Int'l Tax News

With a referendum looming, UK voters are now under pressure to decidewhether to remain in the EU.

On 23 May 2016, the OECD Council approved the amendments to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ("Transfer Pricing Guidelines"), as set out in the 2015 BEPS Report on Actions 8-10 "Aligning Transfer Pricing Outcomeswith Value Creation" and the 2015 BEPS Report on Action 13 "Transfer Pricing Documentation and Country-by-Country Reporting". These amendments provide further clarity and legal certainty about the status of the BEPS changes to the Transfer Pricing Guidelines,whichwere endorsed by the Council on 1 October 2015, by the G20 Finance Ministers on 8 October 2015, and by the G20 Leaders on 15-16 November 2015.

If the UK votes to leave the European Union (EU) on June 23 multinationals face an urgent problem: how to copewith uncertainty in the tax system.

During his first inaugural address, President Obama pledged to bridge the divide betweenwashington and Main Street America by making government accountable to the people.

Nearlyeight years later, that chasm has only grown greater, exacerbated by the steady consolidation of executive power and unbridled growth of the federal regulatory machine.

The circumstances, if any, that permit non-uniform, or differentiated, treaty interpretation are difficult to define. Generally, a differentiated approach stands in tensionwith the Vienna Convention's rules of interpretation,which apply a methodology based on plain meaning to all treaties. Yet courts, states, and scholarswidely accept the notion that some treatieswarrant special interpretive rules. Thus far, however, efforts to justify differentiated treaty interpretation on the grounds of subject matter or treaty purpose have proven inadequate. A more promising avenue is the examination of the objective characteristics sharedwithin a treaty type. One such characteristic, the author argues, is the treaty's degree of completeness. Specifically, all else being equal, standalone instruments call for less reliance upon extrinsic materials; interstitial instruments demand more.

Applying this insight to the tax treaty context, this Article argues that such instruments should not be viewed as complete; consequently, reference to plain meaning or even the treaty parties' mutual intent is often incoherent.

Manufacturers view a corporate tax rate of 25 percent or less, a long-term research and development tax credit, and robust cost-recovery provisions as essential elements of tax reform thatwould make them more competitive, according to survey results released Thursday.

The new US model income tax treaty contains an unusual addition: mechanisms for the parties to unilaterally override the negotiated treaty rates in specified circumstances. Previewed last year in proposed form ÔøΩ a first for Treasury ÔøΩ these new mechanismswork as kill-switches, partially terminating the treaty as to one or both treaty partners. This Article analyzes the new kill-switch provisions and concludes that their introduction in the U.S. Model reflects the steady deterioration of tax treaties from essentially diplomatic documents premised on the good faith of the parties to detailed contracts drafted in anticipation of the opposite.

U.S. companies could face big penalties if they don't report property transfers to foreign corporationsÔøΩand the IRS is telling its agents to put that reporting under the microscope. The Internal Revenue Service issued detailed audit instructions to those agents as it increases its focus on companies that may seek to avoid taxes by moving property, such as stock, overseaswithout telling the government.

Switzerland edged closer to implementing long-awaited business tax reforms on Tuesday,when the lower house of parliament approved proposals aimed at meeting global taxation standards.

One companywas celebrated at a U.S. embassy. Some traveled theworldwith U.S. officials, promoting productswith the imprimatur of the American government despite moving their legal headquarters outside the U.S. and cutting their taxes. Still others continue to receive U.S. government contracts.

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Paul J. Crispino is a principalwith Deloitte Tax LLP. In this report, Crispino discusses the history of the active financing exception of section 954(h) and some of the challenges in satisfying its provisions. He also suggestsways to modify the rules to accommodate modern business practices.

In March Erik H. Corwin left the IRS,where he served as deputy chief counsel (technical) for over four years, to become a principal in KPMG LLP'swashington National Tax practice.

Corwin recently spokewith Tax Analysts' Amy S. Elliott about the requirements in the proposed section 385 debt-equity regulations (REG-108060-15 2016 TNT 65-11: IRS Proposed Regulations),why the proliferation of no-rules in the section 355 tax-free spinoff areawaswarranted, andwhether the IRS Office of Chief Counsel should have more autonomy.