2015

Over the past two years, OECD initiated a fast-paced programme to develop 15 Action Plans under the banner Base Erosion and Profit Shifting (BEPS).
For the Live Mint story, go here.

Opposition to foreign taxes on American investment and hardwork has been coded into our national DNA for almost 240 years. Yet almost two and a half centuries after resolving thatwewould not stand idlewhile others decide how to tax us, Americans once again must take decisive action to guaranteewe can enjoy the dividends of our ingenuity.
For thewashington Examiner story, go here.

The OECD's final package of proposals for reforming the international system for taxing companies brings to an end the two-year BEPS project led by the OECD and other G20 countrieswhich also included participation by representatives of developing countries, business, academia and NGOs.
For the Business Spectator story, go here.

The body that advises industrial nations on economic policy published proposals on Monday to overhaul theway international companies are taxed in an effort to tackle avoidance.
For the Daily Mail story, go here.

"The BEPS project needed to happen, and the OECD and G20 should be congratulated both for their hardwork and for achieving high-level consensus across many issues," said BIAC Tax Committee Chairwill
Morris today on the occasion of the long-awaited release of the OECD's 2015 BEPS deliverables package. "Moreover, this high-level consensuswas achievedwhileworking to an exceptionally ambitious timetable."
For the BIAC release, go here.

The Organization for Economic Cooperation and Development on Monday rolled out a sweeping set of final recommendations to battle offshore tax avoidance costing countries across the globe billions of dollars a year.
For the Hill story, go here.

A major overhaul of the international rules governing the taxation of company profits moved a step closer to completion Monday,with the publication of a package of new standards that are set to be adopted by leaders of the Group of 20 largest economies.
For thewall Street Journal story, go here.

Mindy Herzfeld reviews initiatives underway in Europe to address aggressive tax planning by multinational enterprises and cautions tax professionals against focusing their efforts exclusively on the OECD'swell-publicized base erosion and profit-shifting project.
For the TNI article, go here. (subscription required)

The full text of the OECD's final BEPS reports is available here.

Efforts to tackle unfair tax competition and corporate tax avoidance are straining relations between European Union member states and among (and evenwithin) political parties, according to EU politicians, company representatives and tax practitioners interviewed by Bloomberg BNA.
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A Treasury Department official said the U.S. has agreed to participate in discussions regarding the development of a multilateral instrument under Action 15 of the international project to combat base erosion and profit shifting.
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The OECD presented today the final package of measures for a comprehensive, coherent and co-ordinated reform of the international tax rules to be discussed by G20 Finance Ministers at their meeting on 8 October, in Lima, Peru. The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project provides governmentswith solutions for closing the gaps in existing international rules that allow corporate profits to «disappear» or be artificially shifted to low/no tax environments,where little or no economic activity takes place.
For the OECD release, go here.

As the final recommendations of the 15 action plans that comprise the OECD Base Erosion and Profit Shifting (BEPS) project approach, Pramila Shrivastav, former Chief Commissioner of Income Tax at the Indian Ministry of Finance, looks at the associated issues from a developing country perspective, arguing that convergence of interestswill hold the key to countering complex BEPS challenges.
For the ITR story, go here.

The debate about international tax reform has received a valuable boost from the UN's annual investment report, argues Jeffrey Owens of Vienna University of Economic and Business.
For the ITR story, go here.

China's tax authorities are already using the nation's proposed new transfer pricing method to test the arm's-length nature of related-party transactions involving intangibles as a "backstop" and "to set parameters for a settlement" in transfer pricing cases, a Shanghai practitioner said.
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Dahlia B. Doumar and Carl A. Merino of Patterson Belknapwebb & Tyler and CPA Michael L. Chen discuss how business profits of a foreign corporation generally are taxed in the U.S. and suggest possible holding company structures that a foreign parent corporation can use to help insulate itself from direct U.S. tax exposurewhile taking advantage of treaty exemptions to reduce federal income taxes.
For the BNA Insight, go here. (subscription required)

The US Treasury has broken its silence over the EU's flagship tax investigations into Apple, Starbucks and Amazon to voice concerns that itwould ultimately bear the cost of any extra bills.

A senior official said a move by Brussels to force the multinationals to pay back taxeswould havewider implications for the US because the companywould receive a credit for the taxes paid overseas.

For the Financial Times story, go here.

With the long haul of a presidential election campaign just beginning, companies that leave the U.S. to lower their tax bills are likely to once again become political targets. But thatwon't prevent some firms from trying.
For the Crain's New York story, go here.

The rules that govern cross border profits enable systemic tax avoidance, because they allow profits to be shifted away fromwhere they are generated to another countrywith a lower (or zero) tax rate – all as a matter of accounting rather than real economic activities. These rules frequently serve the economic interests of the largest multinational corporations.
For the Guardian story, go here.

Ian Dykes, Tim Holmes, and Elizabeth A. Sweigart highlight the benefits of value chain analyses for multinational enterpriseswith highly integrated supply chains.
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Even as big American companies launched an effort to get "innovation box" legislation passed in the U.S., a senior U.K. finance official said that country's patent box has been "well received" and is attracting investment by large pharmaceutical companies and others.

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Specialists from the 11 European Union member states supporting an EU financial transactions tax convene in Brussels inwhat one official described as a technical meeting to discuss the "25 building blocks" thatwill eventually form the EU core group's policy on the FTT.
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President Obama's proposal to set a minimum tax for foreign-earned income is limited in scope, but "may have a large impact on the global pattern of investment and employment" by U.S. multinationals, the congressional Joint Committee on Taxation says in a report.
For the JCT report, go here.

Taxes are a crucial component of a country's international competitiveness. In today's globalized economy, the structure of a country's tax code is an important factor for businesseswhen they decidewhere to invest, how much to invest, andwhich types of operations to locate inwhich countries. No longer can a country levy high taxes on business investment and activitywithout adversely affecting its economic performance. In recent years, many countries have recognized this fact and have moved to reform their tax codes to be more competitive. However, others have failed to do so and are falling behind the global movement.
For the Tax Foundation article, go here.

Lastweek, following the sudden announcement by House Speaker John Boehner (R-OH) that hewould be stepping down from Congress at the end of October, Houseways and Means Committee Chairman Paul Ryan (R-WI) and various other Committee members quickly confirmed that the Committeewould continue forwardwith its plans to do international tax reform this year.
For the National Law Review story, go here.

In an 11-page letter to Members of Congress, 24 international tax experts raise significant concerns about legislative proposals thatwould seek to close a six-year funding shortfall in the Highway Trust Fund by taxing $2.1 trillion in U.S. corporate offshore profits at a significant discount thatwould overhaul theway U.S. corporationswould be taxed on their future offshore profits.
For the Americans for Tax Fairness letter, go here.

The Tax Foundation says America's tax code failsin comparison to virtually all other OECD nations. The 2015 International Tax Competitiveness Index ranks the United States an appalling 32 out of the 34 countries in the OECD.with the 3rdleast competitive tax code in the developedworld, only Italy and France have less competitive codes.Donald Trump says hewould change that,withhis version of tax reform.
For the Forbes story, go here.

The German Bundestag (the German parliament) on September 24, 2015, approved a bill making various amendments to German tax law for 2015 (Steueraenderungsgesetz 2015). The bill is not expected to change materially during the legislative process. Thereforewe expect it to be enacted as draftedwhen published in the Federal Gazette.

The amendments most relevant to multinational companies (MNCs) invested in German companies include:
broadening of the intra-group exception in the German loss forfeiture rules,
'clarification' of the attribution rules for events triggering the real estate transfer tax (RETT) for indirect transfers of German real estate owning partnerships,
a new substitute tax basis for RETT in case of share deals and real estate transfers upon reorganizations, and
a limitation on consideration (other than shares) allowed for tax-free contributions in-kind under the Reorganization Tax Act.
For the PwC Insight, gohere.

Guidance on the interaction between tax code Section 267(a)(3)(B), the foreign tax credit and Subpart F look-through rules isn't likely in the near future, although issues raised by practitioners do merit answers, a Treasury Department official said.

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Lowell Yoder of McDermottwill & Emery looks at the Fifth Circuit's Subpart F ruling in BMC Software Inc. v. Commissioner, on the treatment of a CFC's account receivable from a U.S. parent arising under Rev. Proc. 99-32 from settlement of a transfer pricing dispute. Yoder says the case supports the proposition that such a receivable isn't an investment in U.S. property prior to entering a closing agreement, because it didn't exist.
For the BNA Insight, go here. (subscription required)

A push by financial institutions to create computer systems to calculatewhat types of dividend equivalents under new regulations are subject to a 30 percentwithholding taxwhen paid to foreigners highlights the importance of programmerswho understand technology and tax.
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A Treasury economist on September 25 tried to allay taxpayer fears about the transfer pricing environment in thewake of the OECD's base erosion and profit-shifting project.
For the TNT story, go here. (subscription required)

In news analysis, Lee A. Sheppard reports on a September 28 International Tax Institute discussion of the interaction between section 267(a)(3)(B) and controlled foreign corporation rules.
For the Tax Notes article, go here. (subscription required)

The UK's opposition party, Labour, has set out its stall on taxation, reigniting the debate over the financial transaction tax (FTT) in the process.
For the ITR story, go here.

EU Member States have made progress towards improving their tax systems but most still face important challenges and should continue their efforts, according to a report on tax reforms in EU Member States published today by the European Commission. The Tax reforms report 2015, published by the Commission's Directorate General for Economic and Financial Affairs (ECFIN) and the Directorate General for Taxation and Customs (TAXUD), presents an overview of recent tax reforms in the Member States and gives an indication of their performance in major areas of tax policy.
For the report, go here.

Nearly 50 governments are set to agree this fall to a new set of rules to clamp down on tax avoidance among multinational corporations. Their chance of success, however, is unclear.

For thewall Street Journal story, go here.

Jack Bernstein examines the scope of actions and reactions by the European Union and several individual countries to initiatives to curtail base erosion and profit shifting.
For the TNI viewpoint, go here. (subscription required)

Mindy Herzfeld reviews the IRS's latest efforts to stem the tide of tax-free outbound transfers and explains how the newly issued proposed regulations under IRC section 367 reverse current law, as do the new temporary regulations under section 482.
For the TNI article, go here. (subscription required)

Tax competition as such cannot be avoided, but today's system has reached its limits and led to unwanted side effects. Small firms should not have to bear the tax burden of multinationals that pay very little. Action is needed to harmonise corporate tax practices across Europe, so as to make tax competition clearer and fairer. Thiswas the key sentiment voiced at Tuesday's meeting of the Special Committee on Tax Rulingswith finance ministers from Luxembourg, Italy, France, Spain and Germany.
For the European Parliament release, go here.

The final draft on the allocation of risk, to be unveiled by the OECD in October as part of its action plan on base erosion and profit shifting,will be on more "familiar ground" than the previous draft, moving away from concepts that many taxpayers found problematic, said one of the U.S. officials involved in the project.
For the DTR story, go here. (subscription required)

International tax practitionersworry that the OECD's base erosion and profit shifting project is inadequate to address the taxation implications of emerging technology trends.
There is a "perception that there's awholesale moving of finances around the globewithout tax authorities necessarily being able to get at it," said Anne Fairpo, a tax attorney at the London-based law firm of Temple Tax Chambers.
For the DTR story, go here. (subscription required)

In news analysis, Lee A. Sheppard reports on the remarks of Karlwalli, senior counsel (financial products) in the Treasury Office of Tax Legislative Counsel,who defended the final and temporary section 871(m) regulations at the recent American Bar Association Section of Taxation meeting in Chicago.
For the Tax Notes article, go here. (subscription required)

The Indian Government has moved to bring closure to the issue of minimum alternate tax (MAT) applicability to foreign entities.
For the ITR story, go here. (subscription required)

As the final recommendations of the 15 action plans that comprise the OECD Base Erosion and Profit Shifting (BEPS) project approach, Pramila Shrivastav, former Chief Commissioner of Income Tax at the Indian Ministry of Finance, looks at the associated issues from a developing country perspective, arguing that convergence of interestswill hold the key to countering complex BEPS challenges.
For the ITR story, go here.

The Indian Government has today moved to bring closure to the issue of minimum alternate tax (MAT) applicability to foreign entities.
For the ITR story, go here.

Driessen contends that public financial reporting and other representations (or the lack thereof) of deferred foreign earnings mislead policy analysis. He suggests that public accounting reform and better collection and presentation of information are needed to provide a more objective view of foreign deferral.
For the Tax Notes viewpoint, go here. (subscription required)