Int'l Tax News

Kyle Pomerleau of the Tax Foundation describes the International Tax Competitiveness Index,which measureswhether OECD tax systems are competitive and neutral, and gives examples of good and bad country models.
For the TNI viewpoint, go here. (subscription required)

The European Commissionwill force Belgium to claw back about ÔøΩ700 million from at least 35 multinational companies, claiming the country's tax rules amounted to illegal state aid and hurt smaller peers.

The Commission did not name the companies but said more than halfwere European and their sharewas ÔøΩ500 million of the total unpaid taxes. It is now up to the Belgian government to determinewhich companies got overly generous tax breaks.

For the Politico story, go here.

European Competition Commissioner Margrethe Vestagerwill announce that the Belgian 'excess profits' tax scheme is illegal in a press conference today.
For the ITR story, go here.

Corporationswill continue towork around Treasury Department guidance restricting inversions if Congress doesn't overhaul corporate tax law, a National Foreign Trade Council executive said.
"Treasury rules are going to make it very restrictive ofwhat you can do," Catherine Schultz, vice president for tax policy at the NFTC, told reporters Jan. 7. "There are a lot of very good tax lawyers out therewho are going to look atwhat Treasury is going to put out and seewhere the lines are being drawn and how they are going to change it."
For the BNA article, go here. (subscription required)

Companies holding foreign profits abroad shouldn't expect a reduced tax rate for repatriating those earnings this year, said a top Republican House staffer.

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

Panamawill decidewhether to adopt or reject BEPS by March, a government official said, adding that the tax haven has established a multidisciplinary committee to assess the Organization for Economic Cooperation and Development tax avoidance program's potential effects on its flagship services economy.

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

The interest deductibility restrictions proposed under action 4 of the OECD's base erosion and profit-shifting project may significantly affect valuations in private equity deals, according to a panel of transfer pricing and mergers and acquisitions tax practitioners.
For the TNT article, go here. (subscription required)

The 2015 Amended Finance Act and the 2016 Finance Act include other tax measures that are beyond the scope of this Insight.
For the ITR article, go here.

On December 22, 2015, the Dutch Senate approved a new lawwhich entered into force January 1, 2016 containing detailed transfer pricing documentation requirements in linewith Action 13 of the OECD's 'Base Erosion and Profit Shifting' (BEPS) initiatives.

For the PwC Insight, go here.

Reuven S. Avi-Yonah reviewsThe Rise of the Value-Added Taxby Kathryn James and discusses the possibility of a VAT being implemented in the United States.
For the Tax Notes book review, go here. (subscription required)

Kimberly Tan Majure and Monica Zubler of KPMG follow up on their previous article regarding country-by-country reporting for partnerships to examine new regulations (REG-109822-15) proposed by Treasury and the IRS in December. "In our view, the proposed regulations are a bit of a mixed bag for U.S.-based groups; the regulations provide some very helpful guidance, but leave significant challenges on the table for U.S. MNEs," the authorswrite.
For the BNA Insight, go here. (subscription required)

Stewart Karlinsky examines recent tax developments in S corporations, C corporations, the international area, and the partnership area.
For the TNT viewpoint, go here. (subscription required)

Robertw.wood and Huy C. Luu discuss tax planning for U.S. investors in emerging ASEAN economies.
For thewWTD article, go here. (subscription required)

The Luxembourg Parliament on December 17, 2015, enacted Bills 6847, 6891, and 6900 relating to the 2016 Luxembourg budget. The enacted bills,which have changed little from earlier versions, introduce new tax measures that affect both corporations and individuals.

For the PwC Insight, gohere.

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 2015 Irish Finance Bill
The OECD's final report on BEPS Action 4
The UK tax authority's updated guidance on the Diverted Profits Tax
Kenya reintroduces capital gains tax on transfers of Kenyan property

For this month's edition, gohere.

James Fuller comments on U.S. tax developmentswith international implications, focusing this month on STARS transaction cases, the U.S. Treasury's announcement of additional inversions regulations, BEPS developments, and proposed revisions to the U.S. model treaty.
For the TNI article, go here. (subscription required)

Matthew Gilleard introduces this exclusive, comprehensive insight into thework of the OECD in the area of countering tax base erosion and profit shifting (BEPS).within these covers youwill find out about the key messages delivered under each of the OECD's 15 Actions, direct from the individuals responsible for putting each aspect of the project together.
For the ITR article, go here.

With the release of the OECD's base erosion and profit-shifting final reports last October, the fiscal stakeswere high for all countries involved during 2015. Representing the United States and its interests at the BEPS negotiating tablewas Robert Stack, Treasury deputy assistant secretary (international tax affairs) and lead U.S. delegate to the OECD's Committee on Fiscal Affairs. Because of his role in shaping the final BEPS reports and protecting U.S. interests, Stack isTax Notes' 2015 person of the year.
For the Tax Notes article, go here. (subscription required)

In news analysis,william Hoke examines the tax implications of conducting business from an imaginary, self-sufficient cruise ship called the SS Stateless.
For the Tax Notes article, go here. (subscription required)

Jesse Eggert, Liz Chien, and Eric Robert explainwhy the digital economy cannot be ring-fenced for tax purposes.
For the ITR story, go here.

Major financial institutions and trade groups, in a series of comments to the Internal Revenue Service, lodged a plea for an industry exception to proposed regulations thatwould impose tax on the outbound transfer of foreign goodwill and going concern value.
For the DTR story, go here. (subscription required)

One of the most significant events of 2015was the release of the final reports on the OECD's base erosion and profit-shifting project,which the G-20 endorsed at its summit in November.
Although the final reports have been heralded as a major accomplishment in the effort to address BEPS, they have drawn criticism for straying from established principles and for retaining a fundamentally flawed system. The project now enterswhatwill likely be a turbulent implementation phase.
For the TNT story, go here. (subscription required)

The Internal Revenue Service's proposed rules on country-by-country reporting contain few surprises, practitioners say, but raise several questionsÔøΩincluding an unexpected one aboutwhether the new requirements should include an exception for national security reasons.


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

Many developing countries may implement the recommendations of the BEPS project that are relevant to them. This list of countries and topics seems to bewider than many commentators expected.

The OECD's Task Force on Tax and Development meeting on 2-3 November 2015 allowed a number of countries to specify points of satisfaction or dissatisfactionwith the BEPS recommendations. Therewere further, similar opportunities at recent regional BEPS meetings in various locations. The first plenary session of the Ad Hoc Group on the Multilateral Instrument and the 20th Global Forum on Tax Treaties also showed high levels of participation from developing countries.

For the PwC Tax Policy Bulletin, gohere.

Toddwelty, Mark P. Thomas, Laura L. Gavioli, and Cym H. Lowell discuss the need to improve international tax dispute resolution processes in light of the predicted increase inworldwide tax disputes.
For thewWTD article, go here. (subscription required)

Differences between the effective dates in the proposed country-by-country (CbC) reporting regulations(REG-109822-15) issued by Treasury and the IRS and those in the report on action 13 (transfer pricing documentation) of the OECD's base erosion and profit-shifting program may create timing mismatch problems, according to KPMG's Manal Corwin and Kimberly Tan Majure.

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

The IRS should exclude partnerships that have limited opportunities for abuse from rules thatwill crack down on transferring appreciated assets to foreign partners to escape U.S. tax, the New York State Bar Association Tax Section said.

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

The New York State Bar Association Tax Section urged the IRS to make it clear that multiple controlled foreign corporations that support a debt obligation of a U.S. personwon't each be stuckwith the entire obligation under tax code Section 956(d).

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

The 2013 BEPS Action Plan recognised that "actions to counter BEPS must be complementedwith actions that ensure certainty and predictability for business". Edward Barret and Evelyn Lio track thework of Action 14 of the BEPS Action Plan,which called forwork to improve the effectiveness of the mutual agreement procedure (MAP) and thereby address obstacles that currently prevent countries from solving treaty-related disputes and minimise as much as possible elements of uncertainty related to the interpretation and application of novel rules resulting from the otherwork on BEPS issues.
For the ITR article, go here.

Here's some consolation for Americans concerned about theway the Obama Treasury has been circumventing Congress and the statutory rule-making process to stop U.S. companies from moving overseas. The latest merger news suggests that,while the anti-inversion policy lacks a legal foundation, Treasury Secretary Jack Lew may be too incompetent to implement it anyway.
For thewall Street Journal article, go here.

Congresswill review new Treasury regs on country-by-country reporting in order to prevent the establishment of base erosion and profit-shifting policies that enable foreign governments to misuse information reporting and exploit U.S. companies, Houseways and Means Committee Chair Kevin Brady, R-Texas, said in a December 21 statement.
For the statement, go here.

With tax extenders out of theway,ways and Means Committee Chair Kevin Brady, R-Texas,wants to focus on international tax reform in 2016 and set the stage for a broader tax overhaul after the presidential election.
Brady,who took over as committee chair in early November, told Tax Analysts in two exclusive conversations on December 17 and 18 that he has one-, two-, and four-year plans in mindwhen it comes to overhauling the tax code.
For the TNT story, go here. (subscription required)

The IRS proposed rules requiring large companies to report information including the amount of revenue, profit or loss, capital and accumulated earnings for each country of operation, consistentwith OECD recommendations designed to combat base erosion and profit shifting.
For the DTR story, go here. (subscription required)

The Cyprus House of Representatives on December 10, 2015, voted to amend the country's individual and corporate tax framework. The bill addresses:

• neutral tax treatment for foreign currency exchange (forex) differences that do not trade in forex
• compensatory adjustment expense recognition
• employment income exemption (50%) for expatriates earning over €100,000 from five to ten years
• alignmentwith European Directive 2011/96/EU (Parent-Subsidiary Directive).

The amendments have been published in the Official Gazette on Thursday, December 17, 2015. The alignmentwith European Directive 2011/96/EUwill be effective as ofJanuary 1, 2016; the remaining provisionswill be effective retroactively as of January 1, 2015.

For the PwC Insight, gohere.

We are living in an erawhere 'tax avoidance' is a popular theme amongst voters and, hence, politicians. This is in spite of the fact that tax avoidance is legal – it is tax evasion that is illegal.
For the ITR story, go here.

Matthew Gilleard introduces this exclusive, comprehensive insight into thework of the OECD in the area of countering tax base erosion and profit shifting (BEPS).within these covers youwill find out about the key messages delivered under each of the OECD's 15 Actions, direct from the individuals responsible for putting each aspect of the project together.
For the ITR article, go here.

Kate Ramm explains how the building blocks approachwill lead to effective controlled foreign company rules.
For the ITR story, go here.

by PwC

The Belgian Minister of Finance has shared new insights on how Belgium plans to respond to the OECD/G20 project on Base Erosion and Profit Shifting (BEPS). In a recent policy note, the Minister announced the introduction of Country-by-Country (CbC) reporting legislation, new transfer pricing documentation requirements, increased and more-targeted tax audits, investments in e-auditing and data-mining, and other suggested measures intended to prevent tax abuse and to combat tax fraud.

For the PwC Insight, gohere.

Tim Cook made a compelling case that he is acting in Apple shareholders' interests by keeping billions of dollars in cash overseas, out of the hands of the U.S. tax collectors, industry insiders told CNBC on Monday.
"There's this natural tension,whereas the CEO of a publicly traded company's got a fiduciary responsibility to ensure that revenues and profits are recognized in the most tax-efficientway possible," said Jon Brod, co-founder and president of the encrypted messaging platform Confide.
For the CNBC story, go here.

Tim Cook is making somewaveswith the statement that thosewho complain about Apple avoiding tax are spouting "political crap". Further, that the problem is entirely one that is fixable by Congress any time they decide to put their minds to it. This is of course true: andwhat Congress, alongwith everyone else, should be doing is stopping this pretence of taxing companies and corporates in the first place. For in economic terms it simply is not true that companies pay tax at all. Ever. So, let's drop the pretence and go and get the tax revenueswe need or desire from the only group that ever do pay taxes: people.
For the Forbes article, go here.

The CEO of Apple, theworld's biggest and richest company, says the notion that his company is avoiding taxes on overseas profits is just "political crap" coming from politicianswho refuse to change an antiquated tax code. Charlie Rose conducts awide-ranging interviewwith Tim Cook inwhich the Apple CEO also addresses his company's other hot-button issues including encryption technology and manufacturing products in China.
For the CBS News report, go here.

Corporations have a responsibility to seekways to increase value for their shareholders, including looking at inversion options,which can sometimes be at oddswith the U.S. tax code, a Treasury Department official said.

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

After focusing on the issue for years, the Treasury Department and the IRS couldn't craft a foreign goodwill exception thatwould prevent undervaluation in outbound intangible transfers, according to Brenda Zent, special adviser on international taxation for Treasury's Office of International Tax Counsel.
For the TNT story, go here. (subscription required)

Treasury expects to release country-by-country regs for base erosion and profit shifting "any day now," a Treasury official said December 18,while hinting at other active guidance efforts planned for early 2016.
For the TNT story, go here. (subscription required)

The IRS Large Business and International Division is stillwaiting for temporary country-by-country (CbC) reporting regulations for 2016 to drop, but it is already thinking about how to handle and exchange the data in CbC reports thanks to its experiencewith the Foreign Account Tax Compliance Act, a top IRS official said.
For the TNT story, go here. (subscription required)

The IRS plans to flesh out both of its controversial anti-inversions notices in one package of regulations, an agency official saidÔøΩawelcome detail on how the Service plans to address the notices in forthcoming guidance.
Implementing both Notice 2014-52 and Notice 2015-79, the packagewill be "well north" of 150 pages, according to Daniel McCall, special counsel to the Associate Chief Counsel (International). "It's a huge project," he said.
For the DTR story, go here. (subscription required)

The debate over base erosion and profit shifting has been a dangerous context inwhich to address questions of how income should be sourced, Barbara Angus of EY said during a debate on the merits of source- versus residence-based taxation.
For the TNT story, go here. (subscription required)

Victoria Perry, assistant director for tax policy at the International Monetary Fund, said the OECD's project to combat base erosion and profit shifting likelywill have a limited or uncertain effect on the developingworld.

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