Int'l Tax News

Thewidespread adoption and quick implementation of both the OECD's base erosion and profit-shifting project recommendations and the automatic exchange standards set by the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes are high on the list of G-20 priorities, according to Lou Jiwei, China's finance minister.
For thewWTD story, go here. (subscription required)

Jenny Elliott, Clementine Thompson, Kathryn O'Brien, and Elizabeth A. Sweigart of PwC discuss how the OECD's final base erosion and profit-shifting report on transfer pricing documentation and country-by-country reportingwill affect how multinational enterprises handle intercompany agreements.
For the TNI article, go here. (subscription required)

Alain Lamassoure, chair of the European Parliament's TAXE II special committee on tax rulings, expressed optimism that therewill be an agreement on a common consolidated corporate tax base by the end of the year.
For thewWTD story, go here. (subscription required)

News broke this month of an unprecedented data leak: Some 11.5 million documents containing detailed, confidential information about more than 200,000 offshore companies involvedwithMossack Fonseca, a Panamanian law firm, had fallen into the hands of theInternational Consortium of Investigative Journalistsvia an anonymous informant. Collectively known as the Panama Papers, the files revealed just howwidespread the abuse of offshoretaxhavens is among theworld's elite politicians and business people. Still, myths persist about the supposed benefits of offshoretaxhavens, both for the countries that stashwealth there and for the havens themselves.
For thewashington Post article, go here.

Negotiators are pushing aheadwith tax reform talks in hopes of reaching a deal by the end of the year even though Senate Majority Leader Mitch McConnell (R-Ky.) has made clear he's opposed to the effort.
For The Hill story, go here.

President Barack Obama's proposed rules to stop U.S. companies from reincorporating abroad, if only on paper, to avoid U.S. income taxes appear to overstep legal authority, a top Republican lawmaker said on Friday.

For the Reuters story, go here.

The Swiss National Council on March 16-17, 2016, confirmed the Swiss Corporate Tax Reform III (CTR III) package aswell as changes to the proposals presented by the Economic Committee of the National Council (Committee) in February 2016.

CTR IIIwould abolish some currently existing tax regimes, such as the rules for holding or mixed companies).

For the PwC Insight, gohere.

The international community has made Panama a scapegoat for thewrongdoing revealed in the Panama Papers, Ivan Zarak, Panama's deputy minister of economy, said during a panel inwashington on April 14.

For thewWTD story, go here. (subscription required)

The U.S. Treasury's new anti-inversion rules should come as a surprise to no one, Treasury Secretary Jacob Lew said April 14.

For thewWTD story, go here. (subscription required)

Scott Semer of Torys critiques the IRS's proposed rules (REG-108060-15) under tax code Section 385,which in part provide that instruments issued in certain transactionswon't be treated as debt for tax purposesÔøΩeven if they clearly establish a debtor-creditor relationship. Those rules "have nothingwhatsoever to dowith distinguishing debt versus equity," Semerwrites. "Instead, they are a regulatory attempt to impose new earnings-stripping rules."

For the BNA Insight, go here. (Subscription required)

Three days after President Barack Obama held a news conference pledging to close "loopholes" that allow U.S. corporations to claim they're foreign for tax purposes, the IRS blessed one of the biggest corporate expats.

For the DTR story, go here. (subscription required)

Lawmakers' plans to release international tax overhaul legislation by mid-July look to be slipping further, making prospects less clear than ever.

For the DTR story, go here. (subscription required)

After challenging its inversion on audit, IRS Appeals gave Delphi Automotive PLC the all-clear April 8, concluding that section 7874(b)won't apply to treat the company as domestic for U.S. federal income tax purposes, Delphi announced April 13.
For the TNT story, go here. (subscription required)

Darrin Litsky, Sanjay Kumar, and Eric Lesprit look at strategies for combatting controversy risks and double taxation and questionwhether mutual agreement processes are a taxpayer's only option.
For the ITR story, go here.

John Henshall and Philippe G. Penelle, describe the relationship between intellectual property and controversy in tax and transfer pricing.
For the ITR story, go here.

The European Commission is today leading theway towards greater corporate tax transparency by introducing public reporting requirements for the largest companies operating in the EU.
For the EU press release, go here.

The international community should call time on all remaining holdoutswho have yet to implement internationally agreed tax transparency standards, OECD Secretary-General Angel Gurría said in a new report to the G20.
For the OECD report, go here.

European Union officials on Tuesdaywaded into the fight against international tax dodging, calling for theworld's biggest companies to disclose more data about their tax arrangementswith the bloc's member governments and to share information about offshore havenswhere they shelter money.
For the New York Times story, go here.

The Treasury Department's new corporate ruleswill reach far beyond the few companies that moved their legal addresses to low-tax countries, forcing many firms based in the U.S. to change their internal financing strategies and tax planning.
For thewall Street Journal story, go here.

Country-by-country reports can spot the mismatch betweenwhere firms do business andwhere they are taxed but by themselves theywill not end tax avoidance.

For the Guardian story, go here.

A tax policy battle between European Union member states and the EU Parliament looms after the European Commission proposed sweeping public country-by-country tax and profit reporting by multinationals that pleases neither institution.

For the DTR story, go here. (subscription required)

Final tax regulations to curb inversions could be done by the Labor Day holiday in early September, IRS Commissioner John Koskinen indicated.
For the DTR story, go here. (subscription required)

Singapore is a top-tier candidate for U.S. multinational companies seeking to relocate existing structures or create new foreign principal structures that hold, and use, group intellectual property.
For the DTR story, go here. (subscription required)

The appointment of Marjorie Rollinson as the IRS's top international tax lawyer has raised questions among practitioners about how the agency's approach to international disputes might change under her leadershipÔøΩparticularlywhen it comes to transfer pricing.
For the DTR story, go here. (subscription required)

States are intensifying efforts to combat corporate tax avoidance amid a slow federal campaign to rein in perceived tax dodgers.
Several state proposals to curb income shifting overseas have surfaced this 2016 legislative session in Kansas, Kentucky, Maine and Minnesota. If enacted, the regimeswould add to a body of tax haven legislation in six states and the District of Columbia, all targeting profits held offshore by U.S. companies.
For the DTR story, go here. (subscription required)

Following the political uproar caused by the Panama Papers revelations, the European Commission has included a country-specific reporting requirement for tax haven jurisdictions in its final proposed directive on public country-by-country reporting.
For thewWTD story, go here.

Large multinationals operating in theEuropean Unionwill have to publish details of profits andtaxbills generated in countries considered to be "taxhavens," the bloc's executive arm saidTuesday, as it toughened proposals for fightingtaxavoidance following the "Panama Papers" leak.
For thewall Street Journal story, go here.

Treasury's new regulations limit the ability of foreign-based multinationals to reduce taxable profits on U.S.-source income. This is a major expansion for the Obama Administration,which had previously targeted only so-called "inversions" – transactions inwhich U.S.-based firms have sought through mergers to "re-domicile" themselves as foreign-based companies.
For the Tax Policy Center article, go here.

On April 4, 2016, the Treasury Department (Treasury) and the Internal Revenue Service (IRS) issued proposed and temporary regulations (T.D. 9761) under five Code Sections that limit cross-border merger transactions that the government characterizes as 'inversions' and certain post-inversion transactions. The temporary regulations incorporate rules Treasury and the IRS had previously announced in Notice 2014-52 and Notice 2015-79 (the Notices),with some modifications and changes. However, the temporary regulations also include several new rules. The text of the proposed regulations is the same as that of the temporary regulations.

For the PwC Insight, go here.

New U.S. reporting requirements are expected to shed unwelcome light on corporations' use of Dutch holding companiesÔøΩand could result in many of the holding companies being dissolved.

For the DTR story, go here. (subscription required)

Legislation the European Commission plans to propose April 12 thatwould require large multinational companies to publicly report profits and taxes paid on a country-by-country basiswill be expanded to cover jurisdictions that are deemed tax havens.

For the DTR story, go here. (subscription required)

Thomas Bissell, CPA,writes that tax code Section 4985's "anti-inversion" excise tax contains no exception for nonresident alien "insiders," although the eventual income that is realized by an NRA insider may be partially or entirely exempt from U.S. income tax under general tax principles. He considers arguments that extraterritorial application of the excise isn't appropriate.
For the BNA Insight, go here. (subscription required)

The European Commission has released a fact sheet on public country-by-country reporting for multinational enterprises.

For the fact sheet, go here.

EC Commissioner Jonathan Hill delivered a speech on tax transparency rules for multinationals on April 12.
For the speech, go here.

The European Commission on April 12 proposed public reporting requirements for the largest companies operating in the EU and in tax havens.
For the EC release, go here.

Mindy Herzfeld examines the push for public disclosure of country-by-country reports and compares the information to be disclosed under BEPS action 13with rules that FASB is now considering to increase the amount of foreign tax information that companies are required to disclose.
For the TNI article, go here. (subscription required)

Here's how American democratic capitalism shouldwork: U.S. corporationswould have a duty to maximize shareholder profit andwould be free to pursue that duty, including by mergerswith foreign firms. These mergerswould be driven by economic fundamentals, not a desire to game the U.S.taxsystem. In turn, U.S.taxlawwould provide the appropriate incentives, as adjusted through regular legislation, not episodic, politically driven executive action.
For thewashington Post editorial, go here.

The UK Chancellor of the Exchequer delivered his Budget on March 15, 2016. The accompanying Finance Billwas published on March 24.

A new 'Business Tax Roadmap' sets out the government's plans for business taxes through 2020 and beyond. It contains a number of proposals in a range of tax policy areas, including the UK's response to recommendations from the OECD's base erosion and profit shifting (BEPS) action plan.

For the PwC Insight, gohere.

On April 4, 2016, the Treasury and IRS issued proposed and temporary regulations that limit cross-border merger transactions that the government characterizes as 'inversions' and certain post-inversion transactions. The regulations incorporate rules previously announced in Notice 2014-52 and Notice 2015-79,with some modifications. However, the temporary regulations also include several new rules. The text of the proposed regulations is the same as that of the temporary regulations.

For the PwC Insight, gohere.

While the U.S. government's new rules may have killed the tax-inversion deal, cross-border merger activity is likely to continue unabated, analysts and traders said.
For the DTR story, go here. (subscription required)

European companies aren'tworried about the U.S. invoking retaliatory measures to protestwhat American lawmakers say are unfair probes into tax deals between U.S. multinationals and European Union member states, European Commissioner for Competition Margrethe Vestager said.
For the DTR story, go here. (subscription required)

The new U.S. model income tax convention includes some novel changes that represent a significant policy shift and underscore the various functions of the model treaty.
For the Tax Notes article, go here. (subscription required)

The collection of taxes that are owed for past years because of illegal state aid does not amount to retroactive taxation, EU Competition Commissioner Margrethe Vestager said April 8 during her visit towashington.
For the TNT story, go here. (subscription required)

While controversy over the European Commission's alleged unfair targeting of U.S. multinational corporations -- andwhat to do about it -- rages on, behavioral effects of the commission's state aid investigations are already evident among taxpayers and administrators.
For the TNI article, go here. (subscription required)

Large multinational companies such asAlphabet Inc.'sGoogle,IKEAandAmazon.com Inc.will be forced to publishprofits andtaxbills fromEuropean Unioncountries inwhich they operate, under plans the bloc's executivewill bring forward nextweek.
For thewall Street Journal story, go here.

The administration's far-reaching guidance to curb corporate inversions and earnings stripping casts a broad net that could catch common planning deals not intended to avoid taxes, practitioners told Bloomberg BNA.
For the DTR story, go here. (subscription required)