Int'l Tax News

If taxpayerswish to convince theIRSthat upcoming guidance should apply thedividends received deduction(DRD) to lower-tier dividends from specified foreign corporations (SFCs) to a controlled foreign corporation, they may havework to do.

Martin A. Sullivan ponders the possibilities of further base-erosion-and-profit-shifting-related estimates by the OECD and by others.

As part of its effort to prevent profit shifting, Norway'sMinistry of Financehas released a proposal for a newwithholding tax on interest and royalties paid to related parties resident in low-tax countries.

Following the approach recommended by the OECD and the African Tax Administration Forum, South Africa's National Treasury has proposed restricting deductible net interest as a percentage of earnings before interest, taxes, depreciation, and amortization.

The Grand Chamber of the EU's highest court has found that Hungarian turnover-based taxes on telecom and retail operations don't violate the freedom of establishment, even though the tax burden falls heavily on foreign-parented operations.

Hungary's imposition of cascading fines related to Google Ireland's failure to submit a tax declaration for its advertising services constitutes a restriction on the freedom to provide services, according to the EU's highest court.

Although the United Kingdom's diverted profits tax (DPT) has become a powerful transfer pricing enforcement tool, itwasn't intended to be permanent and its future necessity remains under review, according toHM Revenue & Customsofficials.

TheOECD's proposals on the reallocation of taxing rights are "unnecessarily complex" and could lead to the establishment of tax avoidance practices and international conflicts, according to a study by European research institutes.

The United Kingdomwill take public comments about digital taxation into account as it shapes its trade policywith the United States, according to its negotiating mandate for a U.K.-U.S. free trade agreement (FTA).

Some of theworld's largest corporations are finding their financial statements under unwelcome scrutiny as activists ÔøΩ and candidates in the 2020 presidential race ÔøΩ claim they reveal low effective tax rates and loopholes in the system.

The Organization for Economic Cooperation and Development appears to be broadening the scope of its proposed new global taxing regime to include more digital and online activities such as cloud computing and other business-to-business services.

The Organization for Economic Cooperation and Development's program for tax administrations and multinational corporations to openly discuss transfer pricing issues isn't currently taking on any new companies, an Internal Revenue Service official said Thursday.

Companies in Greece are concerned over the vague details of tax legislation that requires online platforms to provide information on sellers. The new law comeswith severe measures for non-compliance.

South Africa's Finance Minister Tito Mboweni has announced that the countrywill aim to increase its corporate income tax base and signalled a future rate reduction. The VAT rate remains unchanged amid minor changes on indirect taxes.

Lawmakerswho supported the Tax Cuts and Jobs Act's global intangible low-taxed income regime didn't realize that some multinational corporationswould end up paying much more in tax thanwas anticipated, according to a former senior tax counsel.

In economic analysis, Martin A. Sullivan examines how any OECD requirement that large multinational corporations calculate their pillar 1 amount A profit reallocations from source countries to market countries could result in significant tax increases.

The OECD's base erosion and profit-shifting project had a catchy name: BEPS. But in a recent statement from the OECD/G-20 inclusive framework on BEPS, the organization refers to its latest undertaking as the "Two-Pillar Approach to Address the Tax Challenges Arising From the Digitalisation of the Economy." The inability to come upwith a succinct title for a project that in reality is awholesale rewrite of international tax rules reflects a deeper problem: The project means different things to its participants, its opponents, and even its advocates.

The Belgian tax administration says patent boxes should be exempted from the OECD's proposed global anti-base-erosion (GLOBE) minimum tax.

G-20 finance ministers haveendorsed an updated roadmap to guide OECD-level negotiations on a global tax overhaul deal by the end of 2020, underscoring the importance of agreement on elements of that solution by July.

Legislation recently introduced in the U.S. House of Representativeswould force large multinational companies to provide country-by-country financial reports that the bill's Democratic sponsors saywould reveal the possible use of offshore tax havens.

Anew economic analysis fromKPMGthrows into question the need for differentiation in amount B of theOECD's so-called unified approach for modernizing corporate tax rules for the digital age.

In economic analysis, Martin A. Sullivan uses details from an OECD proposal and real but imperfect data to mimic how the OECD may begin to tax the digital economy.

Facebook founder and CEO Mark Zuckerberg is expected to deliver remarks on Saturday in Germany expressing his company's acceptance of having to pay more taxes under global tax reforms."I understand that there's frustration about how tech companies are taxed in Europe.we alsowant tax reform and I'm glad the OECD [Organization for Economic Cooperation and Development] is looking at this," excerpts of Zuckerberg's speech read, Reuters reports.

A bill proposed by two Democratic senatorswould reverse a recent U.S. Treasury Department proposed regulation thatwould exempt corporate income already taxed at high rates from the 2017 tax overhaul's global minimum tax.

The Congressional Budget Office's recent economic outlook report is murky on how the 2017 tax overhaul's international measures lowered corporate revenue projections by roughly $110 billion, leaving space for debate aboutwhether business-friendly regulations affected the adjustment.

The OECD has published its long-awaited TP guidance on financial transactions that includes several new points on how to apply the arm's-length principle (ALP) to credit default swaps and economic modelling.

TheOECDis starting to design model rules governments can adopt to ensure sharing and gig economy platform operators report seller details in a consistent manner to tax administrations ÔøΩ and is asking for input.

Finance ministers added four jurisdictions to the EU list of noncooperative jurisdictions for tax purposesand adopted severalVAT-relatedtexts.

The EUwill enact a plan B if countries can't agree on a global tax update by the end of 2020, but for now, it's fully focused on plan A, the EU's tax chief said.

Turkey has until the end of the year to complywith European Union demands on tax transparency, or else risk being added to a list of countries that could face financial sanctions, according to Austrian Finance Minister Gernot Bluemel. The rules include bilateral agreements to automatically exchange bank informationwith EU members,which include Cyprus.

The authors consider the impact of the U.K. tax authority's Diverted Profits Tax so far, andwhat's ahead for multinationals.

A Luxembourg entity that owned a Canadian shale oil company and admitted involvement in a tax avoidance transaction has prevailed over allegations by the Canadian government that itwasn't entitled to treaty benefits.

The two-pillar solution to update international tax rules for the digital age that's being considered by nearly 140 countries is projected to raise $100 billion annually in corporate tax revenues ÔøΩ but that estimate comeswith caveats.

Evenwith pushback from domestic investors, there is a high likelihood that the proposal to repeal India's dividend distribution tax (DDT)will pass in Parliament, a practitioner said.

TheFinancial Accounting Standards Board's pending decision on disclosure requirements for disaggregating income taxes may involve a balancing act,weighing investors' benefits against additional costs that companies might incur.

U.S. multinational corporations could see new restrictions on foreign tax credits under legislation being pushed by twoSenateDemocrats.

The United States has indeed reached a détentewith France over digital taxation and is pushing ahead at theOECDon a global solution to modernize the corporate tax system,TreasurySecretarySteven Mnuchinsaid. Speaking during a February 12Senate Finance Committeehearing,Mnuchinprovided confirmation ofnews in Januarythat the United States and France reached a settlement regarding the latter'sdigital services tax, on the sidelines oftheworld Economic Forumin Davos, Switzerland.

The Cayman Islandswill join Oman, Fiji, and Vanuatu on an EU blacklist of foreign tax havens, making it the first UK overseas territory to be named and shamed by Brussels for failing to crack down on tax abuse.

The tax and trade communities in the United States, Canada, and Mexicowill have towork closely together to successfully navigate the road ahead on taxation of the digital economy, a KPMG tax partner said.

Treasury's proposed rule for sourcing sales of digital content is unworkable and should be revised to allow taxpayers to source those sales to the billing location of the first unrelated purchasing entity, according to several industry groups.

Capitalism needs a revolution, and fair taxation of major digital companies could play a big role in restoring capitalist values, according to French Finance Minister Bruno Le Maire.