Int'l Tax News

The European Union plans to update its year-old blacklist of tax havens to include new criteria and an expanded geographic reachÔøΩpossibly all theway to the U.S.

France's government is said to beweighing a delay in a planned tax cut for large companies in 2019 as part of an effort to maintain the country's public deficit under the 3 percent ceiling imposed by the European Union after President Emmanuel Macron unveiled measures to appease Yellow Vests protesters.

The European Parliament voted overwhelmingly in favor of a temporary digital services tax aimed not only at large internet companies such as Google Inc. but also streaming services such as Netflix Inc., Spotify Technology S.A. and Apple Inc.

The U.K.'s largest corporations paid more taxes than last year, but their share of all tax collected continues to fall. The 100 largest companies paid 84.1 billion pounds ($106 billion) in tax in 2017-18, growing by 1.2 billion pounds year on year. But the share of tax these companies pay annually has dropped 1 percentage point over the past three years.

Online marketplaces including Amazon.com Inc. and eBay Inc.will be required to collect value-added taxes from foreign e-commerce markets selling goods into the European Union under new rules adopted by the European Commission.

The choice of Annegret Kramp-Karrenbauer to lead the ruling Christian Democrats means the same cautious and incremental tax-policy making characterizing Germany for more than a decade even as it faces competitive challenges from Anglo-Saxon tax reform and uncertainties resulting from the looming Brexit.

A surprise announcement from Brazil's revenue service creates the possibility of a 200 percent tax penalty, and the country's leading business association is scrambling to respond. The revenue service announced on Dec. 5 that itwon't accept monthly tax payments companies make after May 31 in relation to a measure that took effect in June that barred companies from using accumulated tax credits to pay income taxes on a monthly basis.

Global e-commerce giant eBaywarned that the costs of goods purchased online by New Zealand customerswould increase come Oct. 1, 2019,when online marketplaces like Amazon.com Inc. and Alibaba.comwould have to collect the country's goods and services tax if a government proposal takes effect.

A European Parliament committee voted to adopt a strict "economic substance test" that corporations must pass before moving from one EU member state to another.

India is bolstering its advance pricing agreement tax programwhichwas designed to reduce costly disputeswith multinationals after it came under criticism for being too burdensome.

The Australian Taxation Office (ATO) said large corporate groups underpaid their taxes by an estimated AUD 1.8 billion (approximately $1.3 billion) during fiscal 2015-2016, or 4.4 percent of the total amount owed.

AwTO appeals body has returned a split decision on rulings by a dispute resolution panel acting on complaints brought by the EU and Japan that some Brazilian tax programswere prohibited subsidies.

U.S. Treasury officials continue to assess the scope of their authority to help alleviate headaches associatedwith the increase in controlled foreign corporations under the Tax Cuts and Jobs Act (P.L. 115-97).

Although the proposed base erosion and antiabuse tax regulations take a taxpayer-favorable approach to the services cost method (SCM) exception, officials concluded that the statute doesn't support netting or a cost of goods sold (COGS) exception.

The first tranche of guidance on previously taxed income (PTI) since the enactment of the Tax Cuts and Jobs Act (P.L. 115-97) may need greater simplicity to prevent "hyper-complexity," a senior Treasury official said.

While the Tax Cuts and Jobs Act makes only a few revisions directly to subchapter K, it introduces many rules uniquely applicable to partnerships. Guidance in TCJA-related notices and proposed regulations clarifies how partnerships should apply these new provisions. The interest deduction limitation, gain on sales of partnership interests, and international provisions are just a few of the new TCJA rules that require special attention from partnerships.

Embattled French President Emmanuel Macron,whose approval rating is at 23 percent, has repealed the fuel tax hike that sparked the protests. Itwould have been about 30 cents on $7 per gallon ÔøΩ more than half ofwhich is tax already.

The IRS has issued proposed regulations (REG-132881-17) eliminatingwithholding on payments of gross proceeds and on some insurance premiums, deferringwithholding on foreign passthrough payments, and clarifying the definition of investment entity. The regs also provide guidance on some due diligence requirements ofwithholding agents and on refunds and credits of amountswithheld.

The European Parliament voted in plenary to support a broader digital services tax (DST) than the one proposed by the European Commission. The commission's proposal has failed to gain the support of EU finance ministers.

The OECD released a report on its second round of peer reviews examining countries' spontaneous exchange of tax rulings, finding that the review process has facilitated positive changes.

Countries remain uneasy overwhether businesseswill flee their markets given the United States' recent tax reforms.

Acknowledging that guidance is needed to better definewhat constitutes foreign use under the foreign-derived intangible income (FDII) provision, the IRS is contemplating presumptions to aid taxpayers.

Although total uniformity may be unrealistic, the eight countries participating in the Forum on Tax Administration's international compliance assurance program (ICAP) pilot are trying to develop common risk assessment standards for country-by-country reporting data.

The U.S. Treasury has indicated that the door may be open to revisiting its controversial net used tested loss amount rule under its guidance to the global intangible low-taxed income provision.

Some controversial aspects of the new proposed foreign tax credit regulationswere intended to reliably approximate economic reality in an administrableway rather than to prevent perceived abuse or avoidance.

Direct Energy has requested thewithdrawal or indefinite suspension of the section 385 recharacterization regulations (T.D 9790) to allow taxpayers to focus their resources on implementing the base erosion and inversion provisions of the Tax Cuts and Jobs Act (P.L. 115-97) and to reduce duplicative efforts, compliance cost and burden, complexity, uncertainty, and unintended consequences.

The Investment Industry Association of Canada has requested guidance for some financial institutions clarifying that as result of the repeal of section 958(b)(4) by the Tax Cuts and Jobs Act (P.L. 115-97), controlled foreign corporationswon't be considered U.S. payers for reporting and backupwithholding purposes andwon't be disqualified from the portfolio interest exemption because of their CFC status.

In this article, the author discusses Cameco, a long-awaited transfer pricing decision from the Tax Court of Canada that criticizes the Canada Revenue Agency's aggressive use of the sham doctrine and its strained interpretation of Canada's transfer pricing rules. The court opts to focus on the parties' actual actions and commercial realities, rather than advance a hypothetical alternative. The ruling is also consistentwith Canadian precedent,which takes a notably different approach to transfer pricing than the OECD.

In an address, Irish Finance Minister Paschal Donohoe discussed the current international tax environment and Ireland'sworkwith the OECD and U.S. government to attain a global solution for digital tax challenges, noting that "it is in everyone's interest that the ongoingwork results in an international tax framework that is sustainable into the long run."

Officials on both sides of the Atlantic agree that a global solution for taxation in the digital era is best achieved through the OECD.

In this article, the author examines the structure of the OECD's multilateral instrument, including the compatibility clauses and the use of opt-in, opt-out, and alternative provisions,with a focus on the capital gains provisions in article 9.

The compliance efforts of an Australian Taxation Office (ATO) task force targeting e-commerce and the digital economy have resulted in over AUD 1 billion (around $723 million) in additional cash collections through June 30, 2018.

The IRS has released a new set of frequently asked questions on the transition tax,which includes a clarification that some overpayments for the 2018 tax year can be refunded.

The US digital streaming company Netflix (NFLX) is the latest tech giant to be scrutinised by the UK tax regulator HM Revenue and Customs (HMRC).

Tax revenues in developed economies have continued to rise,with corporate and personal consumption taxes accounting for a growing proportion of countries' total tax revenues, according to two new reports released by the OECD, "Revenue Statistics 2018" and "Consumption Tax Trends 2018."

In this article, the author takes an in-depth look at Argentine Law 27,430, a major tax reform package that seeks to increase foreign investment by improving Argentina's tax attractiveness and align the country's tax systemwith the OECD's base erosion and profit-shifting project.

To prevent Hong Kong's blacklisting by the EU for offering incentives that ring-fence the domestic economy, the Executive Council has proposed expanding the current exemption for offshore private investment funds to cover their onshore counterparts.

Tax revenues as a percentage of GDP continue to rise in OECD countries,with France overtaking Denmark as the jurisdictionwith the highest tax-to-GDP ratio in 2017, according to a new report.

Lee A. Sheppard discusses new PE standards articulated by the OECD as part of the BEPS project and low adoption rate by European countries.

The United States' adoption of the base erosion and antiabuse tax is a signal to theworld that the time has come to reconsider the relevance of the arm's-length standard, an Indian official said.