Int'l Tax News

A monumental proposal for global tax reformwill be presented at the G20 Finance Ministers meeting in Lima, Peru, later thisweek. That'swhen the Organization for Economic Cooperation and Development (OECD)will present its final Base Erosion and Profit Shifting (BEPS) Project guidelines, a set of tax reform proposals designed to clamp down on tax avoidance among multinational corporations.
For the Forbes story, go here.

Withwealthycountries around theworlddesperate to reel in billions of dollars in unreported corporate tax receipts, the EU is rushing to finishnegotiations onhow toshare tax information for the first time in order tocombat evasion.
For the Politico story, go here.

The OECD's Tax Package, released in Paris today,will not stop corporate tax dodgers cheating poor countries out of billions of dollars of tax revenues, says Oxfam. The Base Erosion and Profit Shifting (BEPS) Action Plan outlines 15 measures aimed at tackling aggressive tax avoidance by multinational companies.
For the Oxfam story, go here.

Top Republican lawmakers are uneasywith new international plans to curb corporate tax avoidance, but they may not have many options to prevent the crackdown.
Rep. Paul Ryan, chairman of the tax-writing Houseways and Means Committee,warned Monday that the rules introduced earlier in the day by the Organization for Economic Cooperation and Development "will only increase the pressure for American businesses to move overseas" and "could put huge new burdens on American job creators."
For thewashington Examiner story, go here.

Multinational companies are girding for new rules designed to force them to pay greater corporate income taxes in more countrieswhere they operate, setting up potential clashes between Silicon Valley giants and European governments angling fortaxrevenue.
TheOrganization for Economic Co-operation and Developmenton Mondayissued recommendations aimed at stopping large companies in many industries from avoiding paying hundreds of billions of dollars in taxes every year through baroque structures that are legal, but have come under increasing political pressure, particularly in Europe.
For thewall Street Journal story, go here.

The OECD's final report on the transfer pricing items under its project to combat base erosion and profit shifting (BEPS),which follows two years of arduous negotiations, reflects a compromise,with country delegates toworking Party No. 6walking back some of the more radical provisions in the discussion drafts.

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

European Union reaction to the OECD's finalwork on its action plan on base erosion and profit shifting ranged from enthusiasticwelcome to scathing criticism, combinedwithwary optimism, indifference andwarnings against the EU implementing the measures if the U.S. doesn't.

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Through tweaks to the Model Tax Convention, the OECD believes itswork on profit shiftingwill stem elaborate structures, such as commissionaire arrangements, used by large multinationals to avoid the creation of a permanent establishment.

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Countries may be able to unilaterally protect their tax bases from hybrid mismatch arrangementswithout creating opportunities for double taxation under model language finalized by the Organization for Economic Cooperation and Development.

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The findings of a probe into Apple Inc.'s tax affairs in Irelandwon't hurt the country, according to Finance Minister Michael Noonan,who vowed to go to court to fight any negative ruling from European Unionwatchdogs.
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The OECD's final recommendations on harmful tax practices, covered in Action 5 of its action plan on base erosion and profit shifting (BEPS), set forth a patent box regime that even GermanyÔøΩlong opposed to the favorable tax regimesÔøΩmight consider adopting, a spokesman for the country's finance ministry told Bloomberg BNA.
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The OECD's final report on Action 13 under the base erosion and profit shifting projectÔøΩwhich calls for countries to adopt a country-by-country reporting template, master file and local fileÔøΩhas the potential to be one of its "greatest legacies."

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Twenty nations have committed to provide mandatory binding arbitration in their bilateral tax treaties as away to guarantee that treaty-related disputes are resolvedwithin a specified time frame, according to new standards under Action 14 of the OECD's project to prevent base erosion and profit shifting.
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The OECD's recommendations for addressing profit shifting and tax base erosion are only likely to increase pressure on U.S. businesses to move overseas, Houseways and Means Committee Chairman Paul D. Ryan (R-Wis.) said.
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The OECD has released its final package of measures to tackle base erosion and profit shifting (BEPS), representing the most ambitious effort in history to harmonize tax laws across national boundaries.
A major achievement of the two-year projectÔøΩundertaken by the Organization for Economic Cooperation and Development on the authority of the Group of 20 countriesÔøΩis revised transfer pricing guidance that replaces guidelines from "pre-history," according to the OECD's top tax official.
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The architects of a sweeping set of recommendations to battle offshore tax avoidance insist their projectwon't allow foreign countries to simply grab cash from U.S. companies.

The business community isn't convinced.

For The Hill story, go here.

In implementing the final OECD base erosion and profit-shifting project measures, the United States should follow the arm's-length principle, allow tax competition among national governments, and provide more clarity on how tax lawwill be applied, the Information Technology and Innovation Foundation said in October 5 comments.
For the ITIF comments, go here.

The OECD's base erosion and profit-shifting plan "is not a substitute for good tax policy," the Organization for International Investment said October 5 in response to the release of final BEPS measures, adding that further limits on interest deductibilitywould decrease GDP, reduce investment in the United States, and lead to fewer U.S. jobs.
For the OFII release, go here.

Lee A. Sheppard outlines the final action 15 report of the OECD's base erosion and profit-shifting project on developing a multilateral instrument to implement treaty-related BEPS measures,which she says amounted to literally stapling a new cover over their 2014 report.
For the TNT story, go here. (subscription required)

The final report on action 14 (improving dispute resolution mechanisms) of the OECD's base erosion and profit-shifting project includes changes to the OECD model tax treaty and commentary to increase the effectiveness of the mutual agreement procedure in resolving treaty-related disputes.
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The OECD's final base erosion and profit-shifting project action 13 report on transfer pricing documentation and country-by-country reporting closely mirrors the September 2014 report, but adds the implementation guidance, model legislation, and model competent authority agreements.
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The OECD's final report on transfer pricing under actions 8, 9, and 10 of its base erosion and profit-shifting project contains significant revisions regarding risk and recharacterization, commodity transactions, intangibles, cost contribution arrangements, and low-value-adding services.
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Ajay Gupta reviews the OECD's final report on action 7, noting thatworking Party 1 concedes further ground to business in its final recommendations for amending article 5 of the model treaty to crack down on the use of commissionnaire arrangements to circumvent permanent establishment provisions.
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The final report on action 6 of the OECD's base erosion and profit-shifting project -- underwhich itwas taskedwith developing model treaty provisions and recommendations to prevent the granting of treaty benefits in inappropriate circumstances -- sets out a broad new vision of the role of tax treaties.
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Lee A. Sheppard outlines the final action 4 report of the OECD's base erosion and profit-shifting project,which she says does not differ dramatically from the discussion draft, and concludes the report lacks strong, simple solutions.
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The OECD's final report on strengthening controlled foreign corporation rules under action 3 of the base erosion and profit-shifting project is largely a discussion of alternative approaches; none of the alternatives are intended to serve as minimum standards and all are expressly optional.
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Lee A. Sheppard summarizes and critiques the final action 2 report of the OECD base erosion and profit-shifting project, saying U.S. interests held too much sway over the topic and that simpler, better solutions should have been offered.
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The OECD on October 5 released its highly anticipated package of final reports from its base erosion and profit-shifting project to combat abusive corporate tax avoidance,which represents a "real agreement, not a lukewarm compromise" among countries, said Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration.
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Pascal Saint-Amans, Raffaele Russo and their tax colleagues at the OECD are happy people after the publication of the second and final set of proposals to tackle base erosion and profit shifting (BEPS) yesterday, following two years of intensive talks.
For the ITR story, go here.

The OECD has delivered the second part of its recommendations to reform international tax rules by tackling BEPS.while unanimity across all points discussedwas impossible, a higher degree of agreement – either in the form of consensus or agreement on 'minimum standards' – has been achieved than many expected, though this has not stopped non-governmental organisations from criticising the package as "a sticking-plaster approach".
For the ITR story, go here.

Sweeping plans for a global crackdown on corporate tax avoidancewere unveiled on Monday, after more than 60 governments agreed the first big overhaul of the rules for taxing profits for nearly a century.

The proposals to improve transparency, close loopholes and restrict the use of tax havens are the culmination of an ambitious international project launched two years ago by G20 governments in response to surging public anger over corporate tax avoidance.


For the Financial Times article, go here.

Theworld's top body for economic coordination unveiled its blueprint Monday for cracking down on international tax avoidance, an opening salvo inwhat promises to be a prolonged battle between countries and companies overwho gets taxed andwhere.

The Organization for Economic Cooperation and Development, a research institute funded by 34 countries including the U.S., is seeking to curb tax haven use and other strategies by companies such as Google Inc., Starbucks Corp. and Apple Inc.,which the group says costs theworld as much as $240 billion a year in lost revenue.

For the Bloomberg story, go here.

Today, the Organization for Economic Cooperation and Development (OECD) released long-awaited recommendations under its Base Erosion and Profit Shifting (BEPS) project to address the tax treatment of corporate profits earned across borders. The BEPS proposal does not change U.S. law, but other nations are expected to adopt the recommendations, and itwill have a significant impact on American companies doing business abroad.
For the Ryan statement, go here.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, haswelcomed the final package of Base Erosion and Profit Shifting (BEPS) measures that the Organisation for Economic Co-operation and Development (OECD) adopted today.
For his statement, go here.

World leaders must step up their efforts to fix the "outdated system of taxing global profits", according to a panel of development expertswho said a planned crackdown on corporate tax avoidance does not go far enough.

However, a G20 plan for a thorough overhaul of international corporate tax rules, to be unveiled on Monday,were hailed as a "a step in the right direction" by the panel set up by trade unions, development charities and campaigners.
For the Financial Times article, go here.

Over the past two years, OECD initiated a fast-paced programme to develop 15 Action Plans under the banner Base Erosion and Profit Shifting (BEPS).
For the Live Mint story, go here.

Opposition to foreign taxes on American investment and hardwork has been coded into our national DNA for almost 240 years. Yet almost two and a half centuries after resolving thatwewould not stand idlewhile others decide how to tax us, Americans once again must take decisive action to guaranteewe can enjoy the dividends of our ingenuity.
For thewashington Examiner story, go here.

The OECD's final package of proposals for reforming the international system for taxing companies brings to an end the two-year BEPS project led by the OECD and other G20 countrieswhich also included participation by representatives of developing countries, business, academia and NGOs.
For the Business Spectator story, go here.

The body that advises industrial nations on economic policy published proposals on Monday to overhaul theway international companies are taxed in an effort to tackle avoidance.
For the Daily Mail story, go here.

"The BEPS project needed to happen, and the OECD and G20 should be congratulated both for their hardwork and for achieving high-level consensus across many issues," said BIAC Tax Committee Chairwill
Morris today on the occasion of the long-awaited release of the OECD's 2015 BEPS deliverables package. "Moreover, this high-level consensuswas achievedwhileworking to an exceptionally ambitious timetable."
For the BIAC release, go here.

The Organization for Economic Cooperation and Development on Monday rolled out a sweeping set of final recommendations to battle offshore tax avoidance costing countries across the globe billions of dollars a year.
For the Hill story, go here.

A major overhaul of the international rules governing the taxation of company profits moved a step closer to completion Monday,with the publication of a package of new standards that are set to be adopted by leaders of the Group of 20 largest economies.
For thewall Street Journal story, go here.

Mindy Herzfeld reviews initiatives underway in Europe to address aggressive tax planning by multinational enterprises and cautions tax professionals against focusing their efforts exclusively on the OECD'swell-publicized base erosion and profit-shifting project.
For the TNI article, go here. (subscription required)

The full text of the OECD's final BEPS reports is available here.

Efforts to tackle unfair tax competition and corporate tax avoidance are straining relations between European Union member states and among (and evenwithin) political parties, according to EU politicians, company representatives and tax practitioners interviewed by Bloomberg BNA.
For the DTR story, go here. (subscription required)

A Treasury Department official said the U.S. has agreed to participate in discussions regarding the development of a multilateral instrument under Action 15 of the international project to combat base erosion and profit shifting.
For the DTR story, go here. (subscription required)

The OECD presented today the final package of measures for a comprehensive, coherent and co-ordinated reform of the international tax rules to be discussed by G20 Finance Ministers at their meeting on 8 October, in Lima, Peru. The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project provides governmentswith solutions for closing the gaps in existing international rules that allow corporate profits to «disappear» or be artificially shifted to low/no tax environments,where little or no economic activity takes place.
For the OECD release, go here.

As the final recommendations of the 15 action plans that comprise the OECD Base Erosion and Profit Shifting (BEPS) project approach, Pramila Shrivastav, former Chief Commissioner of Income Tax at the Indian Ministry of Finance, looks at the associated issues from a developing country perspective, arguing that convergence of interestswill hold the key to countering complex BEPS challenges.
For the ITR story, go here.