2017
Posted on
International Taxation in the Digital Economy: Challenge Accepted? (1)
The digitalization of the economy is considered as a key driver of innovation, economic growth and societal change, and is a major challenge for the international tax system. The OECD has addressed this challenge in its extensive Action 1 Final Report as part of its BEPS project.
To read more go here
Posted on
Treasury recommends significant changes to eight tax regulations
The Treasury Department on October 4, 2017, released its 'Second Report to the President on Identifying and Reducing Tax Regulatory Burdens' (Second Report). This review is part of the President's Executive Order (EO) 13789 calling for a reduction of tax regulatory burdens. The Second Report recommendswhether the eight regulations previously identified that either 'impose an undue financial burden' and/or 'add undue complexity' should bewithdrawn, modified, or revoked. This Insight covers the first six of the eight identified regulations.
To read more go here
Posted on
Incorporating a Minimum Tax in a Territorial System
This report discusses the important and timely issue of the proper design of the U.S. international tax system. Specifically,we discuss the appropriate tax treatment of the future foreign-source income of U.S. multinational corporations (MNCs).
To read more go here Subscription Required
Posted on
Amazon is ordered to pay nearly $300 million by EU over 'illegal tax advantage'
To read more go here
Posted on
International Tax Initiatives Could Affect Caribbean Economies, Report Says
Greaterworldwide pressure to improve tax transparency may be partly to blame for the loss of key correspondent banking relationships (CBRs) among banks in Caribbean countries, many ofwhich rely on low tax rates and a bustling offshore financial services industry, according to a new report.
To read more go here Subscription Required
Posted on
E.U., Citing Amazon and Apple, Tells Nations to Collect Tax
European competition regulators onwednesday mounted a push against tax avoidance by Silicon Valley giants, announcing plans to take Ireland to court for failing to collect back taxes from Apple and ordering Luxembourg to claim unpaid taxes from Amazon.
To read more go here
Posted on
EU Countries Seek Legislative End-Around on Digital Tech Tax
EU nations led by France and Italy reinforced the need for an "equalization tax" or turnover tax on large internet companies such as Facebook Inc. and Amazon.com Inc., and suggested theywould use special legislative procedures to impose one in the event all 28 EU-member countries don't back the levy.
To read more go here
Posted on
EU Seeks Compromise on Tech Taxes as Macron Rails Against Google
The European Commission set itself the challenge of finding a formula thatwill satisfy leaders both like France's Emmanuel Macron,who's demanding giant tech companies pay more taxes, aswell as those concerned about driving their business away.
To read more go here
Posted on
Tax Chiefs Launch Pilot of Joint Risk Assessment Program
The heads of nearly 50 tax administrationswill launch a joint risk assessment pilot to encourage multilateral talks between large multinationals and tax authorities and to enhance tax certainty.
The Forum on Tax Administration (FTA),which concluded its plenary meeting in Oslo on September 29, announced in a communiqué that the voluntary pilot for its international compliance assurance program (ICAP)will kick off in January 2018 and involve seven FTA members ÔøΩ Australia, Canada, Italy, the Netherlands, Spain, the United Kingdom, and the United States.
The Forum on Tax Administration (FTA),which concluded its plenary meeting in Oslo on September 29, announced in a communiqué that the voluntary pilot for its international compliance assurance program (ICAP)will kick off in January 2018 and involve seven FTA members ÔøΩ Australia, Canada, Italy, the Netherlands, Spain, the United Kingdom, and the United States.
To read more go here Subscription Required
Posted on
Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market
The current political priorities in international taxation highlight the need for ensuring that tax is paidwhere profits and value are generated. It is thus imperative to restore trust in the fairness of tax systems and allow governments to effectively exercise their tax sovereignty. These new political objectives have been translated into concrete action recommendations in the context of the initiative against base erosion and profit shifting (BEPS) by the Organisation for Economic Cooperation and Development (OECD). The European Council haswelcomed thiswork in its conclusions of 13-14 March 2013 and 19-20 December 2013. In response to the need for fairer taxation, the Commission, in its communication of 17 June 2015 sets out an action plan for fair and efficient corporate taxation in the European Union.
To read more go here
Posted on
Measuring and analyzing the impact of GVCs on economic development
Global value chains (GVCs) break up the production process so different steps can be carried out in different countries. Many smart phones and televisions, for example, are designed in the United States or Japan. They have sophisticated inputs, such as semiconductors and processors,which are produced in the Republic of Korea or Chinese Taipei. And they are assembled in China. They are then marketed and receive after-sale servicing in Europe and the United States. These complex global production arrangements have transformed the nature of trade. But their complexity has also created difficulties in understanding trade and in formulating policies that allow firms and governments to capitalize on GVCs and to mitigate negative side effects.
To read more go here
Posted on
Understanding Precautionary Cash at Home and Abroad
Has the need for precautionary savings driven the dramatic increase in U.S. corporate cash?we show that the run-up in cash is concentrated in foreign subsidiaries of multinational corporations. Precautionary motives explain variation in the level of cash held domestically, but not the level or growth of foreign cash. Multinational firms' foreign cash balances are instead explained by low foreign tax rates and the ability to transfer profitswithin the firm through among related subsidiaries. The firmswith the greatest incentive and ability to transfer income to low tax jurisdictions do, causing cash to accumulate in their foreign subsidiaries.
To read more go here
Posted on
Questions and Answers on the Communication on a Fair and Efficient Tax System in the EU for the Digital Single Market
The taxation of the digital economy is part of the Juncker Commission's fair taxation agenda. The President's call for digital companies to pay their fair share of taxes in his State of the Union speech on 13 September reflects the Commission's commitment to tackling this issue. It is this Commission's view that the international tax framework needs to be reformed so that it effectively captures the value created from the new business models, aswas already stated in a 2014 Commission report. However, it has so far proved difficult to agree on the solutions at global level, as is evident from OECD report in October 2015.
To read more go here
Posted on
CJEU Addresses VAT Exemption for Services Supplied by Independent Groups
The EU VAT exemption for the supply of services by independent groups of persons (IGPs) for some activities undertaken in the public interest applies to all IGPs operating in the public interest, but not to those conducting economic activities related to insurance and financial services, the Court of Justice of the European Union held in three September 21 decisions.
To read more go here Subscription Required
Posted on
IRS: Foreign Entities Must Forget Unfair Old FAQs on FATCA
Foreign financial entities need to forget prior IRS FATCA guidance to ensure consistent compliancewith the legislation, according to an IRS official.
Deleted in the past two years, these online FAQs "are not available to everyone, so itwould be an unfair advantage over" other entities "if some did," IRS attorney Kamela Nelan said Sept. 20 at the Tax Congress for Financial Institutions in London.
Deleted in the past two years, these online FAQs "are not available to everyone, so itwould be an unfair advantage over" other entities "if some did," IRS attorney Kamela Nelan said Sept. 20 at the Tax Congress for Financial Institutions in London.
To read more go here
Posted on
EU Equalization Tax Could Re-balance Tax Burden
A French-inspired EU "equalization tax" on digital companies' turnoverwould hit incomes that are "untaxed or insufficiently taxed," the European Commission said in a communication setting out short-term solutions for effectively taxing the digital economy.
To read more go here Subscription Required
Posted on
Commission: EU could go alone on taxing digital giants
The EU should be prepared to find away to tax digital firms on its own if the rest of theworld takes too long to get its act together.
To read more go here Subscription Required
Posted on
Multinationals Fear Japan Reports Could Spur Outside Audits
Japanese multinational companiesworry that filing their first country-by-country reports in 2018will lead to a barrage of transfer pricing audits by developing countries.
To read more go here
Posted on
Irelands Tax Treatment of Short-Term Vehicle Imports Violates EU Law, CJEU Says
Ireland's treatment of vehicles imported by its residents from other member states under a short-term rental or lease agreement as permanently registered in the country for purposes of applying its vehicle registration tax is a violation of EU provisions guaranteeing the freedom to provide services, the Court of Justice of the European Union has held.
To read more go here Subscription Required
Posted on
U.S. Tech Giants in EU Crosshairs as Tax Clampdown Takes Shape
The European Commissionwill outline on Thursday different options for taxing digital companies as the 28-nation bloc seeks to raise money from an industry that it says provides less than it should to public coffers.
To read more go here
Posted on
China to Expand Tax Incentives to Attract Outsourcing Industry Investment
Chinawill extend tax breaks for advanced technology service enterprises (ATSEs) nationwide to further attract foreign investment.
Starting in 2010, qualified ATSEs enjoyed a reduced corporate income tax of 15 percent, compared to the general tax rate of 25 percent, aswell as an increase in the maximum deduction rate allowable for employee education expenses from 2.5 percent to 8 percent of salary expenses.
Starting in 2010, qualified ATSEs enjoyed a reduced corporate income tax of 15 percent, compared to the general tax rate of 25 percent, aswell as an increase in the maximum deduction rate allowable for employee education expenses from 2.5 percent to 8 percent of salary expenses.
To read more go here Subscription Required
Posted on
Israeli Officials at Loggerheads Over Import Taxes as E-Commerce Booms
A simmering dispute over sky-high prices on consumer goods imported into Israel boiled over thisweek,with one ministry accusing Colgate-Palmolive Co., Unilever Plc., Procter & Gamble Co. and other major manufacturers of "gluttony" and treating Israeli consumerswith "contempt."
To read more go here
Posted on
Trustees of U.K. Pension Fund May Seek Tax Credit Under EU Law, CJEU Finds
Pension fund trustees can rely on EU law to claim that the foreign income dividends (FIDs) received by domestic companies inwhich they invested must receive the same tax treatment as the domestic dividends those companies received, the Court of Justice of the European Union held, rejecting the U.K. government's claim that the EU's free movement of capital protections do not apply to the trustees.
To read more go here Subscription Required
Posted on
Residence-Based Taxation: Is Revenue Neutrality Possible?
Among all the personal income tax reforms on the table, changing the taxation of Americanswho reside overseas is one of the most obscure and least discussed. Americans abroad are ignored for two reasons. First, the amount of tax revenue collected under current law represents an insignificant rounding error in the total U.S. budget, 0.15 percent of total U.S. revenue. Second, most members of Congress focus on servicing residents of their states and consider the issues of Americans resident abroad as esoteric and unworthy of their attention.
To read more go here Subscription Required
Posted on
Business Tax Burdens and Tax Reform
Tax reforms affect economic performance by changing incentives for business formation, expansion, and operation. The United States has the highest corporate tax rate among OECD countries in 2017, and despite offering significant additional deductions, exclusions, and tax credits, imposes the heaviest tax burdens. This paper offers a new measure of corporate tax burdens based on information in tax expenditure budgets; this measure implies that the burden of U.S. corporate taxation in 2017 is equivalent to that produced by a corporate tax rate between 31.2-34.6%without additional deductions, exclusions, or tax credits.
To read more go here
Posted on
Options for Corporate Tax Reform, 2017
The coming year offers the opportunity to do reforms to fix problems of the corporate tax system that have accumulated over many decades. The Tax Reform Act of 1986 provided a major reform of the personal income tax, reducing the top rate from 50 percent to 28 percent and lowering other rates in a revenue neutral and distributionally neutralway. But it did not improve the corporate tax system.
To read more go here
Posted on
Demystifying the Destination-Based Cash-Flow Tax
This paper describes the Destination-Based Cash-Flow Tax (DBCFT), as proposed in 2016 by Republicans in the US House of Representatives, and its potential economic effects. As a new approach and a major departure from the existing business tax system, the DBCFT and its motivation have been poorly understood by many in government, the business community, and the economics profession.
To read more go here
Posted on
A Macro Perspective on Border Taxes
Tax policy that differentially treats domestically produced and foreign produced goods have long been a part of the arsenal of policy makers. These 'border taxes' can be explicit and take the form of import tariffs and export subsidies or more subtle in the form of value-added taxes (VAT) and payroll tax cuts.
To read more go here
Posted on
BRICS support digitisation to curtail tax evasion
The leaders of Brazil, Russia, India, China and South Africa (BRICS) reaffirmed their commitment to achieving a "fair and modern global tax system" that includes a deeper cooperation between the nations and on the OECD BEPS project. Digital enhancementswill play a large part in their efforts to achieve this.
To read more go here Subscription Required
Posted on
Spain Threatens Penalties if Companies Pay National Taxes to Catalonia
Not content towait for the results of a controversial referendum on independence from Spain scheduled for October 1, the government of the region of Catalonia said September 1 that public sector companies must pay national taxes to the region's recently beefed up tax agency. Spain's Ministry of Finance quickly announced that any company that doesn't meet its national tax obligationswill be penalized.
To read more go here Subscription Required
Posted on
Switzerlands new corporate tax reform proposals likely to succeed
The Swiss Federal Council has released its new corporate tax reform proposals that resolve many of the issues raised in its earlier failed attempt. However, companies and entrepreneurswill be the ones paying for the changes this time.
To read more go here Subscription Required
Posted on
CJEU: French Conditions on Withholding Exemption Violate EU Law
French legislation that conditions an exemption fromwithholding tax on profits distributed by a resident subsidiary to a nonresident parent company controlled by residents in third states on proof that the distribution's purposewasn't to benefit from the exemption violates EU law because it introduces a general presumption of fraud, the Court of Justice of the European Union has held.
To read more go here Subscription Required
Posted on
Move Americans to Jobs, Not the Other Way Around
For far too long, U.S. politicians have been promising to bring jobs to Americans. They should instead be encouraging Americans to move to jobs.
The absurdity of tax incentives to "create jobs" reached new heights last monthwithwisconsin's deal to lure iPhone assembler Foxconn Technology Group --whichwill reportedly cost taxpayers more than $100,000 per job. By promising to bring employment to depressed areas, politicians have convinced Americans that they have a right to a jobwhere they live, and not that they should livewhere the jobs are. Even though labor-market incentives to relocate have increased over the past 50 years,with growing differences inwages and unemployment around the country, people actually move forwork less and less.
The absurdity of tax incentives to "create jobs" reached new heights last monthwithwisconsin's deal to lure iPhone assembler Foxconn Technology Group --whichwill reportedly cost taxpayers more than $100,000 per job. By promising to bring employment to depressed areas, politicians have convinced Americans that they have a right to a jobwhere they live, and not that they should livewhere the jobs are. Even though labor-market incentives to relocate have increased over the past 50 years,with growing differences inwages and unemployment around the country, people actually move forwork less and less.
To read more go here
Posted on
Austrian conservatives target multinationals and QE in economic draft
The front-runner in Austria's parliamentary election, the conservative People's Party,wants to fight tax avoidance by multinationals and backs a swift end to the European Central Bank's bond purchases, a draft of its economic program shows.
To read more go here
Posted on
News Analysis: A Post-Mortem for the Border Adjustment Tax
The border-adjusted tax, a component of the tax reform blueprint released by the U.S. Houseways and Means Committee last June, had a short life. Rumors of its impending demise had been circulating for months, and GOP lawmakers and the Trump administration dealt it a final blowwith the July 27 release of their joint statement on tax reform, saying they had decided to set the policy aside to advance tax reform.
To read more go here Subscription Required
Posted on
Large Companies Oppose Idea for Taxing Foreign Profits
Congressional Republicans are trying towrite new rules for taxing foreign profits of U.S. corporations, and a group of large, influential companies iswarning against one prominent option.
Under current law, companies owe the full 35% corporate-tax rate on theirworld-wide earnings and have to pay it on any profits they bring back to the U.S. That system encourages companies to book profits overseas and leave them there. The issue is often a flashpoint in debates over changing the tax code.
Under current law, companies owe the full 35% corporate-tax rate on theirworld-wide earnings and have to pay it on any profits they bring back to the U.S. That system encourages companies to book profits overseas and leave them there. The issue is often a flashpoint in debates over changing the tax code.
To read more go here Subscription Required
Posted on
France Considering Temporary Tax on Large Companies
The French government is considering instituting a temporary tax on the largest businesses in France to replace revenues from a 3 percent dividends tax recently struck down by the European Court of Justice.
To read more go here Subscription Required
Posted on
Brazils Revenue Service Issues New Rules for Debt Payment Program
Brazilian tax attorneys reactedwith surprise and concern to an unexpected policy alteration by the country's federal revenue service.
On Aug. 21, the service issued Interpretive Declarative Act No. 5,which prohibits tax debts companies have tried to offsetwith tax credits from being included in the government's new program for the payment of tax debts. The Special Program for Tax Regularizationwas created through a decree issued May 31.
On Aug. 21, the service issued Interpretive Declarative Act No. 5,which prohibits tax debts companies have tried to offsetwith tax credits from being included in the government's new program for the payment of tax debts. The Special Program for Tax Regularizationwas created through a decree issued May 31.
To read more go here
Posted on
Commission Consults on Expanding EU Code of Conduct on Withholding Tax Relief
The European Commission has released a consultation document on dismantling capital market barriers,which seeks stakeholder views onwhether the focus of the code of conduct onwithholding tax relief principles being developed should be expanded beyond addressing barriers that result from currentwithholding procedures.
To read more go here Subscription Required
Posted on
Could Puerto Rico Be the Next Hot Tax Haven?
Some 65,000 Puerto Ricans left their bankrupt U.S. island commonwealth last year. A group of private bankers are moving the otherway. They're increasingly opening offshore banks known as International Financial Entities,whichwere created by a Puerto Rican law in 2012. There are 44 IFEs now,with 18 opening in the past year, according to data compiled by the U.S. territory's financial regulator. "Just in the last six months,we've probably closed seven deals for international banks," says Ryan Christiansen, president of Christiansen Commercial Real Estate, a brokerage based in Puerto Rico that leases office space.
To read more go here
Posted on
Chinese Government to Use Blockchain to Prevent Tax Evasion
The Chinese government plans to use blockchain technology for taxation and the issuance of electronic invoices, inwhatwill be the first ever blockchain project to apply to financial and taxation business.
To read more go here Subscription Required
Posted on
Singapore Advocates for Tax Certainty for Business in the Digital Economy
As countries diverge on their positions on the taxation of the digital economy, Singapore has clarified its own approach,which includes ensuring tax certainty for businesses, achieving tax neutrality between traditional and digital businesses, and reaching international consensus.
To read more go here Subscription Required
Posted on
Ukraine Clarifies Application of Tax Treaty With U.K.
The Ukrainian State Fiscal Service (SFS) has released Guidance Letter 1531/6/99-99-15-02-02-15/IPK (dated August 8), inwhich it clarified the application of Ukraine's tax treatywith the United Kingdom to royalty payments that a Ukrainian legal entity makes to a U.K. resident.
To read more go here Subscription Required
Posted on
Saudi Arabia Sets December Deadline for VAT Registration
Saudi Arabia has set a Dec. 20 deadline for mandatory VAT registration, endingweeks of speculation.
The Saudi VAT law, gazetted July 28, referred to a deadline of "30 days" from its publicationwithout a specific date, sparking speculation from professional advisers and media that businesses liable to pay VAT had only until Aug. 26 or 27 to register.
The Saudi VAT law, gazetted July 28, referred to a deadline of "30 days" from its publicationwithout a specific date, sparking speculation from professional advisers and media that businesses liable to pay VAT had only until Aug. 26 or 27 to register.
To read more go here
Posted on
U.K. Government to Seek Customs, VAT, and Excise Powers Soon
The U.K.will publish a customs bill in the autumn thatwould give the government powers to operate stand-alone customs, VAT, and excise systems to prepare for the possibility that the U.K. and EU are unable to come to a satisfactory post-Brexit customs agreement.
To read more go here Subscription Required
Posted on
News Analysis: New Transfer Pricing Challenge in Chinas Domestic Transactions
Chinese tax law provides that transactions between domestic related partieswith the same tax burden are generally not subject to transfer pricing adjustments if the transactions do not directly or indirectly decrease China's overall tax revenue. However, Chinese companies may face a new transfer pricing challenge in this area.
To read more go here Subscription Required
Posted on
U.K. Brexit Plans Hint at New VAT, Customs Regime
The U.K. Government's suggestion for a standalone VAT regime has started to unfold in a recently published policy paper on the country's future customs arrangementsÔøΩto ensure "the UK is prepared for all possible outcomes."
To read more go here
Posted on
EU Mulls Options for Sanctions for Tax Haven Blacklist
European Union member states are considering various options for sanctions on countries that end up on the EU's tax haven blacklist, including a flexible approach that could lead to different EU countries imposing different measures against the same offending jurisdiction.
To read more go here
Posted on
Estonia Welcomes Chance to Steer in EU Digital Tax Storm
EU presidency holder Estonia has committed to doubling down on solving the bloc's tricky digital economy tax issueswhen EU finance ministers meet Sept. 15-16, following revelations U.S.-based Airbnb paid only about 100,000 euros ($117,000) in taxes in France in 2016.
To read more go here
Posted on
CCCTBs Research and Development Provisions Insufficient, EU Working Paper Finds
The European Commission's most recent Common Consolidated Corporate Tax Base (CCCTB) proposal includes research and development provisions but is not ambitious enough on its own to reach the European Union's target of investing 3 percent of GDP in R&D by 2020, according to an EUworking paper.
To read more go Subscription Required
Member Companies
