Int'l Tax News

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UK stuns with support for Bill requiring public country-by-country reporting

In a surprising volte face, Britain is considering becoming the first country in theworld to force companies to publicly reveal how much tax they pay andwhere they earn the money. The about-face comes after the UK defeated a similar amendment amidst Brexit fears.

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Congressional Pressure Mounting on U.S. Treasury's Debt-Equity Regs

The U.S. Senate Finance Committee should hold a hearing on Treasury's proposed debt-equity regulations, a Republican committee member told Chair Orrin G. Hatch, R-Utah, in a September 13 letter provided to Tax Analysts.

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IRS Transfer Pricing Enforcement Leads to Litigation-Like Audits

The recent mandate of the IRS Large Business and International Division's transfer pricing practice (TPP) to identify, develop, and litigate additional transfer pricing cases has resulted in taxpayers facing more litigation-like techniques during audits, a practitioner said.

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Treasury Official Slams EU's Tax Demands on Apple

A senior Treasury Department attorney slammed the European Commission's landmark decision requiring Apple Inc. to retroactively pay $14.5 billion in unpaid taxes as "a bad precedent that undermines stability in the global tax system."

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Lobbyists: Not Much Relief Coming From Debt-Equity Revisions

Lobbyists don't expect many positive changes for their clients from the Treasury Department's ongoing review of proposed debt-equity regulations.
Despite months of engagementwith Treasury officials and tens of thousands of comment letters, stakeholders said they have largely accepted that the broad scope of the proposed rules under tax code Section 385will remain intact and that there is little hope that Congress can stop them.
For the DTR story, gohere. (subscription required)
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Apple's Ireland Bill Puts U.S. Treasury in Tax Credit Bind

When Apple Inc.was ordered by European regulators to pay $14.5 billion plus interest in back taxes to Ireland, the technology giant seemed to be facing an expensive headache.
Turns out it is a headache for the U.S. Treasury Department aswell.

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G-20 Leaders Ask OECD to Report on Transparency

Bloomberg

by Mark Melnicoe and Angela Greiling Keane
G-20 leaders at the group's summit in Hangzhou, China, asked the OECD to report by June 2017 on tax transparency initiatives and by July to prepare a list of jurisdictions "that have not yet sufficiently progressed toward a satisfactory level of implementation of the agreed international standards on tax transparency."
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Destination-Based Taxation in the House Republican Blueprint

bywei Cui (Tax Notes)
In this article, Cui examines the destination-based cash flow tax in the House Republicans' blueprint for tax reform. He addresses the likely impact of the proposed tax and some of the theoretical controversies that it has generated.
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G-20 Leaders Adopt OECD Tax Transparency Listing Criteria, New Tax Pillar

by Stephanie Soong Johnson (Tax Notes)
In their latest communiqué, G-20 leaders approved the OECD's three objective criteria for identifying jurisdictions that fail to cooperatewith internationally adopted tax transparency standards, and approved a new "tax pillar" focused on promoting inclusive growth and tax certainty.
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India's tax plans steaming ahead as GST Council gets approval

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EU states warm to tax avoidance measures

The EU is accelerating towards stronger legislation on corporate tax in thewake of the European Commission's order to Apple to pay a record-breaking ÔøΩ13 billion of tax in Ireland.
At a meeting in Bratislava, finance ministers appeared to achieve broad consensus and endorsed a European Commission proposal to fight tax avoidance.

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Europes Bite Out of Apple Shows the Need for U.S. Tax Reform

In February Iwrote to European Commission President Jean-Claude Juncker and raised concerns about the commission's state-aid investigations involving the tax practices of U.S. multinational companies.
Most important for U.S. taxpayers, the European Commission's actions also threaten to erode America's corporate tax base.

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MEPs to debate EU Commission verdict on Irelands tax deal with Apple

  • By European Parliament

The EU Commission's conclusion that Ireland granted Apple Inc. illegal tax benefits,which enabled it to pay substantially less tax than other businesses over many yearswill be debated in plenary session onwednesday around 16:00.

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Impact of the proposed Section 385 regulations on companies investing in the United States

  • By PwC
The deductibility of interest on related-party debt for US federal income tax purposes is a vital tax issue for foreign businesses investing in the United States (US inbound companies) because it impacts cost of capital and return on investment.

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Temporary Section 482 Regulations: Is All Value' the Same Thing as Arm's-Length Pricing?

by David Ernick
David Ernick of PricewaterhouseCoopersnext considers the meaning of "value" under temporary transfer pricing regulations (T.D. 9738), andwhether the rules signal a departure from traditional arm's-length principles that have been the foundation of U.S. transfer pricing rules.
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Apple May Face Double Tax on Profits If France Adds to Tab

by Rick Mitchell and Ben Stupples

Apple Inc. may face double taxation on some of its profits if the European Commission's Aug. 30 ruling inspires France to slap its own tax adjustment on the company, practitioners said.
Apple could even face "triple taxation" if it repatriates profits from the European Union to the U.S., Laurent Leclercq, a partner at Paris-based law firm Fidal, told Bloomberg BNA.

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EU's Apple Tax Case Prompted by U.S. Senate Tipoff

by Peter Chapman
The European Union's Apple Inc. tax probe evolved after the U.S. Senate "tipped us off" about the company's practices, according to EU Competition Commissioner Margrethe Vestager.
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Moscovici: Apple Ruling Fair, Not Anti-U.S.'

by Jan Stojaspal
European Tax Commissioner Pierre Moscovici defended the European Union's Apple ruling, saying itwas neither "anti-U.S." nor "arbitrary."
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Finalizing April Inversion Regs Isn't Highest Priority

Because the government's international tax lawyers have their hands fullwrapping upwork on a number of high-priority guidance projects -- not the least ofwhich are the final debt-equity regs -- finalizing the newest inversion regs is not at the top of their to-do list.

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OECD Tax Head Warns Against Departing From Arm's-Length Standard

by Stephanie Soong Johnston
The European Commission has not yet published its full decision in the Apple state aid case, but OECD officials say they are hopeful that the EU executive arm is not deviating from the arm's-length standard.
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Final CFC Partnership Loans Regs May Address Multiple Guarantors

Final regulations addressing the treatment of U.S. property held by controlled foreign corporations in transactions involving partnerships could resolve problems some practitioners havewith a provision described in the preamble of the 2015 proposed regulations, an IRS official hinted.

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News Analysis: Hybrids, PEs, and State Aid

by Mindy Herzfeld
Mindy Herzfeld examines the recent OECD discussion draft on hybrid mismatches for branches and links concepts from the draft to those in the OECD's final action 2 report, U.K. legislation on hybrid mismatches, recent U.S. Treasury announcements, and the European Commission's state aid investigation.
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New CCCTB Proposal to Increase Tax Certainty, EU Official Says

The European Commission's coming proposal to revive the common consolidated corporate tax base (CCCTB)will not only help curb aggressive tax avoidance practices butwill also increase tax certainty for both companies and EU member states, according to a top commission official.

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State Aid Rules a Tool to Achieve Fair Taxation, Vestager Says

by Alexander Lewis
The European Commission does not intend to create a supranational tax authority, but companies should still checkwith the commission to make sure their tax agreements don't fall afoul of the state aid rules, according to EU Competition Commissioner Margrethe Vestager.
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Caterpillar CEO Cites Need for Reasonable Tax Reform'

The chairman and CEO of Caterpillar Inc. likened a recent European Commission decision involving Apple Inc. and Ireland to an act of "piracy" and said it could spark new discussions of how to overhaul the U.S. corporate tax system.

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Europes cash grab from Apple makes corporate tax reform more urgent

  • By Editorial Board
Apple did not remove the headphone jack from its new iPhone 7 as a protest against the European Commission's decision ordering Ireland to charge the U.S. tech company $14.5 billion in back taxes. Still, Apple is mighty aggrieved at the E.C., and it has a point.
For thewashington Post editorial, gohere.
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Treasury to Revise Earnings-Stripping Regulations

by Michael J. Bologna
The Obama administrationwill revise portions of its earnings-stripping proposal on several fronts including cash pooling, foreign-to-foreign loans and the application of the regulations to financial institutions and regulated industries, a senior Treasury Department attorney said.
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Eurogroup head to US: If you want billion-dollar fines to stop, sort out your taxes

The U.S. must sort out its tax regime if theywant to protect their companies from billion-dollar penalties imposed on Apple by the European Union, the head of the euro zone finance ministers group told CNBC.

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Schaeuble Goes Global to Salvage Financial Transaction Tax

After five years of fruitless talks on a European financial-transaction tax, frustrated policy makers including Germany'swolfgang Schaeuble are talking up the prospect of a global levy thatwould make sure banks pay their fair share.

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Ireland Doesnt Want Apples Back Taxes, but the Irish Arent So Sure

When European officials ordered Ireland to collect a record $14.5 billion in back taxes from Apple, Kieran O'Connell drew up awish list for spending the money.
But Ireland doesn'twant Apple's billions. Instead, the Irish government is appealing Europe's tax ruling, a move that is exposing a rift in a country still feeling the aftershocks from years of harsh cutbacks.

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Warren presses for corporate tax changes in wake of Apple ruling

Congress should pass corporate tax changes that require corporations to pay their "fair share" in light of the European Union's ruling that Apple owes Ireland $14.5 billion in back taxes, Sen. Elizabethwarren (D-Mass.) said Thursday.
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State Aid Rules a Tool to Achieve Fair Taxation, Vestager Says

The European Commission does not intend to create a supranational tax authority, but companies should still checkwith the commission to make sure their tax agreements don't fall afoul of the state aid rules, according to EU Competition Commissioner Margrethe Vestager.

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News Analysis: Hybrids, PEs, and State Aid

Mindy Herzfeld examines the recent OECD discussion draft on hybrid mismatches for branches and links concepts from the draft to those in the OECD's final action 2 report, U.K. legislation on hybrid mismatches, recent U.S. Treasury announcements, and the European Commission's state aid investigation.

To read more go here Subscription Required

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OECD Tax Head Warns Against Departing From Arm's-Length Standard

The European Commission has not yet published its full decision in the Apple state aid case, but OECD officials say they are hopeful that the EU executive arm is not deviating from the arm's-length standard.

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Public comments received on the BEPS discussion drafts on the Attribution of Profits to Permanent Establishments and the Revised Guidance on Profit Splits

  • By OECD

On 4 July 2016, interested partieswere invited to provide comments on the discussion drafts on the Attribution of Profits to Permanent Establishments and the Revised Guidance on Profit Splits. The OECD is grateful to the commentators for their input and now publishes the public comments received.

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EU's bite into Apple makes US tax reform more appetizing

The European Union took a big bite out of Apple lastweek, to the tune of $14.5 billion in retroactive taxes. This action did not just mark the latest escalation on the Continent to target U.S. corporations' profits piling up overseas. It also furtherwhet the appetite for corporate tax reform here at home.

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How the US could have avoided the Apple tax fight with Europe

Apple's Ireland subsidiary paid an Irish tax rate of five one hundredths of one percent in 2014, slightly above zero. The U.S. statutory corporate tax rate is 35%while the effective rate (what corporations pay on average) is 27.1%. Ireland iswidely regarded as a tax haven country. It sells itself as a haven for major US corporations on the basis of very, very low taxes.

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Picking Apples: Tax Policy as State Aid in the European Union

The European Commission's decision to recover ÔøΩ13 billion plus interest in unpaid taxes due Ireland and some other European countries from the Apple corporation raises many questions. Many of these questions, for example on the retroactive nature of the adjustment,will presumably be taken up by Apple and the Irish government in the courts.whether classifying tax policy as state aidwill lead toward tax harmonization in the European Union is for economists to tackle.

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OECD releases comments on draft tax guidance relating to profit splits, permanent establishment

  • By MNE Tax
The OECD today released 107 comment letters, mostly from business representatives, that respond to two OECD discussion drafts providing for common tax rules to be used to allocate multinational corporation profits among the countries inwhich they operate.
For the MNE Tax story, gohere.
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Apple state aid decision: What is the precedent, if any?

  • By ITR Correspondent

The head of tax at Mason Hayes Curran, John Gulliver, considers the key factors tax directors need to consider following the European Commission's state aid decision against Apple and Ireland.

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Apples Tax Avoidance Illustrates Gap Between Law and Economics

American companies like Apple Inc. aren't justworld-class innovators in personal technology and marketing. They are also, it turns out,world-class innovators in tax avoidance.
This is one of the clear lessons from the European Commission's announcement lastweek that Apple owed Ireland up to $14.5 billion in back taxes. As a matter of economics, the EC is right.
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Elizabeth Warren: What Apple Teaches Us About Taxes

Apple got a big surprise lastweekwhen the European Commission ordered Ireland to collect more than $14 billion in back taxes from the company. The global giant had been attributing billions of dollars in profits to a phantom head office, allowing it to pay a tax rate of 1 percent or lower.
Both Apple and Ireland are appealing the decision, but the commission's announcementwas the latest sign that multinational corporations are running out of places to hide from paying taxes.

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The Impact of the Proposed U.S. QI Agreement

Denise Hintzke and Kelly Cruze of Deloitte Tax LLP highlight some of the key changes found in the new proposed qualified intermediary agreement announced in Notice 2016-42.

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Ireland Debates Apple Appeal

Speaking during a debate over an appeal of the European Commission's decision that Apple received unlawful state aid from Ireland, Prime Minister Enda Kenny said "the commission's conclusion that Ireland granted undue tax benefits of up to ÔøΩ13 billion to Apple in away that transgressed EU state aid rules is so profoundlywrong and damaging that it demands an immediate, clear and strong response."

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Ireland Endorses U.S. Arguments in Apple Case

Ireland's finance agency has joined the U.S. Treasury Department in arguing that the European Commission's decision requiring Ireland to retroactively recoup 13 billion euros ($14.5 billion) in unpaid taxes from Apple Inc. undermines the global consensus on international taxation.

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New UK law allows government to introduce public country-by-country reporting by multinationals

Yesterday saw the latest stage in the parliamentary debates on the UK Finance Bill 2016,which brings in tax legislative changes.
One of the amendments proposed by a cross-party group of MPswas to insert a clause allowing the government to bring in a requirement for public country-by-country reporting by multinational corporations. The amendment gained government support, andwas passed. Thiswill become lawwhen it receives Royal Assent later this year.

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EU finance ministers to discuss how to make tax policy more evenhanded

European Union countries should better coordinate tax rules to avoid hitting corporations too hard, the Slovak presidency of the European Union proposed, in an effort to provide more balance to an EU campaign against tax avoidance by multinational companies.
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Apple: "Attracting investment by granting tax deals is illegal in the EU

  • By European Parliament

The European Commission's ruling that Apple should pay Ireland ÔøΩ13 billion in taxes has reignited the discussion of how much tax large companies should pay.we talked to Markus Ferber, one of the Parliament's leading members on tax issues,who said the Commission's decision enjoyed the Parliament's full backing. He alsowarned that EU countries need to understand that attracting investment by granting tax deals is illegal under EU rules established by member states themselves.

Apple and other large multinationals have explained their position to Parliament's special tax rulings committees.what do they think of the principle that taxes have to be paidwhere the economic activity takes place?


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Analysis of tax developments worldwide - September 2016 edition

  • By PwC
International Tax News is designed to help multinational organisations keep upwith the constant flow of international tax developmentsworldwide. Among the topics featured in this month's edition are:
  • The taxation of capital gain on the sale of shares in Madagascar
  • New Korean tax reform proposals
  • Luxembourg's proposed 2017 tax measures
  • OECD continues BEPS implementation

To read more go here

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Belgium may reduce corporate income tax rate to 20% by 2020 in context of broader tax reform

  • By PwC

The Belgian government isworking on a major corporate tax reform. The discussions include a progressive reduction of the corporate income tax (CIT) rate from 33.99% to 20% by 2020, full exemption of capital gains on shares ÔøΩ replacing the current tax rate of 0.412% on such gains ÔøΩ and an increase in the participation exemption regime for incoming dividends from the current 95% to 100%.

The government also is discussing various 'compensatory' measures to make the reform budget-neutral.
To read more go here

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