2016

Erik Cederwall argues that the profit-shifting debate as currently conceived is misguided and does a substantial disservice to the U.S. economy and U.S. taxpayers.
For the Tax Notes viewpoint, go here. (subscription required)

If you thought therewas a problemwith inversions -- deals that allow American companies to relocate their headquarters to lower theirtaxbills --wait until you hear about the real secret to avoiding corporate taxes. It's called earnings stripping, and it is a technique that the Obama administration has so far failed to stop.
For the New York Times story, go here.

We all know about the famous Supreme Court decision that said corporations should be treated like people. It's too bad that this ruling doesn't apply to U.S. companies that give up their citizenship in order to cut their taxeswhile remaining in this country and benefiting from all it has to offer.
For thewashington Post column, go here.

The risk of protectionist tax measures being taken by national governments has abated as a result of the OECD's Base Erosion and Profit Shifting (Beps) project, a key official has told a conference in Dublin.
For the Irish Times story, go here.

Chile on February 8, 2016, enacted significant amendments to the country's 2014 tax reform through Law No. 20.899,which amends Law No. 20.780, enacted on September 29, 2014.

Multinational companieswith Chilean subsidiaries should consider how the newly enacted law could affect their structures, operations, or transactions in Chile.

For the PwC Insight, gohere.

A flat-rate consumption tax collected at the business level, such as the type proposed by some Republican presidential candidates, could lead to European-style high taxation, a top free-market advocate told the Heritage Foundation.
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Differences between the U.S. and the rest of the OECD on how to approach treaty abuse are likely to continue, a U.S. attorney said at the opening session of a two-day international tax conference in London.
The Treasury Department,which isworking on proposed revisions to the U.S. model income tax convention, "does not like, andwould almost certainly never include in any tax treaty" the principal purpose testÔøΩa general anti-abuse rule, said Kimberly S. Blanchard, a partnerwith New York firmweil, Gotshal & Manges LLP.
For the DTR story, go here. (subscription required)

Ajay Gupta reviews the history and impact of U.S. anti-inversion measures andweighs the costs that some new measures -- both announced and proposed -- may impose on investors andworkers.
For the TNI news analysis, go here. (subscription required)

Practitioners on February 8 challenged both the validity and scope of the IRS's proposed rules thatwould eliminate the foreign goodwill exception in the context of recognition of gain upon outbound transfers of intangibles.
For the TNT story, go here. (subscription required)

Proposed regulations on outbound transfers of intangibles are in danger of legal challenges because of the Treasury Department's insistence the rules aren't subject to notice and comment requirements of the Administrative Procedure Act, a practitioner said.

For the DTR story, go here. (subscription required)

In its recent state aid rulings, the European Commission (EC) appears to have moved away from the OECD's model treaty and transfer pricing guidelines.
For the ITR story. go here.

US multinationals such as Google, Facebook and Amazonwill be forced to publicly disclose their earnings and tax bills in Europe, under legislation being drafted by the EU executive.

The European commission is to table legislation in early April aimed at making theworld's largest multinational corporations open their tax arrangementswith EU governments to full public scrutiny.

For the Guardian story, go here.

Ritesh Kanodia and Geet Shah of Dhruva Advisors set out the arguments for a dual GST in India, and look at the obstacles that have stalled implementation so far.
For the ITR article, go here.

The Internal Revenue Service released two international practice units to train its agents on common fact patterns related to intercompany transactions under tax code Section 482.

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Herman Bouma of Buchanan Ingersoll & Rooney reviews the efforts of the OECD's Base Erosion and Profit Shifting project, concluding it has accomplished little and muddied thewaters in transfer pricing. Bouma examines the factors he says led to the project "being such a hugewaste of time for tax authorities, taxpayers and tax advisers."
For the BNA Insight, go here. (subscription required)

The taxation of global capital has become a matter of growing concern among awide variety of businesses from compliance, risk management and planning perspectives. The Tax Council Policy Institute (TCPI), a non-profit, non-partisan organization,will devote its upcoming 17th Annual Tax Policy & Practice Symposium to those concerns,when it presents, "Capital Matters: How Taxes Influence the Global Creation, Deployment, and Mobility of Capital" (February 11-12).
Wolters Kluwer Tax & Accounting sat down recentlywith two principal organizers of this year's TCPI Symposium to preview some of the issues thatwill be discussed.
For the interview, go here.

Rather than eliminate the corporate income tax, lawmakers should address problemswith the tax through major reforms that permit expensing of capital investment, introduce a corporate rate reduction, and transition the United States to a territorial tax system, according to a February analysis from the Tax Foundation.
For the report, go here.

EY's James Tobin looks at proposed and temporary Section 956 regulations (REG-155164-09; T.D. 9733) that expand the instances requiring an income inclusion as a result of a controlled foreign corporation's holding U.S. property. Though critical of an expanded anti-avoidance rule put in place under the temporary rules, Tobinwrites that it "certainly looks goodwhen compared to the more aggressive approach of the proposed regulations."
For the BNA Insight, go here. (subscription required)

If youwant an example of how bizarre U.S.taxlaws can be - and how companies can game the system - look no further than the recently announced deal forJohnson Controls Inc. of Milwaukee to desert our country by combiningwith a previous corporate deserter,Tyco International PLC.
For thewashington Post story, go here.

Chilean President Michelle Bachelet signed into law legislation designed to simplify proposed tax code changes approved in the nation's 2014 tax overhaul.

For the DTR story, go here. (subscription required)

The special rule for preferential allocations of creditable foreign tax expenditures in a partnership applies only to allocations to a partner that are deductible under foreign law, and not to other items that give rise to deductions under foreign law, the IRS said in temporary and proposed rules.
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Treasury issued a set of temporary and final regulations February 3 that appear to target partnerships that separated creditable foreign tax expenditures (CFTEs) -- in particular, CFTEs related towithholding taxes -- from the related foreign income.
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The European Commission applied its own criterion, one not in linewith national and international rules, in calculating profit in the Starbucks Corp. case, the Dutch government said.

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The European Commission's top tax official briefed members of the EU Parliament on the commission's proposals to curb corporate tax avoidance ahead of a meetingwith EU finance ministers.
"The packagewe presented agrees to a great extentwithwhat you have set out in your reports," EU Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici told members of the European Parliament (MEPs) on Feb. 2 in Strasbourg.

For the DTR story, go here. (subscription required)

The Dutch Ministry of Finance on February 2 published a letter from State Secretary of Finance Ericwiebes to the parliament in response to questions about the European Commission's ruling that the Netherlands' approval of Starbucks's transfer pricing arrangements constituted illegal state aid.
For thewWTD story, go here. (subscription required)

The United States needs faster growth to create the good jobs and higher living standards that Americans expect. The bestway to produce higher growth is to speed up the rate of investment in new capital equipment (which includes machines, equipment, software and the like), thereby boostingworkers' productivity,which has lagged significantly since the end of the Great Recession. Unfortunately, current U.S. tax policies tend to do a poor job of rewarding capital investment. In fact, rather than encouraging new investments, tax policies encourage companies to distribute profits made from things they have done in the past. It is a recipe for resting on your laurels, not reaching for the future.
For The Hill article, go here.

The top Republican taxwriters in Congress havewaded into a brewing taxwar between the US and the European Union, decrying the "hostile" environment big American companies are facing in the EU.

The intervention from lawmakers,who rarely agreewith the Obama administration, came soon after the government complained the European Commissionwas unfairly targeting US groups such as Apple and Amazon in a drive against tax avoidance.
For the Financial Times story, go here.

Britain's corporate tax system is "decaying", MPswere told on Tuesday, as George Osborne came under renewed fire over the Google tax settlement.

For the Financial Times story, go here.

Houseways and Means Chair Kevin Brady, R-Texas, said after a committee hearing February 2 that fresh thinking is needed on how the United States taxes business income and on how to get to a business tax rate that is 15 or 20 percent.
For the TNT story, go here. (subscription required)

The favorable tax treatment of outbound transfers of foreign goodwill and going concern value is set to change as soon as Treasury finalizes regs proposed in September 2015, and practitioners are already sweating over the choice they'll have to make: elect into recognition of a continuous stream of income associatedwith foreign goodwill and going concern value or roll the audit lottery dice.
For the TNT story, go here. (subscription required)

An overhaul of the international tax code is a top priority of theways and Means annual agenda and the committee is atwork on producing a draft, Chairman Kevin Brady (R-Texas) said.

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Ten major business groups are teaming up to push the Senate to ratify eight tax treaties that have long been stuck on Capitol Hill, citing fears that U.S. businesseswill suffer and that treaty partnerswill view the U.S. as not being serious about already-signed pacts.

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In this article, Avi-Yonah argues that the United States needs to join the European Union in curbing tax evasion and avoidance.
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Google's announcement that itwill pay £130 million in back taxes owed to the U.K. since 2005 "wasn't a glorious moment," according to Sajid Javid, U.K. secretary of state for business, innovation, and skills, but he added itwas a success because itwill change taxpayer behavior.
For thewWTD story, go here. (subscription required)

Houseways and Means Committee Chair Kevin Brady, R-Texas, is tasking Tax Policy Subcommittee Chair Charlesw. Boustany Jr., R-La.,with drafting an international tax reform bill that the committee could vote on.
For the TNT story, go here. (subscription required)

House of Representativesways and Means Committee Chairman Kevin Brady (R – Texas) and the Chairman of the Tax Policy Subcommittee, Charles Boustany (R – Louisiana), have urged the need for US international tax reform in response to the European Commission's anti-tax avoidance package on January 28.
For the tax-news.com story, go here.

The European Commission (EC) has released a package of measures including a much-anticipated proposal for an anti-tax avoidance directive.
For the ITR story, go here.

teaseIndia's Income Tax Simplification Committee (ITSC) has recommended amending income tax laws, specifically the Income Tax Act (ITA), to make it easier to do business in the country.
For the ITR story, go here.

Provisions in the new U.S. model tax treaty that cancel benefits in cases of special tax regimes and subsequent changes in law are meant to make the treaties more "dynamic," officials from the Treasury Department said.

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Proposed regulations thatwould eliminate the tax-free exception for foreign goodwill and going concern value transferred under tax code Section 367 are in keepingwith the legislative history behind the provision, Treasury and IRS officials said.

For the DTR story, go here. (subscription required)

"Will They Never Let You Escape Thisworld?"was the title for the international panel at the January 26 New York State Bar Association annual meeting. It's a highly fitting title for an obituary of the otherworldly Bowie,whowas a tax exile in Switzerland before coming to the United States. The title refers to escape from U.S. tax jurisdiction, because corporate income taxes in the land of theworld's reserve currency are just so onerous, don't you know.
For the Tax Notes article, go here. (subscription required)