display the required section of the document. Locate the section heading to view Print & Compare features for that section. 6. To compare rules within a section of the document for different countries, locate the section title and click Compare. 7. From the Search for Country dropdown, select the countries you want to compare the document section for and click Done. 87
8. This displays the Comparison screen. Scroll down to compare the required document section for each of the selected countries. 9. Download/print the compared compliance rules using Download/Print Page options at the top. Note: You can download the checklist as a PDF, a Doc or an HTML file 10. Click Done Comparing at the top of the Comparison screen to go back to the open checklist under Country Analysis. 88
Anti-Avoidance Checklist ITRCE provides you with comprehensive Anti-Avoidance checklists for more than 100 countries under Country Analysis. Anti-Avoidance checklist document for a country covers the following information: 1. General Anti-Avoidance rules 2. Limitation On Benefits clauses 3. Thin-Capitalization rules 4. CFC rules 5. Transfer Pricing rules 1. Select Analysis from the menu bar at the top to display Country Analysis screen. Here, select the required country using Select Country dropdown under Country Analysis. Watch the video on the right for how to use this tool. 89
2. Select Anti-Avoidance under Documents from the left navigation panel. 3. Anti-Avoidance checklist document for the selected country is displayed Note: Download/print the Anti-Avoidance Checklist document using Download/Print Page options at the top of the screen. You can download the checklist as a PDF, a Doc or an HTML file. 4. Click on a section title in the Table of Contents panel to locate and display that section of the document. 90
5. This will display the required section of the document. Hover over the section heading to view Print & Compare features for that section. 6. Click Compare to compare rules within a section of the document for different countries. 91
7. From the Search for Country dropdown, select the countries you want to compare the document section for. 8. Click Done to view the comparison. The Comparison screen is displayed. Scroll down to compare the required document section for each of the selected countries. 9. Download/print the compared anti-avoidance rules using Download/Print Page options at the top of the screen. Note: You can download the compared information as a PDF, a Doc or an HTML file. 10. Click Done Comparing at the top of the Comparison screen to go back to the open checklist under Country Analysis. 92
WORLDWIDE TAX TREATIES ITRCE s Treaties Library enables you to find valuable explanations and commentaries about the key terms and elements used in the required treaty. When you enter a search on ITRCE for treaties signed between countries, you will have access to the following Treaty Documents: Treaty News News regarding tax treaties among the two countries and also individual tax treaty news for each country. Treaty Status determine the current status of a treaty entered into by the required two countries and find treaties signed by those countries with all other countries Treaty History find the history of amendments and protocols made to the treaty Treaty Analysis read the proprietary document created by Orbitax providing essential explanations and analyses of key treaty terms and conditions stated in a treaty Memorandum of Understanding find details of the MoUs signed by two countries (wherever applicable) Protocol find amendments made to the treaty (wherever applicable) Notes find diplomatic notes exchanged regarding the treaty between the two countries (wherever applicable) Technical Explanation find official explanations for the protocols, amendments and conventions (wherever applicable) Withholding Tax Rates find best WHT rates for all 9 different payment streams Withholding Tax Forms find original and English versions of forms required by countries to claim any WHT reductions provided for by an applicable treaty BEPS CbC Exchange Status helps you to view the tax information exchange treaties. It will give you access to following: 1. Tax information exchange status 2. Commentaries 3. OECD models 4. EU directives Besides Treaty Documents, ITRCE also gives you access to the following commentaries that will provide additional support and guidelines to interpret treaties better: Orbitax Commentary The Orbitax commentary is designed to guide you through the essentials of interpreting a legal treaty signed by any two countries Related EU Material guidelines and other documents released by EU Related OECD Material guidelines and other documents released by OECD Models and Commentaries covers OECD, UN and US issued Models and Directives along with necessary technical explanations Materials Related to Exchange of Tax Information 93
fgggfgf gggg drfgr f 1. Select Treaties from the menu bar across the top to display Worldwide Tax Treaties screen. Here, select the two required countries using the two dropdowns available under Select Countries to view available Treaty Documents for the two selected countries. Watch the video on the right for how to use this tool. 94
2. The list of available Treaty Documents are displayed under Documents tab in the left navigation panel. Any Active Treaty document translated into English opens by default on the right. Note: Read Orbitax s proprietary commentary Orbitax Commentary located within Other Documents to interpret the required Treaty document better. 3. Select the required Treaty Document under Documents tab to display the document on the right. Note: You can access the Table of Contents for the open document from the left navigation panel. 4. Download/print any displayed Treaty Document using Download/Print Page options at the top-right of the screen. Note: You can download any treaty document as a PDF, a Doc or an HTML file. Treaties Impacted by Multilateral Instruments Convention As described under BEPS, not all countries have signed up for MLI convention to implement the tax treaty related measures. For the signed countries, the latest amended treaty article appears under the Documents tab. The information indicates how the specific treaty is affected by the exact MLI position. Impact on a particular article/treaty provision is displayed with additional details linked from relevant MLI article(s). 95
Click on MLI Position for any country to view the status of lists of reservations and notifications at the time of signing MLI convention To view detailed impact on the particular treaty clause/article, click on the mentioned MLI article. You can read the treaty in conjunction with the MLI. 96
Treaty Status From the Treaty Status screen under Worldwide Tax Treaties, you can ascertain the status of any treaty signed between the two required countries. ITRCE reflects the Treaty Status by assigning appropriate labels to the treaty in question. The four labels used by ITRCE are: 1. Active (i.e. in effect) 2. Signed (i.e. not yet in effect) 3. Terminated (i.e. no more in effect) 4. Unperfected (i.e. not yet completely agreed upon) 1. Select Treaty Status from the list of Treaty Documents displayed under Documents tab for the two selected countries. 97
2. Treaty Status screen is displayed on the right. Check the current status of the required Treaty under Status column. Click icon under Treaty column to display the translated Treaty Document. This displays the required Treaty Document Note: Read Orbitax s proprietary commentary Orbitax Commentary located within Other Documents to interpret the Treaty document better. 3. For countries signed up for MLI, the Treaty Status screen would include the MLI Position for each country and the BEPS MLI agreement. Click on MLI Position for any of the two countries to view PDF file in new tab, describing the status of reservations and notifications at the time of signing MLI. Click on BEPS MLI to read the MLI convention for implementing tax treaty related measures to avoid BEPS. 98
4. Click icon next to the required country below the Treaty Status table to expand the table and view the history & status of all other treaties signed by the country with all other countries. 5. Download/print the Treaty Status document using Download/Print Page options at the top-right of the screen. Note: You can download the treaty document as a PDF, a Doc or an HTML file. 99
Treaty Analysis ITRCE s Treaties Library provides you access to its editorial Treaty Analysis document which covers the essentials terms and rules stated within a Treaty document. A Treaty Analysis document contains the following sections: Residence Permanent Establishment issues Royalty issues Capital Gains FTC and Tax Sparing Credits MFN Clauses LOB and Other Exclusions from Treaty Benefits Specific Provisions on use of Domestic Anti-Avoidance Rules 1. Select Treaty Analysis under Treaty Documents in the left navigation panel. 2. Download/print the Treaty Analysis document using Download/Print Page options at the top-right of the screen. You can download the document as a PDF, a Doc or an HTML file. 100
Withholding Tax Rates & Forms From Worldwide Tax Treaties screen, you can find best WHT rates applicable to all 9 types of payment streams from Country 1 to Country 2. 1. Select Country 1 and Country 2 using the dropdowns available under Select Countries and click Done. Country 1 Country 2 2. The list of available Treaty Documents is displayed under Documents tab in the left navigation panel. Here, select Withholding Tax Rates. 101
3. Withholding Tax Rates applicable to payments from Country 1 to Country 2 are displayed on the right. Change Holding % using the Holding Percent dropdown. Download/print the WHT Rates table using Download/Print Page options. Change Holding Period using the Holding Period dropdown. Select Withholding Tax Forms to view original and English versions of the forms required to claim any WHT rate reductions provided for by an applicable treaty. Click and icons within WHT Rates table to view any available Footnotes and Progressive Blocks. Note: For WHT Rates applicable to payment transactions from Country 2 to Country 1 reverse the country selections using the dropdowns available under Select Countries. 102
4. A BEP CbC Exchange Status Option has been added under Documents that helps you to view the tax information exchange treaty. To access this, click on the BEP CbC Exchange Status. Click icon to watch video for a demonstration of how to use the tool. Click icon to view MLI video. Note: New material on Exchange of Tax Information has been added. Alternatively click interactive tutorial Icon for more information and guidance. 103
FORMS Orbitax maintains an updated database of key worldwide tax return forms translated into English. From the Forms screen in ITRCE, you can perform the following tasks: Find worldwide tax return forms translated into English including corporate income tax, value added tax, withholding tax, local tax and registration forms. Translate existing foreign tax forms into any language and compare the translated version side by side with the original language version Translate any PDF document, electronic or scanned, including audit notes, financial statements, local country laws, tax returns, etc. into the desired language Create a certified translation of the tax return form you filed in the local country Quickly perform currency conversions of amounts in your tax related documents 1. Select Forms from the menu bar across the top. The results for US tax forms are displayed on the Forms screen by default. Watch the video on the right for information on how to use this tool. 104
2. Select the country using choose a country dropdown at the top-left of the screen and click done. 105
3. The forms for the selected country will be displayed. All tax forms are visible by default. View a specific tax form by selecting the form type from ALL/CIT/VAT/WHT/TP options at the top-right of forms table. Training videos have been added that will demonstrate how to translate documents. 106
Translate & Compare Tax Forms 1. To translate a form into a different language, click icon under Translate column corresponding to the required form in the Forms table. 2. The Translate Options popup is displayed. Choose your preferred language from To Language dropdown and click Translate. 107
3. The Translate Form screen is displayed where you can compare the original language and translated versions of the required form. Use Download/Print options to download/print the original and translated versions of the form. You can choose to download/print both versions side-by-side or each version separately. Click Fix Spacing to remove extra spaces in the translated version of the Form Click Select FX Rates to set the exchange rate for the currency conversions if any in the translated form. Use the central scrollbar provided to compare the two versions of the document side by side. 4. Click Done Comparing at the top-right of the screen to go back to Forms screen. 108
Create Certified Translations of Already Filed Local Country Tax Forms You can create a certified English translation of the actual form you filed in the local country and convert currencies using the required FX Rates to reflect the actual amounts in the certified translation. 1. Click icon under Compare column corresponding to the required form from the table in the Forms screen. 2. The Compare Options popup is displayed. Select Compare your document and upload the already filed tax form using Choose File option. Note: Enable the checkbox next to Treat as scanned if your document is a scanned pdf. 109
3. Compare Options popup will refresh. Now, select the language of the actual form using the dropdown available and enable the checkbox next to Create a Certified Translation. 4. Click Compare to view the two documents side by side. Compare Forms screen is displayed with the original form on the left and the certified translation on the right. 110
5. To convert currencies in the certified translation, click Select FX Rates. The Convert Currencies popup is displayed where you can specify settings for the exchange rate you want to use. Specify the local currency using From Currency dropdown. Then, specify the currency you want to convert the amounts to using To Currency dropdown. For the exchange rate you want to use, choose either Spot Rate or Average Rate. The Exchange Rate field refreshes using your inputs and displays the rate for the currency conversion to be used in the certified translation. Enable the checkbox next to Show Notes to include the inputs specified for the exchange rate used. Click Add Note to add another note to the document. Enable the checkbox next to Apply to All to perform conversions for all amounts in the actual form using the specified exchange rate. 6. Click Done to convert the currencies in the certified translation of your document. 7. Use Download/Print Page options to download/print the certified translation of the actual filed form once you have made the necessary edits and finished the required currency conversions. 111
Convert Currency, Translate & Compare Your Own Documents Translate and compare your PDF documents, including audit notes, financial statements, local country tax laws, etc. using Translate and Compare features from the Forms screen. 1. Click Translate at the top of the Forms screen. 2. The Translate Document popup is displayed. Here, specify the settings for the required translation. Upload your document using Choose File option. Enable the checkbox next to Treat document as scanned if your document is a scanned PDF Enable the checkbox next to Auto Detect Language if you want the tool to determine the language of your document automatically. Specify the original language of your document using From Language dropdown. Then, specify the preferred language of translation using To Language dropdown. 3. Click Translate once you have entered appropriate settings to translate and download the document. 4. To convert currency in a document, click Convert Currency at the top of the Forms screen. The Convert Currency Options popup is displayed. Upload the required document using Choose File option and enable the checkbox next to Treat as scanned if the document is a scanned PDF. 5. Click Convert to open the Convert Currencies popup where you can select the preferred currency and the exchange rate for the currency conversion. 112
6. To compare any two PDF documents, click Compare from the Forms screen. 7. The Compare Options popup is displayed. Upload both the documents using the Choose File options under Document 1 and Document 2. Note: Enable the checkbox next to Treat as scanned if the uploaded documents are scanned. 8. Click Compare to view the documents side by side in Compare Forms screen. Note: If you want to place a request for manual translation of your documents by our experienced translators, click at the top-right of the Forms screen. 113
Worldwide access to valuable tax resources Orbitax allows you to navigate the important and essential tax related websites from around the world, all compiled in one place. 1. To access the Tax websites, click on the tax sites tab. Click on the icon or the tax website name to view the website in other tab. 2. The page opens with essential tax websites from around the world. 114
Tax Calendar A new customizable Tax Calendar tool has been added which provides important compliance dates and other information for corporate tax, value added tax and transfer pricing for over 150 countries. The calendar can be customized by entity and entity tax year, due dates can be overridden, calendar events can be e-mailed to various stakeholders and the calendar can be exported into your own calendar software and devices (e.g. MS outlook and Google calendar) to set alerts and reminders. 1. Access the ITRCE tax calendar by clicking on the Tax Calendar tab. Click on the icon to view the tax form. 115
2. In the Countries tab you can maintain your calendar dates by jurisdiction only. Hover over the icon next to the Countries tab to show the tooltip. 3. In the Entities tab you can maintain your calendar dates by entity as well as jurisdiction. Hover over the icon next to the Entities tab to show the tooltip. 116
4. Click on Export Calendar to export your calendar to either your Outlook calendar, Google calendar or export the data to an excel file. 117
FX Rates A new customizable FX Rates tool has been added to simplify your International Tax Tasks for cross-border transactions, foreign income inclusions or CbC multiple reporting perspectives. FX Rates Module delivers Spot Rates, Tax Year Rates and Period Rates. It provides historical Rates from 1995 onwards. 1. Click FX Rates tab on the menu bar across the top to access FX Rates tool. 2. Select Rate Type by selecting Period or Spot from Rate Type Dropdown. 118
3. Select the time period as applicable. 119
4. From Translation Currencies dropdown select the appropriate currency and click done. Click Get Rates to get tax rates. 120