2019

The French government onwednesday introduced a new levy aimed at big tech giants, adding to momentum behind more than a dozen similar measures globally that could collectively cost Silicon Valley companies billions of dollars. The measure, likely the first in awave of proposed digital-services taxes to be applied in Europe,will apply a 3% tax on French-source revenue that companies like Alphabet Inc.'s Google or Amazon.com Inc. reap from specific services like targeted advertising or running a digital marketplace.

EU delegates meeting February 28 made no progress on a digital advertising tax (DAT) in place of a digital services tax, and remarks by the EU Council's Romanian presidency left member states puzzled.

A three percent tax on the French revenue of large internet companies could yield 500 million euros (568.5 million pounds) per year, French Finance Minister Bruno Le Maire said on Sunday.Le Maire told Le Parisien newspaper the tax is aimed at companieswithworldwide digital revenue of at least 750 million and French revenue of more than 25 million euros.

European Union finance ministers are likely to recognize at their upcoming meeting that they can't "force" even a lighter digital services tax andwill "proactively" support an international effort on taxing the digital economy, an EU official said Friday.

The recent proposal to compensate California residents for the use of their data is another sign of consumers' growing awareness of how tech giants monetize users' digital footprints, but logistical and philosophical concerns make it little more than an intriguing idea for now, experts say.

Corporate tax departments are under pressure to find aggressiveways of reducing their effective rates to take advantage of under-resourced tax authorities that are unable to tackle tax avoidance effectively.

The IRS has developed a standardized residual profit-split model for use in advance pricing agreement applications by the minority of applicants that cannot reliably use a one-sided transfer pricing method.

The OECD has issued a consultation document requesting comments on proposals that attempt to address countries' concerns about taxing the digital economy, the first pillar ofwhich involves reallocating tax rights among countries, not necessarily confined to profits of tech companies. (The second pillar,which involves the expansion of antiabuse rules, is the subject of other articles.)

In news analysis, Nana Ama Sarfo outlines discussions about U.S. tax reform and unilateral actions at the TCPI conference inwashington DC.

The European Council has called for the swift enactment of Switzerland's proposed corporate tax reform package. The recommendationwas one of a number of conclusions adopted by the Council regarding the EU's relationswith the Swiss Confederation.

Proposed rules rewriting the federal business interest deduction should be revised to narrowwhat constitutes business interest, members of an accountants trade group testifiedwednesday at a public hearing.

Bloomberg Tax - BySony Kassam

New Jersey is taking an aggressive new stance to raise taxes on foreign income from multinational companies. New Jersey is including a new federal category of foreign income in its tax base, and is the first state to tax 50 percent of that income,while choosing to grab its share of the income pool through a specialÔøΩand surprisingÔøΩcalculation involving its gross domestic product. Lobbying groups, like the State Taxes After Reform (STAR) Partnership and the Council on State Taxation (COST), are up in arms to stop states from following New Jersey and adopting similar approaches.

German Finance Minister Olaf Scholzwants to support companies that are investing in research and development (R&D) by granting them annual tax breaks of at least 1.5 billion euros (1.3 billion pounds), two people familiarwith the matter said on Thursday.

Nigeria has ordered foreign oil and gas companies to pay nearly $20 billion in taxes it says are owed to local states, industry and government sources said, in a move that could deter investment in Africa's largest economy.

As the climate solutions conversation expands, some Democrats still seem fixated on the half-solutions of cap-and-trade or a carbon tax, lacking the vision ofwhat real action on climate change looks like. Given the immediacy of the climate crisis, market pricing schemes should no longer be the centerpiece of a comprehensive climate strategy.

The Japanese government has announced changeswhichwill give companies more flexibility in tax structuring, lessening the sizeable tax burden on downstream mergers and making triangular reorganisations easier.

Microsoft's landmark transfer pricingwin in the Danish Supreme Court is not enough to lessen the tax authority's aggressive position on TP audits and discretionary assessments, said tax heads.

Progressive Democrats assert that the Green New Deal is the bestway to reduce global greenhouse gas emissions. But this claim ignores the fact that subsidizing "green" energy technologies, such aswind and solar, is less effective than taxing the greenhouse gas emissions produced by brown energy sources, such as oil, natural gas and coal.

Federally insured U.S. banks made more than $28 billion in additional profits in 2018 thanks to the Republican tax-cut law enacted at the start of the year, according to data released Thursday. The Federal Deposit Insurance Corporation (FDIC) revealed that the nation's 5,406 federally insured banks reeled in $236.7 billion in profits last year, according to the agency's quarterly banking profile.

The National Association of Manufacturers has urged the IRS to either modify proposed business interest expense deduction regulations (REG-106089-18) regarding the treatment of depreciation capitalized into inventory or risk hurting manufacturers and slowing the growth of the economy.

The American Forest & Paper Association has asserted that the treatment of depreciation capitalized into inventory under proposed business interest deduction regulations (REG-106089-18) does not provide equal treatment to taxpayers and unintentionally harms those in the business of manufacturing or producing goods for sale.

In this article, the author discusses the important changes and associated complexity in nonresident income taxation of offshore indirect transfers resulting from Germany's Annual Tax Act 2018.

In this article, the author discusses a nonbinding position published by Mexican tax authorities in November 2018 that attempts to revoke a provision in Mexican law limiting the definition of "business profits"when applying Mexican tax treaties.

In this article, the authors examine the extensive regulations proposed under the alreadywide-ranging anti-hybrid provision of the U.S. Tax Cuts and Jobs Act, focusing on the possible impact of the proposals on the structures that Canada-based multinationals and other foreign entities use to finance U.S. acquisitions and expansions.

A European Parliament investigative committee report chastises seven member states for operating as tax havens, recommends the end of golden visa programs, and calls for a European financial police force and anti-money-launderingwatchdog.

The United States supports France's push for minimum corporate taxation and hopes for an OECD solution to taxing the digital economy before the end of 2019, Treasury Secretary Steven Mnuchin said.

The European Parliament on February 25 decided to put pressure on member states by closing the first reading on the European Commission's proposal for public country-by-country reporting.

In this article, the authors discuss the impact of Brexit and the end of the North American Free Trade Agreement on the derivative benefits test in U.S. tax treaties.

Irish pharmaceutical giant Perrigo Co. PLC has mounted an aggressive response towhat iswidely considered one of the largest corporate tax assessments in Irish history, and is seeking assistance from the Irish High Court.

The Information Technology Industry Council has requested changes to proposed section 163(j) regulations (REG-106089-18) regarding the definition of interest and exclusions from the definition, the application of the interest limitation to controlled foreign corporations, the group CFC election, and the depreciation phaseout.

Treasury's proposed regulations that apply business interest expense limitations under the Tax Cuts and Jobs Act to controlled foreign corporations are inconsistentwith congressional intent andwould create complex, burdensome rules, industry groups say.

Member states should deny tax relief provided in directives that companies exploit to advance abusive or fraudulent agendas, even in the absence of domestic law combating such abuse, according to the EU's highest court.

Germany's Ministry of Finance said government ministers are discussing proposals for research and development tax incentives butwould not confirm reports that the benefitwould cost the government at least ÔøΩ1.5 billion a year.

Although the OECD's failure to address the tax challenges posed by digitalization leaves a void, a report found the proposed digital services taxwould apply too broadly and may cause economic distortions and international retaliation.

Structuring a uniform and comprehensive global minimum tax regime could be a technically difficult process at the OECD level.

The OECD-U.N. Tax Inspectorswithout Borders (TIWB) initiative may expand its scope to include other tax issues beyond tax audits,with pilot programs starting soon.

The U.S. Chamber of Commerce has sent the IRS a chart identifying issues arising under proposed regulations (REG-104352-18) on section 951 and section 951A hybrid arrangements, providing suggested solutions and explanations the group believeswill be helpful in addressing those issues.

Irish power management multinational Eaton Corporation PLC,which is facing tax-related litigation on multiple fronts in the United States,was dealt a blow by the U.S. Tax Court concerning the consequences of partnership section 951(a) inclusions.

The Securities Industry and Financial Markets Association has suggested several changes to proposed base erosion and antiabuse regulations (REG-104259-18),which the group says are inconsistentwith the relevant provisions of section 59A and that some provisionswill harm financial groups, their customers, and possibly the financial markets.

Many U.S. multinationals are responding to the Tax Cuts and Jobs Act's international provisions by terminating their cost-sharing arrangements, raising difficult transfer pricing issues associatedwith their existing cost-shared intellectual property.

Practitionersworry that the integrity of the bilateral tax treaty system is threatened by the spread of measures that circumvent treaty restrictions and the United States' failure to ratify any tax treaties in the past 10 years.

Proposed global intangible low-taxed income regulations may overreach in requiring downward adjustments to the basis of stock held in controlled foreign corporations. The proposed regulations (REG 104390-18) also call for basis adjustments to stock in members of a consolidated group. GILTI-related basis adjustments to CFC stock are distinct from basis adjustments to group member stock in timing and rationale.

U.K. business tax rates should be reduced and taxes on online merchants increased to protect High Street retailers from unfair competition, a parliamentary report says.

A taxworking group commissioned by the New Zealand government has recommended the implementation of a capital gains tax and the adaptation of an existing emissions trading scheme to make it more "tax-like."

Allowing British overseas territories to delay establishing public beneficial ownership registers until 2023 is unacceptable and poses a national security risk, a U.K. parliamentary committee said in a new report.

Treasury is examining how it could limit its rule concerning foreign branch transfers of intangible property issued under its proposed foreign tax credit regulations.

In this article, the author discusses some of the general concerns underlying efforts to tax cross-border digitalized transactions, including how these transactions affect both developed and developing jurisdictions. She then focuses more specifically on taxing digital advertising services by reviewing case studies and suggesting possible solutions.

South Africa is contemplating changes to align its domestic lawwith the OECD's model mandatory disclosure rules and transfer pricing provisions.

Reports of aggressive transfer pricing enforcement practices by Mexico's tax administration ÔøΩ including excessive information demands and disallowance of marketing expenses ÔøΩ are another sign of broad dissatisfactionwith the existing allocation of taxing rights.

The U.K. tax authority has published a "mythbusters" document to clarify its Making Tax Digital (MTD) program, shortly after a top HM Treasury official told lawmakers that most affected businesses are preparing for the initiative.