by Matthew R. Madara (Tax Notes)The IRS on January 18 released temporary and final regulations on cross-border partnership transfers that disallow nonrecognition treatment to some transfers of built-in gain property to partnerships with foreign partners.
by Francesco Guarascio (Reuters)European Union lawmakers rejected on Thursday an EU blacklist of ten countries at risk of facilitating money laundering or terrorist financing on the grounds that the list is too short and needs to be expanded to include tax havens.
In a bid to cut terrorist funding after January 2015 attacks on French magazine Charlie Hebdo, the EU adopted stricter rules against money laundering and began naming countries with legal loopholes that could be exploited by militant organizations to get funding.
by Cynthia Kroet (POLITICO Europe)An advocate general for Europe’s highest court said Thursday the United Kingdom and Gibraltar should be treated as “one entity” in their freedom to provide services.
“The application of EU law to Gibraltar does not create new or supplementary rights between the U.K. and Gibraltar that are in addition to those flowing from U.K. and Gibraltar constitutional law,” wrote Advocate General Maciej Szpunar. The European Court of Justice usually follows the line of thinking of its advocate generals, and will rule on the case in the coming months.
by PWCThe increased potential for comprehensive tax reform in 2017 has put a spotlight on the House Republican Blueprint, released by House Speaker Paul Ryan (R-WI) and Ways and Means Committee Chairman Kevin Brady (R-TX) last June. The Blueprint is the likely starting point for drafting tax reform legislation in the House. The business provisions of the Blueprint would radically transform the existing corporate income tax and individual income tax on pass-through business income into a consumption-based tax by providing for “cash-flow” taxation and border adjustability. This Tax Insight provides more detail on these business provisions and discusses the impact the Blueprint would have on US competitiveness, the potential market impact of border adjustability, and the change it would represent in the taxation of cross-border income.
by Sarah Carpenter (Tax Notes)United Arab Emirates President Khalifa bin Zayed Al Nahyan has issued federal decrees ratifying the pending income tax treaties with Belize, Comoros, Jordan, and Macedonia, and the pending tax information exchange agreements with Argentina, Colombia, Denmark, Faroe Islands, Finland, Iceland, Norway, and Sweden, according to a U.A.E. government news release.
by Cym H. Lowell (National Law Review)Adoption of the base erosion and profit shifting (BEPS) action items in specific countries can be expected to alter traditional multi-national enterprises (MNE) tax strategy processes. In this regard, it is appropriate to note that tax authorities and the Organization for Economic Co-operation and Development (OECD) often seem to overlook, or conveniently ignore, that MNE strategies are often a function of the rules established by countries to develop their own tax base (at the expense of other countries). In other words, countries, in their respective self-interests, grant incentives of various sorts to encourage economic investment. MNEs take advantage of these incentives to minimize their tax liabilities, which the BEPS process views as, somehow, inappropriate behavior of MNEs denuding the tax base of other countries.
by Marcus Hoy (Bloomberg BNA)A Swedish government plan to introduce a tax on banks and other financial institutions is prompting criticism from an official at the nation’s tax agency.
Tomas Algotsson, head of unit at the agency’s legal department, told the Dagens Industri (DI) newspaper Jan. 15 that the proposed tax would increase administrative burdens both for companies and the tax authority, Skatteverket.
by Stephanie Soong Johnston (Tax Notes)British Prime Minister Theresa May has confirmed that the U.K. will leave the EU single market and seek a bespoke free trade deal with the bloc, prompting concerns that her government will use the threat of turning the U.K. into a tax haven as leverage in negotiations with the EU.
In a highly anticipated January 17 speech, May outlined a general strategy for Britain to leave the EU, following the controversial June 2016 referendum vote, emphasizing that the U.K. is not seeking any kind of arrangement that leaves Britain "half in, half out."
by Richard Teitelbaum (The Wall Street Journal)Companies are increasingly exploring the economics of moving production to the U.S., as an overhaul of the U.S. tax code looms and President-elect Donald Trump calls out their peers for expanding abroad.
by Gavyn Davies (Financial Times)The financial markets have begun to wake up to the fact that the Republican reforms to US corporate taxation will probably include important new “border adjustments” to the definitions of company revenues and costs. The basic idea is that US should shift to a “territorial” system, with corporations being taxed only on revenues and costs incurred within the US itself, and not on their worldwide aggregates, which is the principle behind the present system.