Int'l Tax News

In this article, the authors discuss similarities and differences in the U.S. and European approaches to taxing digital commerce.

Troublesome consequences of concern to both Treasury and corporate taxpayers could arise if the business interest deduction limitation affects a corporation's global intangible low-taxed income.

The EU must use every means available to police its own members on aggressive tax planning or risk losing credibility, according to Valère Moutarlier, head of direct taxation and tax cooperation at the European Commission.

This essay analyzes how U.S. state tax laws should treat the repatriation income generated by the 2017 federal tax legislation.

In this article, the author argues that the recentwork of the OECD and its Inclusive Framework project involving preferential tax regimes is misguided. He highlights the nexus approach to patent box regimes and the legitimization of offshore financial centers as particularly toxic developments that ultimately run counter to the expressed goals of the OECD's recentwork.

The applicability of the Tax Cuts and Jobs Act's base erosion and antiabuse tax, regardless ofwhether payments are considered arm's length, reflects congressional frustration over the role of transfer pricing in profit shifting.

A key policy board has recommended that the Japanese government proceedwith a consumption tax increase scheduled for October 2019, but it said incentives are needed to offset possible harm to the economy.

The OECD expects that the U.S. Tax Cuts and Jobs Actwill result in higher investment and strong economic growth, at least in the short term, the organization's chief said.

Computational ruleswith overlapping applicability may result in some guidance on the foreign-derived intangible income (FDII) deduction and the global intangible low-taxed income provision being released together, though the rest may be issued separately.

In this symposium essay, the author suggests that increased transparency and disclosure are the consequence of the increased business border flexibility. Although modern business migration is the fundamental force underpinning the creation of new reporting and disclosure regimes, the regimes' precise shape and timing are a function of convulsive triggers such as tax leaks that drive specific moments of reform.

The Alliance for Competitive Taxation, in comments on transition tax guidance (Notice 2018-26), has offered suggestions regarding the treatment of accrued foreign income taxes for purposes of determining post-1986 earnings and profits and on E&P accounting method changes.

Pamela Olson of PricewaterhouseCoopers has asked Treasury and the IRS to reconsider the application of the section 59A base erosion antiabuse tax to interest disallowed and carried forward under section 163(j), as described in Notice 2018-28, and provide that pre-2018 interest carried forward to years beginning after December 31, 2017, isn't subject to section 59A.

In this article, the authors discuss the new U.S. global intangible low-taxed income rules, highlight uncertainties and potential inequalities between the treatment of individual and corporate taxpayers, and consider potential planning techniques to mitigate the consequences of those rules for U.S. individual shareholders.

The OECD's multilateral instrument (MLI) could be expanded to cover areas like taxation of the digital economy and could serve as a model for new multilateral agreements to modify treaty provisions, a U.K. official said.

Ontario is voting for a new government Thursday after a tight election that offers two starkly different choices for Canada's most populous province. Opinion polls show the Progressive Conservatives, led by an irreverent populist promising tax cuts, likely towin against the left-leaning New Democratic Party,which is pushing higher social spending funded by tax increases. The incumbent Liberals,who have been in power since 2003, are staring at a historic defeat.

Agreeing on draft guidance for pricing intragroup financial transactions continues to be a challenge for OECDworking Party 6 members because fundamental differences persist, including on the relevance of groupwide credit ratings and debt-equity characterization.

Disputes involving OECD "value creation" principles account for many of the U.S. mutual agreement procedure cases, and one of the IRS advance pricing and mutual agreement program's biggest challenges is findingways to resolve them.

Germany and France are close to an agreement on a common corporate tax base (CCTB) in the hopes of advancing the proposal at the EU level, a German finance ministry official said.

Peru's President Martin Vizcarra announced late on Monday that he had accepted his finance minister's resignation as part of a policy shift thatwill focus on collecting taxes owed from large companies.

On May 25, 2018, the Economic and Financial Affairs Council (ECOFIN),which is responsible for European Union tax policy, formally adopted the Council Directive that amends Directive 2011/16/EU on administrative cooperation in the field of taxationwith regard to mandatory automatic exchange of information related to reportable cross-border arrangements. The main purpose of this 'Directive on Administration' (commonly referred to as 'DAC6') is to strengthen tax transparency and deter aggressive tax planning. Although 'aggressive tax planning' is not defined, the Directive references a number of pre-determined 'hallmarks.' These hallmarks could render a cross-border arrangement reportable. DAC6 provides for mandatory disclosure of cross-border arrangements by intermediaries, or individual or corporate taxpayers, to tax authorities.

Ensuring the successful implementation of the Tax Cuts and Jobs Act of 2017 remains the US Internal Revenue Service's highest priority, according to its new five-year Strategic Plan

New rules on intermediaries that design or promote tax planning schemes have been adopted by the European Council.

Italy's Ministry of Finance is seeking stakeholders' feedback onwhether to support the EU's digital tax plans, and in particular its proposal for an "interim tax" on otherwise untaxed turnover earned by certain digital economy firms.

A business group that supports the GOP tax law is highlighting the results of a new poll that shows voters see benefits to the tax cuts,which are a key part of the Republican Party's midterm messaging this fall.

Multinational companies shift about 40% of the profits they earn outside their home countries into tax havens, eluding tax-collection efforts, according to an analysis that points to persistent gaps in government revenue collection. U.S. companies are among the most aggressive users of profit-shifting techniques.

The European Court of Justice has doubled down on its position aboutwhen multinational companies can deduct losses from defunct subsidiaries. The court in its ruling backed a Danish auto parts retailer, and its parent company, saying that Danish tax authorities violated European Union rules by denying the parent company the ability to deduct losses of a non-resident subsidiary.

The new tax law handed most of the top 50 Fortune 500 companies a collective $137 billion in one-time benefits,while imposing nearly $20 billion in charges on the others due to its effect on their deferred tax assets and liabilities, according to a Bloomberg Tax analysis.

Foreign-owned companies in Brazil are struggling to dealwith a sudden reduction in tax credits and fiscal benefits. The government has agreed to create a subsidy for diesel fuel, butwill pay for it by cutting certain tax breaks and tax credits for companiesÔøΩmoves thatwill impact multinational companies and their subsidiaries.

Swiss lawmakers agreed to sweeten a controversial tax reform bill to make sure it doesn't fall victim to a voter referendum that could spur an exodus of Swiss-based multinational companies.

Tax professionals arewatching closely as two-year-old IRS anti-inversion rules are simultaneously being appealed in federal court and reviewed by the Office of Management and Budget.

The European Commission June 7 rejected claims by Sweden, Denmark, and Finland that the new U.S. tax reform law solves issues of European tax avoidance by large U.S. tech companies.

Australia's tax chief Chris Jordan has claimed some of the credit for an expected A$10 billion ($7.6 billion) boost in income tax revenue from large companies this year compared to 2017. Australia's implementation of its strict anti-avoidance law, targeting multinational companies engaged in aggressive tax planning, is among the reasons for the boost.

U.S. spending on consultants hit a fresh record last year as executives and government officials sought advice on navigating the new tax law and evolving technology, according to a report by Source Global Research releasedwednesday.

The IRS unit that resolves intercompany pricing issues is undergoing organizational changes as part of an agency-wide mandate, as enforcement approaches and rules are refinedworldwide.

The Dutch government has published a draft law thatwill sharply curtail the amount of interest thousands of resident group companies are allowed to deduct from their taxable profits.

Willis Towerswatson has found a creativeway to proactively identify tax risks in the changing landscape by using a human resources analytics tool, a director from the company said.

Some businesseswonderwhether the U.S. Treasury could cover the cost of the U.K.'s "Google tax." "The starting point is that a foreign tax may be creditable in the U.S. either under the applicable tax treaty, or under unilateral provisions in U.S. law for granting a tax credit," U.K. barrister Philip Baker QC said. "If it is creditable, then the U.S. Treasury effectively bears the burden."

The U.K. and Canada are close to ratifying the OECD's super-tax treaty as it enters into effect in July, according to the countries' government officials.

The IRS and seven other tax administrations, aswell as eight multinational companies,will gather in July for a midpoint evaluation of a pilot project designed to limit cross-border disputes, an IRS Official said.

The U.S. Treasury Departmentwill give multinational corporations some but not all ofwhat theywant in closelywatched international-tax regulations needed to implement the 2017 tax law, a senior Treasury official said Monday.

Multinational companies are still plagued by India's aggressive tax system, despite the country's claim that it has taken steps to encourage investment.

Chilean President Sebastian Piñera has ruled out a reduction in the top corporate tax rate in upcoming legislation to simplify the tax system, citing squeezed public finances.

The new U.S. tax law addresses international concerns about base erosion and profit shifting more thoroughly than any other jurisdiction's rules, a Treasury official said. The legislation "is actually, in my view, the most far-reaching implementation of BEPS principles that I'm aware of," according to the Treasury official.

The San Francisco Foreign Tax Club sent the Internal Revenue Service a laundry list of guidance requests on the 2017 tax act's base erosion and anti-abuse tax (BEAT) to help the tech industry navigate the law's ambiguities.

Italy's new government may introduce the flat tax that the two coalition parties agreed to in 2019 for companies and in 2020 for individuals, League senator Alberto Bagnai said in an interview.

According to companies, profitswere great in the first quarter. According to government statistics, not so much.

Corporate profitswere bolstered in the first quarter by tax cuts enacted at the end of 2017, but the underlying trend showed some signs of strain.

Britain is takingwhat a minister has described as an "active role" in shaping new EU value added tax regulations for the 2020s, suggesting the Treasury is planning for the UK to remain inside the bloc's VAT area after the Brexit transition period.