Int'l Tax News

The European Union is resuming efforts to create a common system for calculating the tax base of businesses operating in the EU, and aims to adopt the OECD BEPS package by the end of the Dutch EU presidency in June, a top official said.

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

Belgium's "excess profit" tax scheme is illegal under EU state aid rules because it confers tax advantages upon multinational corporations at the expense of smaller competitors, the European Commission said, adding that as a result, Belgium must recover ÔøΩ700 million from at least 35 multinationals based primarily in the EU.
For thewWTD story, go here. (subscription required)

2016 should be the year of corporate tax reform and fiscal transparency, tax Commissioner Pierre Moscovici told MEPs from the Special Committee on Tax Rulings and the Economic and Monetary Affairs Committee at a hearing on Monday evening. "We have a serious problemwith tax avoidance and lack of transparency. Too many people have looked the otherway", Mr Moscovici said.
For the European Parliament release, go here.

TheEuropean Commissionsaid on Monday that a corporatetaxbreak that Belgium granted to at least 35 companies, amounting to total reductions equivalent to about $765 million,was illegal.
For the New York Times story, go here.

Just about every American chief executive has the same dream: to get out from under the corporate income tax. For many, that means lobbying Congress to change the tax code. But for a growing number, it also involves increasingly creative ÔøΩ and successful ÔøΩ tricks to avoid their liability.
For the New York Times article, go here.

The U.S. House of Representatives' top taxwriterwants a vote this year on legislation moving the United States to a territorial-style tax system aimed at exempting the earnings of American companies abroad from U.S. taxation.
For the Reuters story, go here.

The biggest corporate deal of 2015was also, in the view of many, the shadiest: Pfizer's $160-billion mergerwith the Irish drug company Allergan. It's a "tax inversion"ÔøΩPfizerwill in effect be reconstituting itself as an Irish company, in order to lower its taxesÔøΩand that'swhy so many people found it so offensive. Hillary Clinton said that ending inversionswasn't just about fairness but about "patriotism"; Donald Trump called the deal "disgusting." It's got to make youwonderwhen even Trump finds your moneymaking schemes repugnant.

For the New Yorker story, go here.

U.S. multinationals preparing their country-by-country reports under new federal regulations may find they have to pull in data from a broad range of sources and not just from forms already being filedwith the Internal Revenue Service, practitioners said.

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

There is rising interest in increasing shareholder taxes and using that revenue to reduce the burden of the corporate tax by providing shareholder credits or by cutting the corporate rate. Butwhat are the implications of these changes for cross-border investment and profit shifting?which approach is preferable?
For the Tax Notes article, go here. (subscription required)

How extensively the country-by-country (CbC) reporting regime affects U.S. businesses and tax revenuewill depend on how vigorously the U.S. competent authority defends the arm's-length standard.
For the Tax Notes article, go here. (subscription required)

Itwill be critical for multinational enterprises to prepare transfer pricing documentation that portrays their global operations in away that supports the allocation of profit in their country-by-country (CbC) reports, according to a panel that included David Varley, former acting director of transfer pricing operations at the IRS.
For the Tax Notes article, go here. (subscription required)

Mindy Herzfeld reviews Australia's first public disclosures of tax information,whichwere made last month, and discusseswhy the information reported may be more likely to mislead the public than to inform it.
For the TNI article, go here. (subscription required)

Multinational enterprises that fail to complywith Australia's recently adopted country-by-country reporting requirements are subject to financial penalties, prosecution and court orders, but a number of MNEs are expected to pay the penalties rather than complywith the new requirements.
For thewWTD story, go here. (subscription required)

Itai Grinberg proposes that the U.S. Treasury consider applying a little-known, never used U.S. tax law to counter the European Commission's pending "discriminatory" state aid investigations.
For the TNI viewpoint, go here. (subscription required)

Kyle Pomerleau of the Tax Foundation describes the International Tax Competitiveness Index,which measureswhether OECD tax systems are competitive and neutral, and gives examples of good and bad country models.
For the TNI viewpoint, go here. (subscription required)

The European Commissionwill force Belgium to claw back about ÔøΩ700 million from at least 35 multinational companies, claiming the country's tax rules amounted to illegal state aid and hurt smaller peers.

The Commission did not name the companies but said more than halfwere European and their sharewas ÔøΩ500 million of the total unpaid taxes. It is now up to the Belgian government to determinewhich companies got overly generous tax breaks.

For the Politico story, go here.

European Competition Commissioner Margrethe Vestagerwill announce that the Belgian 'excess profits' tax scheme is illegal in a press conference today.
For the ITR story, go here.

Corporationswill continue towork around Treasury Department guidance restricting inversions if Congress doesn't overhaul corporate tax law, a National Foreign Trade Council executive said.
"Treasury rules are going to make it very restrictive ofwhat you can do," Catherine Schultz, vice president for tax policy at the NFTC, told reporters Jan. 7. "There are a lot of very good tax lawyers out therewho are going to look atwhat Treasury is going to put out and seewhere the lines are being drawn and how they are going to change it."
For the BNA article, go here. (subscription required)

Companies holding foreign profits abroad shouldn't expect a reduced tax rate for repatriating those earnings this year, said a top Republican House staffer.

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

Panamawill decidewhether to adopt or reject BEPS by March, a government official said, adding that the tax haven has established a multidisciplinary committee to assess the Organization for Economic Cooperation and Development tax avoidance program's potential effects on its flagship services economy.

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

The interest deductibility restrictions proposed under action 4 of the OECD's base erosion and profit-shifting project may significantly affect valuations in private equity deals, according to a panel of transfer pricing and mergers and acquisitions tax practitioners.
For the TNT article, go here. (subscription required)

The 2015 Amended Finance Act and the 2016 Finance Act include other tax measures that are beyond the scope of this Insight.
For the ITR article, go here.

On December 22, 2015, the Dutch Senate approved a new lawwhich entered into force January 1, 2016 containing detailed transfer pricing documentation requirements in linewith Action 13 of the OECD's 'Base Erosion and Profit Shifting' (BEPS) initiatives.

For the PwC Insight, go here.

Reuven S. Avi-Yonah reviewsThe Rise of the Value-Added Taxby Kathryn James and discusses the possibility of a VAT being implemented in the United States.
For the Tax Notes book review, go here. (subscription required)

Kimberly Tan Majure and Monica Zubler of KPMG follow up on their previous article regarding country-by-country reporting for partnerships to examine new regulations (REG-109822-15) proposed by Treasury and the IRS in December. "In our view, the proposed regulations are a bit of a mixed bag for U.S.-based groups; the regulations provide some very helpful guidance, but leave significant challenges on the table for U.S. MNEs," the authorswrite.
For the BNA Insight, go here. (subscription required)

Stewart Karlinsky examines recent tax developments in S corporations, C corporations, the international area, and the partnership area.
For the TNT viewpoint, go here. (subscription required)

Robertw.wood and Huy C. Luu discuss tax planning for U.S. investors in emerging ASEAN economies.
For thewWTD article, go here. (subscription required)

The Luxembourg Parliament on December 17, 2015, enacted Bills 6847, 6891, and 6900 relating to the 2016 Luxembourg budget. The enacted bills,which have changed little from earlier versions, introduce new tax measures that affect both corporations and individuals.

For the PwC Insight, gohere.

International Tax News is designed to help multinational organisations keep upwith the constant flow of international tax developmentsworldwide. Among the topics featured in this month's edition are:

The 2015 Irish Finance Bill
The OECD's final report on BEPS Action 4
The UK tax authority's updated guidance on the Diverted Profits Tax
Kenya reintroduces capital gains tax on transfers of Kenyan property

For this month's edition, gohere.

James Fuller comments on U.S. tax developmentswith international implications, focusing this month on STARS transaction cases, the U.S. Treasury's announcement of additional inversions regulations, BEPS developments, and proposed revisions to the U.S. model treaty.
For the TNI article, go here. (subscription required)

Matthew Gilleard introduces this exclusive, comprehensive insight into thework of the OECD in the area of countering tax base erosion and profit shifting (BEPS).within these covers youwill find out about the key messages delivered under each of the OECD's 15 Actions, direct from the individuals responsible for putting each aspect of the project together.
For the ITR article, go here.

With the release of the OECD's base erosion and profit-shifting final reports last October, the fiscal stakeswere high for all countries involved during 2015. Representing the United States and its interests at the BEPS negotiating tablewas Robert Stack, Treasury deputy assistant secretary (international tax affairs) and lead U.S. delegate to the OECD's Committee on Fiscal Affairs. Because of his role in shaping the final BEPS reports and protecting U.S. interests, Stack isTax Notes' 2015 person of the year.
For the Tax Notes article, go here. (subscription required)

In news analysis,william Hoke examines the tax implications of conducting business from an imaginary, self-sufficient cruise ship called the SS Stateless.
For the Tax Notes article, go here. (subscription required)

Jesse Eggert, Liz Chien, and Eric Robert explainwhy the digital economy cannot be ring-fenced for tax purposes.
For the ITR story, go here.

Major financial institutions and trade groups, in a series of comments to the Internal Revenue Service, lodged a plea for an industry exception to proposed regulations thatwould impose tax on the outbound transfer of foreign goodwill and going concern value.
For the DTR story, go here. (subscription required)

One of the most significant events of 2015was the release of the final reports on the OECD's base erosion and profit-shifting project,which the G-20 endorsed at its summit in November.
Although the final reports have been heralded as a major accomplishment in the effort to address BEPS, they have drawn criticism for straying from established principles and for retaining a fundamentally flawed system. The project now enterswhatwill likely be a turbulent implementation phase.
For the TNT story, go here. (subscription required)

The Internal Revenue Service's proposed rules on country-by-country reporting contain few surprises, practitioners say, but raise several questionsÔøΩincluding an unexpected one aboutwhether the new requirements should include an exception for national security reasons.


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

Many developing countries may implement the recommendations of the BEPS project that are relevant to them. This list of countries and topics seems to bewider than many commentators expected.

The OECD's Task Force on Tax and Development meeting on 2-3 November 2015 allowed a number of countries to specify points of satisfaction or dissatisfactionwith the BEPS recommendations. Therewere further, similar opportunities at recent regional BEPS meetings in various locations. The first plenary session of the Ad Hoc Group on the Multilateral Instrument and the 20th Global Forum on Tax Treaties also showed high levels of participation from developing countries.

For the PwC Tax Policy Bulletin, gohere.

Toddwelty, Mark P. Thomas, Laura L. Gavioli, and Cym H. Lowell discuss the need to improve international tax dispute resolution processes in light of the predicted increase inworldwide tax disputes.
For thewWTD article, go here. (subscription required)

Differences between the effective dates in the proposed country-by-country (CbC) reporting regulations(REG-109822-15) issued by Treasury and the IRS and those in the report on action 13 (transfer pricing documentation) of the OECD's base erosion and profit-shifting program may create timing mismatch problems, according to KPMG's Manal Corwin and Kimberly Tan Majure.

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

The IRS should exclude partnerships that have limited opportunities for abuse from rules thatwill crack down on transferring appreciated assets to foreign partners to escape U.S. tax, the New York State Bar Association Tax Section said.

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

The New York State Bar Association Tax Section urged the IRS to make it clear that multiple controlled foreign corporations that support a debt obligation of a U.S. personwon't each be stuckwith the entire obligation under tax code Section 956(d).

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

The 2013 BEPS Action Plan recognised that "actions to counter BEPS must be complementedwith actions that ensure certainty and predictability for business". Edward Barret and Evelyn Lio track thework of Action 14 of the BEPS Action Plan,which called forwork to improve the effectiveness of the mutual agreement procedure (MAP) and thereby address obstacles that currently prevent countries from solving treaty-related disputes and minimise as much as possible elements of uncertainty related to the interpretation and application of novel rules resulting from the otherwork on BEPS issues.
For the ITR article, go here.

Here's some consolation for Americans concerned about theway the Obama Treasury has been circumventing Congress and the statutory rule-making process to stop U.S. companies from moving overseas. The latest merger news suggests that,while the anti-inversion policy lacks a legal foundation, Treasury Secretary Jack Lew may be too incompetent to implement it anyway.
For thewall Street Journal article, go here.

Congresswill review new Treasury regs on country-by-country reporting in order to prevent the establishment of base erosion and profit-shifting policies that enable foreign governments to misuse information reporting and exploit U.S. companies, Houseways and Means Committee Chair Kevin Brady, R-Texas, said in a December 21 statement.
For the statement, go here.

With tax extenders out of theway,ways and Means Committee Chair Kevin Brady, R-Texas,wants to focus on international tax reform in 2016 and set the stage for a broader tax overhaul after the presidential election.
Brady,who took over as committee chair in early November, told Tax Analysts in two exclusive conversations on December 17 and 18 that he has one-, two-, and four-year plans in mindwhen it comes to overhauling the tax code.
For the TNT story, go here. (subscription required)