Int'l Tax News

The European Commission's proposal for an EUwide tax on financial transactions has generated much public and political discussion since itwas first published on September 28, 2011. This article discusses the proposal for the introduction of a financial transactions tax both in the EU and U.K. and the possibility of its enactment.

The chances of a digital tax on large internet companies like Facebook and Alphabet Inc.'s Google vanished Nov. 28when Ireland, Sweden, Denmark and Finland refused to agree to impose the temporary 3 percent levy.

U.S. companieswon some concessions from the Internal Revenue Service following proposed regulations thatwould soften the blow of a new foreign tax -- but the rules didn't go as far as the business community had hoped.

The Australian Taxation Office (ATO) has issued a new draft risk assessment guideline that rates inbound distributors' transfer pricing compliance risk based on the ratio of earnings before interest and taxes (EBIT) to sales.

Tentative plans to revamp the transfer pricing ruleswith a new intangible property definitionwould add nothing new to the Tax Cuts and Jobs Act (P.L. 115-97), according to a top Treasury official.

Treasury and the Office of Management and Budget continue to sit downwith concerned taxpayers as the proposed regs for the base erosion and antiabuse tax await final approval.

G-20 leaders must unite to keep political momentum going at the highest level so that countries stand a good chance of agreement on a long-term approach to taxing the digital economy, the OECD's chief said.

Spainwill be the next European country to introduce the Financial Transaction Tax (FTT),which is estimated to raise ÔøΩ8.45 billion ($9.57 billion) in 2019, according to the Government's forecasts. The main objective of the FTT,which many refer to as the Tobin tax, is to introduce the tax system into the financial sector and to increase the tax collection of the States. In this case, however, it also responds to the need to justify the budget plan presented by Madrid in Brussels last October,where the Spanish Government proposed a deficit reduction of 0.4% for next year instead of the 0.65% suggested by the European Commission.

Business groups are praising the new tax package from Houseways and Means Committee Chairman Kevin Brady (R-Texas) for including technical corrections to the 2017 tax-cut law. The bill Brady released Monday includes five provisions that aim to correct areas of the 2017 tax lawwhere therewere unintended consequences. Two technical corrections in Brady's billwould address priorities of the retail industry. Another provision in Brady's billwould help businesses receive tax refunds.

A Facebook tax official denied the company had sought special tax treatment in Europe and a Google executive committed to ending structures in Bermuda as European Union lawmakers sought Tuesday to probe suspected aggressive tax planningwithin the bloc. At a hearing held in Brussels, a tax executive from luxury clothing firm Kering also said the company's decision to use a Swiss structurewas "strategic" rather than tax-motivated. This is after statistics suggesting the company's employees in Switzerlandwere 115 times more productive than other staff raised eyebrows among lawmakers.

The U.S. House of Representativeswill likely vote thisweek on a year-end tax package, released Monday evening by Houseways and Means Committee Chairman Kevin Brady, R-Texas, he told reporters Tuesday. The package ÔøΩwhichwould correct parts of the Tax Cuts and Jobs Act, renew expiring tax incentives, enhance tax-advantaged retirement accounts and provide temporary relief for victims of recent natural disasters ÔøΩwill likely be brought to a vote thisweek, at the discretion of House Majority Leader Kevin McCarthy, R-Calif., Brady said.

House lawmakers from both parties announced legislation Tuesday evening thatwould impose a tax of $15 per metric ton on carbon emissions starting in 2019 thatwould increase by $10 each following year. In addition to a carbon tax, the Energy Innovation and Carbon Dividend Act of 2018would also impose a tariff on imports not subject to a similar tax at home andwould rebate to the American public all the revenue raised by the bill.

The Treasury Department issued long-awaited corporate tax regulations onwednesday, partly accommodating companies' pleas for helpwith an unexpected consequence of last year's tax law.

Despite concerns over trade disputes and a slowing global economy, the corporate tax rate cut enacted in December of 2017 continues to encourage the business investment that leads to higher productivity and higherwages for Americanworkers. Today the government reported that such investmentwas higher than it initially reported for the third quarter of the year.

Japanese businesses are nervous that public pressure could again postpone an increase to the consumption tax rate, further delaying the overhaul of the tax system that theywant.

Treaty shopping is still a common practice among taxpayerswhen investing in Africa, and Mauritius remains one of the best jurisdictions for minimising tax liabilities.

An individual has commented on a possible disconnect between the broad definition of interest in proposed section 163(j) regulations (REG-106089-18) and the narrower definition of interest expense in proposed regs (REG-104390-18) on global intangible low-taxed income regarding interest expense allocations.

New voluntary disclosure guidelines apply to both foreign and domestic disclosures and include a penalty framework and access to Appeals.

Apprehension over a potential patchwork of digital taxation measures could compel countries to achieve consensus by 2020.

Predictions that the IRS's advance pricing and mutual agreement programwould face a surge in disputeswith foreign tax authorities emboldened by the base erosion and profit-shifting project have thus far failed to materialize.

Treasury's narrowed scope for forthcoming rules on previously taxed income (PTI)will include guidance on some of the ordering rules, but answers to other PTI questionswill have towait until the spring.

The proposed foreign tax credit regulations include extremely complex rules regarding allocation of expenses, among numerous issues, but largely follow the approaches practitioners thought Treasurywould take.

Google and Facebook users do not create taxable value under existing international rules, company representatives told a European Parliament investigative committee.

The Polish Ministry of Finance has called for public input on forthcoming guidance addressing the specific rules for Poland's recently enacted exit tax and preferential regime for income from intellectual property.

Ireland is set to formally vote against adopting a draft digital services tax (DST) directive at a key upcoming finance ministers meeting, effectively snuffing out any chances of the tax's EU-wide adoption.

Proposed foreign tax credit regulations take the edge off expense allocation but largely dismiss taxpayer concerns that allocating expenses to the global intangible low-taxed income basket results in residual tax beyond Congress's intent.

Peabody Energy has requested clarification on the determination of qualified business asset investment for mineral interests held overseas for purposes of computing global intangible low-taxed income (GILTI) for U.S. shareholders, noting that proposed GILTI regulations (REG-104390-18) do not specifically address those interests.

Davis Polk &wardwell LLP has submitted a proposal on behalf of a client that seeks to provide taxpayer relief from an approach adopted by proposed section 965 regulations (REG-104226-18) to address circumstances inwhich a foreign corporationwas repatriated into a domestic corporation before November 2, 2017, in a transaction governed by section 381.

The American Bar Association Section of Taxation has submitted a report on proposed regulations (REG-104390-18) on global intangible low-taxed income, recommending that portions of the regs be reconsidered and suggesting clarification of other provisions.

Deloitte Tax LLP has asked Treasury and the IRS to amend the applicable regulations under section 962 to provide for a reduction in taxable income to take into account the global intangible low-taxed income deduction allowed by section 250(a)(1)(B), explainingwhy that change is needed to restore compatibility of those regswith the tax code.

Brunswick Corp. has urged Treasury to modify the final section 367 regulations on the treatment of some property transfers to foreign corporations, stating that the prospective application of the repealed active trade or business exception under the Tax Cuts and Jobs Act (P.L. 115-97) creates confusion regarding transfers that occurred before the TCJA's enactment.

An individual, referencing a letter from United Airlines, has commented on the foreign-derived intangible income provisions in the Tax Cuts and Jobs Act (P.L. 115-97) and requested guidance on how theywill affect cross-border transportation services income, specifically regarding apportionment methodology.

The Institute of International Bankers has requested guidance to eliminate new U.S. tax reporting obligations on some foreign subsidiaries of foreign banks, saying that controlled foreign corporations created due to the repeal of section 958(b)(4) should not be treated as U.S. payors for purposes of Form 1099 reporting and backupwithholding.

In this article, the author examines Dutch efforts to address corporate tax avoidancewithout pushing away foreign investors.

The Italian Revenue Agency announced that Facebook's domestic subsidiary has agreed to pay more than ÔøΩ100 million to settle a tax dispute.

Time is running out for EU countries to reach an agreement on the European Commission's proposal for a digital services tax by the end of the year, EU Tax Commissioner Pierre Moscovici has admitted.

Proposed regulations tackle issues that arisewhen applying the business interest deduction limitation to controlled foreign corporations, albeit at the cost of complexity.

Buried deepwithin the House's freshly introduced tax legislation is a provision thatwould allow taxpayers to receive refundswhen making overpayments on the transition tax, potentially resolving a highly contentious issue.

In the latest push to convince EU member states that are either undecided about or opposed to adopting an EU-wide digital services tax (DST), the Austrian EU presidency has proposed delaying its application until 2022.

Proponents of a tax on the European revenue of tech giants are preparing a last-ditch push for a deal thisweek, amid continuing resistance to a levy that divides the region's governments and threatens to fragment its single market.

India's lucrative outsourcing companies are pushing the government toweigh in after a recent ruling suggested they could face heftier tax bills, spooking the foreign businesses that rely on them.

he OECD has released a statement outlining the implementation of information exchange methods now in use, such as the Automatic Exchange of Information, the Exchange of Information on Request and the effort the Global Forum is putting forth to secure a level playing field through identifying jurisdictions that may be relevant to thework of the Global Forum following the eleventh meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

he Court of Justice of the European Union in Sofina SA, Rebelco SA, Sidro SA v. France, C-575/17 (CJEU 2018), held that articles 63 and 65 of the Treaty on the Functioning of the European Union preclude France fromwithholding tax on dividends paid to nonresident companieswhile not taxing similar loss-making resident companies, finding that such treatment amounts to a restriction on the free movement of capital.

"Deeming" provisions are often introducedwithin antiavoidance legislation and can often produce unexpected, unreasonable, and absurd resultswhen taken literally. In this article, the author looks at a recent decision of the U.K. Upper Tribunalwhere common sense prevailed over the letter of the law.

Karen Sowell of the New York State Bar Association Tax Section has submitted a report on proposed regulations (REG-104390-18) on global intangible low-taxed income, supplementing a prior report to reiterate some suggestions thatweren't adopted in the regs and raising concerns about the complexity created by various basis adjustment rules.

Add the New York State Bar Association Tax Section to the list of parties that have taken a strong stance against the global intangible low-taxed income proposed rules' antiavoidance provision aswritten.

The Swiss Government is to press aheadwith its plans to implement the recommendations made by the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes, despite domestic opposition.

The business community is bracing for Democratic proposals to raise the corporate tax rate to pay for infrastructure spending and other priorities. Infrastructure is seen as one of the rare areaswhere Democrats and President Trump might be able to come to a deal, since both sides have called for improvements to the nation's roads, railways and bridges. The problem is how to pay for the new spending.

The United Arab Emirates iswilling to expand its multi-billion dollar investments in Brazil as long as it's no longer labeled a tax haven by Latin America's largest economy.

This article discusses the recent changes to tax incentives in New Zealandwhich are intended to increase corporate investment in research and development.