Int'l Tax News

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Why Ireland Doesnft Want Applefs $14.5 Billion in Back Taxes

by Dara Doyle and Peter Flanagan (Bloomberg)

Apple's billions in back taxes could cover the entire annual Irish health budget, build about 100,000 homes for the poor or pay off a chunk of the nation's debt. Sowhy doesn't the governmentwant the money?@

Irish Finance Minister Michael Noonan on Tuesday vowed to fight a European Commission ruling that could force theworld's richest company to pay it at least 13 billion euros ($14.5 billion), more than twice the country's entire 2015 corporate tax take and equivalent to about $3,000 for every man,woman and child. He drew fire from opposition lawmakerswho say Dublin should take the money. For the government, though, the stakes are higher. @

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Uber tax:US, Australia and Taiwan chase new app taxes

International Tax Review

by Caroline Byrne

Tax authorities from the US to Australia and Taiwan are circling digital service providers Uber, Airbnb and other cash-rich app disrupters in a crusade to impose higher taxes and find cutting-edgeways to subsidise the old economy. @

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Apple Owes $14.5 Billion in Back Taxes to Ireland, E.U. Says (1)

  • By James Kanter and Mark Scott

by James Kanter and Mark Scott (New York Times)

A decision on Tuesday by Margrethe Vestager, the European Union commissioner for competition, is the culmination of a two-year investigation intowhether Ireland gave preferential treatment to Apple. Credit Andrew Testa for The New York Times @

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Europe's antitrust enforcer ordered Ireland on Tuesday to claw back billions from Apple over illegal tax breaks, a move thatwill ramp up trans-Atlantic tensions over how much global companies should pay to countrieswhere they do business.@

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Apple Ordered by EU to Repay $14.5 Billion in Irish Tax Breaks

by Natalia Drozdiak and Sam Schechner(Wall Street Journal)

The European Union's antitrust regulator demanded that Ireland recoup roughly �13 billion ($14.5 billion) in taxes from Apple Inc. after ruling that a dealwith Dublin allowed the company to avoid almost all corporate tax across the entire bloc for more than a decade�a move that could intensify a feud between the EU and the U.S. over the bloc's tax probes into American companies.@

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Apple Ordered to Pay Up to $14.5 Billion in EU Tax Clampdown

by Dana Doyle (Bloomberg)

Apple Inc.was ordered to repay a record 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker's tax bill.@

Apple and the Irish government have both vowed to fight the decision,which also risks stoking a fightwith the U.S. over taxation policies --with the U.S. having already complained that Europe is unfairly targeting American companies and threatening global tax reforms.@

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The European Commission's ruling on Apple and Ireland

by Daniel Shaviro (blogspot.com)
Today the European Commission announced its (internally) final ruling, subject to appeal in the European courts, concerning Apple and Ireland. The verdict holds that Ireland gave Apple illegal tax subsidies, in the form of advance transfer pricing rulings, and that Apple must therefore pay Ireland $14.5 billion relating to a ten-year period.
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EU Orders Apple to Pay Up to $14.5B in Tax to Ireland

byAlastair Macdonald (Fox Business)
The European Union's antitrust regulator is poised to rule as soon as Tuesday that Apple Inc.'s tax arrangementswith Ireland have breached the bloc's state-aid rules, according to people familiarwith the matter.
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Apple Is Said to Owe Back Taxes to Irish Government

by Mark Scott and James Kanter (New York TImes)
The European Union's competition authorities are poised to announce a major tax ruling against Apple's tax dealingswith the Irish government on Tuesday, a decision thatwill likely increase trans-Atlantic tension over how some of theworld's largest companies pay taxes on their global operations.
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Vague Guidance Was Trade-Off for Keeping Arm's-Length System, U.S. Official Says

by Ryan Finley (Tax Note)
Despite its lack of ideal clarity, the guidance on risk and intangibles adopted in the OECD's base erosion and profit-shifting report on transfer pricing is clearly superior to the vague and subjective antiavoidance rules preferred by some countries, a U.S. Treasury official said.
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Multilateral Instrument Could Provide Optionality, Panelists Say

by Stephanie Soong Johnson (Tax Notes)
Although there are few clues aboutwhat the final text of the multilateral instrument (MLI) might look like, it could offer a high degree of optionality for potential signatories to consider, panelists speculated August 29.
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Transfer Pricing Rough Justice for Hemorrhaging States

Bloomberg

by Doloresw. Gregory
Aggressive transfer pricing has long been a fraught battleground for the Internal Revenue Service,which has lost several high profile tax cases involving the transfer of intangibles overseas. The same tax planning strategies that shift income to low-tax and no-tax jurisdictions overseas have implications for state tax revenue aswell. However, states are poorly equipped to challenge companies on their transfer pricing. In a two-part series, Bloomberg BNA looks at the reasonswhy.
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Value Chain Study Under BEPS Puzzles Taxpayers

Bloomberg

by Dolores Gregory
Multinational corporations are taking a fresh look at their operations in light of new transfer pricing guidance from the Organization for Economic Cooperation and Development.
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Treasury to Taxpayers: Want Certainty? Don't Push Envelope

Bloomberg

by Dolores Gregory
Taxpayers concerned that revenue authoritieswill use new international transfer pricing guidelines as a revenue grab can play a critical role in restraining that aggressive impulse, a Treasury Department official said.
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OECD Mulling Public Release of Peer Tax Review Standards

Bloomberg

by Alex M. Parker
An OECD subgroup hasn't yet decidedwhether itwill publish the standards it uses for peer reviews of dispute resolution, according to an officialwith the Canada Revenue Agency.
The peer review, part of the so-called minimum standards approved by the Organization for Economic Cooperation and Development's project to combat tax base erosion and profit shifting, is conducted under the auspices of the OECD's Forum on Tax Administration.
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Canada, Mexico Won't Misuse Global Tax Reports: Officials

Bloomberg

by Alex M. Parker
Officials from the Canadian and Mexican tax authorities reiterated that global tax reports required under international standardswon't be misused to unfairly audit companies.
"We're going to use this information for risk-assessment purposes only," said Alex Ho, manager of the international tax division for the International and Large Business Directorate of the Canada Revenue Agency.
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Apple's Irish Tax Bill Could Jump by Billions on EU Decision

Bloomberg

by Dara Doyle
Apple Inc. is facing a potential tax bill running into billions of euros,with the European Union poised to release a finding into the company's dealings in Ireland as soon as Aug. 30, according to people familiarwith the situation.
Such a ruling might heighten tensions between Europe and the U.S. over taxation policies,with the U.S. having already complained that Europe is unfairly targeting American companies and threatening global tax revisions.
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Canada's Influence Seen in BEPS Guidelines, Official Says

Bloomberg

A new international tax regime aimed at combating base erosion and profit shiftingwon't mean big changes, a Canada Revenue Agency official said.

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Apple's Lack of Pricing Analysis a Linchpin in EU, Ireland Case

Bloomberg

by Kevin A. Bell and Rita McWilliams
When the Irish Office of Revenue Commissioners issued Apple Inc. one of theworld's first advance intercompany pricing agreements, the Soviet Unionwas breaking up, lawyers faxed agreements to one another and the iPhone hadn't yet been invented. Itwas a different time and place in the international taxworld.
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PE risk of cross-border service to China

International Tax Review

by Maggie Zhuang (International Tax Review)

Foreign businesses offering cross-border service provisions to Chinese entities must take caution as the tax authorities are becoming more confident than ever in looking into cross-border transactions involving Chinese companies.@

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Clinton's Talk of Exit Tax for Companies Gathers Steam

Bloomberg

by Alex M. Parker
The notion of charging expatriating companies an exit tax based on their offshore earnings is becoming increasingly central to the presidential campaign of Democratic nominee Hillary Clinton after being batted aroundwashington for a few years.
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News Analysis: Clinton's Exit Tax and a Broader Business Tax Reform Agenda

by Mindy Herzfeld (Tax Notes)
In recent speeches about the economy, Democratic presidential nominee Hillary Clinton has emphasized her intention to impose an exit tax on inverting companies, a key part of her plan to make the tax system fairer. Congressional Democrats in the past have introduced legislation to impose an exit tax. But unlike those proposals, Clintonwould combine a proposed exit taxwith a plan to tighten the threshold for inverting companies under section 7874.
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Treasurys plan to fix to US debt-equity tax regs falls short, GOP lawmakers say

  • By Multinational Tax & Transfer Pricing News
by Multinational Tax & Transfer Pricing News
US Treasury's plan to revise six problematic areas in the proposed section 385 debt-equity regulations does not go far enough to allay concerns about regs' negative impact on the US economy, Republican lawmakers said today in a letter to Treasury Secretary Jacob Lew.
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Asia Pacific nations slashing corporate taxes in competative war

International Tax Review

by Anjana Hines

Indonesia may have started Asia's 'race to the bottom' on corporate tax as it looks to match Singapore and stop companies from keeping assets offshore. Others are announcing cuts to stay in the race. @

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New Zealand charges GST on e-commerce

International Tax Review

Foreign businesses offering digital services should prepare themselves for more e-commerce taxes and more rules from New Zealand. @

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Russia's VAT on digital service creates short timeframe for compliance

International Tax Review

by Joe Stanley-Smith

Businesses have just five months to prepare for Russia's new VAT rules that impose a tax on e-services from 2017. @

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OECD draft tackles multinational corporation tax avoidance though payments to branches

  • By Multinational Tax & Transfer Pricing News
by Multinational Tax & Transfer Pricing News
The OECD today released a draft report for countries that seek to improve their laws to counteract tax avoidance by multinationals through "branch mismatch structures."
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Public comments received on the conforming amendments to Chapter IX of the OECD Transfer Pricing Guidelines

  • By OECD.org
by OECD.org
On 4 July 2016, interested partieswere invited to review the conforming amendments to Chapter IX of the OECD Transfer Pricing Guidelines, "Transfer Pricing Aspects of Business Restructurings". The OECD is grateful to the commentators for their input and now publishes the comments received.
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Public comments received on the discussion draft on the design and operation of the group ratio rule under BEPS Action 4

  • By OECD

by OECD

On 11 July 2016, interested partieswere invited to provide comments on a discussion draftwhich dealswith elements of the design and operation of the group ratio rule under Action 4 (Interest deductions and other financial payments) of the BEPS Action Plan. The OECD is grateful to the commentators for their input and now publishes the comments received.@

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Multilateral Convention for tax co-operation breaks through the 100 mark

by Grace Perez-Navarro (OECD.org)

In a ceremony at OECD Headquarters in Paris today, Burkina Faso, Malaysia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Samoa signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, bringing the number of participating jurisdictions to 103.@

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PE risk of cross-boarder service to China

International Tax Review

by Maggie Zhuang

Foreign businesses offering cross-border service provisions to Chinese entities must take caution as the tax authorities are becoming more confident than ever in looking into cross-border transactions involving Chinese companies. @

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OECD Interest Deduction Rule May Spur Different Approaches

by Alex M. Parker
New OECD rules to limit excessive interest deductions might be interpreted differently in different countries, increasing compliance costs for taxpayers, according to several law and accounting firms, aswell as other business associations.
The concernswere raised in comments to the Organization for Economic Cooperation and Development,which issued a draft of suggested legislation on a "group ratio rule" for countries to use as away to limit interest deductions based on intercompany debt.
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Ireland, U.S. to Renegotiate Tax Treaty

The U.S. and Ireland are renegotiating their 1997 income tax treaty,whichwas amended by a protocol in 1999.
"Discussions have begun"with the U.S. Treasury Department "on updating certain elements" of the double tax treaty, the Irish Finance Department said in an Aug. 25 announcement.
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Puerto Rico's Wal-Mart' Tax Invalid, Appeals Court Holds

by Doloresw. Gregory
Puerto Rico's alternative minimum tax is unconstitutional on its face, a federal appeals court ruled, affirming a lower court's injunction that bars enforcement of the tax againstwal-Mart Puerto Rico Inc. (Wal-Mart P.R., Inc. v. Zaragoza-Gomez, 1st Cir., No. 16-01370, 8/24/16).
The U.S. Court of Appeals for the First Circuit said Aug. 24 that it is "indisputable" that the AMT unfairly targets cross-border transactions.
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OECD releases discussion draft on branch mismatch structures

  • By PwC
by PwC
On 22 August 2016 the OECD published, for discussion, recommendations for domestic laws thatwould neutralise the effect of payments involving certain branch mismatch arrangements.
This expansion of the final Base Erosion and Profit Shifting (BEPS) Action 2 paper, Neutralising the Effects of Hybrid Mismatch Arrangements, issued on 5 October 2015, adds even more complexity to that very long and complicated hybrid mismatch guidance.
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Debt-Equity Rules Big Concern for ABA Tax Section: New Chair

Action on the controversial rules to curb multinational companies from stripping income out of the U.S. through loans to subsidiaries remains one of the highest priorities of the American Bar Association Section of Taxation, its incoming chair told Bloomberg BNA.
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Republicans Keep Up Pressure on Debt-Equity Regulations

by Kaustuv Basu
Seven Republican senators are questioningwhether the Treasury Department is taking into account lawmakers' concerns about controversial debt-equity regulations.
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U.S. Treasury Ups Pressure on EU Over Apple, Other Inquiries

  • By Saleha Mohson
The U.S. is stepping up its effort to convince the European Commission to refrain from hitting Apple Inc. and other companieswith a demand for possibly billions of euros in underpaid taxes.
In awhite paper released Aug. 24, the Treasury Department said the Brussels-based commission is taking on the role of a "supra-national tax authority."
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Treasury: EU State Aid Investigations Undermine BEPS Project

by Ryan Finley
By creating a unique interpretation of the arm's-length principle that strays from the OECD transfer pricing guidelineswithout offering any coherent guidance as to how itwill be applied, the European Commission may threaten the consensus achieved through years of negotiation during the base erosion and profit-shifting project, according to a Treasurywhite paper.
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GOP Taxwriters Ask Lew to Explain His Role in Debt-Equity Regs

by Kat Lucero
Seven Senate Finance Committee Republicans are demanding that Treasury Secretary Jacob Lew explain his role duringwhat may seem to be the final stretch in approving the controversial proposed debt-equity regs.
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Proposed Section 385 Regulations Go Way Too Far

James J. Tobin of Ernst & Young examines documentation and information reporting standards and "per se stock" rules proposed under earnings-stripping regulations (REG-108060-15).
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Rewrite Earnings-Stripping Rules, GOP Tax-Writers Tell Lew

by Kaustuv Basu
Top Republican tax-writers in Congress are urging the Treasury Department to completely overhaul or repropose regulations that seek to curb corporate earnings stripping.
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Hatch, Brady Renew Effort to Stop Treasury's Debt-Equity Regs

by Dylan F. Moroses, Kat Lucero & Stephen K. Cooper
House and Senate taxwriters August 22 renewed their effort to derail Treasury's proposed debt-equity regulations, sending two letters urging the department to revise its rules or face legislative action.
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OECD Discussion Draft Targets Branch Hybrid Mismatches

by Alex M. Parker
Countries may soon have new blueprints for how to nix tax exemptions for companies that use branches to create so-called hybrid mismatch arrangements after the OECD's latest discussion draft of legislative recommendations.
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OECD Releases Discussion Draft on Branch Mismatch Structures (1)

by Alexander Lewis
The OECD has released a public discussion draft that recommends improvements to domestic laws to dealwith several of the most common types of branch mismatch structures.
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Profit Split Should Be the Default Method, BEPS Group Says

by Ryan Finley
A simplified version of the profit-split method should be considered the best transfer pricing method unless the taxpayer can establish that a one-sided method is clearly more appropriate, according to a network of tax experts, nongovernmental organizations, and tax justice campaigners.
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News Analysis: The European Union's Vanishing Withholding Tax Regimes

by Ajay Gupta
In a move toward implementing action 14 2015wTD 193-31: Consultation Documents and Responses of the OECD's base erosion and profit-shifting project, Brazil's Federal Revenue Department (FRD) on August 19 issued a consultation document on rules for mutual agreement procedure (MAP) cases for disputes involving tax treaties.
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Transfer Pricing Officer Can't Use Entity-Level Reports, Mumbai Tribunal Rules

by Sherry Samuel Oommen
The transfer pricing officer (TPO) cannot adopt entity-level reports for benchmarking an international transaction if the taxpayer furnished segmental reports, the Mumbai Tribunal held in Paradigm Geophysical India Private Ltd. (IT Appeal No. 1878 (Mum.) of 2014), made public August 19.
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Brazilian tax authorities issue proposed ruling on the definition of 'significant economic activities' for purposes of 'gray list'

  • By PwC
by PwC
The Brazilian tax authorities on May 30, 2016, issued proposed ruling PC 007/2016, stating their view of the intended meaning of 'significant economic activities' for purposes of Article 2 of Normative Instruction 1,037/2010 (NI 1,037/2010).
NI 1,037/2010 names blacklisted countries and privileged tax regimes ('gray list') from a Brazilian tax perspective.
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News Analysis: Tax Transparency Is in the Eye of the Beholder

Mindy Herzfeld examines recent unsuccessful efforts by nongovernmental organizations to persuade the OECD and the IRS to require multinationals to make their country-by-country reports public and discusses the next battlegrounds for the fight to increase tax transparency: the SEC and the Financial Accounting Standards Board.

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Unprecedented ruling in Brazil boosts PIS and Cofins credits for businesses

The Federal Administrative Court of Appeals (CARF) has issued an unprecedented ruling, by majority vote, on PIS and Cofins credits related to the acquisition of inputs for commercial companies.

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