Int'l Tax News

Pfizer Inc.'s $160 billion megadealwith Allergan Plc,which comeswith the benefit of an overseas tax address, is likely to be envied by competitorswhowon't be able to do much to mimic it.

For the DTR story, go here. (subscription required)

David Sicular of the New York State Bar Association Tax Section has submitted a report recommending that the IRS issue guidance undersections 901and903to addresswhether a foreign tax is creditable in circumstances described by tax section members.
The circumstances includewhen a foreign country imposes tax based on an assertion of taxing jurisdiction that reaches beyond conventional limits orwhen the tax is imposed under a regime that imputes income or denies deductions to a taxpayer that engages in behavior perceived by the taxing country potentially to be designed to shrink the taxpayer's local taxable base.
For the NYSBA report, go here.(subscription required)

In this article, Cummings reviews 63 (and counting) international training practice units that are available on the IRSwebsite (if you knowwhere to look). They don't reveal much about the law, but they demonstrate a great confidence in the ability of nonspecialist agents to conduct audits of international transactions, both of individuals and of large corporations.
For the Tax Notes article, go here. (subscription required)

Pfizer Inc. and Allergan Plc agreed on Monday to combine in a record $160 billion deal, creating a giantwith products ranging from Viagra to Botox and a low-cost tax base on the edge ofwestern Europe.

"The lure of tax advantages from a Dublin head office has been a significant factor in driving this deal," said John Colley, a professor atwarwick Business School, in central England,who studies large-scale mergers. "The threat of succumbing to U.S. tax rates has meant that Pfizer has been desperate for a deal outside the U.S."
For the Bloomberg story, go here.

After two rounds of rule-making designed to stymie inversion deals that ship taxable U.S. corporate profits overseas, companies hoping to continue the practice are largely undeterred. Absent legislation from Congress -- and, some argue, a feistier Treasury Department -- corporate profitswon't stop leaving American shores.
For the International Business Times story, go here.

When the Treasury Department unveiled its latest highly anticipated effort to curtail tax-lowering foreign mergers, deal makers reactedwith relief.
After poring over the language of a notice released Thursdayevening, deal lawyers, bankers and policy specialistssaid it is less drastic than feared and mostly makes minor changes to rules U.S. companies must followwhen they acquire a foreign counterpart and movetheir tax addressesabroad.
For thewall Street Journal story, go here.

The Indian government plans to phase out profit- and investment-linked exemptions and deductions to fund a gradual corporate tax rate cut from 30 percent to 25 percent over four years and to help simplify the country's tax laws.
For thewWTD story, go here. (subscription required)

The U.S. believes that the OECD's base erosion and profit-shifting final report on transfer pricing provides that some cash boxes may be entitled to more than a risk-free return, IRS Deputy Associate Chief Counsel (International) Anne Devereaux told Tax Analysts November 20.
For thewWTD story, go here. (subscription required)

Howard J. Levinewrites concerning a recent article by Ryan Finley andwilliam Hoke, "Tax Treaties Awaiting Senate Vote Face Uncertain Future,"Tax Notes, Nov. 16, 2015, p. 897. The authors highlighted the changes in the pending tax treatieswith several countries, including Japan, and quoted J. Brian Davis of Ivins, Phillips & Barker as saying the changes "are good for business, for jobs, and inbound investment." However, the article ignored a glaring (and obvious) problemwith the pending Protocol to the Japan-U.S. Income Tax Treaty.
For the Tax Notes letter, go here. (subscription required)

With the release of its new anti-inversion notice November 19, Treasury has increased the intricacy in an already convoluted field of guidance regarding those transactions, tax observers told Tax Analysts.
For the TNT story, go here. (subscription required)

The IRS is aware of the potential for a sharp increase in double-tax cases, one official said,while another addressed questions about the impact of the U.K. diverted profits tax on U.S. companies.

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Are there policy reasons to further tighten the restrictions on trading tax attributes in cross-border transactions that generate foreign tax credits? That question has arisen yet again following a trial court's finding of economic substance in a structured trust advantaged repackaged securities (STARS) transaction.
For the Tax Notes story, go here. (subscription required)

Lowell Yoder of McDermottwill & Emery looks at an IRS legal advice memorandum that adopts a new approach to applying the Subpart F branch rule tax rate disparity test, used to determinewhether a CFC's income is treated as foreign base company sales income. "The policy rationale behind this new approach is understandable, but the technical basis for it isn't obvious from reading the regulations," hewrites.
For the BNA Insight, go here. (subscription required)

The provision in new IRS anti-inversions guidance making it more difficult for companies to restructure their operations through lower-tax third countries carries a bigwallop and shows the government is broadly interpreting its legal authority to close down these deals, practitioners told Bloomberg BNA.

For the DTR story, go here. (subscription required)

Over the past couple ofweeks there has been a lot discussion about the value-added tax among those in the media and in certain policy circles.
For the Tax Foundation article, go here.

Here's a tax policy issue I humbly submit you should agreewith me on even ifwe have polar opposite views on taxation: an eroding tax base is a bad thing.
For thewashington Post article, go here.

In recent days, the new Speaker of the House Paul Ryan (R-Wis.) signaled a priority for international tax reform in 2016. And if the newest recommendations from the Organization of Economic Cooperation and Development (OECD) are any indication ofwhat's ahead on the global tax scene for American businesses, it should be number one on the legislative agendawhen Congress returns in January.
For The Hill blog post, go here.

The rich have long made the most of cross-border tax avoidance. Developing countries are hit hardest by this practice, but may benefit the least from efforts to tackle it
For the Public Finance International story, go here.

The Treasury Department and the Internal Revenue Service have outlined additional steps they are taking to reduce the tax benefits of corporate inversions, andwhen possible, stop the transactions from occurring.
For the Accounting Today story, go here.

The U.S. strengthened efforts to discourage corporate inversions by making the deals more difficult and limiting the benefits of the transactions, just as an iconic American firm considers shifting its legal address abroad to lower its taxes.
For the Bloomberg Business story, go here.

The Treasury Department and theInternal Revenue Serviceon Thursdayissued new rules aimed at discouraging American companies from moving their headquarters abroad in search of lowertaxrates.
Increasingly, American companies have been trying to reduce theirtaxliabilities through a tactic known as a corporate inversion -- buying smaller foreign competitors and using those purchases to move their headquarters to countrieswith more favorabletaxrates than the United States'.
For the New York Times story, go here.

A recent Australian ruling thatwent against Chevron reflects how thinking has evolved on transfer pricing, even though it turned on old tax law, a senior Australian Taxation Office official said.
"The profit shifting problem has evolved over time andwas one thatwas limited to price, and now I think is recognized and acknowledged as a function of structures," ATO Assistant Commissioner Michael Jenkins said Nov. 18 at a conference in Sydney. "It's a structural issue, not a pricing issue. And interestingly, therewas a flavor of that kind of thinking in the Chevron judgment."
For the DTR story, go here. (subscription required)

Treasury released its new anti-inversion notice on November 19, andwhile placing new limitations on potential inverters, the guidance continues in the same vein as last year's notice.
For the TNT story, go here. (subscription required)

There are no easy answerswhen it comes to cost sharing, an IRS official said in response to a question about the OECD's crackdown on "cash boxes" and its impact on cost sharing as defined under the tax regulations.

For the DTR story, go here. (subscription required)

The IRS issued new guidance to continue the government's battle against inversion deals that let U.S. companies move their addresses outside the U.S. to reduce taxesÔøΩguidance that is for the most part prospective, but signals the government's intense efforts to make these deals tougher and less attractive.

For the DTR story, go here. (subscription required)

Treasury on November 19 issued a fact sheet regarding corporate inversions.

For the fact sheet, go here.

Today, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued a notice that takes additional steps to reduce the tax benefits of – andwhen possible, stop – corporate inversions. U.S. companies are currently taking advantage of an environment that allows them to move their tax residence overseas to avoid paying taxes,without making significant changes in the nature of their overall operations. Last year, Treasury took targeted steps​ to address this issue, and this notice identifies additionalways to reduce the incentives to invert.
For the Treasury release, go here.

Treasury Secretary Jacob J. Lew delivered prepared remarks on a press conference call regarding Treasury's announcement on corporate tax inversions.
For the release, go here.

The Obama administration has unveiled new measures aimed at deterring tax-cutting corporate transactions such as Pfizer's potential $150bn deal to buy Dublin-based Allergan.

For the Financial Times story, go here.

The Treasury Department on Thursday released new rules to restrain U.S. companies from putting their addresses in foreign countries to reduce their tax bills.

The changeswill make it harder for U.S. companies to buy a company in one foreign country and locate the combined entity's address in a different country. They alsowould limit companies' maneuvers before a merger to make a foreign company look bigger and thus escape existing U.S. tax restrictions.

For thewall Street Journal story, go here.

Senate Finance Committee Ranking Member Ronwyden, D-Ore., today issued the following statement following the release of new anti-inversion guidance.

For the statement, go here.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) today issued a statement after the U.S. Treasury Department announced new targeted guidance on corporate tax inversions:
For the statement, go here.

Houseways and Means Chairman Kevin Brady (R-TX) released a statement in response to a notice from the U.S. Treasury Department and the Internal Revenue Service (IRS) on measures to curtail corporate tax inversions.
For the statement, go here.

Ways and Means Committee Ranking Member Sander Levin (D-MI) issued a statement after the U.S. Treasury Department and the Internal Revenue Service (IRS) issued a notice that takes additional steps to curb corporate tax inversions.
For the statement, go here.

Treasury on November 19 issued a fact sheet regarding corporate inversions.

For the fact sheet, go here.

Today, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued a notice that takes additional steps to reduce the tax benefits of – andwhen possible, stop – corporate inversions. U.S. companies are currently taking advantage of an environment that allows them to move their tax residence overseas to avoid paying taxes,without making significant changes in the nature of their overall operations. Last year, Treasury took targeted steps​ to address this issue, and this notice identifies additionalways to reduce the incentives to invert.
For the Treasury release, go here.

Treasury Secretary Jacob J. Lew delivered prepared remarks on a press conference call regarding Treasury's announcement on corporate tax inversions.
For the release, go here.

The Obama administration has unveiled new measures aimed at deterring tax-cutting corporate transactions such as Pfizer's potential $150bn deal to buy Dublin-based Allergan.

For the Financial Times story, go here.

The Treasury Department on Thursday released new rules to restrain U.S. companies from putting their addresses in foreign countries to reduce their tax bills.

The changeswill make it harder for U.S. companies to buy a company in one foreign country and locate the combined entity's address in a different country. They alsowould limit companies' maneuvers before a merger to make a foreign company look bigger and thus escape existing U.S. tax restrictions.

For thewall Street Journal story, go here.

Senate Finance Committee Ranking Member Ronwyden, D-Ore., today issued the following statement following the release of new anti-inversion guidance.

For the statement, go here.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) today issued a statement after the U.S. Treasury Department announced new targeted guidance on corporate tax inversions:
For the statement, go here.

Houseways and Means Chairman Kevin Brady (R-TX) released a statement in response to a notice from the U.S. Treasury Department and the Internal Revenue Service (IRS) on measures to curtail corporate tax inversions.

For the statement, go here.

Ways and Means Committee Ranking Member Sander Levin (D-MI) issued a statement after the U.S. Treasury Department and the Internal Revenue Service (IRS) issued a notice that takes additional steps to curb corporate tax inversions.

For the statement, go here.

Congress must permanently increase tax revenues from large corporations and end "loopholes" and "gimmicks" unavailable to small businesses, Sen. Elizabethwarren (D-Mass.) said at a National Press Club forum.
For the DTR story, go here. (subscription required)

Recent bipartisan international tax reform proposals under consideration in Congress received scathing criticism November 18 from Sen. Elizabethwarren, D-Mass.,who called deemed repatriation a "giantwet kiss" and the innovation box a "gift for lazy" U.S. companies that have moved their headquarters to lower-tax countries.
For the TNT story, go here. (subscription required)

To hear some presidential candidates tell it, if itwere suddenly easy from a tax standpoint for U.S. corporations to repatriate more than $2.1 trillion in overseas earnings, the moneywould be in the nextwire transfer home, giving the economy a jump-start like none before.
For the TNT story, go here. (subscription required)

"Additional targeted guidance" thatwould further deter and reduce the economic benefits of corporate inversionswill be coming later thisweek, Treasury Secretary Jacob Lew said November 18.
For the TNT story, go here. (subscription required)