The debate around the taxation of multinational companies across their global markets has shown no signs of ceasing as the New Year gets underway, with politicians continuing to wake up to consumer sentiment on taxation of large corporates in their jurisdiction. 2012 saw responses at each end of the spectrum from some of the targeted multinationals, with Starbucks opting to agree annual tax payments with the UK authorities, whilst Google vehemently defended their global tax positions, emphasising the fact that they act legally within the tax structures set up by those countries in which they operate. Taxand discusses why competition for inward investment between countries is creating another hurdle for harmonisation.

The Foreign Account Tax Compliance Act ("FATCA") was enacted in 2010 to create transparency and combat what was perceived as tax evasion by US persons holding investments in offshore accounts. The primary goal of FATCA is to allow the Internal Revenue Service ("IRS") and US Treasury to identify offshore income earned by US persons with offshore accounts or investments; and to identify US persons with non-US assets. Denmark, Mexico and the UK have since agreed concluded FACTA exchange of information agreements. Taxand investigates the impact of these developments on corporations operating globally.

In the recent GfBk Case (C-275/11), the European Court of Justice (ECJ) is analysing the VAT treatment of investment advisory services rendered to a management company of an investment fund. The issue in question is whether such services may benefit from the VAT exemption applicable to the management of investment funds. The opinion of the Advocate General, released on 8 November 2012, brings hope and is in favour of applying a VAT exemption to advisory and information services provided by a third party in relation to the management of a special investment fund, provided that the service is autonomous and continuous. Although the judgment is to be released shortly, the opinion of the Advocate General is a positive sign. Taxand's Global Indirect Tax team details this ruling and its potential impact on global organisations.

Multinational corporations are required to participate in a large number of statutory pension plans imposed by countries with respect to employees working in their territory. Statutory coverage typically includes old age, death and disability benefits. Specific mandatory industry pension schemes may also be applicable, for example under collective bargaining agreements. In addition to required statutory coverage, additional company-specific supplementary pension benefits are widely used to provide enhanced remuneration to employees and to retain and incentivise key executives. Taxand's Global Compensation Tax team investigates the pension plans on offer in various jurisdictions, and the tax benefits of these for multinationals.

The continuation of the global financial crisis and the threat of a triple dip recession for Europe has again led to an increasing number of strange and somewhat bizarre taxes across the world. Here's what we've discovered in 2012.