Int'l Tax News

Mindy Herzfeld analyzes the 2016 U.K. budget, arguing that some of its provisions might not be as positive as they seem on first blush.
For the TNI article, go here. (subscription required)

The OECD should no longer be responsible for undertaking reviews of the global tax system, a UK parliamentary group examining changes to the international taxation has been told.
For the Public Finance International article, go here.

In a continued effort to boost transparency in international tax matters, the OECD has today released its standardised electronic format for the exchange of Country-by-Country (CbC) Reports between jurisdictions – the CbC XML Schema – aswell as the related User Guide. The CbC XML Schema is part of the OECD'swork to ensure the swift and efficient implementation of the BEPS measures, endorsed by G20 Leaders as part of the final BEPS package in November 2015.
For the OECD release, go here.

The European Union is showing the rest of theworld thewaywhen it comes to implementing the OECD's 15 Base Erosion and Profit Shifting (BEPS) recommendations, according to research from EY.
Indeed, the European Commission's attempts to bring consistency to tax reform across member states "appears to be driving the first major response to BEPS".
For the Economia article, go here. (subscription required)

Wall Street is mobilizing against proposals to tax financial transactions as the idea gains attention on the campaign trail and in Congress.
For The Hill story, go here.

In a letter to the Republican and Democratic leaders of Congress's tax-writing committees, the Houseways & Means Committee and Senate Finance Committee, Parity for Main Street Employers urged lawmakers to enact tax reform that is comprehensive, restores tax rate parity for all businesses, and reduces or eliminates the double tax imposed on corporations.
For the FEI release, go here.

Samuel Starr, CPA, Esq., examines how potential corporate tax integration legislation could change the calculuswhen selecting a business entity.whatever form such legislation might take, Starrwrites, "if a potent corporate tax integration proposalwere to become law, choice of business entitywould never be the same."
For the BNA Insight, go here. (subscription required)

Companiesworldwide could face lower income tax burdens this year, despite increased enforcement due to the OECD's project to combat base erosion and profit shifting, an analysis by EY LLP shows.
For the DTR story, go here. (subscription required)

The European Commission's upcoming proposal to make limited country-by-country reports by multinationals public is expected to be introduced as legal rather than tax legislation to allow co-approval by the European Parliament,which is expected to insist on even broader reporting requirements.
For the DTR story, go here. (subscription required)

Anti-base-erosion measures are among the major hang-ups keeping the Houseways and Means Committee from advancing an international tax reform draft, Tax Policy Subcommittee Chair Charles E. Boustany, R-La., said March 23.
For the TNT story, go here. (subscription required)

The Financial Accountability and Corporate Transparency Coalition, seeking clarity in proposed country-by-country (CbC) reporting regulations (REG-109822-15), has recommended that U.S. parent entities be required to provide CbC reporting for constituent entities and has urged Treasury and the IRS to respect rather than disregard the existing international process for sharing CbC information.
For the FACT Coalition letter, go here.

London-based Markit Ltd.'s reverse acquisition of data analysis provider IHS Inc.will yield a 20 percent to 25 percent tax rate for the combined company, according to company management, but the rate the combined corporation ends up paying could actually be much lower, a practitioner said.

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

The Canadian governmentwill contribute to the global effort to strengthen the integrity of tax systems by acting on recommendations from the OECD's base erosion and profit shifting initiative, including through new transfer pricing legislation and increased sharing of tax information, the federal Department of Finance said.
For the DTR story, go here. (subscription required)

The U.S. Treasury Department should take "prompt regulatory action" to prevent Pfizer Inc. and Johnson Controls from finalizing their inversions and permanently avoiding taxes owed on a combined $43 billion in overseas profits, a coalition of 55 groups said in a March 21 letter to Treasury Secretary Jacob Lew.
For the letter, go here.

The IRS is cracking down in caseswhere taxpayers set up multiple, separate corporations to escape taxes on foreign base company income or insurance income, according to instructions to its agents.
For the DTR story, go here. (subscription required)

It has to be said that this isn't theway that you'd normally think about it. But this is the assertion: corporate tax avoidance actually reduces the profit that companies make. The mechanism is that the tax avoidance increases the cost of capital to the firms. How that happens is that the variance of corporate tax flows increases as a result of the tax avoidance and this increased variance makes investors desire higher returns: or, the same thing, onlywilling to supply capital at higher costs (which, for the company, is at a lower valuation).
For the Forbes story, go here.

It's hard to have a productive discussion about base erosion and profit shiftingwithout getting the premises right. First, the OECD's BEPS project is not going to produce thewindfall revenue gains that some governments and accounting firmswere counting on. Second, the United States is only pretending to cooperate.without an understanding of those two things, BEPS discussions are just polite people talking past each other.
For the TNT story, go here. (subscription required)

Mindy Herzfeld summarizes a recent global tax policy conference hosted by the Irish Tax Institute and the Harvard Kennedy School, focusing on the OECD's progress on base erosion and profit shifting and its possible new mandate to examine how tax laws affect innovation and growth.
For the TNI story, go here. (subscription required)

In the second article in a series on the development of an international tax dispute resolution process, the authors examine the lessons that can be learned from the alternative dispute resolution mechanisms used by the IRS.
For the TNI story, go here. (subscription required)

Philip Lowe comments on U.S. assertions that U.S. companies have been unfairly targeted by the EU state aid investigations.
For the TNI article, go here. (subscription required)

The IRS has issued final regulations that eliminate one exception to the coordination rule between asset transfers and indirect stock transfers for some outbound asset reorganizations and modify another exception for section 351 exchanges so that it's consistentwith the remaining asset reorganization exception.
For a summary and the full text of the regs, go here. (subscription required)

The IRS released final regulations that continue its efforts to prevent U.S. companies from doing tax-free repatriations and put the brakes on some corporate inversion deals.

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

U.S. multinationals are concerned that new OECD standards for permanent establishments, under the BEPS action plan, create undue costs and administrative burdens that may force them to change theway they operate abroad.

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

IRS examiners could be putting corporate interest deductions that take money out of the U.S. under increased scrutiny.
A new guide for auditors on how to treat deductible interest payments under tax code Section 163(j) could be another step in the government's fight to stop the flow of untaxed money offshore, practitioners told Bloomberg BNA.
For the DTR story, go here. (subscription required)

The IRS is telling its agents to look closely at assertions by controlled foreign corporations that income isn't taxable foreign personal holding company incomeÔøΩand to recharacterize that income if it doesn't matchwhat companies are saying.

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

A senior U.S. Treasury official confirmed that the agencywon't accept U.S. multinational companies' country-by-country reports until after mid-2016, much to the chagrin of international tax planners.
For the DTR story, go here. (subscription required)

The OECD's base erosion and profit-shifting project's objective to "consolidate rather than coordinate" international tax rules could result in less economic competition and diversity, higher compliance costs, andweakened taxpayer rights, Jason J. Fichtner and Adam N. Michel of George Mason University's Mercatus Center said in a March report.
For the report, go here.

The disclosure of country-by-country reporting data to the public should be avoided to protect bigger companies from unfair competition from smaller companies thatwould not be covered by the provisions, Irene Yates, vice president for corporate tax at McDonald's Corp., told members of the European Parliament March 15.
For thewWTD story, go here. (subscription required)

The European Commission should play a key role in coordinating, overseeing, and assessing the effectiveness of the automatic exchange of country-by-country reports among EU member states, according to a member of the European Parliament's Committee on Economic and Monetary Affairs.
For thewWTD story, go here. (subscription required)

George Osborne, UK chancellor of the exchequer, has delivered his Budget 2016 speech, criticising "large companies that exploit loopholes"while lowering corporation tax to attract multinationals. The big 'winners'were small and medium-sized enterprises.
For the ITR story, go here.

Chancellor of the Exchequer George Osborne's decision to cut corporation tax to 17 percent by 2020will bring the U.K. rate to the second lowest among developed countries.
For the Bloomberg Business story, go here.

To curb tax avoidance by multinational corporations, the U.K.'s 2016 budget contains proposals to cap interest relief, limit the use of intragroup royalty payments to shift profits from the United Kingdom, and extend hybrid mismatch rules to cover permanent establishments, Chancellor of the Exchequer George Osborne said.
For thewWTD story, go here. (subscription required)

Both Democratic and Republican House appropriators on March 16 criticized the chamber's budget forwhat they considered its failure to address the problem of U.S. corporations fleeing the country for more favorable tax conditions, but the measure ultimately passed a House Budget Committee markup.
For the TNT story, go here. (subscription required)

Despite its lengthy new discussion of risk and its invention of an awkward acronym for analyzing intangibles, the OECD's report on actions 8 through 10 (transfer pricing) of the base erosion and profit-shifting project is based on familiar transfer pricing principles, according to officials from the OECD and Treasury.
For the TNT story, go here. (subscription required)

The OECD's efforts to establish a peer review process to monitor countries' performance in resolving mutual agreement procedure cases are "well advanced," and it expects to have the reviews ready for Germanywhen it takes over the G-20 presidency in 2017, according to the OECD's tax chief.
For the TNT story, go here. (subscription required)

Although officials from the United States, France, and the OECD have stressed that the final report on action 13 (transfer pricing) of the base erosion and profit-shifting project doesn't indicate any new preference for profit-split methods, tax authorities in Mexico and China say profit splits may be necessary to account for the value of all parties' contributions.

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

The USwill not share country-by-country report (CbCR) informationwith foreign authoritieswho choose to make the reports public, said deputy assistant secretary at the US Treasury Robert Stack.
For the ITR story, 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:

• Australia's multinational anti-avoidance legislation
• The new bill mandating automatic exchange of information in Hong Kong
• Poland's general anti-avoidance rule
• The European Commission's anti-tax avoidance package

Congress should pass legislation to allow the IRS to participate in the internationally agreed common reporting standard for automatic exchange of financial account information, IRS Commissioner John Koskinen said March 14.
For the TNT story, go here. (subscription required)

The U.S. should use the OECD's common reporting standard instead of the Foreign Account Tax Compliance Act reporting requirements so the country is operating on a common transmission system, IRS Commissioner John Koskinen said.

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

The OECD's new six-step analysis of risk for transfer pricing purposes is conceptually alignedwith the U.S. treatment of risk under tax code Section 482 regulations, a U.S. Treasury official said.

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

An Intel Corp. tax executive said Ireland's 12.5 percent company tax rate gives the Emerald Isle a huge advantage over the U.S. in attracting U.S. investment.
Ronald Dickel, vice president of global tax at Santa Clara, Calif.-based computer chip giant Intel, said the tax rate difference between the two nations is huge,which "encourages us to invest overseas."
For the DTR story, go here. (subscription required)

Houseways and Means Chairman Kevin Brady on Monday put international tax reform first in line for the committee this year. But it's not all good news for the Ciscos and Facebooks of theworld.
For the Politico story, go here.