Int'l Tax News

Mindy Herzfeld examines public comments that criticize the lack of direction in the OECD's pillar 2proposals, saying itwould bewise for the organization to slow its aggressive timeline for consensus on howto address the digital economy.

Carrie Elliot reviews how the proposed BEAT regulations apply to partnerships.

France may have announced the United States is no longer pushing for a global tax overhaul to beoptional for companies, but that doesn't really change much in ongoing negotiations, the OECD's tax chiefsaid.

U.S. Treasury Secretary Steven T. Mnuchin's surprise proposal to make pillar 1 of the OECD's digitaleconomy project electivewas driven by doubt that Congresswould approve a mandatory regime, accordingto Treasury's top international tax official.

France and the United States are making progress in OECD-led negotiations on a solution tomodernize international corporate tax rules by the end of 2020 ÔøΩ but morework remains, a top Frenchofficial said.

If countries insist on imposing arbitrary taxes on American digital companies, the United States couldrespond by levying tariffs on their automobiles, U.S. Treasury Secretary Steven Mnuchinwarned.

The IRSwill provide relief in the form of private letter ruling or closing agreement to taxpayerswith repatriated earnings that are taxed twice under Section 965.

In economic analysis, Martin A. Sullivan explores just how much profit shifting into tax havens hasincreased over time.

European Commissioner for Trade Phil Hogan said the EUwill present a united front against tariffsthe United States plans to impose on France in response to its digital services tax.

The OECD's base erosion and profit-shifting project has increased the number of transfer pricingdisputes, according to members of a panel discussing the strengthening of dispute avoidance and resolutionmechanisms.

While acknowledging that the current proposal for a minimum tax under pillar 2 of the OECD's projecton digital economy taxation lacks key details, an OECD official urged caution in seeking a solution focusedon simplicity.

Punitive U.S. tariffs on French goodswon't convince France to abandon its digital services tax, butagreement on a global tax deal at the OECDwill, French Finance Minister Bruno Le Maire said

Look-through rules,which govern the taxability of payments between U.S. controlled foreign corporations andwhichwere extended in budgetary legislation enacted in December,will cost the federal government $700 million, the Congressional Research Service has said in a report.

President Donald Trump's administration saidwednesday it is supporting Brazil's bid to join the Organization for Economic Cooperation and Development, asserting that the country isworking toward policies that meet OECD standards.

Countries can strengthen their ability to collect tax revenue by acting multilaterally in away that limits their sovereignty, Pascal Saint-Amans, head of tax policy at the Organization for Economic Cooperation and Development, said Thursday at a conference in Berlin.

After months of tensions, French and US officials are set to meet face-to-face at theworld Economic Forum (WEF) nextweek to try and end the row over international taxing rights.

Richard Rubin and Theo Francis broadly review the effects of the Tax Cuts and Jobs Act.

The OECD is currently in the midst of a project intended to tackle the tax challenges arising from the digitalization of the economy. As laid out in Pillar 1 of its program, the goal seemed, broadly, to develop consensus on a new taxing right and to allow countries to tax multinationals even in the absence of traditional physical presence.Part I of the authors' article beginswith a brief survey of some of the main factors that prompted the OECD to turn its attention to this topic. They continue on to Part II inwhich they consider the origins and development of nexus in the international tax regime and showwhy this concept is amenable to broad expansion. In Part III, the authors then examine the range of reforms currently under consideration; they argue that the framing on digitalization misses a necessary connection to other pressing international policy programs that are also under development, specifically, a global commitment to building institutions that support sustainable economic development. Finally, they concludewith a prediction that on its current trajectory, the program ofwork on digitalization is likely to produce a new global tax deal that looks much like the old global tax dealwith a relatively modest redistribution of taxing rights among a few key states.

The IRS has opened an informal process that may offer relief to companies that pay tax twice on the same repatriated earnings.

Financial Accounting Standards Board Chairman Russell Golden told lawmakers that the Boardwill debatewhether companies must detail tax payments to individual countries by the end of the first quarter.

German Finance Minister Olaf Scholz intends to present a draft for a national financial transaction taxwithin the next month in the event that the ongoing negotiations for an EU-wide tax fail.

Under a new EU directive known as DAC 6 (EU Directive 2018/822), intermediaries that advise, assist, and direct cross-border arrangementswill now be required to report those transactions to their home member state. The first reports are due in August.

Although Norwegian officials remain optimistic that countries participating in theOECD's inclusive frameworkwill reach consensus on taxing the digital economy by 2020, the governmentwill move forwardwith unilateral measures if those countries cannot agree.

This article makes some projections about howwashingtonwill dealwith the BEPS 2.0 project over the coming months.Treasuryhijacked the European-led BEPS agenda once before, andwe're in the process of doing it again.

Implementing the recommendations of theOECD's base erosion and profit-shifting project could cost Ireland up to ÔøΩ2 billion in corporation tax revenue from 2022, according to theDepartment of Finance.

International agreement on taxing the digital economy needs to be reached by the end of 2020, given the proliferation of unilateral measures, but the solutionwon't be simple,according to anOECDofficial.

CbC reportswere supposed to help tax officials identify good candidates for audit, that is, "help theIRSperform high-level transfer pricing risk identification and assessment." But the data are blurredwith biases of unknown magnitude.why didwe spend hundreds of millions, or perhaps billions, of dollars developing and collecting datawith such questionable value?

Mindy Herzfeld examines the various tranches of regulations promulgated to interpret the Tax Cutsand Jobs Act and askswhether Treasury followed notice and procedure requirements in developing them

Finance Minister Siv Jensen confirmed that the countrywould consider unilaterally implementing a digital services tax as soon as 2021 if international negotiations to rewrite tax rules for the digital economy fail to reach consensus.

Tariffs and year-end transfer pricing adjustments present a unique conundrum in this era of tradewars. The authors analyze how tariffs can upset carefully planned transfer pricing arrangements and how to adjust those arrangements in response.

Pressure from voters has forced politicians to co-ordinate aninternational response

The U.S. Trade Representative's recommendation to impose tariffs on French imports in response toFrance's digitalservices tax has received mostly positive reviews from U.S. companies,whichwant amultilateral solution to digital taxation.

French Finance Minister Bruno Le Mairewarned that his governmentwould immediately go to theWTO to fight anysanctions imposed by the United States,which found that France's digital services taxdiscriminates against U.S. companies.

Mindy Herzfeld discusses the recently released final section 59A regs, saying Treasury's explanationsfor granting some taxpayer requests and not others aren't logical.

The author's research describes the plausible magnitude of US revenue loss due to profit shifting, building on recent developments in the literature aswell as new country-by-country data on US multinational companies in 2016. In the past, the most complete data sources have all shown large magnitudes of profit shifting, suggesting substantial revenue losses in non-haven countries.This research note uses recently released country-by-country tax data to estimate plausible benchmarks regarding the scale of profit shifting, finding that profit shifting is likely to be costing the US government about $110 billion a year in 2016 (at 2016 tax rates).The author concludes thatwhile much can be done to refine these estimates and learn more about the scale of the problem, the problem remains unambiguously very large.

Judge Albert G. Lauber of the U.S. Tax Court ruled that the U.S.-U.K. tax treaty protecting certain British enterprises from U.S. federal income taxes does not protect the U.K. company from the IRS increasing its taxable income by nearly $50 million.