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International Tax News Blog

  • Tax Legislation: Look to Finance's Hatch for Movement On Inversions After Recess, Expert Says

    by Casey Wooten (Bloomberg)

    As lawmakers return to Capitol Hill after the August recess, addressing corporate inversions will be a top priority, and the person to follow may be the Senate Finance Committee's ranking member Orrin Hatch (R-Utah), a top practitioner and former Hill counsel said during a webcast.
    “We'll have to be watching what reaction Hatch will have when Congress comes back, to see if he will introduce his own legislation,” John Gimigliano, principal in charge of federal legislation and regulatory services for KPMG's Washington National Tax practice , said Aug. 27.
    For the story, go here.

    By Wooten, Casey, posted on Thursday August 28, 2014
  • Inversions a Factor in Tax Base Erosion, Elmendorf Says

    by David van den Berg (Tax Notes Today)

    The federal government will collect less corporate income tax revenue over the coming decade, and inversions are one reason why, Congressional Budget Office Director Douglas Elmendorf said August 27.
    "Our projections of corporate tax receipts over the coming decade do incorporate some erosion of the corporate tax base through a variety of tax reduction strategies," Elmendorf said during a press briefing on the CBO's updated budget outlook. "One factor there would be corporate inversions."
    For the story, go here. (subscription required)

    By van den Berg, David, posted on Thursday August 28, 2014
  • Rep. Paul Ryan: America is not as competitive as it needs to be

    by Nicole Goodkind (Yahoo! Finance)

    It seems as though we can't go a week without another report of an American company merging with a foreign business in order to relocate their headquarters and avoid the nominal U.S. tax rate of 40%. The latest is Burger King’s merger with Canadian brand Tim Hortons in an $11 million deal that will move Burger King's business operations to Canada, where the corporate tax rate is only 26%.
    Congressman Paul Ryan (R-Wis.), 2012 Vice Presidential candidate and author of “The Way Forward: Renewing The American Idea” joined Yahoo Global Correspondent Bianna Golodryga to weigh in. Congressman Ryan has long called for a comprehensive tax reform bill, but with midterm elections coming up, any serious reform seems at least six-months off. With this in mind, many politicians have called for a temporary solution or ban on inversions all together.
    “The problem with those so-called solutions is that all they would do is make it more likely that American companies would be ripe for takeover by foreign corporations,” says Ryan. “There’s really no shortcut to the real answer which is tax reform.”
    For the story, go here.

    By Goodkind, Nicole, posted on Thursday August 28, 2014
  • United States: Treasury Secretary Willing To Consider Regulatory Response To Inversions

    by Mel Schwarz, Dustin Stamper & Shamik Trivedi (Grant Thornton) (Mondaq)

    Treasury Secretary Jacob Lew said last week that the Obama administration is considering administrative options to curb inversions. The comments mark a significant shift from just a few weeks earlier, when Lew said he didn't believe Treasury had the power to address inversions without legislation.
    The announcement came just hours after Senate Democrats wrote to Lew asking Treasury to take immediate administrative action to curtail the tax benefits U.S. companies receive for merging with offshore companies and reorganizing as foreign entities.
    For the article, go here.

    By Schwarz, Mel, Dustin Stamper & Shamik Trivedi, posted on Thursday August 28, 2014
  • Why Canada now skates circles around U.S. on business taxes

    by Jeffry Bartash (MarketWatch)

    Canada: the New Cayman Islands.
    Okay, that’s a really big stretch. The large nation of 35 million people north of the U.S. border is not a brazen tax haven like the tiny Caribbean island with a population of an American suburb. Yet Canada has made a conscious and concerted effort over the last 15 years to slash its corporate tax rate, making it one of the most attractive places in the world to locate a global-oriented business.
    The United States? Tax reform has repeatedly foundered amid deep distrust and disagreement between Democrats and Republicans, leaving the country with one of the higher tax burdens in the developed world. Lately that’s spurred some large Americans companies to agree to buy foreign rivals and move their headquarters outside the U.S., a move some Democrats including President Obama have suggested is “unpatriotic.”
    For the story, go here.

    By Bartash, Jeffry, posted on Thursday August 28, 2014
  • Is it time to scrap the FTT?

    by ITR Correspondent

    With the EU Commission struggling to deal with the abundance of new regulatory red tape aimed at the financial sector, KPMG consultants urge the new EU Commission and Parliament to focus on growth, rather than implementing a badly designed tax that could spell disaster for the European economy.
    For the story, go here.

    By ITR Correspondent, posted on Thursday August 28, 2014
  • Businesses Are Winning Cat-and-Mouse Tax Game

    by David Gelles (NY Times/DealBook)

    A pharmaceutical company moved its headquarters to Ireland, sharply reducing its tax rate. A billboard company reclassified itself as a real estate concern, meaning it will no longer pay corporate taxes. And a big oil producer split itself in two, cleaving off a multibillion-dollar division that now operates tax-free.
    Across corporate America, companies large and small are finding new ways to address one of the business world's oldest irritations: paying taxes.
    By exploiting existing loopholes and devising new ones, some of the country's best-known companies are making it harder than ever for the federal government to replenish its already depleted coffers.
    For the story, go here.

    By Gelles, David, posted on Friday August 29, 2014
  • Opinion: Lower corporate tax rates. Now.

    by Charles Krauthammer (Washington Post)

    The Obama administration is highly exercised about "inversion," the practice by which an American corporation acquires a foreign company and moves its headquarters out of the United States to benefit from lower tax rates abroad.
    Not fair, says Barack Obama. It's taking advantage of an "unpatriotic tax loophole" that hardworking American families have to make up for by the sweat of their brow. His treasury secretary calls such behavior a violation of "economic patriotism."
    For the article, go here.

    By Krauthammer, Charles, posted on Friday August 29, 2014
  • Corporate Inversions: Deloitte: Inversions Frustration Building In Congress, but Legislative Path Unclear

    by Alison Bennett (Bloomberg)

    Congressional frustration with large companies taking part in inversion transactions is continuing to build, but it remains unclear when lawmakers may act on legislation to prevent these deals or sharply reduce their tax benefits, practitioners from Deloitte Tax LLP said.
    While the administration has raised the possibility of acting unilaterally if it appears lawmakers may be unable to pass legislation, “the president may want to wait to see if Congress can do something” when lawmakers return in September, according to partner James Gannon during an Aug. 28 webcast.
    For the story, go here. (subscription required)

    By Bennett, Alison, posted on Friday August 29, 2014
  • Corporate Inversions: Long-Term Dent in Tax Inversions At Least Two Years Off, Analysts Say

    by Marc Heller (Bloomberg)

    No matter how Congress responds to the latest flurry of corporate tax inversions, the most lawmakers will manage in the short run is a temporary bandage, analysts say.
    David Burton, a senior fellow at the Heritage Foundation—a conservative think tank—said the recent controversy over inversions illustrates how “broken” the U.S. tax code is and that only a comprehensive overhaul will accomplish lawmakers' goal of curbing the practice.
    For the story, go here. (subscription required)

    By Heller, Marc, posted on Wednesday August 27, 2014