Int'l Tax News

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U.K Paves the Way for Public CbC Reporting but Stresses Multilateral Approach

Tax transparency campaigners havewelcomed the U.K. government's decision to accept a Finance Bill amendment thatwill enable HM Treasury to make regulations requiring large multinationals to publish country-by-country (CbC) reports of their profits and taxes. The government, however, stressed that it intends to seek international agreement on a reporting model before using the new power.

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A Price-Based Royalty Tax?

by Kimberly A. Glausing and Michael C. Durst (Tax Notes)
In this article, the authors consider the merits of a price-based royalty as a tax instrument for extractive industries. A price-based royalty is a royalty forwhich the rate varieswith the product price.
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Multinational under fire: Who will be the Eurpean Commission's next target

International Tax Review

by Amelia Schwanke

Company tax directors are questioningwhether the European Commission acted beyond its powers in fining Apple �13 billion ($14.5 billion) for accepting "illegal" state aid - and they arewonderingwhether they may be next in line. @

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Tax Technology: A brave new world

International Tax Review

by Amelia Schwanke

Tax authoritiesworldwide are increasingly relying on digital technologies to gather and analyse tax data, and implement intelligent systems that provide real-time tax collections and assessments. Moreover, tax data sharing among tax authorities,whichwill become an automated process from 2017,will help tax authorities complete more audits and investigations, creating aworldwhere therewill be nowhere to hide from the tax man. Amelia Schwanke investigates how authorities and taxpayers are adjusting to digital tools and systems andwhat the future holds. @

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EU nations losing billions in uncollected VAT

International Tax Review

by Joe Stanley-Smith and Anajana Haines

The European Commission has released figures on the 'VAT Gap' that support its plan to overhaul the EU's VAT system and introduce a definitive regime for cross-border trade in the EU. @

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Will EU SAF-F reporting be the death of VAT returns?

International Tax Review

by Richard Asquith

Richard Asquith, vice president of global indirect tax at Avalara, provides an analysis of the revolutionary standard audit files for tax (SAF-T) filing requirements that are sweeping across Europe. @

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Production Deduction Rule May Push Jobs Abroad: Publishers

Bloomberg

by Allyson Versprille
Proposed rules to simplifywhat entities are eligible to take the domestic production tax deduction may push production activities of U.S. companies overseas, a publishers' association said.
The ruleswould likely prevent publishers from being eligible for the Section 199 deduction even though they produce and design the content of publications and are the ones that derive gross receipts from the sale of the product to customers, the Association of American Publishers said in a letter to the IRS and Treasury Department released Sept. 6 under provisions of the Freedom of Information Act.
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Irish Branches Didn't Generate Apple Group's Income, Government Says

By attributing all of Apple's Irish-incorporated nonresident entities' income to their Irish branches, the European Commission is effectively forcing Ireland to tax income generated in the United States, according to the Irish government.

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Portman, Brady react to EUs retroactive tax ruling against Apple

  • By Ripon Advance News Service
U.S. Sen. Rob Portman (R-OH) and U.S. Rep. Kevin Brady (R-TX) reacted on Tuesday to news that the European Union (EU) Commissionwould levy a multi-billion dollar tax on Apple, Inc.
Following the ruling, Portman called for international tax reform and said that the EU Commission continues to ignore serious concerns from the Treasury Department.

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Apple tax decision based on facts

  • By Reuters
An EU ruling that Apple Inc must pay a huge tax bill to Irelandwas clearly based on facts and existing rules andwas not a decision aimed against the US, European Commission (EC) President Jean-Claude Juncker said on Sunday.
Lastweek, EU antitrust regulators ­ordered Apple to pay up to 13 billion euros ($14.5 billion) in taxes to the Irish ­government after ruling that a practice of routing profits through Irelandwas illegal state aid.

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Apple tax crackdown not an attack on US, says EU Commission president

The European Union ruling that US tech giant Apple must pay ÔøΩ13bn (£10.9bn, $14.50bn) in back taxeswas clearly based on facts and existing rules and not an action taken "against the United States of America", EU Commission President Jean-Claude Juncker said on Sunday.

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Irish government to appeal against Apple's $13bn tax bill

The Irish government has decided to appeal against the European commission's ruling that Applewas given a sweetheart tax deal and should hand Dublin ÔøΩ13bn (£11bn) in fiscal payments.
Apple tax: European commissioner defends ÔøΩ13bn ruling
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G20 leaders endorse new international standard for tax transparency

  • By MNE Tax
G20 leaders during their summit in Hangzhou, China, held September 4–5 endorsed a proposal setting out objective criteria to be used to identifywhether countries are sufficiently tax transparent or not.

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UK parliament debates public country-by-country reporting

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The UK is debatingwhether Britain should become one of the first countries in theworld to introduce public country-by-country reporting (CbCR). The measure is one of many tax proposals on the parliamentary agenda, including lowering the corporate tax rate.

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U.K. Tax Simplification Office Calls for Clearer Strategy, Better Public Debate

The increased use of roadmaps setting out the direction of U.K. tax policywould increase confidence and trust in the tax system and help to reduce uncertainty arising from the Brexit vote, the Office of Tax Simplification (OTS) has said in response to a joint project to improve tax policymaking.

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U.K. Lawmakers to Debate Public CbC Reporting as Tax Expert Urges Caution

Members of the U.K. Parliament have been urged not to risk "confrontation"with U.S. lawmakers by breaking ranks on public country-by-country (CbC) reporting, as they prepare to debate for a second time a finance bill amendment thatwould pave theway for mandatory public CbC reporting by large multinationals.

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Ireland to Appeal Apple Ruling, Review Corporation Tax Code

Ireland's Cabinet has unanimously voted to appeal the European Commission's findings that the country provided Apple Inc.with approximately ÔøΩ13 billion in state aid through selective tax rulings.

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News Analysis: Tax Extortion -- the European Version

Mindy Herzfeld reviews the European Commission's recently announced decision that in two tax rulings, Ireland granted ÔøΩ13 billion in illegal state aid to Apple Inc., and examines the commission's shifting rationale for its decision.

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Apple Ruling to Be Appealed as Irish Cabinet Ends Squabble

Ireland's government agreed to fight the European Union's Aug. 29 decision forcing Apple Inc. to pay it vast tax arrears, ending a squabblewhich threatened to destabilize Prime Minister Enda Kenny's administration.
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EU Apple Tax Decision Ducks Arm's-Length Controversy

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The European Commission decision requiring Ireland to retroactively recoup $14.5 billion in unpaid taxes from Apple Inc. suggests the commission didn'twant to become embroiled in a spat over the international arm's-length standard.
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Apple CEO says EU tax ruling 'total political crap': Irish Independent

byConor Humphries(Yahoo)
Apple's Chief Executive Tim Cook described an EU ruling that it must pay a huge tax bill to Ireland as "total political crap", but France joined Germany on Thursday in backing Brussels as transatlantic tensions grow.
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Pinning Down Apples Alleged 0.005% Tax Rate Is Nearly Impossible

by Lynnley Browning and David Kocieniewski (Bloomberg)
The European Commission's finding that Ireland must collect as much as an attention-getting 13 billion euros ($14.5 billion) in back taxes from Apple Inc. contained a second stunning number: 0.005 percent.
"It's plausible, butwe can't verify it," said Michelle Hanlon, a professor of accounting and taxes at the Massachusetts Institute of Technology's Sloan School of Management. Apple, like most multinational companies, doesn't disclose a country-by-country breakdown of its profits or taxes paid.
For the Bloomberg story, gohere.

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Apple Bites Back, Says Ruling Was Politically Motivated

The European Commission's finding that Apple Inc. received approximately ÔøΩ13 billion in illegal state aid from Irelandwas politically motivated, according to Apple CEO Tim Cook.

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Tim Cook Says Apple Could Send Cash Back to U.S. Next Year

by Paul Hannon and Sam Schechner (Thewall Street Journal)
Apple Inc. Chief Executive Tim Cook said the company may repatriate at least some of the billions of dollars of cash it holds offshore as early as next year, in comments made in thewake of a ÔøΩ13 billion ($14.5 billion) tax claw-back decision by European authorities.
Mr. Cook took his case to Ireland on Thursday, blasting the decision as "political crap" and saying anti-competition authorities in Brussels miscalculated how much tax the company paid in Ireland.
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Apple May Repatriate at Least $5 Billion in 2017, Cook Says

Bloomberg

by Alexwebb
Apple Inc. may bring at least $5 billion of its offshore cash back to the U.S. next year, Chief Executive Officer Tim Cook suggested in an interview on Irish radio.
"We provisioned several billion dollars for the U.S. for payment as soon aswe repatriate it, and right now Iwould forecast that repatriation to occur next year," Cook told RTE Radio 1.
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Business Groups Warn Against Double Taxation of Santander

Bloomberg

by Erin McManus
Business groups say that Congress intended to prevent the double taxation towhich Santander Holdings USA Inc.would be subject if it isn't allowed foreign tax credits incurred in a transactionwith Barclays Bank PLC (Santander Holdings USA, Inc. v. United States, 1st Cir., No. 16-01282, briefs filed 8/22/16).
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PE risk of cross-boarder service to China

International Tax Review

by Maggie Zhuang
Foreign businesses offering cross-border service provisions to Chinese entities must take caution as the tax authorities are becoming more confident than ever in looking into cross-border transactions involving Chinese companies.
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Denmark Announces Significant Tax Initiatives in 2025 Reform Plan

by Arne Riis and Poul ErikLytken (Tax Notes)
The Danish government on August 30 presented a major 2025 reform plan that contains several significant tax initiatives.
It remains to be seenwhether the minority government during the next few monthswill be able to secure the support needed from other political parties to implement the plan. Also, a number of the initiatives are subject to the prior approval of the European Commission,which is generally expected to support the measures.
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Canada Mulling Ways to Handle Stateless Entities in CbC Reports

by Stephanie Soong Johnson (Tax Notes)
The Canada Revenue Agency is considering how to properly report data for stateless entities in country-by-country (CbC) reports under action 13 of the OECD's base erosion and profit-shifting project, an issue that is causing some consternation among practitioners.
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BEPS Corner: Are the Final BEPS Reports on Actions 8-10 Effective Now?

by Jason Osborn, Brian Kittle and Kenneth Klein (Tax Notes)
In this article, the authors discuss the impact of the final BEPS actions 8-10 reports,which contain final, currently applicable revisions to the OECD transfer pricing guidelines.
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Digital Economy Requires International Cooperation on VAT, OECD Official Says

by Ryan Finley (Tax Notes)
Cross-border transactions involving digital products have made VAT enforcement a global issue that can be effectively addressed only through coordinated international efforts and a globally consistent set of rules, according to Stéphane Buydens, VAT policy adviser at the OECD.
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Apple's Income Should Be Taxed in U.S., Not Ireland, Lew Says

by Alexander Lewis (Tax Notes)
The European Commission's finding that Apple Inc. received illegal state aid from Ireland to the tune of ÔøΩ13 billion represents an attempt to tax income that belongs to the United States, according to Treasury Secretary Jacob Lew.
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Tax Move Is EU''s Latest on Tech -- WSJ

by Sam Schechner (Nasdaq)
The European Union's decision Tuesday that Apple Inc. owes roughly 13 billion euros ($14.5 billion) inwhat it calls uncollected taxes over a decade, represents a new high-water mark in the bloc's efforts to rein in alleged excesses of American tech giants.
But it is also just the first shot inwhat is expected to be a busy autumn for European officials,who are pushing forward a raft of regulations and investigations aimed at altering the behavior of a cadre of U.S.-based internet superpowers.
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Yesterday, Outraged by Apples Tax Dodge. Today, by Its Tax Bill

by Alan Rappeport (The New York Times)
American lawmakers have for years been assailing companies for dodging taxeswith overseas maneuvers. But now that the European Union has done something about it by trying towrest billions of dollars from Apple, those officials have offered a response viewed by many as rifewith hypocrisy: collective outrage.
Tax avoidance has become a lightning rod as the presidential campaign has taken on a strong populist cast, and leading Republicans and Democrats in Congress have demanded that companies be forced to pay their fair share.
Despite all that, Apple now has the federal government standing up for it after the European Union's executive commission ordered Ireland on Tuesday to collect $14.5 billion in taxes from the company.
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Intangibles Regs Grant Perpetual Life, but Are They 'Useful'?

by Kristina L. Novak, Mark Thomas and Cym H. Lowell (Tax Notes)
In this article, the authors argue that in granting perpetual useful life to intangibles, the recently proposed section 367(d) regulations appear to be inconsistentwith much of the data and experience provided by today's dynamic business environment. They conclude that Treasury's view is unfortunate for taxpayers in an area already fraughtwith litigation and that it may have unintended consequences for the IRS.
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Practitioners: EU Apple Case Will Cause Chaos, Hurt BEPS

Bloomberg

by Alex M. Parker
The European Commission's decision to require Apple Inc. to retroactively pay 13 billion euros ($14.5 billion) in unpaid taxes increases uncertainty and chaos in the international tax system, throws tax rulings and advance pricing agreements into question and undermines other global efforts to dealwith international tax avoidance, practitioners say.
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Lack of U.S. Tax Overhaul Is a Shame,' Saint-Amans Says

Bloomberg

by Rick Mitchell
The U.S. is seeing EU countries make a grab for tax revenue from U.S. companies because it has failed to implement key tax policy changes, the head of OECD tax policy said.
For the DTR story, gohere. (subscription required)

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Lew: EU's Apple Tax Ruling Shows U.S. Companies Targeted

Bloomberg

by Saleha Mohsin
Treasury Secretary Jacob J. Lew said the European Union is singling out American companies for tax investigations as shown by its ruling thisweek that Apple Inc. must pay Ireland more than 13 billion euros ($14.5 billion) in back taxes.
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EU Apple Ruling to Hurt Global Companies: Technology Group

Bloomberg

by Alison Bennett
Global technology companies face big problems overseas and in the U.S. after the European Union ruled that Apple Inc. owed $14.5 billion in taxes it avoided through Irish tax agreements, according to a major technology group that counts Apple among its 60 members.
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Corporate Foreign Tax Credit Claims Rise as Economy Recovers

Bloomberg

by Colleen Murphy
The number of corporations looking to reduce their income taxes increased 6.9 percent in 2012, the IRS said.
In total, 7,190 U.S. corporations claimed the creditÔøΩsignaling recovery from the "hangover" of the Great Recession, Robertonwilliams, the Sol Price Fellow at the Urban-Brookings Tax Policy Center, told Bloomberg BNA Aug. 31.
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Fighting Apple's Record Tax Bill: What Happens Next?

Bloomberg

by Stephanie Bodoni
Apple Inc. and Ireland have always vowed to go to court to fight a negative European Commission ruling over the iPhone maker's fiscal affairs.
Ireland received the commission's full decision Aug. 31, andwillwant to study exactlywhy the regulator thinks theworld's richest company must pay back years of allegedly illegal tax breaks.
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News Analysis: The EU's Vanishing Withholding Tax Regimes -- Part II

The authors conclude their review of the Court of Justice of the European Union's ongoing scrutiny ofwithholding taxes imposed by member states on cross-border financing arrangements. Thisweek they look at the Court's treatment of interestwithholding under the EU and European Economic Area guarantees of freedom to provide services.
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Fact-Checking Apples Claims on E.U. Tax Ruling

by Katie Banner (The New York Times)
Timothy D. Cook, Apple's chief executive, issued a defiant letter to his European customers on Tuesday after the region's antitrust enforcer ordered Ireland to collect 13 billion euros, or about $14.5 billion, in back taxes from the company.
We examined some of the points Mr. Cook made in the letter, consultingwith five tax experts to fact-check the chief executive's statements.while Mr. Cookwas technically truthful, he omitted some context and shifted the spotlight from the thrust of the European Commission's case:whether Apple took advantage of loopholes in Irish tax laws.
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Apple Owes $14.5 Billion in Back Taxes to Ireland, E.U. Says

  • By Kanter James and Mark Scott
by James Kanter and Mark Scott (The New York Times)
The European Union on Tuesday ordered Ireland to collect $14.5 billion in unpaid taxes from Apple, a record penalty thatworsened tensionswith the United States over the bloc's crackdown on sweetheart dealswith global multinationals.
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Brexit May Make U.K. More Attractive to Multinationals After EUs Apple Ruling

by Jason Douglas (Thewall Street Journal)
In theory, quitting the European Unionwould free the U.K. from the sort of EU oversight that on Tuesday resulted in Brussels ordering Ireland to recoup some 13 billion euros ($14.5 billion) ofwhat it called unpaid taxes from one of its biggest multinational investors, Apple Inc.
That, and the country's low corporate-tax rate, could burnish post-Brexit Britain's allure for multinational companies, provided it maintains a high degree of access to the EU's huge single market for goods and services, tax experts said.
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EU Apple Tax Ruling Stirs Fears of Revenue Loss in U.S.

by Richard Rubin (Thewall Street Journal)
American politicians have spent years salivating over U.S. companies' stockpile of untaxed foreign profits, now more than $2 trillion and growing.
Europe got to that money pot first.
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Europes Apple Tax Ambush

  • By The Wall Street Journal
by Thewall Street Journal
Even by the usual Brussels standards of economic malpractice, Tuesday's 13 billion euro ($14.5 billion) tax assault on Apple is something to behold. The European Commission decided that Dublin's application of Irish tax law to an American company violated European antitrust rules. Orwellwould understand.
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Apple owes $14.5 billion in back taxes, European authorities say

by Renae Merle (Thewashington Post)
European authorities ruled Tuesday that Apple owes more than $14.5 billion in back taxes after striking a sweetheart dealwith Ireland that allowed the tech giant to underpay for more than a decade.
Apple paid a tax rate of 1 percent or even less - 0.0005 percent, in some years - on its European profits, according to the European Commission,which launched an investigation into the company's international tax strategies in 2014. That arrangement, according to the commission, is illegal because it amounts to an improper incentive under European rules.
The ruling is likely to rattle many U.S. corporate boardroomswhere aggressive tax strategies have become standard practice.
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How the E.U.s ruling on Apple explains why Brexit happened

by Max Bearak (Thewashington Post)
The governing body of the European Union ruled Tuesday that one of its members, Ireland, had broken its rules by allowing U.S.-based Apple to pay a tax rate of 1 percent - and sometimes as little as 0.0005 percent. Ireland's regular tax rate is 12.5 percent, and the E.U.'s rules state that members cannot give special benefits to individual companies, even if the entity in question is the most highly valued company in theworld.
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House and Senate Taxwriters Denounce Apple State Aid Ruling

by Dylan F. Moroses (Tax Notes)
House and Senate taxwriters voiced their frustration andworry about the European Commission's announcement August 30 that Ireland must collect ÔøΩ13 billion in illegal state aid it provided to Apple over a decade through tax rulings.
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