Int'l Tax News

Disputes involving OECD "value creation" principles account for many of the U.S. mutual agreement procedure cases, and one of the IRS advance pricing and mutual agreement program's biggest challenges is findingways to resolve them.

Germany and France are close to an agreement on a common corporate tax base (CCTB) in the hopes of advancing the proposal at the EU level, a German finance ministry official said.

Peru's President Martin Vizcarra announced late on Monday that he had accepted his finance minister's resignation as part of a policy shift thatwill focus on collecting taxes owed from large companies.

On May 25, 2018, the Economic and Financial Affairs Council (ECOFIN),which is responsible for European Union tax policy, formally adopted the Council Directive that amends Directive 2011/16/EU on administrative cooperation in the field of taxationwith regard to mandatory automatic exchange of information related to reportable cross-border arrangements. The main purpose of this 'Directive on Administration' (commonly referred to as 'DAC6') is to strengthen tax transparency and deter aggressive tax planning. Although 'aggressive tax planning' is not defined, the Directive references a number of pre-determined 'hallmarks.' These hallmarks could render a cross-border arrangement reportable. DAC6 provides for mandatory disclosure of cross-border arrangements by intermediaries, or individual or corporate taxpayers, to tax authorities.

Ensuring the successful implementation of the Tax Cuts and Jobs Act of 2017 remains the US Internal Revenue Service's highest priority, according to its new five-year Strategic Plan

New rules on intermediaries that design or promote tax planning schemes have been adopted by the European Council.

Italy's Ministry of Finance is seeking stakeholders' feedback onwhether to support the EU's digital tax plans, and in particular its proposal for an "interim tax" on otherwise untaxed turnover earned by certain digital economy firms.

A business group that supports the GOP tax law is highlighting the results of a new poll that shows voters see benefits to the tax cuts,which are a key part of the Republican Party's midterm messaging this fall.

Multinational companies shift about 40% of the profits they earn outside their home countries into tax havens, eluding tax-collection efforts, according to an analysis that points to persistent gaps in government revenue collection. U.S. companies are among the most aggressive users of profit-shifting techniques.

The European Court of Justice has doubled down on its position aboutwhen multinational companies can deduct losses from defunct subsidiaries. The court in its ruling backed a Danish auto parts retailer, and its parent company, saying that Danish tax authorities violated European Union rules by denying the parent company the ability to deduct losses of a non-resident subsidiary.

The new tax law handed most of the top 50 Fortune 500 companies a collective $137 billion in one-time benefits,while imposing nearly $20 billion in charges on the others due to its effect on their deferred tax assets and liabilities, according to a Bloomberg Tax analysis.

Foreign-owned companies in Brazil are struggling to dealwith a sudden reduction in tax credits and fiscal benefits. The government has agreed to create a subsidy for diesel fuel, butwill pay for it by cutting certain tax breaks and tax credits for companiesÔøΩmoves thatwill impact multinational companies and their subsidiaries.

Swiss lawmakers agreed to sweeten a controversial tax reform bill to make sure it doesn't fall victim to a voter referendum that could spur an exodus of Swiss-based multinational companies.

Tax professionals arewatching closely as two-year-old IRS anti-inversion rules are simultaneously being appealed in federal court and reviewed by the Office of Management and Budget.

The European Commission June 7 rejected claims by Sweden, Denmark, and Finland that the new U.S. tax reform law solves issues of European tax avoidance by large U.S. tech companies.

Australia's tax chief Chris Jordan has claimed some of the credit for an expected A$10 billion ($7.6 billion) boost in income tax revenue from large companies this year compared to 2017. Australia's implementation of its strict anti-avoidance law, targeting multinational companies engaged in aggressive tax planning, is among the reasons for the boost.

U.S. spending on consultants hit a fresh record last year as executives and government officials sought advice on navigating the new tax law and evolving technology, according to a report by Source Global Research releasedwednesday.

The IRS unit that resolves intercompany pricing issues is undergoing organizational changes as part of an agency-wide mandate, as enforcement approaches and rules are refinedworldwide.

The Dutch government has published a draft law thatwill sharply curtail the amount of interest thousands of resident group companies are allowed to deduct from their taxable profits.

Willis Towerswatson has found a creativeway to proactively identify tax risks in the changing landscape by using a human resources analytics tool, a director from the company said.

Some businesseswonderwhether the U.S. Treasury could cover the cost of the U.K.'s "Google tax." "The starting point is that a foreign tax may be creditable in the U.S. either under the applicable tax treaty, or under unilateral provisions in U.S. law for granting a tax credit," U.K. barrister Philip Baker QC said. "If it is creditable, then the U.S. Treasury effectively bears the burden."

The U.K. and Canada are close to ratifying the OECD's super-tax treaty as it enters into effect in July, according to the countries' government officials.

The IRS and seven other tax administrations, aswell as eight multinational companies,will gather in July for a midpoint evaluation of a pilot project designed to limit cross-border disputes, an IRS Official said.

The U.S. Treasury Departmentwill give multinational corporations some but not all ofwhat theywant in closelywatched international-tax regulations needed to implement the 2017 tax law, a senior Treasury official said Monday.

Multinational companies are still plagued by India's aggressive tax system, despite the country's claim that it has taken steps to encourage investment.

Chilean President Sebastian Piñera has ruled out a reduction in the top corporate tax rate in upcoming legislation to simplify the tax system, citing squeezed public finances.

The new U.S. tax law addresses international concerns about base erosion and profit shifting more thoroughly than any other jurisdiction's rules, a Treasury official said. The legislation "is actually, in my view, the most far-reaching implementation of BEPS principles that I'm aware of," according to the Treasury official.

The San Francisco Foreign Tax Club sent the Internal Revenue Service a laundry list of guidance requests on the 2017 tax act's base erosion and anti-abuse tax (BEAT) to help the tech industry navigate the law's ambiguities.

Italy's new government may introduce the flat tax that the two coalition parties agreed to in 2019 for companies and in 2020 for individuals, League senator Alberto Bagnai said in an interview.

According to companies, profitswere great in the first quarter. According to government statistics, not so much.

Corporate profitswere bolstered in the first quarter by tax cuts enacted at the end of 2017, but the underlying trend showed some signs of strain.

Britain is takingwhat a minister has described as an "active role" in shaping new EU value added tax regulations for the 2020s, suggesting the Treasury is planning for the UK to remain inside the bloc's VAT area after the Brexit transition period.

The U.K. government is privately exploring new guidance around the taxation of cryptocurrencies such as Bitcoin, Ripple, and Ethereum, according to a personwith knowledge of the matter.

An Indian judicial body spared a U.S. tech company from paying royalty taxes on income from its Indian subsidiary, a reprieve that contradicts a recent judgment involving Alphabet Inc.'s Google.

More than a half dozen of the biggest U.S. banks reduced their holdings of state and local government bonds by billions of dollars after the federal government slashed corporate tax rates, making the securities less valuable to one of the market's key buyers.

The possibility of a higher value-added tax rate in Russia could hurt the manufacturing sector and slow already sluggish economic growth, economists told Bloomberg Tax.

A May 31 judgment from the EU's second-highest court sends a message that European governments have little chance of appealing government-aid decisions by alleging a short-term competitive disadvantage from staggered edicts, practitioners said.

One of the tax law's new U.S. international tax provisionswill hit corporations even harderwhen it's applied at the state level, because states don't recognize the foreign tax credits granted at the federal level.

India's commerce ministry has asked for an examination of the recentwalmart-Flipkart acquisition deal to probe a potential violation of the country's foreign investment and tax rules, according to a statement from the ministry.

German Chancellor Angela Merkel's call to put a value on data in order to tax it like a tangible product is fraughtwith unknowns and could place a huge burden on business, analysts told Bloomberg Tax.

The top 55 companies on the 2017 Fortune 500 list expect to pay about $131 billion in taxes on their earnings stockpiled overseas. The amounts those companiesÔøΩexcluding the ones that are private or government-sponsoredÔøΩare disclosing in their earnings reports show that the revenue from the law's repatriation taxwill likely fall far short of lawmakers' and the Trump administration's expectations.

An Australian Senate committeewrapped up a four-year inquirywith a call for public tax and profit reporting for multinational companies. The Senate Economics Reference Committee, in a report released May 30, also recommended that all companies and trusts publicly disclose information about beneficial owners.

Companies in Brazil have been given an additional four months to prepare for the startup of a controversial law permitting lienswithout a court order on any asset owned by a firmwith tax debts.

Australia's chief for international tax haswarned some multinational companies that they could face a tax bill in the future if they arrange their affairs to principally obtain a local or foreign tax benefit.

Amazon.com Inc. and eBay Inc., two of theworld's largest online marketplaces, have put pressure on their rivals by publicly signing up to the U.K.'s latest efforts to crack down on value-added tax fraud.

Canada's proposed legislation to implement measures to combat aggressive tax planning go significantly beyond the minimum requirements agreed to at the international level.

EU member stateswill approve a new set of guidelines to clarifywhen a tax measure has been granted to a companywith no real economic activity during an EU finance ministers' meeting on June 22.

In this article, the author considers how the U.S.worldwide tax system has changed under the Tax Cuts and Jobs Act, and challengeswhether it should be called a territorial systemwhile proposing a new name.