Int'l Tax News

The OECD model tax convention's beneficial owner definition has no direct relevance for interpreting the same term under the EU interest and royalties directive, according to an opinion by Advocate General Juliane Kokott.

Technological advances and digitization of the traditionalways of doing business have fundamentally changed theway businesses carry out their global activities and are posing new challenges to the international tax framework ÔøΩ a system devised almost a century ago, based on criteria that rely primarily on physical presence.

The European Parliamentary Research Service has issued an in-depth analysis on taxing value created by the collaborative economy, emphasizing the importance of maintaining a level playing field between collaborative economy platforms and traditional incumbent operators.

Tax and mergers and acquisitions specialists haveweighed in, andwhile many expect the new tax law to affect company valuations and M&A strategy, the groups differ on how much influence new rules are expected to have.

First Solar Inc. isweighing an expansion of its manufacturing footprint in the U.S. as a result of the recent tax overhaul, according to Chief Financial Officer Alexander Bradley. The solar-panel maker is booking a one-time charge of $408 million linked to the tax legislation, Mr. Bradley said. The chargewas connected to the company's previously untaxed foreign earnings and the reassessment of deferred tax assets.

U.S. companies arebuying back their shares at an aggressive pace, stirring debates inwashington and onwall Street about how savings fromcorporate tax cutsare being used andwho benefits most. Share buybacks announced by large U.S. companies have exceeded $200 billion in the past three months, more than double the prior year.

Wolters Kluwer N.V. is on the hunt for acquisitions in the U.S. following the federal tax overhaul, according to the company's finance chief, Kevin B. Entricken. The drop in the U.S. corporate tax rate to 21% from 35% is making investments in the country more attractive, Mr. Entricken said. This "is good for a company like us," he said.

Multinational companies that supply electronic and online services to South African consumers may be required to register for value-added tax by Oct. 1, in linewith plans to collect tax revenue from them.

European Union member states have narrowed differences to regulate tax intermediaries but remain stuck on the terms for mandatory reporting arrangements involving tax deductible cross-border payments, especially as they concern corporate tax rates.

Belgium's Constitutional Court has struck down a levy on dividend distributions affecting large companies after finding it incompatiblewith both Belgium's constitution and European Union law. The March 1 judgmentwill benefit companies in cross-border situationswith pending disputes, practitioners say.

The OECD and Brazil on February 28, 2018, launched a joint project to examine the similarities and gaps between the Brazilian and OECD approaches to valuing cross-border transactions between associated firms for tax purposes.

The International Monetary Fund's (IMF) top official said Thursday that a set of U.S. tax cuts signed into law byPresident Trumpin Decemberwould likely boost economic growth and trade, butwarned of soaring budget deficits and of an"overheating impact" on the economy.

Beijing has announced major changes to tax abuse provisions thatwill make it harder for companies to treaty shop, butwill broaden the number of firms that can benefit from tax treaties.

Large companies need to get used to the Australian government publicly disclosing their financial data, according to the senior commissioner of the country's tax authority.

In this article, the authors attempt to solve the policy puzzle behind the global intangible low-taxed income rules in the Tax Cuts and Jobs Act.

The proposed EU tax on digital companies might exclude streaming services like Netflix and Spotify, according to a confidential document from the European Commission. According to the document, seen by Tax Analysts, the tax proposal due to be unveiled March 21will target services that consist of "the valorization of user data by means of making available advertisement space (e.g. Facebook, Google AdWords, Twitter, Instagram, 'free' Spotify), or the sale of such user data." Itwill also target companies that make digital platforms and marketplaces or intermediation services available ÔøΩ for example, Airbnb and Uber. "The business model of such marketplaces heavily relies on the participation of end users in the platform," the document states.

U.S. bank profits dropped3.5 percent in the fourth quarter of 2017, in part due to one-time changes to the tax code, the Federal Deposit Insurance Corporation (FDIC)reported Tuesday.

The Australian Tax Office has updated and added to its list of the guidance on international tax matters it intends to release this year.

Awidelywatched proxy for business investment fell for the second straight month in January, a hint that business spending didn't take off in the immediatewake of landmark tax legislation passed last year that lowered corporate tax rates and created new incentives for investment.

The Netherlands is fighting back against its reputation as a tax havenwith reforms to make it more difficult for companies to set up in the countrywithout a real business presence. The tax proposals,whichwill need to be backed by the Dutch parliament, are part of a bid to clean up the Netherlands' image and attract genuine investment, rather than "shell" or "letterbox" companies.

A $2.4bn benefit from US tax reform helped Altice USA swing to profit in the fourth quarter as the US's fourth-largest cable operator prepares to spin off from its European parent company, Patrick Drahi's Altice NV. "Tax reform is going to have a positive impact on us specifically from a cash flow savings standpoint," said Dexter Goei, chief executive.

The Polish finance ministrywants to introduce an exit tax for corporations and individuals starting from 2019. The proposal,which transposes the EU's Anti-Tax Avoidance Directive (ATAD) into Polish law, is also expected to target tax avoidance through cross-border hybrid instruments, tax practitioners said.

A committee of the European Parliament has approved bywide margins proposals to implement both a common corporate tax base (CCTB) and a common consolidated corporate tax base (CCCTB).

In this article, the author considers China's new Environmental Tax Law and the country's fast-developing carbon emissions trading system, comparing these measureswith past attempts to use taxes to protect the environment and also examining the general efficacy of market-based instruments for limiting pollution and protecting the environment in China and across the globe.

The Israeli tax authority has decided that virtual currencies, such as Bitcoin, should be treated as a form of "property," rather than as foreign currency.

The Polish Government has approved plans to effectively extend the scope of Poland's Special Economic Zones (SEZ) regime nationwide.

EU Tax Commissioner Pierre Moscovici has said that the bloc must "act fast to secure a common approach to digital taxation" and that member states must decide on how to achieve "a fundamental overhaul of our corporate tax systems."

The "Tax Cuts and Jobs Act" (TCJA) enacted on December 22, 2017 includes several provisions that raisewTO compliance issues. At least one such provision, the Foreign-Derived Intangible Income (FDII) rule, is almost certain to draw a challenge in thewTO and is likely to lead to another US loss and resulting sanctions. This outcomewould be another addition to the repeated losses suffered by the US for export subsidies from the 1970s to 2004,which led to the imposition of sanctions and the ultimate repeal of the offending regime. The important question for 2018 and beyond iswhether the Trump administration and its Congressional allieswill react to such a loss in a similar fashion as the Bush administration did in 2004, orwhether itwill defy thewTO,with potential far-reaching consequences for theworld trade order.

U.S. capital markets predict a substantial boost to net income among S&P 500 companies from the recent tax overhaul, though such a collective view by analysts might be too optimistic, Morgan Stanley & Co. LLC researchers said.

U.K. lawmakers have "significant" concerns about the British government's tax bill thatwill create the legal framework for the country's cross-border trade system once it leaves the European Union. In aFeb. 23 report, the House of Lords Constitution Committee said theTaxation (Cross-border Trade) Billgives the government powers that are toowide-reaching and need more parliamentary scrutiny.

The Houseways and Means Committee is heavily focused on fine-tuning the international provisions of the new U.S. tax law, Chairman Kevin Brady (R-Texas) said. "We threw an awful lot of new policy at this economy, especially in the international side," Brady said Feb. 23. "I fully expect that to be the areawherewe do the most fine-tuning."

South Korea is proposing to mandate that a company's profits be reported in annual terms and be included in its country-by-country reports compiling all its units' filings, departing from the previous practice of only reporting deficits. The country's Ministry of Strategy and Finance is consulting on the proposed change, among several amendments it recently made to personal income, corporate income, international tax adjustments, and securities transaction tax laws.

Germany must move to counter the newly reduced corporate tax code in the U.S. to remain competitive in the global market by joiningwith France in harmonizing corporate tax treatments across the bloc, analysts say.

U.S. tax reform has given companies listed on the U.K.'s benchmark FTSE 100 stock index a total short-term financial gain of $22.4 billion, according to data compiled by Bloomberg Tax. The disclosure comes fewer than fourweeks after Bloomberg Taxrevealedthat the overall short-term boost for the U.K.'s largest public companies from the new U.S. lawwas approaching $2 billion.

Europe's highest court has dealt an irrevocable blow to a tax regime that allowed thousands of Dutch companies to deduct intragroup interest expenses from their taxable profits. Some of the Dutch tax regime's provisions break European Union rules on freedom of establishment, the Court of Justice of the European Union said in the Feb. 22 decision.

Canadawill increasingly gather and use large amounts of raw tax data to combat offshore tax evasion. The focus on big data shows the government is getting serious about offshore evasion, but the intense focus on international taxes may be coming at the expense of attention on more serious domestic issues, tax professionals told Bloomberg Tax.

Share buybacks are expected to bounce back this year as companies deploy savings from the recent cut in the U.S. corporate tax rate. But some analysts are skeptical the resurgence in share buybackswill last, saying rising U.S. interest rateswill put a damper on debt-fueled corporate buyback binges that many believe have been a key driver behind U.S. stocks' nine-year-rally.

Google New Zealandwill begin paying more in taxes after announcing itwill no longer attribute its New Zealand sales to Singapore, a notoriously low-tax jurisdiction.

Large technology companies such as Facebook and Google face a tax on their revenues in the UK after a Treasury minister said thiswas the "potentially preferred option" after a government review.

The new tax law allows firms to claim an immediate 100% deductionwhen they buy an asset, including purchases ofusedequipment that have already beenwritten off by previous owners. Tax planners say the market forusedequipment is likely to heat up in the months ahead. It could mean a shuffling ofassetsby companies purely for tax reasons and mergers and acquisitions that exploit new tax edges.

Luxembourg continues to reject claims from the European Commission that it gave Amazon illegal tax benefitsworth 250 million euros. The EU competition authority on Feb. 26released183 pages of non-confidential details of the Oct. 4 decision inwhich it said theworld's leading online retailer should pay 250 million euros ($310 million) for violating bloc rules. The disputeÔøΩcentered onwhether Amazon.com Inc. received selective advantage over competitorsÔøΩis one of several ongoing state-aid cases.

The French presidentwants the European Union to use revenue from an upcoming digital tax proposal targeting companies such as Google, Facebook, and Amazon to help cover a Brexit-induced budget shortfall.

China's tax revenue collections increased by 8.7 percent in 2017, the Chinese State Administration of Taxation said during a February 1 press conference, adding that the introduction of a blacklist mechanism for illegal tax practices and a joint punishment system has also improved taxpayer compliance.

French President Emmanuel Macron is expected to tell his peers February 23 that access to EU funds should be made conditional on fair tax competition. EU leaders are due to gather in Brussels to give guidance to the European Commission regarding the next multiannual financial framework. The commissionwill then make a formal proposal May 2.

A new Morgan Stanley survey of stock market analysts found that companies are expected to use the biggest share of their corporate tax savings to reward shareholders and spend a substantially smaller share onworkers and capital investments. Council of Economic Advisers Chair Kevin Hassett, asked to respond at a February 22white House briefing, attributed those results to a one-time adjustment caused by the deemed repatriation provision in the Tax Cuts and Jobs Act (P.L. 115-97).

Treasury is considering guidance on constructive stock ownership under section 958(b), butwould like to receive comments concerning its authority to issue such guidance. Speaking February 22 at the International Fiscal Association's annual conference in Houston, Jason Yen, attorney adviser at Treasury, said the agency is considering potential guidance regarding the implications of the new downward stock attribution in section 958(b) , butwants to get comments from taxpayers aboutwhere they think Treasury gets the regulatory authority to issue the guidance.

It's an election year in Sweden and Prime Minister Stefan Lofven is trying hard to promote an agenda of social equality. But that could prove tough in aworld inwhich tax cuts are stealing the agenda.with U.S. President Donald Trump pushing through major corporate tax cuts, the competitive fallout for businesses in Sweden and the rest of Europe is causing concern.

Waste Management Inc. plans to reinvest itswindfall from the new U.S. tax legislation in mergers and acquisitions, bonuses for itsworkforce and capital improvements, said Chief Financial Officer Devina Rankin.