Int'l Tax News

Germany's environment minister says the governmentwill discuss introducing a carbon tax as part of its national plan to curb climate change.

There is no gap in the architecture of globalization more serious than the failure of nations to prevent global companies andwealthy individuals from escaping taxation through tax havens, accounting devices and pressure to bring down business tax rates.

The Czech Republic has published corporate income tax amendments in connectionwith its implementation of the EU's anti-tax-avoidance directive (ATAD). Most of the new measures took effect April 1.

The European Commission rerouted an informal discussion on growth and taxation by the Economic and Financial Affairs Council April 6 to promote a shift toward qualified majority voting in tax matters. Three member states said they oppose the move.

The French public is exasperated over the country's high tax burden, so the government must respond quickly and decisively, France's prime minister said following the close of a national consultation initiated after violent protests.

The objective of the proposed Swiss corporate tax reform is to ensure that the Swiss corporate tax system is in linewith international minimal standards,which recognize as harmful the cantonal preferential tax regimes for holding, domicile and mixed companies. Accordingly, these privileged tax regimes need to be abolished by the cantons. The proposed new tax provisions are intended to achieve international acceptancewhile at the same time maintaining Switzerland's attraction for multinational enterprises.

The Treasury Department is being pressed by Republican lawmakers and business groups to correct a defect in a new tax on foreign earnings that has companies like biotech giant Amgen Inc. saying they may move their research and development operations offshore. They are asking Treasury to clarify how to properly allocate research and development expenses under the new rules,which are meant to ensure multinationals pay at least a minimum amount of tax on overseas profits earned in countrieswith lower tax rates than the U.S.

The treatment of stock payments under the new base erosion and anti-abuse tax is high on Treasury's list of outstanding items to tackle, an official said. The Treasury Department has received comments on pending issueswith the BEAT, includingwhether non-cash or property payments, including stock payments or the assumption of a liability, should be captured under the new tax.

Jeff VanderWolk of Squire Patton Boggs querieswhether the OECD needs to revise profit allocation rules to address digitalization.

Germany, Netherlands plan towork together to establish "minimum tax standard" to counter tax havens, according to joint statement supplied by Germany's Finance Ministry.

President Donald Trump's signature tax cuts are set to end starting 2021, and Corporate America must prepare for an increase in levies as it's unlikely Congresswill extend the stimulus, according to Morgan Stanley.

French Budget Minister Gerald Darmanin said March 29 that the state must stop creating new taxes and rather cut spending, in an interviewwith RMC radio.

The final part of this four-part Insight continues a review of the different forms of digital services tax introduced as interim measures in a number of jurisdictions until a global solution is reached.

IRS Commissioner Charles Rettig reiterated his intent to crack down on the use of complex offshore tax evasion techniques involving intellectual property.

A European-wide digital tax could have driven a global solution to the challenges of taxing the modern economy, said EU Competition Commissioner Margrethe Vestager.

The Netherlands officially ratified the OECD's multilateral "super tax treaty" designed to implement measures to prevent base erosion and profit-shifting in double-tax treaties March 29, joining 23 other jurisdictions.

The U.S. proposal to tax the digital economy could prove to be difficult to implement, especially for developing countries, an OECD official said. The complexity may put developing countries off from backing the U.S. proposal, according to Sophie Chatel, head of the Tax Treaty Unit at the OECD Center for Tax Policy and Administration.

European Union finance ministerswill make a push to include corporate tax reform at the top of the European Commission's agenda at a meeting in Bucharest.

U.S. exporterswill lose their ability to take a deduction on foreign-derived income if they're unable to prove to the IRS that the exportswere intended for foreign use. Companies should have "reason to know" that their goods and serviceswere meant for foreign persons and foreign use, and provide documentation to substantiate that claim if the goods find theirway back to U.S. soil.

Any solution to the digital taxation problemwill have to balance the desire for a simple solution against the need for precision, the OECDwarned. The Organization for Economic Cooperation and Development is grapplingwith the concepts as part of itswork to find solutions to taxing the digital economy, according to its senior officials.

The European Commissionwill try to unite countries on digital tax proposals being discussed at the OECD to ensure the plan alignswith the bloc's plans to reform corporate tax.

A new chart from Deutsche Bank's economicswizard Torsten Slok shows the effect of Trump's corporate tax cuts.

There have been significant changes to theway electronic services are taxed in Russia. Anton Nikiforov of Pepeliaev Group discusses the challenges that foreign companies face and how these challenges can be overcome.

The Frenchwant to pay less tax. Thatwas the clear message that emerged from a two-month "Great Debate" that saw voters present their grievances and suggest remedies to President Emmanuel Macron. "There's an exasperation about taxes," Prime Minister Edouard Philippe said in Paris April 8, as hewas presentedwith a study outlining the findings of the national debate. "The clear message is that taxes must fall and fall fast."

French lawmakerswill start debating April 8 a tax meant to force Internet giants like Amazon Inc. and Facebook Inc. to pay a 3 percent levy on digital turnover.

EU Competition Commissioner Margrethe Vestager says, "The best thing is a global solution, but ifwewant solutions in a reasonable time, then Europe must step forward," on France Inter, a radio channel part of Radio France.

France's National Assemblywill begin debate April 8 on a far-reaching bill thatwould impose a tax on revenue tech companies make from certain digital servicesÔøΩbut could exclude ad exchanges from the tax. The proposal to exclude such exchange companiesÔøΩthose that help advertisers place targeted ads onlineÔøΩwould address industry complaints that the legislationwould tax them twice on revenue they earn from certain types of digital advertising.

Jeff VanderWolk of Squire Patton Boggs discusses the feasibility of the OECD's proposal to allocate non-routine or residual income of a multinational business based on marketing intangibles.

Royal Dutch Shell PLC has announced that itwill be bowing out of a prominent U.S. industry association overwhat it views as a "material misalignment" on climate policy, including carbon pricing.

If governmentswere to take proven steps to attack corruption, global tax revenueswould increase by approximately $1 trillion, the IMF said April 4.

While the U.S. Tax Cuts and Jobs Act has created new incentives for dealmakers, trade tensions continue to pose a challenge to deal activityworldwide, and cross-border megadeals are at a historic low.

Francewon't drop its digital services tax despite the U.S. secretary of state'swarnings butwill keepworkingwith the United States to acceleratework on an OECD-level solution to tax the digital economy.

The Tax Cuts and Jobs Act's new section 250 provides domestic corporationswith deductions for foreign-derived intangible income and global intangible low-taxed income. Meanwhile, deemed dividends that are attributable to GILTI under section 78 are also deductible.

U.S. Secretary of State Mike Pompeo urged France in a meetingwith his French counterpart Jean-Yves Le Drian on Thursday not to approve a digital services tax, saying itwould hurt U.S. technology firms, the U.S. State Department said.

JPMorgan CEO Jamie Dimon lauded President Trump's tax cuts, saying the legislation passed in 2017 boosted the bank's net profit by $3.7 billion. "All things being equal (which they are not), the new lower tax rates added $3.7 billion to net income," Dimon said in JPMorgan's annual investor letter on Thursday.

In response to the OECD's digital taxation consultation, online platform providers including Uber and Spotify expressed fear of being singled out and subjected to stiffer treatment than conventional businesses.

A cross-party committee of UK politicians has said the Big 4 accounting firms should be broken up, justweeks before the Competition and Markets Authority (CMA) is due to publish the results of its review into UK audit practices.

This paper is a draft chapter of a forthcoming book on the taxation of international business profit by the authors of this paper, to be published by Oxford University Press. The bookwill study two proposals for reform in depth: a destination based cash flow tax and a residual profit allocation.This paper focuses on the residual profit allocation by income proposal in detail.

Proposed rules for a 2017 tax law provision aimed at stopping U.S. multinationals from shifting profits offshorewould create a significant tax burden for natural gas and oil companies and other industries, group representatives said during an IRS hearing.

Companieswould have to provide more details about income taxes they pay under a proposal by U.S. accounting rulemakers. The Financial Accounting Standards Board said its March 25 proposal is intended to help investors and analysts understand a business's tax liabilities aswell as international tax exposureÔøΩa hot topic as more U.S. companies move operations and investments overseas. Under FASB's proposal, businesses must break down their income tax expenses or benefits, aswell as cash tax paid to domestic, foreign, and state governments.

A senior Dutch government official has called on countries to follow the Netherlands' lead and impose awithholding tax on royalty and interest payments to companies operating in low-tax jurisdictions and tax havens.

Brussels on Tuesday ruled that the UK gave illegal tax breaks to some multinational companies and ordered Britain to recoup lost revenues.

Cargill Inc.'s recent victory in a customs court case sets an important precedent for Brazil's exporters, shielding them from potentially huge tax fines. Brazil's revenue service appeals court, in a unanimous decision, upheld the legality of Cargill's export processes. The court rejected the revenue service's $2.6 billion fine, that equaled the total of the company's exports for 2013. The ruling is an important victory for exporters because "it recognizes that the mere existence of a company abroad for business operations, even in locations considered tax havens, does not render the operations unacceptable," said Fabio Pallaretti Calcini of the law firm Brasil Salomao and Matthes.

Denmark's parliament has given its final go-ahead to a landmark agreement thatwill see Airbnb Inc. share information on rental incomewith the local tax authorities. The agreement is due to come into force on July 1,with the information-sharing process due be automatized from 2021.

The Treasury Departmentwill refine guidelines that tell taxpayers how to show they qualify for a 2017 tax law perk for exporters, a Treasury official said.

The OECD haswarned that failure to reach a global agreement on how to tax the digital economy could lead to "international tax chaos."

A group of 15 Republicans on the Houseways and Means Committee urged thewhite House to "use all appropriate tools," potentially including trade responses, in response to taxes France and other countries are proposing for digital companies.

India is processing intercompany pricing pacts involving the U.S. and other countries at a faster clip than ever before, churning out 52 pacts in the year ended March 31, tax authorities said. Of the 52 deals India inked in 2018-19, 11were bilateral advance pricing agreements,which involve foreign tax departments aswell as companies, India's Central Board of Direct Taxes said.

The United Nations has issued a report, "Financing for Sustainable Development,"which calls for an overhaul to national and international financial systems in the face of inadequate digital tax rules and revenue.