Int'l Tax News

The European Commission has raised concernswith proposed base erosion and antiabuse tax regulations (REG-104259-18), seeking an exemption for foreign affiliate reinsurance transactions to alleviate discriminatory elements of the BEAT and, to diminish double taxation, a provision that applies the BEAT to transactions netted of any related amounts included in taxable income from the same transaction.

The National Foreign Trade Council has asked in part that section 15 not apply to the first-year 5 percent base erosion and antiabuse tax rate in proposed BEAT regulations (REG-104259-18) and that payments to a related foreign party for contract research and development services should be specifically included in the services cost method exemption.

The Organization for International Investment has requested many changes to proposed base erosion and antiabuse tax regulations (REG-104259-18), including a change to provide that section 15 doesn't apply to tax years beginning in calendar year 2018 and asserting that payments to a controlled foreign corporation shouldn't be treated as base erosion payments.

International tax practitioners believe that any revisions to existing nexus and profit allocation principles that emerge from the OECD's digital economywork should be carefully designed and implemented,with a focus on administrability and proportionality.

In this article, the author discusses the design of an effective digital taxation system, arguing that the system's theory and goals must bewell defined.

Although the OECD is still in the early stages of finding a long-term, consensus-based solution to address the tax challenges of the digital economy, it is also doingwork on assessing potential options' economic impacts.

The German government does not expect European Union finance ministers to unanimously agree to a digital tax on Tuesday and is continuing to strive for minimum corporate tax rates at the global level, a source said on Monday.

Uber has been fighting on multiple fronts over its VAT obligations in different jurisdictions. ITR examines how a settlementwith the Egyptian authorities and an ongoing legal drama in the UK signal two different approaches to making the 'platform economy' subject to VAT rules.

A regulatory project regarding passive foreign investment companies had been "languishing" for decades, but a minor change under 2017's federal tax overhaul paved theway for a comprehensive draft of proposed rules, a U.S. Treasury Department official said Thursday.

The French cabinet has cleared theway for Europe's first active digital service tax (DST). Experts say the proposals are still not detailed enough for the affected companies to prepare to pay the tax, despite its retroactivity and the quick turnaround before the first payment is due.

The Silicon Valley Tax Directors Group has criticized aspects of proposed foreign tax credit regulations (REG-105600-18) that affect technology companies, asserting in part that a foreign branch income rule is too harsh and that a new proposed rule iswarranted to address the allocation and apportionment of research and experimentation expenses.

PwC has submitted comments on behalf of a group of companies on an issue arising from the interaction of section 267(a)(3)(B)with the repeal of section 958(b)(4), seeking guidancewith retroactive effect to mitigate an unintended consequence of the repeal that could have tax and financial statement implications for many foreign-parented multinationalswith U.S. subsidiaries.

The Court of Justice of the European Union has published the reference for a case (C-749/18) onwhether Luxembourg tax integration rules applicable to multinational corporate groups infringe upon the EU freedom of establishment.

U.K.-based Cairn Energy PLC's claims brought under the India-U.K. bilateral investment treaty over a retroactive tax dispute likelywon't be resolved until late 2019.

A new IMF policy paper says many proposals for taxation of the digital economy fail to adequately address profit shifting and tax competition ÔøΩ concerns that it says persist despite the OECD's base erosion and profit-shifting project.

Anticipation is building as stakeholders, including businesses, academics, and civil society organizations, prepare to speak at the OECD's public consultation on the tax challenges of the digital economy.

In this article, the author examines allegations by European finance ministers that the deduction for foreign-derived intangible income violates thewTO rules, and he explainswhy ÔøΩ based on the eligibility requirements of section 250 and the scope of thewTO subsidy disciplines ÔøΩ those concerns are misplaced.

Robert Goulder critiques Open, the latest offering from Kimberly Clausing,which argues against protectionist trade policies and for stricter rules on corporate profit-shifting.

The Kansas House has amended and passed a comprehensive tax bill thatwould exempt global intangible low-taxed income from state taxation and impose sales tax collection obligations on remote sellers.

With the recently proposed U.S. foreign tax credit regulations prompting calls for an update, Treasury and the IRS are consideringwhether to issue proposed regulations on the allocation of research and experimentation expenses.

Government officials from the United States, France, and Italy are optimistic that OECD negotiations concerning the tax challenges of digitalizationwill ultimately lead to an international consensus on new principles for allocating taxing rights.

The European Commission has opened an in-depth state aid investigation into a ruling allowing a Finnish multinational group's Luxembourg financing subsidiary to deduct "fictitious interest payments" associatedwith interest-free intragroup loans.

EU member states have unanimously rejected the European Commission's expanded blacklist of 23 jurisdictionswith deficient safeguards against money laundering and terrorist financing.

The Romanian presidency of the EU Council conceded March 1 that "all possibilities to make progress" at the technical level on its digital advertising tax (DAT) proposal have been exploredwithout success.

Treasury may not be done offering relief from one of the most high-stakes issues under the global intangible low-taxed income provision.

The IRS released an international practice unit that provides a general explanation of the process for competent authority requests made to the U.S. competent authority under a mutual agreement procedure article representative of most U.S. income tax treaties.

No-tax countrieswill probably have to beef up their administrative resources to enforce the OECD's substantial activities requirements, according to a tax practitioner.

The Ninth Circuit's forthcoming decision in Altera may decide the fate of thewave of new challenges to the transfer pricing regulations that followed the release of the Tax Court's 2015 decision.

The IRS is not backing down from its disqualified imported mismatch rule under its proposed anti-hybrid regs, defending the rule as necessary.

U.S. Treasury officials' goal in moving forwardwith negotiations on new approaches for taxing the digital economy is to reach international consensus on standards that can regulatewhat many countries are already doing.

Although Treasury expects to issue final global intangible low-taxed income regulations by this summer, basis adjustment rules for the use of tested losseswill come in a later round of regs.

U.S. tax law maintains a unique and valuable tax exemption for certain sovereignwealth fund (SWF) income. The exemption can be traced to U.S. allegiance to sovereign immunity, and it is uniquewithin the international tax community.

In news analysis, Nana Ama Sarfo looks at corporate responses to the U.K.'s tax strategy disclosure requirement and how they fit into broader tax transparency trends.

The European Commission has opened an investigation to examinewhether tax rulings by Luxembourg amounted to state aid for Finnish food and drink packaging company Huhtamaki, it said on Thursday.

Research and development tax benefits require technological risk and advancement, but not necessarily a successful project, according to a recent judgment from the Canadian Tax Court.

India's direct and indirect tax regimeswill continue undergoing changes to advance the ease of doing business in the country, according to Finance Minister Arun Jaitley.

The OECD's call for input on approaches to solve the tax challenges of the digital economy elicited more than 100 submissions from a range of stakeholders that raised flags about the four options under consideration.

The following reportwas published in November 2018 by the Council on Economic Policies (CEP) as Discussion Note 2018/3.

U.S. companies deciding to invest domestically offer signs that tax provisions benefiting U.S. exporters areworking as intended, but countervailing factors still frustrate decisions to bring intellectual property home.

France plans to require large internet companies to start paying a temporary 3 percent digital services tax in October.

France movedwednesday to impose a 3 percent tax on Google, Apple, Facebook and other tech giants in a bid to advance an international agreement to clamp down on corporate tax avoidance.

The IRS has scheduled a March 25 public hearing on proposed regulations (REG-104259-18) that provide guidance on the tax on base erosion payments of corporationswith substantial gross receipts that make payments to foreign related parties and on the applicable reporting requirements. Discussion topic outlines are due by March 15.

The European Commission's blacklist of 23 jurisdictionswith insufficient money laundering and terrorist financing controls has been metwith fierce resistance from EU Council member states, according to EU Justice Commissioner Věra Jourová.

Citing the need to remain competitive, the government of Luxembourg has proposed a 1 percentage point reduction in the corporate tax rate and a more flexible interest expense limitation for consolidated corporate groups.

The U.S. Virgin Islands government is urging the U.S. Court of Appeals for the Third Circuit to clarify that the commerce clause doesn't extend to unincorporated territories of the United States.

Practitioners are applauding proposed regs on the foreign-derived intangible income provision for taking a comprehensive and reasonable approach, though some details may need to be further explained in final regs.

Recent EU court decisions may have dealt the European Commission a setback in its effort to fight tax competitionwith state aid law, but they avoid ruling on key questions involved in other high-profile cases.

In a February 25 letter to IRS Commissioner Charles Rettig and two Treasury officials, American Citizens Abroad requested relief from the "extensive expansion" of reporting requirements imposed by the revised Form 5471, "Information Return of U.S. Personswith Respect to Certain Foreign Corporations."

China's governmentwill ask the National People's Congress to cut taxes by more than CNY 1.3 trillion (about $194 billion) to stimulate manufacturing, a Ministry of Finance official told China Daily, a state-funded newspaper.

The European Commission is assessing its next steps after a court annulled its decision that Belgium's excess profit tax schemewas illegal state aid, according to EU Competition Commissioner Margrethe Vestager.