Int'l Tax News

New Zealand has received the OECD's highest tax transparency rating, alongwith 21 other countries. The Organization for Economic Cooperation and Development's Global Forum issued the rating of "compliant," the highest rating possible, after reviewing how the country exchanges tax informationwith authorities.

China's southernmost province of Hainanwill soon see significant tax breaks as part of the country's drive to attract multinationals. President Xi Jinping announced plans April 13 to create a free trade zone on the island by 2020 and a free trade port by 2025, turning Hainan into a beacon for tax reform. Tax breakswill be a top priority among the proposed changes as China seeks to counter the 14 percentage-point tax cut in the U.S.

The Authority for Advance Ruling ("AAR") rulings discussed in the article give both favorable and adverse views on the claim of tax treaty benefit for capital gains of nonresident companies arising from corporate strategy restructuring under Article 13 of the India–Mauritius tax treaty.

Britain's largest public companies face a bill of more than $500 million from the EU's investigation into a U.K. tax scheme, highlighting the growing potential cost of the probe.

The EU is set to boost legal protection for corporatewhistleblowers, saying scandals such as the LuxLeaks tax revelations and Cambridge Analytica data mining underline the importance of shielding thosewho exposewrongdoing.The measures cover peoplewho revealed breaches of awide spectrum of EU law ranging from financial regulations to nuclear safety standards, aswell as flouting of corporate tax rules.

Germanywill keep domestic business interests in mindwhile examining the European Commission's plan to tax the digital economy, a Ministry of Finance spokesman told Tax Analysts. The country's business sector has urged caution regarding the commission's proposals, arguing they could harm domestic industry and escalate trade tensionswith the United States.

While global economic growth in the second half of 2017was its strongest since 2010, the U.S. Tax Cuts and Jobs Act is expected to slow that roll starting in 2020, according to the IMF.

Illinois Toolworks Inc. has supplemented its prior request for guidance on the apportionment of some expenses to global intangible low-taxed income for purposes of the foreign tax credit limitation under section 904(a), providing further details on two issues that the company says are pertinent to the requested guidance.

In this article, the authors examine the international provisions in the Tax Cuts and Jobs Act generally and then focus on how the changeswill affect the tax efficiency of cross-border investment structures involving France and the United States. Many of the conclusions they reach can be extended to apply to investment structures involving the United States and other members of the European Union.

The European Commission is standing by its package of proposals to tax the digital economy despite concerns that they should be revised post-U.S. tax reform and also could slow down progress toward a long-term solution.

The EU moved closer to finalizing some of the toughest company transparency standards in theworld as the European Parliament overwhelmingly approved new beneficial ownership rules for companies and commercial trusts. As part of its push to fight tax evasion, EU lawmakers April 19 approved rules thatwould require EU member nations to publish national registries of the beneficial owners of companies.

New Zealand's Labour government, seeking to follow through on campaign promises, has announced that itwill propose a 12.5 percent research and development credit beginning in April 2019.

The Tax Cuts and Jobs Act (P.L. 115-97) contains several provisions that question the premise of the regulatory authority granted by section 367(b) and how that authority has historically been interpreted by Treasury and the IRS. That's because it's no longer clearwhether the reorganization provisions of the code still provide an effective tool for taxpayers to avoid U.S. income taxes in a cross-border setting.whether any of the section 367(b) regulations make sense after enactment of the TCJA is an open question that has mostly escaped public notice.

The IRS intends to issue guidance on how U.S. multinational corporate families that file a single tax return should calculatewhat they owe under a new "base erosion" tax, an agency official said.

An open letter organized by The Australia Institute has urged the Australian Government not to join a race to the bottom on tax and to instead focus on tackling tax avoidance and tax loopholes.

Promised tax cuts in Israel are unlikely after lackluster revenue figureswere releasedÔøΩthough such a movewould be politically popular and could help the country competewith the U.S., practitioners told Bloomberg Tax.

Big banks posted strong and rising returns on equity in the first quarter, some as high as 15%.while the banks' first-quarter ROEswere strong, a significant chunk of the strength stemmed not from growth in the banks' operations, but from the sharply lower tax rates they're now enjoying because of the federal tax overhaul enacted in December, according to an analysis by Thewall Street Journal.

European Union members of parliament accused countries in the bloc of "protecting the interests" of multinational companies by blocking a proposal requiring them to report profits earned and taxes paid on a country-by-country basis.

The EU's proposal to tax the digital economy has the support of 20 of 28 member nations, European Taxation Commissioner Pierre Moscovici said April 19. "I'd say there's a reasonable chanceÔøΩor a reasonable risk, depending onwhere you stand," that the proposal is adopted, Moscovici said at an American Enterprise Institute forum inwashington.

Among President Donald Trump's most deeply held economic convictions is that trade deficits are bad, yet his signature economic policyÔøΩa major tax cutÔøΩlikelywill deepen the trade deficits he abhors for years to come.

European Union member nations have agreed to analyze the tax revenue impact of a stripped-down version of a common corporate tax base (CCTB) for the bloc asway to ensure there are no "winners and losers" because of the reform.

Companies are holding on to a ton of cash that could end up in shareholders' hands, one reason some investors are turning more optimistic about the stock market. A lot of that cash could go towards buybacks as companies figure outwhat to dowith their fatter profits and bring back overseas money as a result of the recent tax-code overhaul.

Big banks just received the first installment of benefits corporate Americawill reap from the new federal tax law. The haul: more than $2.5 billion. The latest gain came Tuesdaywhen Goldman Sachs Group Inc. reported first-quarter profit that rose 26% from a year earlier. Thiswas aided by a lower corporate tax rate that boosted earnings by about $232 million.

The new Dutch government has announced its policy agenda to address tax evasion and tax avoidance in the Netherlandswhilst at the same time maintaining an attractive investment climate for Dutch and foreign multinational companies.

Forcing up-front payment of disputed tax benefits in avoidance probes has been the U.K.'s most effective new law to fight non-compliance in the past five years, according to a government official.

Digitizationwill undoubtedly change how the European Commission reviews competition issues as more industries are affected by digital tax factors, EU Competition Commissioner Margrethe Vestager said April 13.

An EU Councilworking groupwill discuss a recent meeting of the OECD's Forum on Harmful Tax Practices (FHTP),which began reviewing elements of U.S. tax reform that the EU flagged as potentially problematic.

In this article, the authors discuss Luxembourg's proposed intellectual property tax regime, a new policy designed to complywith the OECD's nexus approach and ensure that Luxembourg remains an attractive location for intellectual property investment.

While members of the OECD'sworking Party 6 are near agreement on final profit-split guidance and a new draft on hard-to-value intangibles (HTVIs), countries remain divided on financial transactions, according to an OECD official.

The EU needs to do furtherwork on its transfer pricing framework and is currently focusing on issues such as joint audits and profit splits, a top EU official said.

Despite the challenges inherent in adding participants to a consensus-based process, the base erosion and profit-shifting project's inclusive framework ultimately gives OECD recommendations moreweightwith nonmember countries, according to an OECD official.

Increasing tax neutrality across different types of savings may encourage more inclusive growth, but there is little need to introducewealth taxes in countrieswith broad-based personal capital income taxes, according to the OECD.

In this article, the authors discuss Mexico's special economic zones, the first five ofwhich are slated to become operational this year, including how the zoneswill function and the benefits theywill provide to investors.

Nathan Boidman reflects on the high tax kickout as applied to the GILTI provision.

US companies are expected to shower investorswith a record amount of share buybacks in the current earnings season, as corporate executives take advantage of major tax cuts and a faltering stock market to increase their repurchase programs.

Lower taxes and higher interest rates have helpedBank of America reach an important threshold for profitability for the first time in seven years, the latest sign that the industry bellwether has put its post-crisis malaise behind it.

Donald Trump's tax reforms have yet to deliver their biggest boost to America's banks or economy, Citigroup chief financial officer John Gerspach said on Friday as his company reported solid growth in first-quarter earnings. "The real benefits of tax reform are really yet to be felt in the overall economy and in corporate actions," Mr. Gerspach told reporters.

The U.K. Treasury's tax simplification adviser has called for a detailed review of tax relief available to businesses at significant stages of their development.when "one looks across the tax charges and reliefs applicable to the business lifecycle as awhole, the picture becomes complex and confusing to many," the Office of Tax Simplification said in an April 16 report.

Drugmakers have been hitworst among Europe's largest economies from a one-off U.S. levy on corporations' overseas earnings, a result of the deal-making boom in the pharmaceutical sector.

Many tax authorities are becoming increasingly specialized in intercompany pricing arrangements of multinationals,which is leading to more audits, practitioners said.

The new U.S. base erosion and anti-abuse tax suggests that U.S. policymakers have lost confidence in the ability of transfer pricing to solve the problem of corporate tax evasion, the OECD's tax policy chief said.

U.S. multinationals are starting to feel the impact of the new tax law's levy onwhat is called global intangible low-taxed incomeÔøΩand analysts and tax practitioners see more effects to come. The announcement of a GILTI-related higher tax rate by Tupperware Brands Corp. is an example ofwhat other companies could face, they told Bloomberg Tax.

Foreign-derived intangible income (FDII) provisions in the new U.S. tax law could activate a "defensive measure" under German law thatwould deny deductions for royalty payments made to U.S. companies, a German tax official said.

The EU still hopes to find an international answer to tax policy changes for internet based companies, a senior official said. "We are now embarking on discussions at the EU level, but that does not mean thatwe've given up on the international discussion, or thatwe in anywaywithdraw from the international discussion," said Bernardus Zuijdendorp, head of the European Commission's Company Taxation Initiatives unit.

The push to overhaul the European Union value-added tax regime has stalled because a majority of member nations oppose an exemption for companies to transition to a destination-based scheme for cross-border sales.

The OECD has published new transfer pricing country profiles for Australia, China, Estonia, France, Georgia, Hungary, India, Israel, Liechtenstein, Norway, Poland, Portugal, Sweden, and Uruguay, bringing the number of such overviews published by the OECD to 44.

HM Revenue and Customs (HMRC) has launched a consultation inviting input on proposals to tackle arrangements entered into by individuals, partnerships, or companies that aim to move UK profits outside the scope of UK taxation, typically through the use of offshore trusts and companies.

The Bank of Canada has published the findings of its latest business outlook survey,which shows some concern among firms over the impact of US trade and tax policies.

Since the spring of 2017, the Bank has asked firmswhether policy announcements from the Trump administration – or the uncertainty around them – have had, or are expected to have, an impact on their business.