The ITPF News Blog is managed by the students at the University of Florida Levin College of Law International Tax LLM Program.
By The Editorial Board
Rule No. 1 for international economic affairs ought to be “Don’t give Donald Trump a legitimate excuse for a trade war.” French President Emmanuel Macron missed the memo, which explains why Paris is pushing a new digital tax that even the Germans don’t want for Europe. The digital services tax approved by the National Assembly last week imposes a 3% levy on sales by global tech companies in France. If the companies have no profits, they will still pay the tax. The theory is that 80-year-old global agreements that tax profits in a company’s home country are outdated in the digital era.
By Douglas Holtz-Eakin
The business tax reforms embedded in the Tax Cuts and Jobs Act (TCJA)remain the crown jewel of the Trump administration’s economic policy. They are part of the reason that year-over-year macroeconomic growth has ramped up from 1.3 percent in the second quarter of 2016 to over 3 percent in early 2019, that labor productivity growth has rebounded to 2.4 percent in the first quarter of 2019 and that there is reason to expect an upshift from the previous trend growth rate of 2 percent or below. That crown jewel will be at risk when Treasury Secretary Mnuchin attends this week’s G7 Finance Minister summit in France.To read more go here
By The Associated Press
Finance officials from the Group of Seven rich democracies will weigh risks from new digital currencies and debate how to tax tech companies like Google and Amazon when they meet at a chateau north of Paris starting Wednesday. Those issues, raised by the impact of digitalization on the world economy, are at the top of the agenda for a two-day gathering hosted by French Finance Minister Bruno Le Maire and including U.S. Treasury Secretary Steven Mnuchin.
Germany's Ursula von der Leyen, seeking to become the first female head of the European Commission, has said she wants U.S. tech giants to pay "fair taxes" in the EU instead of gaming the different systems across the bloc to cut their bills. If she should win the European Parliament's backing for the job, and implement the policy, it could further strain ties between the European Union and the United States, already troubled by differences over trade, antitrust and politics.
By Danish Mehboob
Multinational businesses are simplifying structures to navigate the rules that target controlled foreign corporations (CFCs) and their shareholders. ITR asked those tax heads who have adopted this approach to share their business’s operational changes.
By International Tax Review
Cryptocurrencies are still capturing the attention of investors, traders and enterprises around the globe, lauded for their potential as a radically transformative force on the existing financial playing field. But legal systems are yet to catch up.
By Tiffany Hu
The U.S. on Monday offered more detail on its investigation of France’s plan to raise taxes on foreign tech companies that was announced last week, laying out exactly which aspects of the plan it believes may run afoul of global trade rules. Following U.S. Trade Representative Robert Lighthizer’s July 10 announcement of the probe, his office has formally launched an investigation to determine whether the French “Digital Services Tax” plan would hurt American technology companies.
By Lilian V. Faulhaber
Last Thursday, the French Senate passed a digital services tax, which would impose an entirely new tax on large multinationals that provide digital services to consumers or users in France. Digital services include everything from providing a platform for selling goods and services online to targeting advertising based on user data, and the tax applies to gross revenue from such services. French politicians and media outlets have referred to this as a “GAFA tax,” meaning that it is designed to apply primarily to companies such as Google, Apple, Facebook and Amazon — in other words, multinational tech companies based in the United States.
Online advertising group Adevinta said the newly introduced digital tax in France lacked clarity but would likely hit the Norwegian company's earnings as it posted second-quarter earnings roughly in line with expectations. France's Senate gave final approval to a tax on big technology firms on Thursday. The 3% levy would apply to digital revenues from digital services earned in France by firms with more than 25 million euros ($28 million) in French revenue and 750 million euros worldwide. It is due to kick in retroactively from the start of 2019.
The Organization for Economic Cooperation and Development has encouraged taxpayers to complete a mutual agreement procedure questionnaire as part of the ongoing peer review process under action 14 of the BEPS Action Plan; comments on MAP access and availability of relevant guidance should be submitted by August 12.To read more go Subscription Required
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