Int'l Tax News
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Rate Competition Is New International Tax Planning Reality
Lower corporate tax rates around theworld are expected to play an important part in multinational companies' tax planning in 2017,with a rate as low as 15 percent on the table in the U.S. and countries such as the U.K. planning to maintain or lower their current rates.
A radical reduction to the 35 percent U.S. rate is almost certain. The June 2016 House Republican tax blueprint proposes a 20 percent corporate tax rate, and President-elect Donald Trump has proposed a 15 percent rate.
A radical reduction to the 35 percent U.S. rate is almost certain. The June 2016 House Republican tax blueprint proposes a 20 percent corporate tax rate, and President-elect Donald Trump has proposed a 15 percent rate.
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Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches
The proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches2 (the proposal)was made by the Commission on the basis of Article 50(1) TFEU pertaining to the right of establishment and more specifically to the protection of the interests of members of companies and others,within the meaning of Article 50(2)(g) TFEU.
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Final regulations revise Section 956 anti-abuse and partnership rules, and Section 954(c) active rents and royalties exception
On November 2, 2016, Treasury and the IRS issued final regulations under Sections 954 and 956 and proposed regulations under Section 956. The regulations finalize guidance addressing the treatment of loans from a controlled foreign corporation to a foreign partnership under Section 956, the attribution of United States property of a partnership to its partners, the treatment of other non-partnership transactions under Section 956, the application of the 'formed or funded' Section 956 anti-avoidance rule, and the active rents and royalties exception under Section 954.
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IRS Notice targets repatriation of offshore earnings
The IRS and Treasury target cross-border triangular reorganizations and inbound nonrecognition transactions in Notice 2016-73 (the 'Notice'). The Notice, issued December 2, 2016, is the sixth set of rules that the government issued in the last decade regarding these transactions and is the latest salvo in its campaign against repatriation of offshore cash. Companies considering such transactions should carefully contemplate the Notice's potential application, as it states that future regulationswill be effective as of its issuance date.
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Final Section 987 regulations issued with significant new limitations on recognition of Section 987 losses
The Treasury and IRS issued final and temporary regulations under Section 987 on December 7, 2016. The final regulations implement an accounting regime based largely on proposed regulations issued on September 6, 2006, to account for income earned through a qualified business unit (QBU) that operateswith a functional currency different than that of its owner (Section 987 QBU).
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News Analysis: India and the United States -- Half a World Apart on Tax
Tax professionals in India and their U.S. counterparts have nearly diametrically opposed views of the OECD's base erosion and profit-shifting project. U.S. practitioners generally believe that the primary effect of the projectwas to hinder the efficient conduct of business,while U.S. Treasury officials largely sought to limit the scope of the project during negotiations. In contrast, those in India -- both inside and outside the government -- view BEPS as the opening salvo in an effort to rewrite the international tax rules to reallocate income between source and residence countries, thereby leveling the playing field for developing countries.
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EU Targets U.S. for Tax Haven Blacklist Screening
The U.S. is one of eight "mismatch" countries identified for potential screening for the European Union's tax haven blacklist because of its failure to adopt the OECD's common reporting standard.
Based on confidential documents seen by Bloomberg BNA aswell as on comments from EU diplomats, the EU Code of Conduct Group of Business TaxationÔøΩwhich is overseeing the EU tax haven blacklisting processÔøΩhas cited the U.S.'s failure to commit to automatic information exchange of bank and tax data,which means it falls short of EU transparency criteria.
Based on confidential documents seen by Bloomberg BNA aswell as on comments from EU diplomats, the EU Code of Conduct Group of Business TaxationÔøΩwhich is overseeing the EU tax haven blacklisting processÔøΩhas cited the U.S.'s failure to commit to automatic information exchange of bank and tax data,which means it falls short of EU transparency criteria.
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GOP Proposal to Change Tax Treatment of Imports and Exports Raises Questions
As a rule, taxing a behavior makes people do less of it, and that principle applies to anything from cigarette smoking to realizing capital gains.
That principle, though, isn't so clear regarding a Republican proposal that for the first timewould tax American importswhile exempting exports from U.S. tax. And economists questionwhether such a policy, known as a border adjustment,would diminish imports into the country or increase exports.
That principle, though, isn't so clear regarding a Republican proposal that for the first timewould tax American importswhile exempting exports from U.S. tax. And economists questionwhether such a policy, known as a border adjustment,would diminish imports into the country or increase exports.
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McDonald's Moves Tax Base to U.K. as EU Attacks Tax Structure
McDonald's Corp. shrugged off Brexit by announcing plans to switch its non-U.S. tax base to the U.K., ditching Luxembourg,where its fiscal arrangements are under attack from European Union regulators.
In an apparent vote of confidence in the U.K., the company said Dec. 8 it is creating a new international holding company based in Britain,which decided in June to quit the EU. The new companywill be responsible for most of the royalties received from licensing McDonald's intellectual property rights outside the U.S. Itwill pay U.K. corporate tax, according to an e-mailed statement.
In an apparent vote of confidence in the U.K., the company said Dec. 8 it is creating a new international holding company based in Britain,which decided in June to quit the EU. The new companywill be responsible for most of the royalties received from licensing McDonald's intellectual property rights outside the U.S. Itwill pay U.K. corporate tax, according to an e-mailed statement.
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Sweetheart Deals on Rise in Europe Despite LuxLeaks, Report Says
Despitewidespread outrage prompted by the disclosures in 2014 of the LuxLeaks tax rulings granted by Luxembourg authorities to multinational companies, the number of sweetheart deals entered into by the Grand Duchy and other European countries has increased by 160 percent from 2013 through 2015, a nongovernmental organization said in a report issued December 7.
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OECD Issues More CbC Reporting Guidance, Dispute Resolution Statistics
The OECD has published additional guidance on country-by-country (CbC) reporting under action 13 2015wTD 193-30: Consultation Documents and Responses of the base erosion and profit-shifting project, and it has published statistics for 2015 on the timeliness of completing mutual agreement procedure (MAP) cases as part of an effort to improve effectiveness of dispute resolution mechanisms under action 14.
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Noose tightens on tax havens in global crackdown
Overlookingwhite sands and turquoisewater, One Cable Beach is the latest oceanfront condominium to be built on the sun-drenched coastline of the Bahamas. Yet its top selling point is not the natural beauty of its surroundings. Instead it is the financial privacy it offers investors trying to escape from a looming crackdown on tax evasion.
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EU Fails to Reach Deal on Foreign Country Hybrid Mismatches
European Union finance ministers have failed to agree on extending anti-tax avoidance rules to hybrid mismatchesÔøΩthe mismatch in tax outcomes due to different jurisdictional tax treatmentsÔøΩbetween member countries and foreign territories, amid disputes over financial sector exemptions and an implementation date.
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News Analysis: Reality Check on a Destination-Based Cash Flow Tax in 2017
Many in the tax and businessworld are excited about the possibility that 2017 could bring meaningful tax reform based on the reform blueprint released by the U.S. Houseways and Means Committee in June. But the destination-based cash flow tax proposed by the Republican planwould be a major overhaul of the code -- far beyond even the Tax Reform Act of 1986. It is far from certain that such a radical changewill be achievable.
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Apple, EU Clash in Public Ahead of Court Fight Over Tax Bill
Apple Inc. and European Union competitionwatchdogs clashed on a public stage for the first time since regulators ordered Ireland to claw back a record-breaking 13 billion euros ($13.9 billion) in back taxes from the company.
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Significant financing costs from Mexico's VAT bill 2017
A bill of tax amendments submitted by the Executive Branch and approved by the Mexican Congress included changes to Article 5-I of the Value Added Tax Law (VAT Law), regarding the creditable VAT of fixed assets or expenses incurred in preoperative periods (i.e. before generating VAT income on its activities).
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Planning for the Use of the United States as a Financial Haven: Part One
The United States has not agreed to participate in the Common Reporting Standard (CRS), relying instead on the Foreign Account Tax Compliance Act (FATCA) regime enacted in 2010 and initiated in 2014. United States participation in CRS is highly unlikely. Evenwith a change in control of Congress, CRS may be viewed as unnecessary because FATCA has been implemented by a series of intergovernmental agreements ("IGAs"), most ofwhich provide for reciprocal exchanges of information.
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Vestager Talks Apple, Tax, and Competition With France's Legislators
National legislators and tax authorities should consider taking a "second look" at Apple's old tax agreements, EU Competition Commissioner Margrethe Vestager told French legislators December 1.
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New Tax Rules on Corporate Inversions Face Uncertain Future
The U.S. Treasury Department spent nearly three years reshaping international corporate transactions, reinforcing the U.S. tax base and deterring inversions, the controversial maneuvers that put companies' addresses in low-tax countries.
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Trump tax plan may collide with EU tax crackdown
President-elect Donald Trump's plan for a corporate tax overhaul next year could bolster the European Union's efforts to reduce international avoidance through tax reform efforts of their own ÔøΩ but don't count on it.
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EU Mulls Substance Test to Determine Zero-Rate Tax Havens
European Union member countries are considering a "substance test" to determinewhether a country or jurisdictionwith a zero corporate tax rate qualifies as a tax haven that doesn't reflect "real economic activity."
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Taxing Untaxed Foreign Income May Help U.S. Companies in the Long Run, Stack Says
Some U.S. multinationals may owe more tax under the global minimum tax proposed by the outgoing Obama administration, but it could prevent decades of volatility in the international tax environment and unilateral anti-profit-shifting measures, according to Robert Stack, Treasury deputy assistant secretary for international tax affairs.
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OECD Anticipates Global Market Reaction to Trump's Tax Plans
The OECD has highlighted awidespread expectation of significant directional change in macroeconomic policy following the U.S. elections in November. It said in its latest global economic outlook that the likely evolution of fiscal policy over the next two years could affect growth prospects and inflation in economies beyond the U.S.
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EU Seeks VAT Changes to Boost E-Commerce, Digital Publications
The European Commission is set to propose an overhaul of electronic commerce ruleswhile expanding the one-stop-shop value-added taxation system for collecting and distributing the levy.
In addition, the commissionwill aim to permit European Union member states to reduce VAT rates on electronic publications, including newspapers, magazines and e-books.
In addition, the commissionwill aim to permit European Union member states to reduce VAT rates on electronic publications, including newspapers, magazines and e-books.
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After Google, Indonesia targets Facebook over unpaid taxes and fines
After Google, Indonesia is targeting social network giant Facebook for unpaid taxes and penalties.
The government's latest move comes after Googlewas expected to reach a tax settlementwith Indonesia in the next fewweeks. As per the proposed settlement, Googlewould pay back taxes and fines, and agree to a new calculation of profits made in the country.
The government's latest move comes after Googlewas expected to reach a tax settlementwith Indonesia in the next fewweeks. As per the proposed settlement, Googlewould pay back taxes and fines, and agree to a new calculation of profits made in the country.
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European Parliament Backs VAT Reverse Charging
The European Parliament gave overwhelming support to the use of value-added tax reverse charging by European Union member states in order to clamp down on fraud for cross-border sales that annually costs governments close to $200 billion.
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House GOP Business-Tax Plan Upends U.S. Policy, Bares Corporate Fault Lines
Fault lines inside the corporateworld are emerging over a proposed rewrite of the U.S. tax code, pitting importers against exporters. At the heart of the fight is a Republican plan in Congress thatwould impose corporate taxes on importswhile eliminating them from exports, a move thatwould upend decades of tax policy.
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EU Approves Automatic Exchange of Bank Data
The European Parliament has overwhelmingly approved legislation thatwould allow tax authorities across the EU to automatically share bank informationwith other member states and to implement registers recording the beneficial ownership of companies and trusts.
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UK Prime Minister reignites 'race to the bottom' on corporate taxes
UK Prime Minister Theresa May has once again sparked the so-called 'race to the bottom' on corporate tax rates after she said shewants the UK to have he lowest corporate tax rate among G20 member countries.
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Global Competition to Cut Corporate Taxes Heats Up
An international race to lower corporate taxes is back in the global spotlight after Britain recommitted to slashing rates and as the election of Donald Trump puts U.S. corporate-tax overhauls on the front burner.
U.K. Prime Minister Theresa May on Monday officially endorsed a move by Britain's previous Conservative government to lower the main corporate rate there to 17% by 2020, from today's 20%. President-elect Donald Trump promoted on the campaign trail a 15% U.S. headline corporate tax-rateÔøΩdown from the current 35%.
U.K. Prime Minister Theresa May on Monday officially endorsed a move by Britain's previous Conservative government to lower the main corporate rate there to 17% by 2020, from today's 20%. President-elect Donald Trump promoted on the campaign trail a 15% U.S. headline corporate tax-rateÔøΩdown from the current 35%.
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China's Tax Reform May Hit the Country's Wealthiest
Days after taking the job, Chinese Finance Minister Xiao Jie is accelerating income tax reforms that could help fill government coffers by digging into the pockets of thewealthiest.
A new office established at the ministry this monthwill be specifically devoted to handling payments from individuals, separating that responsibility from corporate tax collection. Tax authorities also are getting more power to monitor overseas accounts of citizens and track the finances of thewealthiest,whose incomes aren't always on the government's radar.
A new office established at the ministry this monthwill be specifically devoted to handling payments from individuals, separating that responsibility from corporate tax collection. Tax authorities also are getting more power to monitor overseas accounts of citizens and track the finances of thewealthiest,whose incomes aren't always on the government's radar.
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U.S. Tax Review (10)
In this article, the author discusses recent U.S international tax developments, including section 385 regulations and foreign tax credits, various IRS rulingswith international implications, the DreamWorks Animation case, and recently released OECD documents related to the mutual agreement procedure.
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News Analysis: Populism and State Aid
Business and political eliteswhowere surprised by the populistwave manifested in the U.K.'s Brexit vote last June received an even ruder awakeningwith the results of the U.S. presidential election.
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Belgium Likely to Scrap Fairness Tax
A Belgian tax on dividend distributions affecting large companieswill likely be abolished if the European Court of Justice follows a recent opinion by its highest adviser that it fails to complywith European law.
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Business wary over further cuts to UK corporation tax
Theresa May on Monday promised business leaders to maintain the "lowest corporate tax rate in the G20", paving theway for further reductions if Donald Trump fulfils a promise to cut the US rate to 15 per cent.
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UK's Autumn Statement: A fiscal reset or just a tune-up?
UK Chancellor of the Exchequer Philip Hammond is about to deliver his first budget statement at a timewhen tax uncertainty looms on every business as a result of the Brexit vote, butwhat could his budget look like?
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Hungary to offer EUs lowest corporate tax rate
Hungary's government is to cut its corporate tax rate to the lowest level in the EU in a sign of increasingly competitive tax practices among countries seeking to lure foreign direct investment.
Prime Minister Viktor Orban said a new 9 per cent corporate tax ratewould be introduced in 2017, significantly lower than Ireland's 12.5 per cent.
Prime Minister Viktor Orban said a new 9 per cent corporate tax ratewould be introduced in 2017, significantly lower than Ireland's 12.5 per cent.
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Trump's Election Could Change International Taxes Overnight
An election that turned the globe upside down may leave the international taxworld changed overnight aswell.
After Donald Trump's surprisingwin in the 2016 presidential election, the chances of a systemwide tax overhaulÔøΩonce seen as years awayÔøΩis now possible in a matter of months.
After Donald Trump's surprisingwin in the 2016 presidential election, the chances of a systemwide tax overhaulÔøΩonce seen as years awayÔøΩis now possible in a matter of months.
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Treasury Vows to Finalize Expiring International Guidance
The U.S. Treasury Department'swork on several high-priority guidance projectswill continue, including the finalization of two temporary regulation international tax packages set to expire before the new administration is sworn in, Treasury officials said November 16.
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News Analysis: Range of Foreign Responses Predicted to Trump Tax Plans
While many of the finest tax minds in the U.S. areworking overtime trying to divine the direction that the incoming Trump administrationwill take the country's tax policy, their counterparts overseas are scratching their heads about how foreign governmentswill react if those inchoate policies prove harmful to their national interests.
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France Investigating 500 Taxpayers After Panama Papers Leaks
The French government is investigating the tax records of about 560 taxpayers based on leaked documents from a Panamian law firm.
The budget office of the Finance Ministry said Thursday its experts have studied the leaked information and are now digging deeper into 560 specific cases. It didn't identify any of the taxpayers involved.
The budget office of the Finance Ministry said Thursday its experts have studied the leaked information and are now digging deeper into 560 specific cases. It didn't identify any of the taxpayers involved.
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U.S. and Europe Must Set Example in Push for Global Transparency, Report Says
The U.S. and Europe must eliminate the secrecy havens in their own backyards before they can force other financial centers to complywith global transparency standards, according to a report by Nobel Prize-winning economist Joseph Stiglitz and Swiss anti-corruption expert Mark Pieth.
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Donald Trump's plan to cut US corporation tax 'could impact on Northern Ireland jobs'
One of Donald Trump's economic advisors has cautioned that a cut in the US corporate tax rate could have an impact on Northern Ireland jobs. Mr Trump plans to slash the US rate from 35% to 15% to get manufacturers to movework to the United States.
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House GOP grapples with cross-border tax proposal
The Houseways and Means Committee is grapplingwith how to ensure that a Republican tax reform plan doesn't run afoul ofworld Trade Organization (WTO) agreements, according to a top GOP committee aide on Monday.
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EU Parliament May Lose Right to Veto Public Tax Reporting
byJoe Kirwin(Bloomberg BNA)
The European Parliament risks losing the right to veto plans to make multinational companies publish tax and profit details for the countries inwhich they operate, according to the European Union's legal advisers.
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Switzerland and Austria will terminate withholding tax agreement
Thewithholding tax (WHT) agreement between Switzerland and Austriawill be terminated on January 1, 2017, the Swiss authorities have announced, and the UK'swHT treatywith Switzerland also faces the same fate.
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Tax Reform in the Next Congress
It is clear that the next Congress and President-elect Trump very likelywill to try to do corporate tax reform ÔøΩ particularly international tax reform. Among the reasons this is the case is that there is an emerging consensus among both parties from a policy perspective that improving the business tax code could make America more competitive.
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Tax Revenues Rising Since Financial Crisis, EU Report Says
Tax revenues have continued to rise since the 2007-2008 financial crisis in most EU member states, and the EU remains a relatively high-tax area, according to a report published November 11 by the European Commission.
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News Analysis: What's on Trump's International Tax Agenda?
Donald Trump's presidentialwin, combinedwith the fact that Republicanswill control both chambers of Congress,will increase the chances for comprehensive tax reform, including on the international side, in 2017. Trump's campaign proposals included several international tax proposals, some consistentwith those introduced by Republican lawmakers and others not.
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Moscovici doesn't rule out U.S. inclusion on tax haven blacklist
European tax czar Pierre Moscovici says no country, including the U.S., should consider itself immune from the tax haven blacklist the European Union is drawing up.
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