Int'l Tax News

French oil company Total S.A. pays its fair share of tax in the countrieswhere its drilling operations take place, a company official told a European Parliament tax committee hearing, adding that Total has closed three subsidiaries based in Panama, the Bahamas and the Cayman Islands.

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

U.S. lawmakers are exploring a new corporate tax break thatwould benefit companies already adept at avoiding taxes.
The idea -- known as a patent box or innovation box --would impose a lower tax rate on income generated from patents and other intellectual property housed in the U.S. Thiswould aid technology and pharmaceutical companies trying to maintain low tax rates that they've achieved by booking income in overseas tax havens.
For the Bloomberg Business article, go here.

MEPs are to debate the European Commission's corporate taxation action plan onwednesday eveningwith tax Commissioner Pierre Moscovici,who tabled it on 17 June. The plan,whichwould introduce a common corporate tax base (CCTB), follows the Commission's March proposal for automatic exchange of tax rulings between tax authorities and the Commission.
For the European Parliament release, go here.

On 22 May 2015,interested partieswereinvited to commenton arevised discussion draftwhich includes proposals on how to dealwith the follow-upwork on Action 6 (Prevent treaty abuse) of theBEPSAction Plan. The OECDis grateful to the commentators for their input andnow publishes the comments received.
For the comments, go here.

Campaigners say the European Commission's tax transparency consultation, designed to find out if the publicwould support extra disclosure from corporate taxpayers as away of combating tax evasion and aggressive tax planning in the EU, does not go far enough.
For the ITR story, go here.

Countries should seek towiden their tax revenue bases by combating tax evasion, reducing tax relief on mortgage payments, capital gains, and stock options, and lowering high labor taxes, IMF Managing Director Christine Lagarde said in a June 17 speech.
For the speech, go here.

An international project to combat base erosion and profit shifting (BEPS) has hidden implications for indirect taxes such as value-added and general sales taxes, a panel of practitioners said.
Under Action 1 of the Organization for Economic Cooperation and Development's BEPS project, the OECD issued revised guidelines for VAT/GST to clarify that the jurisdiction to tax digital transactions goes to the location of the consumer.
For the BNA DTR story, go here. (subscription required)

The Treasury Department is hoping to release a final revised U.S. model tax treaty by the end of the year and is seeking comments on proposed changeswithin the next 90 days, Treasury International Tax Counsel Danielle Rolfes said.

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

The thesis of this Article is that the construct of source and residence as two competing and irreconcilable doctrines is largely incorrect as a legal matter. Rather, both source rules and residence rules can and should be thought of solely as instrumental tools to divide taxing authority in a globalizedworldwith mobile capital. Under this approach, there is no reasonwhy "source" rules as a doctrinal matter need to be used only for "source" taxation as an economic matter, or that "residence" rules as a doctrinal matter need be used for "residence" taxation as an economic matter. Instead, the source rules as a doctrinal matter can actually be used to solve the problems of the residence rules as a doctrinal matter. Put differently, source and residence as doctrinal rules can converge into a single concept in the modern global economy.
For the Florida Law Review paper, go here.

French corporate tax legislation stipulates that distributions of profits from a subsidiary to a French parent company are not, in principle, taxed at the parent.
For the International Tax Review story, go here.

The European Commission launched its much-anticipated Action Plan on Corporate Taxation yesterday, basing it on the idea of the Common Consolidated Corporate Tax Base as a 'holistic solution to corporate tax reform' and the principles of ensuring effective taxation and increasing transparency.
For the International Tax Review story, go here.

The Tax & Accounting business of Thomson Reuterswas lucky enough to secure an exclusive interview thisweekwith Pascal Saint-Amans, director of the Center for Tax Policy and Administrationwith the Organization for Economic Cooperation and Development (OECD).widely referred to as "the face of tax," Saint-Amans is the tip of the OECD's swordwhen it comes to the controversial BEPS initiative.
For the Forbes interview, go here.

While corporate-only tax reform may appear to be less complicated and more expeditious than comprehensive reform, there are reasons to believe that the goal of revenue neutrality and economic growth are at oddswith each other.
For the Tax Foundation report, go here.

On 4 June 2015, interested partieswere invited to comment on a discussion draft on Action 8 (Hard-to-value intangibles) of the BEPS Action Plan. The OECD is grateful to the commentators for their input and now publishes the comments received.
For the comments, go here.

When a major corporation is found to be paying little or no taxes, public backlash and media furor over the issue may ensue. Some governments maywell be just finewith it,while others like U.S. may take steps to ensure companies pay more tax. Sometimes, companies being in a non-taxpaying position properly reflects appropriate tax policy. That explanation, however, does not sell lattés,which iswhy in 2012, after the British public grew outraged over the discovery that Starbuckswas paying no corporate taxes in the U.K., the coffee retailer actually volunteered to justwrite a cheque to the government. The reputational damage to Starbucks' brand, the company calculated,was notworth the money itwas saving in avoiding taxes, even if itwas doing so perfectly legally. The fear of this kind of reputational damage can foil the very taxation policies that governments design specifically as a means to tax corporations fairly, efficiently and competitively.
For the paper, go here.

In economic analysis, Martin A. Sullivan analyzeswhether a U.S. patent box could be tailored to support domestic manufacturing.
For the Tax Notes article, go here. (Subscription required)

In another exclusive article for International Tax Review, Keith Brockman, EMEA tax director of Mars, discusseswhat other countries may do to achieve the objectives of the UK's diverted profits tax (DPT),whichwas developed as a two-pronged attack: on transactions having insufficient economic substance and the avoidance of permanent establishment (PE).
For the International Tax Review article, go here.

The globalwar on low tax rates entered a new stage this month as the Organization for Economic Cooperation and Development (OECD) released guidelines for intrusive paperwork requirements for multinational companies. Hang onto yourwallets -- and your proprietary corporate data.
For thewall Street Journal article, go here.

Mindy Herzfeld discusses the United States' recent criticism of key elements of the OECD's base erosion and profit-shifting project and explains how, from the beginning, Treasury officials may have miscalculated their power to steer the project in a favorable direction.
For the Tax Notes International article, go here. (subscription required)

The OECD's base erosion and profit-shifting project is not turning out to be quite as consensus-based as it purported to be and has plenty of pitfalls for American business interests, an economistwith an international trade policy organization said June 19.
For the TNT story, go here. (subscription required)

European Union finance ministers failed to approve a compromise plan designed to take a two-stage approach toward amending the EU's interest and royalty payments tax legislation.
The failurewas due to insistence by Germany and France that the phase-in approachwould backtrack on commitments to stop base erosion and profit shifting by the Group of 20 countries.
For the BNA DTR story, go here. (subscription required)

European efforts to design a financial transactions tax for 11willing nations may come together soon, European Union Economic and Tax Commissioner Pierre Moscovici said.
"The number of options on the table has been significantly reduced and I expect that therewill be a political choice made in the comingweeks to lead us to a successful conclusion," Moscovici said in a June 19 statement to Bloomberg.
For the BNA DTR story, go here. (subscription required)

The National Foreign Trade Council, representing 250 major U.S. multinational companies, haswelcomed Treasury's decision not to join the focus group of 86 countries taskedwith developing a multilateral instrument under Action 15 of the international project to combat base erosion and profit shifting.

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

In news analysis, Marie Sapirie discusses the recent OECD release on country-by-country reporting and how it fitswith the trend toward more global transparency of tax information.
For the Tax Notes article, go here. (subscription required)

This edition of VAT News highlights the Advocate General's opinion on input tax deductibility for 'active' holding companies, the European Commission's proposed strategy for a digital single market in Europe, the introduction of VAT rules regarding the supply of digital/online services in Australia, the potential delay in the implementation of a GST system in India, and the upcoming key indirect tax changes in Puerto Rico.
For this issue of VAT News, go here.

In this interviewwith the Tax Foundation, Pam Olson discusses tax competition, the importance of a consensus on taxing jurisdiction in the international trading regime, multilateral cooperation and the BEPS project, challenges in determining value added on a geographic basis, andwhy the focus on profit shifting is misdirected.
For the interview, go here.

In this interviewwith the Tax Foundation, Tom Neubig shares his insights into the forefront ofwhat is known, in a quantitative sense, about profit shifting. Specifically, Mr. Neubig examines the current limitations to estimating the magnitude of profit shifting, the status quo of existing data sources used to measure profit shifting, key issues in determiningwhere value added occurs on a geographic basis, andwhy using descriptive statistics to infer profit shifting is problematic.
For the interview, go here.

Bermuda has attacked a tax haven list drawn up by Brussels as "unjustified and baseless", adding to criticism of the measure that forms part of the commission's latest effort to crack down on avoidance.

The commission published a list of the 30 countries most often dubbed uncooperative by member states lastweek. The list swiftly came under fire as arbitrary and unfair from tax campaigners and the Paris-based OECD, in charge of a global push to make countries exchange tax informationwith each other.

For the Financial Times story, go here.

Robert Robillard provides some observations on the key components of the public discussion draft "BEPS Action 8: Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contributions Agreements (CCAs),"whichwas released on April 29, 2015.
For the Tax Notes International viewpoint, go here. (subscription required)

Tim Davies and David Sayers note thatwhile the OECD'swork on county-by-country reporting is the third pillar in the standardized approach to transfer pricing documentation (after the master file and local file), it may pose compliance challenges for multinational businesses.
For the Tax Notes International article, go here. (subscription required)

Patrick Driessen identifies potential tax effects from the Trans-Pacific Partnership to highlight the link between aggressive upstream transfer pricing and downstream earnings stripping.
For the Tax Notes viewpoint, go here. (subscription required)

Philipwagman analyzes several technical questions concerning the U.K. diverted profits tax, aswell as some broader tax policy considerations.
For the Tax Notes special report, go here. (subscription required)

Whether a tax on deferred foreign earnings is mandatory or voluntary, or is a stand-alone measure or part of larger tax reform alters its revenue and incentive effects, the Joint Committee on Taxation said June 22.
For the TNT story, go here. (subscription required)

A one-time tax on repatriated, historic earnings is a more efficient revenue raiser than increasing the tax burden on future earnings, the Joint Committee on Taxation said.
"Reducing the tax burden on future earnings generally promotes economic efficiency since future earnings (in contrast to historic earnings) reflect decisions the taxpayer can still make, and a tax on those earnings may distort investment decisions," the JCT said in a report (JCX-96-15) released June 22.
For the JCT report, go here.

Taxpayers expressedwariness about a new proposal from the OECD to allow tax administrations to use ex post evidence to re-price transactions involving "hard-to-value" intangibles.
The comments from 42 stakeholders on the June 4 discussion draft covering hard-to-value intangibles, published by the Organization for Economic Cooperation and Development on June 19, included several proposals to limit the scope of ex post evidence re-evaluations.
For the BNA DTR story, go here. (subscription required)

Mylan NV,which moved its corporate address overseas this year to lower its U.S. taxes, is now asking the U.S. government for help fending off a hostile takeover.
So far, it's not getting an answer.

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

Mylan NV,which moved its corporate address overseas this year to lower its U.S. taxes, is now asking the U.S. government for help fending off a hostile takeover.
So far, it's not getting an answer.

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

The European Commission launched its much-anticipated Action Plan on Corporate Taxation yesterday, basing it on the idea of the Common Consolidated Corporate Tax Base as a 'holistic solution to corporate tax reform' and the principles of ensuring effective taxation and increasing transparency.
For the International Tax Review story, go here.

The European Commission on June 17, 2015, presented the Tax Transparency Package 2.0 (the Package),which sets out a new approach to business taxation. The Package's overall goals are to provide fairer and more efficient taxation and to effectively tackle corporate tax avoidance.
For the PwC Insight, go here.

The European Commission is taking aim at corporate tax avoidancein the EUwith a politically ambitious set of proposals it sayswould makeit tougher for multinational companies to take advantage oflegal loopholes.
For the Politico story, go here.

A report issued on June 17 by an organization critical ofwal-Mart Stores Inc. for setting up low-profile subsidiaries in tax havens to lower its global tax bill has some observers askingwhy the retailer should be attackedwhen it is doing nothing illegal.
For the TNT story, go here. (subscription required)

A European Parliament committee asked member state lawmakers June 17 to help get multinational enterprises to respond to questions about tax practices, saying that MNEswere lying if they refused to appearwhile publically agreeing to the need for tax policieswith greater transparency.
For theworldwide Tax Daily story, go here. (subscription required)

The European Commission has launched a public consultation onwhether companies' mandatory disclosure of more tax information could help combat tax avoidance and aggressive tax practices in the EU; responses are due September 9.
For theworldwide Tax Daily story, go here. (subscription required)

The European Commission on June 17 presented a comprehensive action plan to reform corporate taxation in the EU, including a second attempt at the controversial common consolidated corporate tax base proposal, in a move to address tax avoidance and promote fairness and efficiency.
For theworldwide Tax Daily story, go here. (subscription required)

Wal-Mart Stores Inc. owns more than $76 billion of assets through aweb of units in offshore tax havens around theworld, though youwouldn't know it from reading the giant retailer's annual report.

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

The European Commission has accused 30 countries from around theworld, including a host of European independent territories and Caribbean nations, of being "non-cooperative" tax havenswhere multinational companies can funnel money by using aggressive tax avoidance tactics.
At the same time, the European Commission launched a plan that could lead to legislation forcing multinational companies in all sectors to report how much tax they pay andwhere they pay it.
For the BNA DTR story, go here. (subscription required)

The European Commission unveiled a comprehensive plan to overhaul corporate tax legislation and ensure companies pay an appropriate level of tax in countrieswhere they make profits.

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

The 11 European nations seeking a financial transactions taxwill meet June 18 in Luxembourg in a bid to decide how to design the measure, according to European Union officials.

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

Reducing the debt bias in corporate taxation, combinedwith other tax reforms, could help restore the financial sector's health and promote long-term economic growthwhile also reducing inequality in OECD countries, according to a June 17 OECD report.
For the TNT story, go here. (subscription required)

Douglasw. O'Donnell, the IRS officialwho soonwill take the helm of the agency's Large Business & International Division, said a new, risk-based approach to auditing big companies is part of the division's increasing efforts to put multinational companies under the microscope.

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