Quarterly tax treaty review: October to December 2015

BEPS Actions 6 and 7 relating to treaty and permanent establishment abuse are continuing to have an impact on new treaties and have been the subject of a recent Japanese case. The Swiss Supreme Court has published the reasoning behind its decision that a total return swap arrangement denied beneficial ownership of the underlying hedged shares. Decisions in the Spanish and French courts have held that the 2010 commentary on the attribution of profits to a branch under the authorised OECD approach cannot apply to a treaty concluded before then. The European Commission has asked the Netherlands to amend the anti-avoidance LOB provisions of its treaty with Japan so as to provide a get out for EU/EEA residents and stock exchanges. The South African Revenue Service has released an interpretation note designed to provide guidance on the place of effective management of a dually resident company.