Int'l Tax News

The Treasury Department's crackdown on tax inversions reverberated through the political and corporateworlds on Tuesday.

Both Democraticwhite House hopefuls endorsed the effort from President Obama's administration.

For The Hill story, go here.

Kerwin Chung, Shiraj Keshvani, and Eddie Morris explain how BEPS guidancewill impact APA programmes globally.

For the ITR story, go here.

New Treasury regulations are a positive step toward ending corporate tax avoidance, but Treasury should take further regulatory action to prevent hopscotch loans and Congress "should stop coddling corporate deserters and enact anti-inversion reforms," Robert S. McIntyre of Citizens for Tax Justice said in an April 5 statement.
For the statement, go here.

Since October 2015, authorities have been reacting to the outcome of the BEPS Project. The implementation of new legislation and adaption of existing regulations to match the new OECD guidelines has already begun to impact multinationalsworldwide. The undeniable headline change has been a broad move to implement country-by-country reporting (CbCR); however the other policy that stands out from the crowd is in the area of patent boxes, as Joelle Jefferis explains.
For the ITR story, go here.

For the past couple of years, President Barack Obama has been accused of failing to prevent US companies from abandoning their home base in search of lower tax rates.
Critics dismissed his administration's early efforts to deter such controversial inversion deals,which companies use to shift their addresses abroad for tax purposes, as timid and ineffectual.
Not any more.
For the Financial Times story, go here.

In keepingwith the reputation that "The United States can always be relied upon to do the right thing ÔøΩ having first exhausted all possible alternatives,"the Obama Treasury has announced its third set of rules aimed at preventing U.S. companies from mergingwith foreign companies based in low-tax countries such as Ireland. These transactions are known as inversions.
Of course, since the 35% U.S. corporate tax rate is the highest among all industrialized nations, the right thing to do is to cut our tax rate to a competitive level, not build a higherwall to prevent companies from leaving.
For the Forbes article, go here.

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:
Romania's new tax code
Treaty benefit implications of the final US Model Income Tax Treaty
Luxembourg's 2017 tax changes
The OECD framework for broader participation in BEPS stage two
For the latest edition, gohere.

As the U.S. took tougher steps Monday to limit the tax-cutting power of corporate inversions, analysts said the new rules may put a planned $160 billion merger between Pfizer Inc. and Allergan Plc in jeopardy.

The Treasury Department said Monday the ruleswould limit companies' ability to participate in inversion transactions if they've already done themwithin the past 36 months. Allergan has been involved in several mergers in that time frame. In a corporate inversion, a U.S. company mergeswith a smaller foreign firm and then transfers the new company's tax address offshore.

For the Bloomberg story, go here.

The European Commission is scrutinizing more than 100 advance transfer pricing tax rulings that multinational companies have signedwith European Union member states over concerns the terms give an incomplete picture of the group's profits and could result in new illegal state aid decisions.
For the DTR story, go here. (subscription required)

The U.S. government is taking more steps to clamp down on companies that try to reduce their tax bills by mergingwith foreign firms.
On Monday, the Treasury announced new regulations intended to further discourage so-called inversions,which have been on the rise in recent years.
For the CNN story, go here.

The top Republican taxwriters in the House and Senate are unhappywith the Treasury Department's latest actions aimed at deterring companies from moving their legal residences overseas to lower their taxes.
For The Hill story, go here.

The Treasury Department imposed tough new curbs on corporate inversions Monday, shockingwall Street and throwing into doubt the $150 billion merger between Pfizer Inc. and Allergan PLC,whichwas on track to be the biggest deal of its kind.

"It's going to be a major impediment. They're pretty much taking all of the juice out of inversions," said Robertwillens, a New York-based tax analyst. "They've addressed literally every benefit that one attempted to gain from an inversion and shut them all down systematically."
For thewall Street Journal story, go here.

The Treasury Department took new steps on Monday to further curtail a popular type of merger inwhich an American company buys a foreign counterpart, then moves abroad to lower its tax bill.

The new rules, announced in conjunctionwith the Internal Revenue Service, take particular aim at foreign companies that have completed multiple dealswith American companies in a short period,what the regulator calls "serial inverters."
For the New York Times story, go here.

Ways and Means Committee Ranking Member Sander Levin (D-MI) released a statement after the U.S. Treasury Department took steps to further limit corporate tax inversions and address the use of earnings stripping by U.S. corporations.
For the statement, go here.

Senate Finance Committee Ranking Member Ronwyden, D-Ore., issued a statement regarding the Treasury Department's new guidance on tax inversions.

For the statement, go here.

The U.S. Treasury Department has issued proposed regulations aimed at curbing earnings stripping, a common practice used by companies that redomicile, or invert, their headquarters overseas for tax purposes. The Department also issued additional anti-inversion guidance and released an updated framework for business tax reform. In response, Senate Finance Committee Chairman Orrin Hatch (R-Utah) issued a statement.
For the statement, go here.

Houseways and Means Chairman Kevin Brady (R-TX) released a statement after the U.S. Treasury Department announced further regulatory developments aimed at penalizing American companies that are already burdened by an outdated and uncompetitive U.S. tax system.
For the statement, go here.

Treasury issued temporary and proposed regs on April 4 to further combat inversions and more broadly address earnings stripping among foreign-owned multinationals for transactions thatwould otherwise generate large interest deductions in the United States.
For the TNT story, go here. (subscription required)

The Treasury Department took another major step to put more limits on corporate inversions,where U.S. companies change their tax residence to cut or avoid U.S. taxes, issuing long-awaited guidance that also targets earnings stripping.
The proposed, final and temporary rulesÔøΩwhich could take away the benefits of some recent dealsÔøΩcome as the U.S. has struggled to stop massive inversionswhere companies have structured their transactions around existing laws.
For the DTR story, go here. (subscription required)

The new chief executive officer of insurer Travelers Companies Inc. called on U.S. lawmakers to reduce corporate taxes or risk harming businesses.
For the DTR story, go here. (subscription required)

The OECD has put out a consultation about how to accommodate unregulated investment fundswith treaty benefits. This call for comments comes on top of treaty commentary calling for recognition of regulated investment funds as treaty residents of the countries inwhich they are organized. Are unregulated investment funds any closer to treaty relief? Only if they manage to construct a narrative that makes tax administrators feel better about recommending it.
For the Tax Notes article, go here. (subscription required)

Mindy Herzfeld reviews the history of tax provisions contained in existing multilateral trade agreements and compares themwith the tax provisions of the Trans-Pacific Partnership.
For the TNI article, go here. (subscription required)

In this article, the author discusses stock/asset coordination, CbC, and FIRPTA regulations; and theGuidant,Mylan, andWrightcases, aswell as other U.S. tax developmentswith international implications.
For the TNI article, go here. (subscription required)

We'll soon find out how good the Treasury is atwhac-A-Mole.
Andwe'll also see if thewrittenword - specifically, a recent article inTaxNotes, a hard-coretax-techie specialty publication - has the power to influence events.which in this case, I hope it does.
Let me explainwhat's going on. Andwhy you should care about it.
Any day now, the Treasury is expected to unveil the final version of proposed regulations it issued in 2014 and 2015 to stop corporate inversions.
For thewashington Post story, go here.

U.S. manufacturers have something to say to Donald Trump, Bernie Sanders and even Hillary Clinton: Please stop trying to "protect" uswith simplistic slams on free trade.

And NAM also has a long list of other issues that it thinkswould make U.S. manufacturers more competitive inworld markets, including tax reform.
For the Politico story, go here.

A perfect storm of global tax reform, bad publicity about corporate tax avoidance, and increased scrutiny of corporate balance sheets is putting corporations under a microscope and making it harder than ever for them to manage their international tax operationswith certainty. Increasingly, many multinational corporations are coming to the conclusion that costs associatedwith lengthy conflict resolution and years of having their names tarnishedwith the stigma of corporate tax avoidance isn'tworth the trouble and are simply succumbing to higher taxes to avoid the drama.
For the Forbes article, go here.

Whatwe have now in these uncertain times is not so much a monetary problem as a major fiscal problem. In particular, corporate tax rates must be slashed in the U.S. for large and small businesses.we also need full cash tax expensing for new investment and an end to the double taxation of foreign profits.

For The New York Sun story, go here.

The IRS should consider dropping an expanded anti-abuse rule in regulations making it tougher for controlled foreign corporations to use loans to foreign partnerships to shrink their tax bills, PricewaterhouseCoopers LLP said. For the DTR story, go here. (subscription required)

KPMG's Thomas Herr, Raj Bodapati and Rui Che outline considerations for U.S. multinationals preparing to embark on country-by-country reporting required under the OECD base erosion and profit shifting program. The authors focus on the establishment of a process for preparing the report, aswell as analysis of the data necessary to ensure overall consistency in transfer pricing and other tax positions.
For the BNA Insight, go here. (subscription required)

HM Revenue & Customs on March 31 issued draft guidance on a new tax strategy disclosure requirement, setting out the guidelines for large companies to publish information about such issues as their attitude toward tax risk and their approach to their relationshipwith the U.K. tax authority.
For thewWTD story, go here. (subscription required)

The U.S. expects to propose regulations soon thatwill treat foreign-owned, single-member limited liability companies as corporations, requiring them to disclose beneficial owner information, Treasury Deputy Assistant Secretary for International Tax Affairs Robert Stack told Bloomberg BNA.

For the DTR story, go here. (subscription required)

The Japanese legislature enacted country-by-country reporting as part of its 2016 Tax Reform Bill.
The rules, issued March 29,will be effective for companieswith fiscal years beginning on or after April 1, 2016, leaving a three-month gapwith the U.S. requirements,which are expected to be effective as of June 30.
For the DTR story, go here. (subscription required)

Existing U.S. rules can be used to dealwith potential transfer pricing obligations of multinational digital companies that collect user personal data abroad, a senior Treasury official told Bloomberg BNA.

For the DTR story, go here. (subscription required)

In news analysis, Ryan Finley examines the European Parliament Greens/European Free Alliance report on tax avoidance by IKEA, noting that given its political impact, the methods and assumptions used to calculate the ÔøΩ1 billion EU revenue loss estimatewarrant careful examination.
For thewWTD story, go here. (subscription required)

Deloitte's Vishweshwar Mudigonda, Eunice Kuo and Gary Thomas discuss how transfer pricing controversy has developed in Asia Pacific region, specifically India, China and Japan.
For the ITR story, go here.

François Auger and Juliawang of Blake, Cassels & Graydon explore recent M&A-related developments in Canadian tax law aimed at clarifying and expanding the use of the corporate tax 'bump' tool.
For the ITR story, go here.

Minnesotawill become the latest U.S. state this legislative season to consider tax haven legislation to address the taxation of foreign-source income andwill do sowith a bill that includes a list of tax haven countries that must be accounted forwhen companies file combined reports.
For thewWTD story, gohere. (subscription required)

This quarter'sTax and Investment in the USaddresses:

• President Obama's FY2017 budget as it affects US inbounds
• New FIRPTA regulations reflect changes made by the PATH Act
• Final US Model Income Tax treaty and how it could significantly reduce access to treaty benefits
• PwC's State Tax Review and a look ahead to 2016 and beyond
• Why global investment in the US matters
• Upcoming events in your area

For this issue, gohere.

Companies bidding for contracts from the city of Philadelphiawill need to confirm inwriting that they have not undergone a corporate tax inversion under a City Council proposal, practitioners told Bloomberg BNA.
For the DTR story, go here. (subscription required)

This NYSBA report analyzes final, temporary, and proposed regulations under section 871(m),whichwere issued on September 18, 2015. Since this is the NYSBA's fourth report on section 871(m), the
goal here is to focus on issues that have not been considered in prior reports. Section 871(m) addresses concerns about the use of derivatives to avoidwithholding tax on U.S. source dividends.

For the NYSBA report. go here.

The Internal Revenue Service should consider changing a safe harbor provision in thewithholding rules for so-called dividend equivalents so that foreigners investing in U.S. financial products can't skirt taxes by creating new indices, the New York State Bar Association Tax Section said.

For the DTR story, go here. (subscription required)

Adam G. Province of Baker, Donelson, Bearman, Caldwell & Berkowitz PC reviews the potential creation of a permanent establishment resulting from the assignment of employees to a foreign host subsidiary.
For the TNI article, go here. (subscription required)

The Financial Accountability and Corporate Transparency (FACT) Coalition is urging the Treasury Department to take further action to prevent companies from reincorporating overseas to lower their taxes.
For The Hill story, go here.

European Union member states are taking the lead on implementing the Organisation for Economic Co-operation and Development's recommendations under the base erosion and profit shifting (BEPS) project, a new EY report says.
For the Global Tax News story, go here.

Final rules to prevent corporations from importing losses into the U.S. include minor changes from a 2013 proposal, and reject many of the taxpayer comments seeking simplification.

For the DTR story, go here. (subscription required)

American negotiators participating in the OECD's base erosion and profit-shifting projectwatered down the permanent establishment definition changes to match their coffee brewing. Even so, the United Stateswill not adopt even the minor changes and corrections to the PE standard recommended by the BEPS action 7 report .
A recent ABA-IFA-IBA conference in Milan featured a discussion onworkingwith the new BEPS PE concepts.
For the Tax Notes article, go here. (subscription required)

Financial and taxation authorities of China announced on Thursday that itwill apply its value-added tax pilot program across all sectors to consolidate the fiscal and taxation reform in China.

For the China Topix article, go here.

China's tax agency and the International Monetary Fund have renewed a three-year agreement thatwill support tax policy and administration reform efforts in China.
For the Global Tax News article, go here.