Int'l Tax News

Indian clothing suppliers to American and European brands say new tax incentiveswill help them lower prices and reclaim ground they've lost to competitors elsewhere in Asia. A new program to make textile exports effectively tax free comes as buyers in places like the U.S. are looking to diversify their supply chains after years of relying heavily on countries like China, said Sanjay Arora ofwazir Advisors, a textile industry consultancy.

The U.K. government believes that some profits fromwork carried out in the U.K. by U.K. traders, professionals and companies are partly being allocated to entities or individuals in overseas territorieswhere no tax, or a lower rate of tax is paid, hence partially or fully avoiding U.K. tax. The U.K. tax authority is addressing the issue of fragmented profits by bringing the profits accruing to U.K. traders, professionals and companies into the U.K. tax charge.

Italy has introduced tax measures to support companies in their digital transformation, looking specifically at how blockchain, artificial intelligence and the internet of thingswill have a significant impact on the future business model of Italian businesses.

"An impetus for rethinking international corporate taxation stems from the rise of highly profitable, technology-driven, digital-heavy business models," International Monetary Fund Managing Director Christine Lagarde said March 25 in prepared opening remarks for an event inwashington.

France and the U.K. are edging closer to establishing a system to tax tech giants like Amazon.com Inc. and Alphabet Inc.'s Google, even as the OECD tries to reach global consensus on its efforts to rewrite international tax rules. The uptick in digital tax proposals,which most jurisdictions indicate are temporary measures, makes it clearwhat's at stake if efforts to find a global consensus at the OECD fail, tax practitionerswarned.

The 2017 tax overhaul reformed international tax rules in the U.S., including requiring companies to bring home offshore profits. Nearly a year and a half later, companies are stillwaiting for final guidance from the Treasury Department on many of those international rules. If the government finalizes rules by June 22, 2019, theywill be retroactively effective to the date of the law's passage. But if not, there could be a period of time inwhich the regulationswouldn't be effective. Here'swhere the international rules stand now.

The OECD released recommendations on how digital tech giants can aid in the international effort to crack down on value-added tax fraud.

Rahul Mitra of Dhruva Advisors LLP in New Delhi discusses the transfer pricing issues surrounding "marketing intangibles," following the OECD's release of revised guidelines.

In news analysis, Lee A. Sheppard describes how the Tax Cuts and Jobs Act limits the reach of the foreign tax credit.

Although intended as a means of increasing foreign digital companies' tax contributions, a digital services tax may be borne almost entirely by local consumers and businesses in the form of higher prices and commissions.

Whether they're streaming a movie on Netflix or buying a music album on iTunes, consumers are at risk of paying multiple taxes on the digital goods and services they buy. That's simply unfair, and Congress should do something about it. Suppose a resident of Nevada purchases a smartphone appwhile vacationing in Maine. The vendor's server happens to be located in Virginia. Currently, as a result of outdated lawswrittenwith brick and mortar stores in mind, there is nothing to prevent any and all of those states from levying a tax on that transaction, tripling the tax burden on the consumer.

France plans to make significant progresswith members of the G7 group of countries to reach an agreement on a minimum corporate tax rate after the OECD has presented itswork on taxing the digital economy to the G20 in June.

The South Korean government said itwill lower the stock transaction tax rate for shares traded on two major exchanges by 0.05 percentage point.

European officials have agreed to maintain funding for an information exchange program designed to curb tax dodging during the EU's next long-term budget period.

Nonstandardwork,which is on the rise in many countries, could have significant implications for tax revenues and raises serious questions aboutwhether and how tax systems should adapt accordingly, a new OECD paper says.

Australiawill not be joining the bandwagon of countries considering their own digital taxes, butwill insteadwait to seewhat comes of multilateral efforts coordinated by the OECD for taxing the digital economy.

In this article, the authors discuss the Netherlands' effort to overhaul its international tax ruling policy.

German Chancellor Angela Merkel said on Tuesday that if therewas no international agreement on taxing digital companies by the second half of next year, Europe should go ahead anyway.

For global corporations, determining how to complywith the US tax reform provisions and manage tax liabilities is difficult because as soon they resolve one tax problem, another pops up.

Eric Solomon of the American Bar Association Section of Taxation has submitted comments on proposed regulations (REG-105600-18) that provide guidance on the determination of the foreign tax credit, suggesting that some provisions be reconsidered and others clarified.

The European Parliament's Special Committee on Financial Crimes, Tax Evasion, and Tax Avoidance (TAX3) has published its final recommendations after concluding its one-year mandate.

The U.S. Treasury has updated its timeline for the release of proposed regs on previously taxed income, now targeting the end of summer or early fall.

Canada is clamping down on tax evasion via the real estate sector, limiting stock option deductions for employees of large corporations, strengthening its international tax rules, and enhancing beneficial ownership data availability.

Polish Prime Minister Mateusz Morawiecki suggested that a lack of consensus among EU member states on a digital tax regime could lead to more unilateral measures.

In this article, the author discusses issues regarding the arm's-length standard and its viability in today's evolving tax environment.

While some member states are moving rapidly to implement digital taxes that the EU failed to agree on as a community-wide directive, observers say such national laws conflictwith the EU's freedom of establishment clause.

Stephanie Soong Johnston delves into the OECD's March public consultation at its headquarters in Paris,where some of the taxworld's brightest minds gathered to discuss adapting the international tax rules for the digital age.

The European Commission has released a report by the Centre for European Economic Research analyzing the possible impacts of the draft common corporate tax base directive of October 2016 on the effective corporate tax burdens in EU member states.

In light of the profit-split method's potentially expanded role under a new regime for taxing the digital economy, the EU Joint Transfer Pricing Forum (JTPF)will exploreways to improve the method's clarity and simplicity.

Final regulated investment company rules clarify the treatment of subpart F and passive foreign investment company income inclusions, reversing Treasury and theIRS's 2016 proposed regulations.

Despite international progress on profit shifting, there are still policy gaps concerning opaque offshore ownership structures and corporate tax avoidance that are costing developing countries needed tax revenue.

The potential impact of a global minimum tax proposal on countries' taxing sovereigntywas a commonly raised issue during the OECD's public consultation.

Similarities between regulatory language in the foreign-derived intangible income provision and section 199 guidance could mean that regs under the defunct statutewill inform taxpayers on applying FDII's foreign use rule for general property.

Mindy Herzfeld examinesways to help the United States fix its flawed base erosion and antiabuse tax, saying the OECD's recent consultation document might offer a favorable path.

Sweden's governmentwants to revisit the idea of imposing a tax on the financial industry. Finance Minister Magdalena Andersson says her goal is to have a levy that singles out bankswith far more precision than previous proposals.

The OECD needs to better definewhat types of incomewould be targeted by new proposals to revamp how multinationals are taxed, the business communitywarned in letters to the group. The OECD is considering four ideas as it seeks a globally agreed-upon solution by 2020 to address some countries' concerns that multinationals aren't paying their fair share of tax, or aren't paying it in the right places.

Traders of European shares may face a new tax bill as finance ministers edge closer to an agreement in long-running talks on a financial-transaction tax.

The public perception that large multinational companies pay little tax has led to political demands for urgent action. The easewithwhich multinationals seem able to avoid tax and the three-decade-long decline in corporate tax rates compromise faith in the fairness of the international system. Recent international efforts ÔøΩ notably through the G20 and OECD ÔøΩ have made it harder for multinationals to shift profits to low tax rate locations. But vulnerabilities remain.

Multinationals looking to stay out of India'swidening tax net may have a new tool: A recent ruling that quashed authorities' attempts to tax income from a company based outside India.

A global minimum tax proposal to rewrite international tax rules for the modern economy may be unnecessary, companies and practitioners told the OECD at a public consultation in Paris. But if the OECD does move forwardwith the plan, it must be simple if it is towork, according to a range of speakers from businesses, non-governmental organizations, and academia.

French Prime Minister Edouard Philippe has said raising taxes isn't the solution to the issues that have been raised in a national debate launched by President Emmanuel Macron.Taxes "are high enough, they must come down," Philippe said on Europe 1 radio.while some taxes could be raised if others are lowered, Philippe says, "I can't believe that the only adjustment tool to resolve our country's problems is fiscal policy."

Companies that engage in cross-border mergers to lower their tax bill are likely to be stopped in their tracks as EU countries are set to have new powers to reject such moves.

In the fourth of a four-part series on the fundamentals of tax reform, James Atkinson and Kimberly Majure debunk five myths arising from the domestic provisions of the 2017 tax law and their interactionwith the law's international provisions.

India and the U.S. have reached an agreement to start exchanging country-by-country reports that disclose inwhich countries multinationals earn profits and pay their taxes.

The earnings and profits of an upper-tier controlled foreign corporation's partners must be increased due to a domestic partnership's income inclusions, the U.S. Tax Court ruled Feb. 25. The IRS determined Eaton Corp. owed tax deficiencies and penalties for 2007 through 2010 for failing to include correct gross income amounts. The reported amountswere underestimated by millions because Eaton didn't increase the earnings and profits of its upper-tier CFC partners, the IRS said. Eaton argued that the domestic partners' inclusions, under tax code Section 951(a), didn't affect the earnings and profits of its upper-tier CFC partners.

Irish Finance Minister Paschal Donohoe has told French Finance Minister Bruno Le Maire that Ireland doesn't support the European Commission's proposal for a temporary digital advertising tax.