2018

The core problemwith taxing the digital economy is that some business models allow firms to produce in a given countrywithout a physical presence and avoid (adequate) source taxation in that country. This mismatch of value creation and taxation may require an adjustment of international tax standards. The authors analyze all major digitalization trends as towhether and, if so, towhich extent they allow for value creationwithout taxable nexus in the above sense.while some trends are still adequately covered by the existing set of international tax rules, others allow for remote access to local data sources and networkswithout being liable to source taxation. The authors propose a systematic and administratively feasible approach to allocating taxing rights based onwhat the authors call a sustained user relationship.

A European Union plan to tax certain digital services has encountered opposition from a number of member states and no agreement has been reached on a final proposal. In the authors' view, such a taxwould be a serious mistake.

Companies in China face higher tax compliance costs as the country rolls out the tax portion of its "social credit system," but the extra outlay may beworth itÔøΩor even necessaryÔøΩto stay in business.

New guidance from Australia on cross-border financing arrangements has allayed fears of a tax hit for multinational companies in the event of structured arrangements being prematurely scooped up by upcoming anti-tax avoidance rules.

The European Commission has issued a report on tax policies in the European Union, focusing on the performance of the national tax system, policy options, and reforms in member states.

The Court of Justice of the European Union in Germany v. A-Brauerei, C-374/17 (CJEU 2018), held that a real property transfer tax exemption that may be available to companies that acquire a right of ownership to property in the context of corporate group restructuring procedures doesn't constitute state aid under article 107(1) of the Treaty on the Functioning of the EU.

In this article, the author examines the final version of a package of international business taxation rules that Canada released in late October, including antiavoidance rules that target the use of tracking shares, provisions on controlled foreign affiliate status, alleviating rules for some corporate divisions, and amendments to the cross-border surplus-stripping rules.

In this article, the author reviews the new foreign derived intangible income regime and links it to discussions regarding the broader direct tax challenges.

Corporate tax avoidance is estimated to cost EU member states around ÔøΩ36 billion annually,with the United Kingdom taking the top spot as an appealing locale for multinational companies looking to treaty shop.

Between 2011 and 2013 Gibraltar violated EU state aid ruleswith a corporate tax exemption regime for interest and royalties and five tax rulings that favored multinational enterprises, the European Commission has found.

French President Emmanuel Macron's reversal on a proposed fuel tax increase in the face of violent protests has cast doubt on the political viability ofwide-ranging consumption taxes that may be necessary to combat climate change.while debates continue over how best to discourage carbon emissions, the French experience highlights the political consequences of using broad-based taxes on gasoline and carbon to combat climate change, and the challenges certain communities face,which policies imposed by central governments may exacerbate.

It has been nearly a year since President Trump signed sweeping tax changes into law. The macroeconomic data already rule out some of the more extravagant claims about immediate jumps inwages and capital. But the more serious debate over the tax cuts' long-run impact is still far from decided.

Heads of tax at multinational companies havewelcomed the Dutch government's announcement that itwill publish anonymised summaries of all its tax rulings from July 2019. The measures are designed to allow public scrutiny of rulings and prevent the use of shell companies, and is part of a broader drive by the Netherlands to prevent itself being seen, and used, as a pipeline to tax havens.

In this article, the authors discuss recent U.S. international tax developments, including IRS proposed regulations on U.S. corporations that own stock in foreign corporations and comments from the New York State Bar Association on the 100 percent dividends received deduction under section 245A.

In this article, the author discusses EU Council Directive 2018/22, otherwise known as DAC6, addressing the automatic exchange of information regarding reportable cross-border arrangements for intermediaries.

Britain risks driving banks overseas if current high levels of taxation on the industry are maintained after Brexit, a bank lobby group said onwednesday.

Hundreds of people have protested in Jordan's capital against the government's planned tax increases and high youth unemployment.

Francewill move to collect a tax on digital giants from the start of Januarywithoutwaiting for an agreement on a European levy, as its finances come under pressure from measures taken to appease thegilets jaunesprotesters.

Francewill push aheadwith its own digital tax as of Jan. 1, rather thanwaiting for Europe-wide consensus, finance minister Bruno Le Maire said.

European Union leaders agreed on a plan to advance corporate tax reforms next year that they believe are vital in response to U.S. tax law changes adopted a year ago.

Japan's ruling coalition approved a tax reform package for fiscal 2019 that includes new tax avoidance measures for multinational corporations and limits on interest deductions. The reform package includes a mix of international and domestic tax rules, including a 2% consumption tax hike, auto-related tax and housing-loan credits, and revised application of Japan's controlled-foreign-company rules to Japanese multinationals' subsidiaries in the U.S.

As president, Ivan Duque is looking to sign into law a tax bill similar to the ones he used to criticize as a senator,which raises enough to patch a hole in the budget for a year,while kicking other cans down the road. But the tax bill is sowatered down that it may not achieve its main goal of preventing a downgrade to the nation's credit rating, according to Nomura Holdings.

A new U.K. tax charge on multinationals using intangibles held in low tax jurisdictions to generate revenue in the U.K. could have a greater impact than the U.K.'s proposed new digital services tax.

The IRS is making it a point to fully explain the proposed rules it issues on 2017 tax law changes, after being challenged in court for not doing so. In recent litigation over intercompany pricingÔøΩcaseswhich often involve very large sums of moneyÔøΩthe companies have challenged theway the IRS issued regulations in the past, using the Administrative Procedure Act to argue that the agency didn't fully take taxpayer comments into account. The IRS is in the process of releasing major guidance to implement the 2017 tax law. Avoiding extensive litigationwould be a boon for the agency and the companies it ends up against.

The IRSwill begin next summer to revisit the old guidance "that needs to be conformed to the newworld" after the 2017 tax overhaul. The first priority is building the "newworld core structure"with guidance on new international provisions such as the tax code Section 965 transition tax and the base erosion and anti-abuse tax said David Kautter, assistant Treasury secretary for tax policy.

Internal Revenue Service rules clarifying that companieswon't have to pay an unpopular anti-base erosion tax on some payments for services arewelcome news. The Dec. 13 proposed rules brought companies the answer that theywanted: only the markup, not the entire payment, is eligible for the BEAT.

Eric Vroemen of PWC Netherlands argues thatwhile the OECD's Base Erosion and Profit Shifting initiative may restore the confidence of governments in the system for taxing multinational enterprises, the same confidence isn't being achieved for the MNEs. The current proposed measures are likely to result in double taxation and an excessive compliance burden for MNEs, the author says.

Global law firms are turning the tables on the Big Four accounting firms' incursions into the legal industry by setting up consultancies that assist clientswith non-legal matters. Top law firms have branched outwith new units that help clients manage cyber risks, provide intelligence and security assessments, boost crisis communications, and develop new forms of legal technology-which are designed to compete directlywith Big Four offerings

The U.S. appeals court inwashington, D.C., revived a 2014 lawsuit filed by Maurice "Hank" Greenberg's Starr International Co., challenging an Internal Revenue Service denial of claim. Zurich-based Starr sought a 2007 tax refund on U.S.-source dividend income under the U.S.-Swiss tax treaty.

Shanghai transfer pricing economist Glenn DeSouza posits a contrarian view that the massive trade dispute bedeviling theworld's two greatest trading nationswon't necessarily hurt U.S. multinational investment in the middle kingdom. Instead, tax directors of U.S. multinationals have a unique, nuanced, opportunity, to map out a holistic strategy to exploit the business and tax opportunities that lay below the surface.

Stephen Jackson and Julia Tonkovich of Ernst & Young discuss the considerations and potential complications involved in makingwhatwould appear to be a simple cash distribution from a U.S. corporation to a non-U.S. parent corporation shareholder.

When tax investigators raided the Montreal offices of Uber in 2015, it marked a flashpoint after years of tension between the ride-sharing service and authorities in Quebec. Eventually, the Canadian province's government issued an ultimatum: Uber and its drivers must become fully tax compliant or be barred from operating in the jurisdiction.

Corporate America is on a spending spree. Flushwith cash from President Donald Trump's 2017 tax cuts, companies are on track to shell out more than $1tn on stock buybacks this year. Critics such as US senator Elizabethwarren say this is bad news. Buybacks may boost prices in the short run, they claim, but a betterway to boost the value of a corporation is to invest in the future. Ought the US to be making moves to restrict the rush of activity?

Sweden's political crisis deepened onwednesday as parliament rejected the caretaker government's budget in favor of a tax-cutting one from the opposition.

Australia is seeking investment to develop a battery industry towring more value from its mineralswealth. Under the strategy, the governmentwill offer yearly tax offsets of up to A$200,000 (113,105 pounds) per year for investors and a 10-year exemption on capital gains taxes for investments held for at least a year.

When Mr. Trudeau came to office three years ago, combating climate changewas near the top of his agenda and putting a price on carbon pollutionwas his government'sweapon of choice. But Mr. Trudeau's climate program has increasingly been targeted by critics at both ends of the political spectrum, and conservative governments in several provinces have refused to participate, forcing federal intervention.

Finance Minister Bruno Le Maire said onwednesday he favored calling on big companies to contribute to efforts to keep France's budget deficit as close as possible to the EU limit next year.

Federal, state and local governments have gotten into the habit of providing corporationswith incentives to move, incentives to stay, bailouts to stave off failure and tax benefits to build on success and create more jobs. All are based on promises about job creation and economic development that more often than not prove hollow.

Fiat Chrysler could review its 5 billion euro ($5.7 billion) Italian investment plan,which includes a shift to cleaner engines, if Rome raises taxes on petrol and diesel cars.

A network of favorable tax treaties and an industry devoted to minimizing tax bills has made the Netherlands the conduit for an annual flow of capital five times the size of its own economy. Statistics show that the country had received 4.6 trillion euros ($5.2 trillion) in "foreign direct investment" in 2017.

In a case concerning the double nontaxation of profits earned by McDonald's, the European Commission found that the Luxembourg-U.S. tax treatywas not misapplied by Luxembourg.

McDonald's cited information obtained through LuxLeaks to show that tax rulings it obtained from Luxembourg didn't convey a selective advantage or constitute illegal state aid.

Three senators from states affected by General Motors' recent decision to shutter manufacturing plants have asked the company to demonstrate how it has benefited from the federal tax overhaul's global intangible low-taxed income provision and to cancel planned stock buybacks. Sens. Chris Van Hollen, D-Md., Amy Klobuchar, D-Minn., and Tammy Duckworth, D-Ill., asked the auto manufacturer to provide a country-by-country breakdown of how the company has used the Tax Cuts and Jobs Act's GILTI and to not follow through on proposed stock buybacks in a letter sent Friday.

Proposed section 250 regulations,whichwill address the deductions available under the global intangible low-taxed income and foreign-derived intangible income (FDII) regimes, have been sent to the U.S. Office of Management and Budget for review.

The U.S. Treasury Department's latest tranche of guidance dealingwith previously taxed earnings and profits (PTEP) provides taxpayerswith awelcome bit of certainty, but comeswith the cost of a significant compliance burden.

The past year saw a number of important international tax cases, including rulings about conflicting statutory and regulatory language involving U.S.-held foreign financial accounts and $608 million paid by Boston Scientific Corp. in a transfer pricing dispute.

The article picks the top five international tax cases of 2018.

The Trump administration on Monday finalized a regulation limiting the ability of U.S.wineries and global alcohol companies to reduce import taxes. In the government's view, the new rules stopwine and spirits companies from double-dipping on tax breaks.