Int'l Tax News

The Internal Revenue Service sets an Oct. 22 hearing on its proposed rules to implement the one-time repatriation tax; a New York State Bar Association Tax Section report recommends beneficial treatment for basis adjustments in calculating previously taxed income so itwon't face another tax.

The Australian Taxation Office has issued updated practical compliance guidelines regarding the treatment of transfer pricing issues related to offshore marketing, sales, and distribution hubs.

In this article, the author discusses the Court of Justice of the European Union's judgment in NN, inwhich loss relief for Danish groupswas successfully challengedwhen a Danish permanent establishment of a nonresident group company encountered final losses that could not be relieved in Sweden because of a Swedish merger operation.

The Australian governmentwants to advance by five years a reduction of the tax rate for small and medium-size businesses from 27.5 percent to 25 percent.

Oxfam onwednesday rejected Singapore's defense of its low taxes after the NGO ranked thewealthy city state among the 10worst-offending countries in fuelling inequalitywith its low-tax regime.

During 2017 and 2018, Mexico's President issued diverse decrees designating the following Mexican regions as special economic zones (SEZs): Puetro Chiapas, Coatzacoalcos, Progreso, Salina Cruz, Dos Bocas, and Champoton. The tax benefits applicable in the SEZs include: exemption of income tax for the first 10 years; fifty percent reduction of income tax for the next five years; zero percent VATwhen acquiring goods for use in the SEZs; zero percent VAT on services rendered to an investor; and goods imported to Mexico to be used exclusively in the SEZs are not treated as imports.

Multinational companies and their advisors have until before 30 November 2018 to comment on the Australian Treasury's Discussion Paper on "The digital economy and Australia's Corporate Tax System." This article examines the Discussion Paper,with some reference to U.K. and European proposals.

The Netherlands' 2019 Budget includes measures to gradually reduce the corporate income tax rates, to limit loss carry forward and to abolish dividendwithholding tax and introduces a conditionalwithholding tax on intra-group dividend distributions to low tax jurisdictions.

India's tax authority isworking to make the country an easier place for multinational companies to do business,which is a shift from its long-running adversarial approach toward foreign companies.

Brazil's leftist presidential candidate Fernando Haddad said in a radio interview on Thursday that he plans to send tax and bank reform bills to Congress if elected in October.

Japanese companies are stepping up plans to move businesses out of the UK, on the premise that their country's tax authorities have granted a temporary amnesty on cross-border mergers between Britain and other EU countries ahead of Brexit.

This article discusses Australia's thin capitalization rulesÔøΩwhich refer to the amount of debt used to fund Australian operations in comparisonwith the amount of equity capital and may limit debt deductions (such as interest) for certain thinly capitalized entities.

Deere & Co., better known as John Deere, is pushing the IRS to grant it a company-specific exception to the 2017 tax overhaul's levy on offshore cash, andwhile the exceptionwould be a narrow one, the tractor maker isn't alone in asking for it.

This article discusses a recent Tax Court case inwhich the taxpayers moved their former operating subsidiaryÔøΩwith its substantial cash holdings after a sale of the operating assetsÔøΩfrom Hong Kong to Cyprus. The author finds the moveÔøΩmade in anticipation of extracting a dividend that the taxpayers sought to classify as "qualified dividend income"ÔøΩdidn'twork out verywell.

Offshore holdings of bonds issued by China's policy banks rose to a new high in September after the cabinet announced a tax-rule change aimed at attracting more foreign participants to theworld's third-largest bond market.

The European Union is considering screening its own member states to assesswhether they should be included in the bloc's blacklist of tax havens.

Oxfam onwednesday rejected Singapore's defense of its low taxes after the NGO ranked thewealthy city state among the 10worst-offending countries in fuelling inequalitywith its low-tax regime.

France's push for an EU-wide digital tax targeting the likes of Apple and Google has hit another potential stumbling block after Brussels lawyers questioned the legal route used to impose a "temporary levy" on tech giants.

EU presidency holder Austria is considering creating an allowance to "mitigate a cliff-edge effect" for companies close to the 50 million euros ($57 million) threshold that is part of its digital tax proposal.

Irish-based multinational corporationswill be subject to a 12.5 percent exit rate on assets moved from Ireland starting Oct.10, Finance Minister Paschal Donohoe announced as part of the 2019-20 budget release.

ExxonMobil, the largest US oil group, is giving $1m to support a US campaign to address the threat of climate change by introducing a carbon tax,whichwould return revenues to the public in dividend payments.

Advocates of taxing fossil fuels believe their position is stronger now because of an alarming new report on climate change and a Nobel Prize awarded to by two American economists, but neither development is likely to break down political resistance to a carbon tax.

International and Dutch unions filed a complaintwith a global trade body on Tuesday accusing Chevron Corp. of funnelling billions of euros through letter box companies in the Netherlands to avoid taxation.

In a supplemental letter brief for the Ninth Circuit, the government argued that the six-year limitations period that generally applies to procedural challenges under the Administrative Procedure Act does not apply in Altera Corp.'s transfer pricing case challenging the validity of 2003 cost-sharing rules.

In this article, the authors discuss the Court of Justice of the European Union's decision in Hornbach-Baumarkt,which reassessed the compatibility of EU members' domestic transfer pricing rules and EU law.

In this article, the author discusses tax competition in Belgium and the arrival of pension funds.

Puerto Rico's governor has rejected a proposal by the Senate president to include a tax increase on the income of controlled foreign corporations in a tax reform package before the legislature.

Although more mutual agreement procedure cases are being closed than ever before, the global inventory is still on the rise,with some jurisdictions faring better than others, according to new statistics from the OECD.

The European Commission should broaden the scope of its proposed digital services taxwhile increasing the rate to 5 percent, and provide better definitions of digital activity, according to two reports from a parliamentary committee.

Tax Executives Institute Inc. has suggested several changes to proposed regulations (REG-104226-18) under section 965, including changes to provide a specified exclusion from the definition of cash position, changes to prevent double counting of earnings and profits, changes regarding the basis election, and changes regarding the treatment of overpayments.

Libin Zhang of Roberts & Holland, in his personal capacity, has offered awide range of comments on proposed transition tax regulations (REG-104226-18) and recommended revisions to 31 areas of the regs.

McDermottwill & Emery has requested clarification in proposed transition tax regulations (REG-104226-18) that stock in a corporationwill not be included in a specified foreign corporation's cash position if the stock properlywas not reported as a current asset on audited financial statements.

Davis Polk &wardwell LLP, on behalf of a client, have asked that proposed regulations (REG-104226-18) under section 965 be modified so that they take into account cash positions of a specified foreign corporation only if that corporationwas in existence on one of the earnings and profits measurement dates, asserting that the relevant requirement under the regs is an impermissible implementation of section 965.

Deere & Co., commenting on proposed regulations (REG-104226-18), has highlighted anomalies that could occur in measuring a U.S. taxpayer's cash position under section 965 for purposes of applying the transition tax, suggesting changes to exclude specified amounts from liquid assets.

The National Foreign Trade Council has offered awide range of comments on proposed transition tax regulations (REG-104226-18) and recommended many revisions in light of the complexity of the regs and their significant impact on U.S. income tax administration and compliance.

Abercrombie & Fitch has requested changes to proposed transition tax regulations (REG-104226-18) so that the anti-avoidance rule only provides for disregarding transactionswhen the taxpayer has not rebutted a presumption that the electionwas made principally to reduce a section 965 element.

The U.S. Chamber of Commerce and a coalition of business organizations have asked Treasury and the IRS to revise relevant section 965 guidance on the application of overpayments to allow taxpayers to choose how to apply their tax payments, asserting that Congress explicitly gave taxpayers the election to defer their tax liabilities under section 965.

Treasury should revise its position in proposed regs on section 965 and permit taxpayers to use a facts and circumstances test to analyze the liquidity of cash assets, according to the National Association of Manufacturers (NAM).

Lawyers for the EU Council cast further doubt on the European Commission's controversial digital services tax (DST), arguing that it's not an indirect tax on the legal basis onwhich itwas presented.

The proposed consolidated group global intangible low-taxed income allocation rules minimize U.S. shareholders' planning opportunities concerning their controlled foreign corporations, but issues remain.

The U.S. tax overhaulwas designed to let companies bring home their offshore earnings tax-free after a one-time payment of the transition tax, but other factors ÔøΩ including snags elsewhere in the revenue code ÔøΩ complicate the decision ofwhether to repatriate at all.

The U.S. Chamber of Commerce has provided comments on a range of topics under proposed transition tax regulations (REG-104226-18), addressing issues such as exclusions from cash positions, determining foreign cash positions and previously tax income, and the applicable attribution threshold.

In this article, the authors explain how to calculate the amounts needed to compute U.S. tax liability resulting from section 965 using theworksheets provided in Publication 5292, focusing on the section 965(c) deduction and the disallowed foreign credits. Draft Form 965, issued on August 30, 2018, incorporates theworksheet.

In this article, the authors examine changes in the transfer pricing environment on both an international level and in the United States specifically, including changes in the IRS's approach to transfer pricing enforcement and in the advance pricing agreement process, to determine how these shifts affect taxpayers' desire to pursue an APA in the United States.

Carbon emissions pricing is necessary to avoid some of the most catastrophic potential effects of globalwarming in a cost-effectiveway, but higher taxes likelywon't be enough on their own, a new report says.