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International Tax News Blog

  • France, a Tax Haven? Yes, for Microsoft to Chinas Huawei

    by Marie Mawad and Helene Fouquet (Bloomberg)

    Move over, Ireland.

    Companies from Microsoft Corp. to China’s Huawei Technologies Co. scouring Europe for fiscally attractive shores are turning to an unlikely country: France.

    As a base for research and development teams, that is.

    Tax breaks for R&D, 5.6 billion euros ($7 billion) this year alone, combined with world-class scientists are making France a honey pot for technology companies. As the French parliament debates how to shrink the country’s budget deficit this month some lawmakers are demanding reining in the R&D credits, saying some companies are abusing them. President Francois Hollande has pledged it’s a budget line he won’t touch.

    For the story, go here.

    By Mawad, Marie and Helene Fouquet, posted on Monday November 17, 2014
  • BEPS Project Must Address CFC Issues to Be Effective, Shay Says

    by William R. Davis (Tax Analysts)

    The OECD's base erosion and profit shifting initiative is facing a significant issue in how it addresses controlled foreign corporations because European case law currently restricts the scope of EU members establishing CFC regimes, Stephen E. Shay of Harvard Law School said November 14.
    For the story, go here. (subscription required)

    By Davis, WIlliam R., posted on Monday November 17, 2014
  • European Commission explains State aid investigation in the Netherlandss

    by PwC

    The European Commission (EC) has published its opening decision in the formal investigation into transfer pricing agreements between Starbucks and the Dutch tax authorities.  The Commission had already communicated this investigation through a press release issued on June 11, 2014.  The current decision, issued November 14, 2014, explains the reason for this investigation, and specifies the additional information which the EC has requested from the Netherlands.
    For the PwC Insight, go here.

    By PwC, posted on Monday November 17, 2014
  • News Analysis: Luxembourg Rulings and Tax Provisions

    by Mindy Herzfeld (Tax Analysts)

    The furor over the release of more than 300 tax rulings prepared by PricewaterhouseCoopers LLP for submission to Luxembourg will likely lead to more negative portrayals of cross-border tax planning and structuring. The public debate may result in changes to tax laws and additional investigations by prosecutors and lawmakers. At the same time, the outcry raises questions about the extent to which shifts in public acceptance of some types of corporate behavior may result in changes to professional practice.
    Changes to corporate tax practice caused by informal pressure and social regulation are not easily reconciled with accounting rules for how and when to recognize and measure tax positions.
    For the article, go here. (subscription required)

    By Herzfeld, Mindy , posted on Monday November 17, 2014
  • News Analysis: International Changes the United States Shouldn't Have Made

    by Lee A. Sheppard (Tax Analysts)

    The United States is not serious about taxing U.S. multinationals on their foreign income and does not need the revenue.
    This fundamental understanding is amply demonstrated by the U.S. attitude toward the base erosion and profit-shifting project, which is a polite pretense of participation with quiet undermining. European efforts to change laws to extract tax from U.S. multinationals are met with U.S. proposals to enact a minimum tax that would still have the effect of encouraging foreign investment.
    For the story, go here. (subscription required)

    By Sheppard, Lee A., posted on Monday November 17, 2014
  • UK and Germany agree on joint proposal regarding preferential IP regimes: good news for UK patent box?

    by PwC

    The UK and German governments on November 11, 2014, announced a proposal that they co-developed to advance negotiations on new rules for preferential intellectual property regimes within the G20/OECD base erosion and profit shifting (BEPS) project. If agreed, this is a key development for the UK patent box. Germany had led opposition to patent box regimes, while the UK was in the minority in opposing the nexus approach as set out in the September OECD BEPS paper on Harmful Tax Practices.

    For the PwC Insight, go here.

    By PwC, posted on Tuesday November 18, 2014
  • G20 leaders back drive to unmask shell companies

    by Jamie Smyth and George Parker in Brisbane and Vanessa Houlder in London (Financial Times)

    World leaders have backed a transparency drive against the use of anonymous shell companies and trusts, giving new political momentum to longstanding promises to tackle the secrecy behind corruption, tax evasion and money laundering.
    Following talks on Sunday, the Group of 20 leading nations published a set of principles for governments that aims to make it easier to find out who is the beneficial owner of shell companies. Experts say these entities facilitate hundreds of billions of dollars in illicit financial flows.
    For the story, go here.

    By Smyth, Jamie and George Parker in Brisbane and Vanessa Houlder in London, posted on Monday November 17, 2014
  • Starbucks Unit Swapped Millions of Euros for Roasting Art

    by (Bloomberg)

    A Dutch unit of Starbucks Corp. paid millions of euros to a U.K.-based arm of the company that isn’t taxed in Britain in exchange for a technique to roast coffee beans.

    Exaggerated tax-deductible royalty payments for this technique may have allowed Starbucks to unfairly lower its Dutch taxes, the European Union said as it continues to probe sweetheart fiscal deals for multinationals. The EU findings are preliminary.

    For the story, go here.

    By Sebag, Gaspard, posted on Monday November 17, 2014
  • Scope of Leaked Tax Accords Took Luxembourg by Surprise

    by Stephanie Bodoni (Bloomberg)

    Luxembourg’s government was taken by “complete surprise” by the amount of files revealed last week in a report detailing hundreds of secret corporate deals that allegedly helped multinationals dodge taxes during Jean-Claude Juncker’s tenure as the nation’s prime minister.

    The publication of a “tsunami” of more than 500 so-called tax rulings executed by the government between 2002 and 2010 “totally astonished” Luxembourg Finance Minister Pierre Gramegna, he told journalists at a briefing yesterday in Luxembourg.

    For the story, go here.

    By Bodoni, Stephanie , posted on Monday November 17, 2014
  • E.U. Accuses Starbucks and Netherlands of Making Unfair Tax Deal

    by James Kanter (New York Times)

    European Union authorities have accused the Netherlands of making a special deal with Starbucks that helped the company lower its taxes, creating unfair advantages over other countries in the bloc.
    The report by the bloc's competition authority, made public on Friday, is a preliminary finding in a review of Starbucks' arrangements with the Netherlands. It is the latest sign of mounting concern, and indignation, over the scale of tax breaks for multinational companies in a period of weak growth and high unemployment in many parts of Europe.
    For the story, go here.

    By Kanter, James , posted on Monday November 17, 2014