Int'l Tax News

Google New Zealandwill begin paying more in taxes after announcing itwill no longer attribute its New Zealand sales to Singapore, a notoriously low-tax jurisdiction.

Large technology companies such as Facebook and Google face a tax on their revenues in the UK after a Treasury minister said thiswas the "potentially preferred option" after a government review.

The new tax law allows firms to claim an immediate 100% deductionwhen they buy an asset, including purchases ofusedequipment that have already beenwritten off by previous owners. Tax planners say the market forusedequipment is likely to heat up in the months ahead. It could mean a shuffling ofassetsby companies purely for tax reasons and mergers and acquisitions that exploit new tax edges.

Luxembourg continues to reject claims from the European Commission that it gave Amazon illegal tax benefitsworth 250 million euros. The EU competition authority on Feb. 26released183 pages of non-confidential details of the Oct. 4 decision inwhich it said theworld's leading online retailer should pay 250 million euros ($310 million) for violating bloc rules. The disputeÔøΩcentered onwhether Amazon.com Inc. received selective advantage over competitorsÔøΩis one of several ongoing state-aid cases.

The French presidentwants the European Union to use revenue from an upcoming digital tax proposal targeting companies such as Google, Facebook, and Amazon to help cover a Brexit-induced budget shortfall.

China's tax revenue collections increased by 8.7 percent in 2017, the Chinese State Administration of Taxation said during a February 1 press conference, adding that the introduction of a blacklist mechanism for illegal tax practices and a joint punishment system has also improved taxpayer compliance.

French President Emmanuel Macron is expected to tell his peers February 23 that access to EU funds should be made conditional on fair tax competition. EU leaders are due to gather in Brussels to give guidance to the European Commission regarding the next multiannual financial framework. The commissionwill then make a formal proposal May 2.

A new Morgan Stanley survey of stock market analysts found that companies are expected to use the biggest share of their corporate tax savings to reward shareholders and spend a substantially smaller share onworkers and capital investments. Council of Economic Advisers Chair Kevin Hassett, asked to respond at a February 22white House briefing, attributed those results to a one-time adjustment caused by the deemed repatriation provision in the Tax Cuts and Jobs Act (P.L. 115-97).

Treasury is considering guidance on constructive stock ownership under section 958(b), butwould like to receive comments concerning its authority to issue such guidance. Speaking February 22 at the International Fiscal Association's annual conference in Houston, Jason Yen, attorney adviser at Treasury, said the agency is considering potential guidance regarding the implications of the new downward stock attribution in section 958(b) , butwants to get comments from taxpayers aboutwhere they think Treasury gets the regulatory authority to issue the guidance.

It's an election year in Sweden and Prime Minister Stefan Lofven is trying hard to promote an agenda of social equality. But that could prove tough in aworld inwhich tax cuts are stealing the agenda.with U.S. President Donald Trump pushing through major corporate tax cuts, the competitive fallout for businesses in Sweden and the rest of Europe is causing concern.

Waste Management Inc. plans to reinvest itswindfall from the new U.S. tax legislation in mergers and acquisitions, bonuses for itsworkforce and capital improvements, said Chief Financial Officer Devina Rankin.

Countrieswith higher corporate tax rates are looking to the U.S. as a model to lower the levy on businesses, the Houseways and Means Committee chief tax counsel said. Barbara Angus, one of the key drafters of the new tax law, said she has metwith representatives of other countrieswho are looking to see how they can use the U.S. tax law changes to spur tax changes in their home countries.

A dividend or capital gain earned by a foreign entitywill be taxed at a higher 30 percent rate if it isn't subject to tax in its home country, the Swedish Tax Agency said.

South Africa announced in its national budget Feb. 21 plans to curb excessive interest deductions multinational companies use to reduce their tax bill.

European Union lawmakers voted to redefine an online business's taxable presence in a member state, part of a drive to ensure that large internet companies such as Facebook Inc. and Alphabet Inc.'s Google pay more in tax. The vote on Feb. 21 comes in advance a key digital taxation proposal from the European Commission due in March.

IMF Managing Director Christine Lagarde said the Trump administration's $1.5 trillion tax cut could prompt other nations to follow suit, fueling a "race to the bottom" that risks hemming in public spending.while the impact of the package passed by Congress in December is only just beginning to be understood, its effects are likely to include increased consumption and "hopefully the payment of higherwages," Lagarde said on a panel at the Munich Security Conference in Germany on Friday. It alsowill fuel inflation, she said.

The tax overhaul that President Trump signed into law now has more supporters than opponents, buoying Republican hopes for this year's congressional elections. The growing public support for the law coincideswith an eroding Democratic leadwhen voters are askedwhich party theywould like to see control Congress. And it follows an aggressive effort by Republicans, backed by millions of dollars of advertising from conservative groups, to persuade voters of the law's benefits.

The new U.S. tax law could throw a monkeywrench into a method many analysts and investors use to gauge the strength of companies' earnings. A provision of the tax overhaul enacted in December assesses a one-time tax on companies' accumulated earnings from outside the U.S. Butwhile the tax is typically charged to companies' 2017 earnings, firms have the option of stretching the actual tax payment over the next eight years, interest free.

Utility operator Duke Energy Corp. plans to tap equity markets to bolster its balance sheet and offset the strain tax reform has placed on cash flow, according to Chief Financial Officer Steve Young.

Singaporeremains a competitive destination for businesses even though it's raising taxes and maintaining some restrictions on foreignworkers, Minister for Trade and Industry S. Iswaran said.

The U.K. government has increased the number of staff on its "Google tax" team in a move that highlights a growing focus on the cross-border structures of multinational companies.

European Union finance ministers are urging the bloc to approve its own corporate tax reform in response to U.S. tax law changes by adopting an EU-wide common corporate tax base thatwould offset any potential company investment losses. EU finance ministers insisted thatwhile the EU should consider defensive measures against any parts of the U.S. tax reform that prove discriminatory, they must also go on the offensive.

Tech trade groups representing Alphabet Inc.'s Google, Apple Inc. and other companies are urging U.S. Treasury Secretary Steven Mnuchin to push back against European Commission plans to impose new taxes on digital goods and services.

The Governor of the Reserve Bank of Australia haswaded into the debate onwhether the country should reduce its corporate tax rate in response to the U.S. cutting its corporate rate to 21 percent from 35 percent last year.

The European Central Bank on February 14 published an opinion (CON/2018/8) on a proposal from lawmakers in Slovenia on a draft law on the return of monetary funds to the country from designated "tax havens" and the imposition of a penalty tax, providing an outline of the proposed regime.

The Australian Government is legislating to close loopholes in the tax consolidation regime.
Tax consolidation allowswholly owned corporate groups to be treated as a single entity for tax purposes.

As part of its effort to cut red tape, the US Treasury Department has singled out the section 385 regulations to be dropped alongside almost 300 tax regulations deemed to be out of date. This is after President Donald Trump called for the Treasury to findways to reduce the regulatory burden on taxpayers.

In this article, the authors discuss how taxpayers can leverage the emphasis on the mutual agreement procedure and mandatory binding arbitration in action 14 of the base erosion and profit-shifting project to efficiently resolve active or potential MAP cases.

Therewas a telling moment at a recent tax conference inwashington. It occurredwhen a member of the audience asked how the taxpayer election under section 962would alter the expected outcomes under the Tax Cuts and Jobs Act (P.L. 115-97). The panelists stared at each other for a few awkward moments until one of them acknowledged that section 962 had never come up during his long career in the tax profession. That's about to change. More than a half-century after its enactment, the section 962 election has once again become relevant.

Taxes aren't enough to solve income distribution problems in the hardest-hit nations, according to some experts; inequity can't be solvedwithout a close look at government spending, public optics, and social contracts.

Some practitioners are beginning to express consternation about the consequences of the broad regulatory authority granted to Treasury under new hybrid payment rules in the Tax Cuts and Jobs Act.while much of the focus thus far has been on other, lengthier international provisions of the TCJA, the newly enacted legislation also takes action against hybrid arrangements. The relatively terse section 267A disallows disqualified related-party payments made in a hybrid transaction or to a hybrid entity.

Canadian Finance Minister Bill Morneau said Friday he has no plans to be "impulsive" in response toworries over the impact of sweeping U.S. tax cuts and the renegotiation of the North American Free Trade Agreement might have on investment in the country.

The German government never had so much money or so many ideas about how to spend it. The one thing that isn't being discussed is giving it back to taxpayers.

A forthcoming report by the OECD's digital tax force almost certainlywon't endorse a digital excise tax and the U.S.will continue to oppose different tax rules for digital companies, a senior Treasury Department official said.

The European Commissionwill include a call for a temporary tax on the advertising revenue of large internet companies, such as Facebook and Google, in its upcoming digital taxation legislation. The legislationwill also include a separate tax aimed at online platforms such as Amazon.com Inc., Ebay Inc., and Airbnb Inc.

As the OECD sees its efforts on anti-base erosion and profit shifting measures come to fruition, it's time to turn to new questions about creating an international tax system that is fair for both developing and developed countries, an OECD official said.

Japanese banks are awaiting guidance on the base erosion and anti-abuse tax (BEAT) included in the U.S. tax reform law,which someworry may apply to interest payments on inter-company loans and bonds.

E-commerce giants like Amazon.com Inc. could be at risk of larger tax bills in the future after an Indian tax tribunal demanded $17.1 million from Flipkart. The Feb. 6 Income Tax Appellate Tribunaldecisiondeclining a suspension of the tax bill is just the latest sign that India is taking a no-holds-barred approachwhen it comes to taxing the digital economy, practitioners told Bloomberg Tax.

The OECD has released a new report analyzing energy use and tax regimes in 42 countries,which make up 80 percent of global energy use. The report calls on governments to adopt more effective use of taxes to cut harmful emissions from energy use.

The European Commission is about to unveil its proposals for the EU's digital tax strategy. Major EU states like France and Germanywant to take action now, but Ireland stands in theirway.

The Australian Government is to tighten its Multinational Anti-Avoidance Law (MAAL) to prevent the use of certain structures to circumvent the law's application.

A new e-commerce tax, tax hikes, and changes to the goods and services tax (GST) regime that may affect MNEs are all highly likely in Singapore's 2018 budget nextweek.

Almost two years after the European Commission presented its proposal for country-by-country reporting, member states have yet to agree on a negotiating position. The chairs of the European Parliament's committees on economic and monetary affairs and legal affairs, Roberto Gualtieri (Socialists and Democrats Group, Italy) and Pavel Svoboda (Group of the European People's Party, Czech Republic) havewritten to Maria Koleva, deputy permanent representative of Bulgaria to the EU, urging the EU Council to hasten the negotiating process. Bulgaria holds the council's rotating presidency this semester.

House and Senate committee officials appear to disagree over the importance of the legislative history in interpretingwhich payments for services are subject to the base erosion and antiabuse tax (BEAT). Speaking February 15 at the Tax Council Policy Institute conference inwashington, Mark Prater, deputy staff director and chief tax counsel for the Senate Finance Committee, said he does not believe a colloquy between Sen. Rob Portman, R-Ohio, and Senate Finance Chair Orrin G. Hatch, R-Utah, on December 1, 2017, is instructive in determiningwhether the BEAT applies to services that include a markup.

Although the U.S. foreign-derived intangible income (FDII) rules may superficially resemble harmful tax practices under OECD standards, they differ fundamentally from traditional preferential regimes, according to a top Treasury official.

Now that the historic bail-out of earnings and profits at capital gains rates is no longer a critical policy factor, the subchapter C distribution provisions should be rethought in terms of the policy factors that are relevant for today's context. This paper sets forth a reform proposal that attempts to reform Subchapter C's corporate distribution provisions for the current era.

This article discusses the new base erosion and anti-abuse tax (BEAT),which focuses on cross-border related party payments, bringing groupswith international operations and transfer pricing arrangements into its sights. The authors examine the options for groups bound by now-unfavorable advance pricing agreements (APAs)with the U.S. and for other taxpayers subject to tax treatieswith mutual agreement procedure (MAP) articles.

Japan plans on making additional financial contributions to support the activities of the Platform for Collaboration on Tax,whileother countries, such as China, say they plan to support greater tax cooperation in otherways.

A digital common consolidated corporate tax base(CCCTB) and a simplified VAT could help plug the EU budget gap after Brexit, raising between ÔøΩ124 billion andÔøΩ280 billion over seven years, according to the European Commission.

AbbVie, the maker of one of theworld's best-selling drugs, is lifting its dividend and launching a new $10bn share repurchase programme, as it is poised to cash in on US tax reform.