By: Michael Devereux
When Margaret Hodge complained about how little tax Amazon paid in the UK, the tax cognoscenti rather patronisingly pointed out that the existing system does not generally give the right to tax profit to the country in which a sale in made. But since then the US House of Representatives Ways and Means Committee, the European Commission, and also the OECD have all put forward proposals which move the system in this direction
By: Dominic Coyle
Single Malt directs profits to countries with which Ireland has a double taxation agreement but that do not have any corporation tax
By: Joe Kirwin (Bloomberg BNA)
European Union presidency holder Estonia has ruled out agreement by the end of 2017 on the pending EU tax intermediary framework designed to clamp down on aggressive tax planning. According to officials, despite pressure to reach agreement—in the wake of the Paradise Papers—negotiations are bogged down on issues such as scope, client confidentiality laws, penalties, retroactivity, the date of implementation, and the hallmarks that will define which cross-border tax arrangements have to be reported.
By: Rick Mitchell (Bloomberg BNA)
France's Parliament definitively adopted on November 14th a bill that forces large businesses and multinational groups to pay a one-off “contribution” to help cover a multi-billion euro budget gap stemming from an October ruling that voided a controversial tax on dividends.
By: Peter Menyasz (Bloomberg BNA)
Proposed corporate tax reforms in the U.S. are putting pressure on Canada to consider how to continue to attract business investment. Lower corporate tax rates have given Canada a significant competitive advantage over the U.S. for more than a decade, providing sufficient incentive for companies to shift income and profits to lower-tax Canada and expenses to the U.S. But if the proposals before Congress become law, the tide would shift in favor of the U.S.
By: Ryan Finley
Reallocating the global profits of U.S. multinationals using a formula based on sales or employee compensation would have increased U.S. GDP by $3.5 trillion over the 1994-2014 period, according to economist Kim Ruhl of Pennsylvania State University.
By: David Carey (Bloomberg BNA)
Some experts say the House and Senate plans could be a boon to mergers and acquisitions. Provisions in the bills that may set the stage for a wave of acquisitions include provisions that slash the levy that companies pay on repatriated foreign earnings and that let buyers immediately deduct the entire value of the tangible assets—equipment, buildings, land, inventory—of the businesses they acquire.
By: J. Walczak, A. El-Sibaie
Late Thursday evening, the Senate Finance Committee released its version of the Tax Cuts and Jobs Act. The Senate Tax Cuts and Jobs Act shares many things with the House counterpart: both plans reduce the corporate income tax rate, move to a territorial tax system, provide full expensing of certain capital expenditures (on a temporary basis), repeal the alternative minimum tax, provide more favorable tax treatment of pass-through businesses, and eliminate many targeted tax preferences in favor of lower rates and a higher standard deduction.
By: Tax Analysts
The European Economic and Social Committee has published an opinion on taxing the collaborative economy, calling for "the rapid construction of a uniform, integrated European system that ensures common rules for the different Member States regarding the digital economy" and warning against unilateral approaches.
By: Andrew Velarde
While the Senate chair’s mark on tax reform envisions a territorial regime and one-time transition tax on accumulated earnings that is akin to the House’s proposal, some of its more prominent international base erosion measures bear only thematic similarities to its counterpart, with significant operational differences standing between the two.