Int'l Tax News

The architects of a sweeping set of recommendations to battle offshore tax avoidance insist their projectwon't allow foreign countries to simply grab cash from U.S. companies.

The business community isn't convinced.

For The Hill story, go here.

In implementing the final OECD base erosion and profit-shifting project measures, the United States should follow the arm's-length principle, allow tax competition among national governments, and provide more clarity on how tax lawwill be applied, the Information Technology and Innovation Foundation said in October 5 comments.
For the ITIF comments, go here.

The OECD's base erosion and profit-shifting plan "is not a substitute for good tax policy," the Organization for International Investment said October 5 in response to the release of final BEPS measures, adding that further limits on interest deductibilitywould decrease GDP, reduce investment in the United States, and lead to fewer U.S. jobs.
For the OFII release, go here.

Lee A. Sheppard outlines the final action 15 report of the OECD's base erosion and profit-shifting project on developing a multilateral instrument to implement treaty-related BEPS measures,which she says amounted to literally stapling a new cover over their 2014 report.
For the TNT story, go here. (subscription required)

The final report on action 14 (improving dispute resolution mechanisms) of the OECD's base erosion and profit-shifting project includes changes to the OECD model tax treaty and commentary to increase the effectiveness of the mutual agreement procedure in resolving treaty-related disputes.
For the TNT story, go here. (subscription required)

The OECD's final base erosion and profit-shifting project action 13 report on transfer pricing documentation and country-by-country reporting closely mirrors the September 2014 report, but adds the implementation guidance, model legislation, and model competent authority agreements.
For the TNT story, go here. (subscription required)

The OECD's final report on transfer pricing under actions 8, 9, and 10 of its base erosion and profit-shifting project contains significant revisions regarding risk and recharacterization, commodity transactions, intangibles, cost contribution arrangements, and low-value-adding services.
For the TNT story, go here. (subscription required)

Ajay Gupta reviews the OECD's final report on action 7, noting thatworking Party 1 concedes further ground to business in its final recommendations for amending article 5 of the model treaty to crack down on the use of commissionnaire arrangements to circumvent permanent establishment provisions.
For the TNT story, go here. (subscription required)

The final report on action 6 of the OECD's base erosion and profit-shifting project -- underwhich itwas taskedwith developing model treaty provisions and recommendations to prevent the granting of treaty benefits in inappropriate circumstances -- sets out a broad new vision of the role of tax treaties.
For the TNT story, go here. (subscription required)

Lee A. Sheppard outlines the final action 4 report of the OECD's base erosion and profit-shifting project,which she says does not differ dramatically from the discussion draft, and concludes the report lacks strong, simple solutions.
For the TNT story, go here. (subscription required)

The OECD's final report on strengthening controlled foreign corporation rules under action 3 of the base erosion and profit-shifting project is largely a discussion of alternative approaches; none of the alternatives are intended to serve as minimum standards and all are expressly optional.
For the TNT story, go here. (subscription required)

Lee A. Sheppard summarizes and critiques the final action 2 report of the OECD base erosion and profit-shifting project, saying U.S. interests held too much sway over the topic and that simpler, better solutions should have been offered.
For the TNT story, go here. (subscription required)

The OECD on October 5 released its highly anticipated package of final reports from its base erosion and profit-shifting project to combat abusive corporate tax avoidance,which represents a "real agreement, not a lukewarm compromise" among countries, said Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration.
For the TNT story, go here. (subscription required)

Pascal Saint-Amans, Raffaele Russo and their tax colleagues at the OECD are happy people after the publication of the second and final set of proposals to tackle base erosion and profit shifting (BEPS) yesterday, following two years of intensive talks.
For the ITR story, go here.

The OECD has delivered the second part of its recommendations to reform international tax rules by tackling BEPS.while unanimity across all points discussedwas impossible, a higher degree of agreement – either in the form of consensus or agreement on 'minimum standards' – has been achieved than many expected, though this has not stopped non-governmental organisations from criticising the package as "a sticking-plaster approach".
For the ITR story, go here.

Sweeping plans for a global crackdown on corporate tax avoidancewere unveiled on Monday, after more than 60 governments agreed the first big overhaul of the rules for taxing profits for nearly a century.

The proposals to improve transparency, close loopholes and restrict the use of tax havens are the culmination of an ambitious international project launched two years ago by G20 governments in response to surging public anger over corporate tax avoidance.


For the Financial Times article, go here.

Theworld's top body for economic coordination unveiled its blueprint Monday for cracking down on international tax avoidance, an opening salvo inwhat promises to be a prolonged battle between countries and companies overwho gets taxed andwhere.

The Organization for Economic Cooperation and Development, a research institute funded by 34 countries including the U.S., is seeking to curb tax haven use and other strategies by companies such as Google Inc., Starbucks Corp. and Apple Inc.,which the group says costs theworld as much as $240 billion a year in lost revenue.

For the Bloomberg story, go here.

Today, the Organization for Economic Cooperation and Development (OECD) released long-awaited recommendations under its Base Erosion and Profit Shifting (BEPS) project to address the tax treatment of corporate profits earned across borders. The BEPS proposal does not change U.S. law, but other nations are expected to adopt the recommendations, and itwill have a significant impact on American companies doing business abroad.
For the Ryan statement, go here.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, haswelcomed the final package of Base Erosion and Profit Shifting (BEPS) measures that the Organisation for Economic Co-operation and Development (OECD) adopted today.
For his statement, go here.

World leaders must step up their efforts to fix the "outdated system of taxing global profits", according to a panel of development expertswho said a planned crackdown on corporate tax avoidance does not go far enough.

However, a G20 plan for a thorough overhaul of international corporate tax rules, to be unveiled on Monday,were hailed as a "a step in the right direction" by the panel set up by trade unions, development charities and campaigners.
For the Financial Times article, go here.

Over the past two years, OECD initiated a fast-paced programme to develop 15 Action Plans under the banner Base Erosion and Profit Shifting (BEPS).
For the Live Mint story, go here.

Opposition to foreign taxes on American investment and hardwork has been coded into our national DNA for almost 240 years. Yet almost two and a half centuries after resolving thatwewould not stand idlewhile others decide how to tax us, Americans once again must take decisive action to guaranteewe can enjoy the dividends of our ingenuity.
For thewashington Examiner story, go here.

The OECD's final package of proposals for reforming the international system for taxing companies brings to an end the two-year BEPS project led by the OECD and other G20 countrieswhich also included participation by representatives of developing countries, business, academia and NGOs.
For the Business Spectator story, go here.

The body that advises industrial nations on economic policy published proposals on Monday to overhaul theway international companies are taxed in an effort to tackle avoidance.
For the Daily Mail story, go here.

"The BEPS project needed to happen, and the OECD and G20 should be congratulated both for their hardwork and for achieving high-level consensus across many issues," said BIAC Tax Committee Chairwill
Morris today on the occasion of the long-awaited release of the OECD's 2015 BEPS deliverables package. "Moreover, this high-level consensuswas achievedwhileworking to an exceptionally ambitious timetable."
For the BIAC release, go here.

The Organization for Economic Cooperation and Development on Monday rolled out a sweeping set of final recommendations to battle offshore tax avoidance costing countries across the globe billions of dollars a year.
For the Hill story, go here.

A major overhaul of the international rules governing the taxation of company profits moved a step closer to completion Monday,with the publication of a package of new standards that are set to be adopted by leaders of the Group of 20 largest economies.
For thewall Street Journal story, go here.

Mindy Herzfeld reviews initiatives underway in Europe to address aggressive tax planning by multinational enterprises and cautions tax professionals against focusing their efforts exclusively on the OECD'swell-publicized base erosion and profit-shifting project.
For the TNI article, go here. (subscription required)

The full text of the OECD's final BEPS reports is available here.

Efforts to tackle unfair tax competition and corporate tax avoidance are straining relations between European Union member states and among (and evenwithin) political parties, according to EU politicians, company representatives and tax practitioners interviewed by Bloomberg BNA.
For the DTR story, go here. (subscription required)

A Treasury Department official said the U.S. has agreed to participate in discussions regarding the development of a multilateral instrument under Action 15 of the international project to combat base erosion and profit shifting.
For the DTR story, go here. (subscription required)

The OECD presented today the final package of measures for a comprehensive, coherent and co-ordinated reform of the international tax rules to be discussed by G20 Finance Ministers at their meeting on 8 October, in Lima, Peru. The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project provides governmentswith solutions for closing the gaps in existing international rules that allow corporate profits to «disappear» or be artificially shifted to low/no tax environments,where little or no economic activity takes place.
For the OECD release, go here.

As the final recommendations of the 15 action plans that comprise the OECD Base Erosion and Profit Shifting (BEPS) project approach, Pramila Shrivastav, former Chief Commissioner of Income Tax at the Indian Ministry of Finance, looks at the associated issues from a developing country perspective, arguing that convergence of interestswill hold the key to countering complex BEPS challenges.
For the ITR story, go here.

The debate about international tax reform has received a valuable boost from the UN's annual investment report, argues Jeffrey Owens of Vienna University of Economic and Business.
For the ITR story, go here.

China's tax authorities are already using the nation's proposed new transfer pricing method to test the arm's-length nature of related-party transactions involving intangibles as a "backstop" and "to set parameters for a settlement" in transfer pricing cases, a Shanghai practitioner said.
For the DTR story, go here. (subscription required)

Dahlia B. Doumar and Carl A. Merino of Patterson Belknapwebb & Tyler and CPA Michael L. Chen discuss how business profits of a foreign corporation generally are taxed in the U.S. and suggest possible holding company structures that a foreign parent corporation can use to help insulate itself from direct U.S. tax exposurewhile taking advantage of treaty exemptions to reduce federal income taxes.
For the BNA Insight, go here. (subscription required)

The US Treasury has broken its silence over the EU's flagship tax investigations into Apple, Starbucks and Amazon to voice concerns that itwould ultimately bear the cost of any extra bills.

A senior official said a move by Brussels to force the multinationals to pay back taxeswould havewider implications for the US because the companywould receive a credit for the taxes paid overseas.

For the Financial Times story, go here.

With the long haul of a presidential election campaign just beginning, companies that leave the U.S. to lower their tax bills are likely to once again become political targets. But thatwon't prevent some firms from trying.
For the Crain's New York story, go here.

The rules that govern cross border profits enable systemic tax avoidance, because they allow profits to be shifted away fromwhere they are generated to another countrywith a lower (or zero) tax rate – all as a matter of accounting rather than real economic activities. These rules frequently serve the economic interests of the largest multinational corporations.
For the Guardian story, go here.

Ian Dykes, Tim Holmes, and Elizabeth A. Sweigart highlight the benefits of value chain analyses for multinational enterpriseswith highly integrated supply chains.
For thewWTD story, go here. (subscription required)

Even as big American companies launched an effort to get "innovation box" legislation passed in the U.S., a senior U.K. finance official said that country's patent box has been "well received" and is attracting investment by large pharmaceutical companies and others.

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

Specialists from the 11 European Union member states supporting an EU financial transactions tax convene in Brussels inwhat one official described as a technical meeting to discuss the "25 building blocks" thatwill eventually form the EU core group's policy on the FTT.
For the DTR story, go here. (subscription required)

President Obama's proposal to set a minimum tax for foreign-earned income is limited in scope, but "may have a large impact on the global pattern of investment and employment" by U.S. multinationals, the congressional Joint Committee on Taxation says in a report.
For the JCT report, go here.

Taxes are a crucial component of a country's international competitiveness. In today's globalized economy, the structure of a country's tax code is an important factor for businesseswhen they decidewhere to invest, how much to invest, andwhich types of operations to locate inwhich countries. No longer can a country levy high taxes on business investment and activitywithout adversely affecting its economic performance. In recent years, many countries have recognized this fact and have moved to reform their tax codes to be more competitive. However, others have failed to do so and are falling behind the global movement.
For the Tax Foundation article, go here.

Lastweek, following the sudden announcement by House Speaker John Boehner (R-OH) that hewould be stepping down from Congress at the end of October, Houseways and Means Committee Chairman Paul Ryan (R-WI) and various other Committee members quickly confirmed that the Committeewould continue forwardwith its plans to do international tax reform this year.
For the National Law Review story, go here.

In an 11-page letter to Members of Congress, 24 international tax experts raise significant concerns about legislative proposals thatwould seek to close a six-year funding shortfall in the Highway Trust Fund by taxing $2.1 trillion in U.S. corporate offshore profits at a significant discount thatwould overhaul theway U.S. corporationswould be taxed on their future offshore profits.
For the Americans for Tax Fairness letter, go here.

The Tax Foundation says America's tax code failsin comparison to virtually all other OECD nations. The 2015 International Tax Competitiveness Index ranks the United States an appalling 32 out of the 34 countries in the OECD.with the 3rdleast competitive tax code in the developedworld, only Italy and France have less competitive codes.Donald Trump says hewould change that,withhis version of tax reform.
For the Forbes story, go here.