2018

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.

A U.S. circuit court has reversed a lower court's dismissal of Starr International Co. Inc.'s multimillion-dollar tax refund claim and said the company can't pursue an action under the Administrative Procedure Act (APA).

A major global trade groupwill soon present a tax policy framework for countries to consider as theywork to find agreement on long-term answers for how to tax the digital economy.

The OECD expects to release a significant update regarding itswork on taxation of the digital economy in January 2019, according to Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration.

In January Democrats retake the House and Republicans remain in control of the Senate, making it unlikely that major tax legislationwill be passed in the next two years. President Trump has said hewould like to see a middle-income tax reduction passed, but it's unclearwhether his policy goalswill alignwith those of House Democrats, some ofwhom mightwant more relief for low-incomeworkers, and many ofwhom successfully campaigned on providing relief from the rollback of the state and local tax deduction in the Tax Cuts and Jobs Act (P.L. 115-97).

"I said the first thing you can do is you can take away that tax ÔøΩ that provision in his tax bill that gives a company a 50 percent-off coupon in their taxes. If you're producing in Lordstown, you pay a 21 percent tax rate. If you move to Mexico, you pay a 10.5 percent tax rate."

The Tax Executives Institute has urged the IRS to eliminate the so-called 12-month presumption rule in proposed regulations (REG-104390-18) on global investment low-taxed income and has asserted that Treasury and the IRS lack the authority to create the broad antiabuse rule that is found in proposed regulation section 1.951A-2(c)(5). The group offers additional comments on other aspects of the proposed regs.

The United States' strengthened rules on aggregation and realistic alternatives and a growing international skepticism of one-sided transfer pricing methods have led some practitioners to question the future viability of the traditional arm's-length principle.

Large digital companieswill be taxed next year even if the EU can't reach agreement on a digital services tax (DST), Finance Minister Bruno Le Maire said.

Final regs on the transition tax have reached the Office of Management and Budget, potentially setting the stage for publication of the first major finalized guidance sprouting from the U.S. Tax Cuts and Jobs Act.

The British government should levy a tax on retailerswith online sales accounting for more than 20 percent of revenue to save traditional shopping districts, the billionaire boss of Sports Direct told lawmakers on Monday. Mike Ashley said the movewould be "a massive electric shock" for the sector, encouraging retailers to invest in physical stores.

Ireland collected even more corporate tax by the end of November than expectedwhen it flagged an anticipated one-off boost, pushing the state's tax take by 2.4 percent, or 1.2 billion euros (1.07 billion pounds), ahead of target for 2018.

Ireland's finance minister poured coldwater Tuesday on a new Franco-German proposal for a European tax on companies' digital revenues, saying it failed to address his concerns.

The OECD is considering an approach to taxing the digital economy similar to proposals in the 2017 U.S. tax overhaul, including giving countries more leverage to tax foreign entities that use valuable branding trademarks and copyrights to sell into their jurisdiction, a top Treasury official said Monday.

Nearly a year after the federal government rewrote the corporate tax code, big U.S. companies are still movingwarily. Much has changed: Smaller tax bills have boosted quarterly earnings. Stock buybacks are soaring, capital spending has risen, and hundreds of billions of dollars have flowed from foreign subsidiaries to their U.S. parent companies. But much remains in flux, too.

France's violent Yellow Vest protests are now about many domestic concerns, but it's no accident that the triggerwas a fuel-tax hike. Nothing reveals the disconnect between ordinary voters and an aloof political class more than carbon taxation.

The European Union's leading business lobby called for new economic analysis before EU member nations vote on a 3 percent digital services tax targeted at large internet companies such as Google Inc. and Facebook Inc.

Germany and France renewed their bid to unlock talks on a new European financial-transaction tax based on an existing French levy on stock trades.

Airbnb Inc. has stepped away from negotiationswith Mexico thatwould have required the home-sharingwebsite to collect income tax from its hosts and send the money to the government, according to a person familiarwith the talks.

Canada's business investment remains spotty, showingwhy Prime Minister Justin Trudeau introduced corporate tax breaks this month to ease the economy's dependence on indebted consumers. Spending on non-residential capital projects fell at a 7.1 percent annualized pace in the third quarter, the most in almost two years, Statistics Canada reported Nov. 30. The contribution to gross domestic product of C$191 billion ($143 billion) remains below a peak of C$230 billion set four years ago, veryweak compared to household consumption gains that have triggeredwarnings about record consumer debts.

The specter of chaos could prompt countries to collaborate on digital taxes, an OECD official suggests; companies now have a challenging time moving assets outside of the U.S.without paying tax; Treasury Department aims to release guidance on ordering of different types of previously taxed income in U.S. tax calculation; a Treasury official says companies arewanting to record Subpart F income to achieve a better tax result; and top congressional tax aides see next year's committee agendas driven by oversight of the tax overhaul and of how the tax system isworking overall.

A senior Treasury official laid out elements of a new global tax planÔøΩcatalyzed by the 2017 U.S. tax overhaulÔøΩthat could forestall the Europe-U.S. standoff over the European digital tax proposal multinationals dread. The EU finance ministers are meeting Dec. 4 on the tax, and may vote to postpone any action until the OECD finds a digital tax solution all its members can agree on.

France and Germany have abandoned EU plans to impose awide-ranging digital tax on tech companies, in favour of a narrow levy on advertising sales thatwould be likely to exclude giants likeAmazon andApple.

Mike Ashley, the chief executive of Sports Direct, told MPs that they should impose a 20% tax on online sales in a bid to save bricks-and-mortar stores.

Houseways and Means Committee Chair Kevin Brady, R-Texas,welcomed the EU's abandonment of a proposal to tax digital services, stating that the "introduction of a new tax targeting cross-border digital serviceswould have singled out a key global industry dominated by American companies andwould have been a clear revenue grab."

The Court of Justice of the European Union has published the reference for a case (C-565/18) onwhether EU law precludes Italy from charging a tax on financial transactions that involve the trading of derivatives.

The Mauritius Revenue Authority recently released a statement of practice (SP 17/18) clarifying the rules under section 73A of the Income Tax Act regarding the place of effective management.

EU member states have not reached consensus on a proposal to tax the digital economy.

Guidance on the treatment of foreign partners' gains on a sale of a U.S. partnership is now awaiting approval of the Office of Management and Budget before publication.

H.R. 5145, the Close Tax Loopholes That Outsource American Jobs Act, introduced by Rep. Rosa L. DeLauro, D-Conn.,would repeal the Tax Cuts and Jobs Act's reduced tax rates on foreign-derived intangible income and global intangible low-taxed income.

The European Parliament's Committee on Economic and Monetary Affairs has voted by awide margin to adopt its reports on proposals for EU Council directives on the corporate taxation of a significant digital presence and a digital services tax.

Leaders of the G-20 countries pledged to continueworking toward finding a common approach to address the tax issues of the digital economy,with a status update in 2019 and a final report by 2020.

European efforts to tax the digital economy indicate a partiality for local interests that could violatewTO trade principles, according to a former U.S. official.

Despite the likelihood that the EU Councilwill reject a proposal to tax digital services on December 4, members of the European Parliament (MEPs) have voted in favor of recommendations to strengthen the proposed directive.

On the eve of the OECD's task force meeting on the digital economy, a senior U.S. Treasury officialwarned of grim potential consequences if the international community fails to reach an agreement on questions of allocation.

French and German finance ministerswill propose that the EU tax only advertising sales revenue, as opposed to the three revenue streamswithin the scope of the European Commission's digital services tax (DST) proposal.