Int'l Tax News

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Department has singled out the section 385 regulations to be dropped alongside almost 300 tax regulations deemed to be out of date.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.

European Union finance ministers are preparing to counterwhat they deem discriminatory elements of the U.S. tax reform law. At the behest of France, EU finance ministers Feb. 20will beginwork on a strategy to address provisions in the law such as the base erosion and anti-abuse tax (BEAT) and the global intangible low-taxed income scheme (GILTI).

Siemens AG expects to spend more on compliance as the German company adjusts its accounting in accordancewith the new U.S. tax law, the company's head of tax told CFO Journal. The maker ofwind turbines, trains and motorswill be subject to the new base erosion and anti-abuse tax ÔøΩknown as BEATÔøΩ starting from Oct. 1, said Christian Kaeser, Siemens' head of tax.

U.S. tax reform has bolstered GKN Plc's attempt to rebuff a 7.3 billion-pound ($10.2 billion) hostile takeover from Melrose Industries Plc in a sign the new law may play a key role in business deals.

Automobile manufacturers like Hyundai Motor India, Mercedes-Benz India, and General Motors Indiawill have to consider procuring auto parts domestically or face a higher tax bill, following a tax increase on imported parts.

Cisco Systems Inc. is the latest technology giant to bring home huge sums of cash held overseas, a beneficiary of the newU.S. tax law. The networking-gear maker saidwednesday itwould repatriate $67 billion of its foreign cash holdings to the U.S. this quarter, in one of the largest repatriation plans yet revealed. Cisco plans to spend much of the newly repatriated cash on share buybacks and dividends.

On February 3, 2018, China's State Administration of Taxation set out new rules on the disallowance of tax treaty benefitswhere an entity fails to demonstrate it is the beneficial owner of Chinese assets fromwhich passive income is derived.

Executives around theworld have embracedthe overhaul's big reduction in the federal corporate-tax rateÔøΩfrom 35% to 21%. Less-well-known provisions in the new code, however, could hurt some companies based outside the U.S. and doing business in the country. One of the biggest potential threats is the base-erosion and anti-abuse tax (BEAT).

President Donald Trump and Republicans are betting the 2017 tax overhaulwill invigorate the U.S. economy after a long but slow expansion, putting controversial economic theories about growth to a crucial test.

The amount of tax the U.K.'s tax authority collected from payroll investigations into the country's largest businesses increased by nearly one-third in the last year, totaling 503 million pounds ($694 million), according to figures released by law firm Pinsent Masons LLP.

The left-leaning Social Democrats' takeover of the country's powerful finance ministry for the first time in almost a decade is essentially the biggest tax overhaul in the newly formed coalition agreementwith the Christian Democrats, economists and tax attorneys told Bloomberg Tax. The agreement envisions a harder push toward tax harmonizationwithin the European Union, the gradual dismantling of decades-old tax treatments and heightened investments in digital infrastructure and social programs.

The Australian government has issued draft legislation to close a loophole involving the use of trusts and partnerships to circumvent anti-avoidance law targeting multinational companies.

China is the U.S.'s largest trading partner and theworld's second largest economy, so the largest tax reform in the U.S. since the 1980swill, of course, present both risk and opportunities for both countries.

President Trump said Monday that hewill propose a tax on imports as soon as thisweek in an effort to crack down onwhat he believes are unfair trade practices.

The Netherlands,which is one of the main gateways for American business to enter the EU market, faces tough tax competition from the US Tax Cuts and Jobs Act. But the US changes may have made things more difficult for the EU as awhole, negatively impacting the Dutch market.

A European Union action to combat hybrid mismatch structureswill take effect for some member nations in January 2022ÔøΩbut U.S. tax reform may have solved the problem already.

The Treasury Department is consideringwriting an exception to rules on the transfer of intangibles and acting on the earnings-stripping rules, an official told Bloomberg Tax. The government is considering a retroactive exception for corporate values known as "foreign goodwill" and "going concern" under the tax code Section 367 intangibles rules, according to a Treasury official.

Singaporewill pare back tax incentives covering intellectual property as part of a global fight against tax evasion, using new legislation to expand thewindow inwhich companies can qualify for other tax breaks.

U.S. tax reform is counteracting the higher costs that multinational companies are facing from the OECD's project to quash tax avoidance, according to an analysis of corporate filings by Bloomberg Tax.

Northern Irelandwon't cut its corporate tax rate to 12.5 percent until at least April 2019 because of the ongoing political failure to restore the region's devolved parliament. The delay of at least one year is a major blow to the U.K.'s smallest country's ambitions of attracting more foreign investorswith a corporate tax rate thatwould match neighboring Republic of Ireland.

The IRS hopes a groundbreaking OECD pilot program designed to limit cross-border disputeswill help identify transfer pricing issues that can be removed from the audit process, an IRS official said. A group of eight tax administrations and multinational companies headquartered in Australia, Canada, Italy, the Netherlands, Japan, Spain, the U.K., and the U.S. are participating in the International Compliance Assurance Program (ICAP).

The IRS is "grappling"with the new tax law's base erosion and anti-abuse tax (BEAT), and how to dealwith it in situationswhere double taxation may arise, especiallywhen companieswork toward negotiating advance pricing agreements.

Singapore may unveil an e-commerce tax in nextweek's budget, setting the tone for a region that's grapplingwith online retail's assault on brick-and-mortar vendors.

The Australian government has proposed legislation thatwould incorporate approved articles of the OECD's multilateral instrument into domestic law, including rules on treaty abuse, permanent establishment avoidance, and mandatory binding arbitration.