Int'l Tax News

Tax reform should ensure competitive rates for all businesses, extend full business expensing, end double taxation by combining the corporate and individual systems, allow deferral of taxes on all saved income, and shift to a territorial system, the Tax Foundation said in an April 15 letter to the Senate Finance Committee's businessworking group.
For the letter, go here.

During a May 11 public consultation on action 12 of the OECD's base erosion and profit-shifting project regarding the design of mandatory disclosure regimes, business representativeswarned that imposing excessive tax compliance obligations on multinationalswill negate the benefits of enhanced transparency.
For the TNT story, go here. (subscription required)

An OECD analysis of 79 multinational companies regarding their ratio of net interest expense to earnings before interest, taxes, depreciation and amortization (EBITDA) is persuasive, a Treasury Department official said.

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

Business delegates told an Organization for Economic Cooperation and Development consultation that, in many cases, itwould be impracticable for subsidiaries to complywith the organization's recent discussion draft on mandatory disclosure rules, if countries choose to adopt such rules.

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

Indonesiawill gradually cut its corporate tax rate to discourage companies from booking profits in lower-tax countries such as Singapore, President Jokowidodo's top aide said.

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

A Liberal government in Canada may need to "adjust" its corporate tax rate if the U.S. reduces levies on companies, the party's leader said.
Liberal Leader Justin Trudeau,whose party polls show is the biggest threat to Prime Minister Stephen Harper's Conservatives heading into this year's election,was asked in a television interview May 11 if hewould rule out any increase to Canada's corporate tax rate.
For the BNA DTR story, go here. (subscription required)

Australiawill introduce legislation targeting 30 multinationals suspected of diverting billions in profits out of the country, Treasurer Joe Hockey said.
In a May 11 news release announcing the proposed legislation, Hockey also said the scope of Australia's goods and services tax (GST) regimewould be extended to apply to offshore suppliers of digital goods and services.
For the BNA DTR story, go here. (subscription required)

Australian Treasurer Joe Hockey has said the governmentwill introduce a new tax crackdown against 30 multinational corporations.

Without identifying the targets, Mr Hockey said the big corporationswere "diverting profits earned in Australia away from Australia to no-tax or low-tax jurisdictions".

For the BBC story, go here.

Just five US companies are hoarding nearly half a trillion dollars as the country's tax code and a tepid global economy deter businesses from spending their overseas cash piles.
For the Financial Times story, go here.

The government plans to soon issue eagerly awaited rules on loans to foreign partnerships by controlled foreign corporations under tax code Section 956, Treasury Department attorney-adviser Brian Jenn said.
For the BNA DTR story, go here. (subscription required)

Implementing a patent box has become an "almost primary" topic of the tax debates on Capitol HillÔøΩa shift in focus that happened almost overnight, according to the chief tax counsel of the U.S. Houseways and Means Committee.
"It seemed to me that in January or February of 2015, a substantial portion of the business communitywoke up one morning, and despite the goals" of a 25 percent corporate tax rate and an exemption system, "decided that a patent box or an innovation boxwas one of their top priorities," said George Callas, aways and Means stafferwhoworked under former Chairman Dave Camp (R-Mich.) to craft a tax reform proposal, and remainedwith the committee after Rep. Paul D. Ryan (R-Wis.) took over the chair earlier this year.
For the BNA DTR story, go here. (subscription required)

Theworldwide growth of intangible income and potential for base erosion has made guidance on intangibles one of the government's highest priorities, two senior officialswith the IRS and Treasury Department said.
Another key focus is guidance on cloud computing as that, too, increases across awide swath of companies, they said, and comments from taxpayers are essential as that process goes forward.
For the BNA DTR story, go here. (subscription required)

Quyen Huynh, Treasury associate international tax counsel, said May 8 that the next U.S. model tax treatywill include a mandatory arbitration provision.
For the TNT story, go here. (Subscription required)

An expanded use of profit splits at the conclusion of the OECD's base erosion and profit-shifting project could put pressure on dispute resolution mechanisms, according to J. David Varley, acting transfer pricing director, IRS Large Business and International Division.
For the TNT story, go here. (subscription required)

Businesses' recent focus on the introduction of a patent (or innovation) box in the United States may be due to concerns about assertions of taxing jurisdiction over previously low-taxed income and an interest in access to U.S. competent authority assistance, said George Callas, majority chief tax counsel on the Houseways and Means Committee.
For the TNT story, go here. (Subscription required)

A U.S. Treasury official sharply criticized the U.K.'s diverted profits tax, saying it undercuts the process of having nationswork together on the Organization for Economic Cooperation and Development's base erosion and profit shifting project.
For the BNA DTR story, go here. (subscription required)

As the Organization for Economic Cooperation and Development's project to combat base erosion kicks into high gear, sowill taxpayer demand for assistance from the IRS, an agency official said.

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

The international project to fight base erosion and profit shifting is unlikely to produce an agreement on controlled foreign corporation rules or specific measures to address the digital economy, a top U.S. tax official told Bloomberg BNA.

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

India's biggest indirect tax reform since 1947 looks like it has finally arrived – the Goods and Service Tax.

For the Scroll report, go here.

Parthasarathi Shomewill become the first chairman of the International Tax Research and Analysis Foundation. The organisation,whichwill be based in Bangalore,will bring together professionals from thewhole of the tax market in India to produce commentary about the Indian tax system.
For the International Tax Review story, go here.

The IRS Chief Counsel's Office issued CCA 201516064 on April 17, 2015, addressing the application of Notice 88-108where a controlled foreign corporation made loans back to its US parent over two quarter-ends, both ofwhichwere repaidwithin 30 days, but also made a third loanwhich caused the CFC to be a creditor of the US Parent for more than 59 days during the year.

For the PwC Insight, go here.

As the ABA Tax Section celebrates its 75th anniversary, the authorwas asked to reflect on the Section's contribution in the international tax arena and on how the
Section's international community has grown.
For the ABA Tax Lawyer article, go here.

Former Houseways and Means Committee Chair Dave Camp said May 7 that Congress should notwait until 2017 to completework on comprehensive tax reform lest the growing trend of corporate inversions boost the number of U.S. companies moving abroad.
For the TNT story, go here. (Subscription required)

A draft legislative decreewas approved by the Italian Government on 21 April 2015which includes a large number of tax changes, many ofwhich are particularly relevant for companieswith international operations.
For the PwC Insight, go here.

Why doesn't Europe have its own Google or Facebook?
Many European policy makers say the region's homegrown Internet companies haven't made the big leagues at least in part because of a patchwork of tax, copyright and e-commerce rules that have stunted their growth.
For thewall Street Journal story, go here.

Popular opinion and high-profile domestic targets aside, it's not clear that Notice 2014-52, 2014-42 IRB 712 is responsible for increased foreign takeovers or even that foreign takeovers have increased.
For the TNT story, go here. (subscription required)

Michael Durst, former director of the IRS Advance Pricing Agreement Program, examineswhether a new transfer pricing method, suggested recently for use by developing countries, might be developed further to serve as an administratively streamlined transfer pricing method for countries of all levels of economic development.
For the BNA Insight, go here. (subscription required)

Poland has referred a case to the European Court of Justice (ECJ)which could dramatically impact insurance outsourcing activity across Europe.
For the International Tax Review story, go here.

The Peruvian tax authorities have changed the periodwithinwhich settlement must take place for income derived from financial derivatives to be considered sourced in Peru.
For the International Tax Review story, go here.

The IRS needs to address the complex foreign tax credit issues surrounding cloud computing, the American Institute of CPAs said in a range of recommendations for the agency's 2015-2016 Priority Guidance Plan.

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

For Nigerian tax purposes recharges can be defined as costs reimbursed by a non-resident company to its Nigerian affiliate in respect of services provided by the affiliate in execution of a joint contract in Nigeria. Generally, this amount includes a profit mark-up for the affiliate, and the non-resident company is allowed the amount as a deduction in its income tax returns.
For the International Tax Review story, go here.

Partho Shome's 30-year career as a tax official and adviser to Indian governments and multilateral organisations may be at an end for now, but hewill still take a keen interest in tax policy, as this exclusive interviewwith International Tax Review reveals.
For the International Tax Review story, go here.

Leading congressional taxwriters in both parties are getting behind a major new tax break for corporate innovation as part of their continuing quest to identifyways to make the U.S. business-friendlier.
For thewall Street Journal story, go here.

The Organization for Economic Cooperation and Development's recent discussion draft on strengthening rules on controlled foreign companies is a missed opportunity to address base erosion and profit shifting, according to an official from the OECD's Business and Industry Advisory Committee.
For the BNA DTR story, go here. (subscription required)

On 31 March 2015, interested partieswere invitedto comment on the discussion draft on Action 12 (Mandatory Disclosure Rules) 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.

On 3 April 2015, interested partieswere invitedto comment on the discussion draft on Action 3 (Strengthening CFC Rules) of the BEPS Action Plan. The OECD is grateful to the commentators for their input and is now publishing the comments received.
For the comments, go here.

Why did the EU Commission take so long to launch investigations into member states' tax rulings? Is its strategy to go only after small countries, such as Belgium, the Netherlands, Luxembourg and Ireland?will the instruments available to it suffice? And if not,whatwould it take to do awaywith unfair tax competition? These questionswere raised by MEPs in Tuesday's Special Tax Rulings Committee debatewith competition Commissioner Margrethe Vestager.
For the European Parliament news release, go here.

The Organization for Economic Cooperation and Development's discussion draft on mandatory disclosure rules, if adopted,will lead to "differing disclosure regimes across jurisdictions," a Tax Executives Institute Inc. official said.
For the BNA DTR story, go here. (subscription required)

The $1.22 trillion in foreign profit from U.S. multinationals is in good companyÔøΩnearly two-thirds of it is parked in a handful of countries, according to data analyzed by the Congressional Research Service.
Seven of the top 10 countries are considered "tax havens," according to a CRS report that looked at 2012 data.
For the BNA DTR story, go here. (subscription required)

Mike Gaffney argues that the OECD discussion drafts on permanent establishment status and transfer pricingwill likely lead to increased uncertainty and more double taxation disputes in the short term, especially if tax authorities are allowed to depart from the arm's-length principle.
For the Tax Notes article, go here. (subscription required)

Japan recently announced that itwill be lowering its corporate tax ratewith further planned cuts over the next five years.while other countries are actively improving their corporate tax code, the United States seems stuck in the discussion phase. Much talk has focused on our burdensome and complex domestic corporate tax code, but Congresswould be remiss to gloss over the same problems that existwithin our international tax system.
For thewashington Examiner article, go here.

One significant consequence of the international project to combat base erosion and profit shifting (BEPS) is that the boards of multinational companieswill spend more timeweighing the risks of engaging in international tax planning, a U.S. Treasury official said.

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

In news analysis, Lee A. Sheppard discusses how unregulated investment funds are attempting to escape the treaty benefits crackdown contemplated in the OECD base erosion and profit-shifting project.
For the Tax Notes article, go here. (Subscription required)

The IRS has nearly completed regulations intended to halt certain tax-avoiding loans by controlled foreign corporations to foreign partnerships, a senior agency official said.
Jason T. Smyczek, Internal Revenue Service senior technical reviewer, Branch 4, associate chief counsel (International), called the long-awaited Section 956 guidance project a "high priority" for the government. Smyczek said April 30 that the regulationswould be released "very soon."
For the BNA DTR story, go here. (subscription required)

In recent years, corporate tax strategies have become the focus of some high-profile public debates. Last year, for example, tax inversion deals received scorching criticism from regulators and lawmakers. One prominent critic ÔøΩ President Barack Obama ÔøΩ likely helped spur the Treasury Department to issue rules discouraging such maneuvers.
In the long shadow of a financial crisis that ushered in the phrase "too big to fail," the public has become more attuned to ÔøΩ if not downright suspicious of ÔøΩ corporate motivations for tax strategies.

For the CFO Magazine story, go here.

International Tax News is designed to help multinational organizations keep upwith the constant flow of tax developmentsworldwide. Among the topics featured in this month's edition are:
The proposed amendments to the Brazilian tax legislation regardingwithholding tax on dividend payments
The UK Finance Act of 2015
The OECD BEPS proposals regarding controlled foreign companies
Swiss Corporate Tax Reform III

For the latest issue of International Tax News, go here.

The Australian government on April 28, 2015, released exposure draft legislation that reflects amendments to the Australian tax consolidation regime first announced in the 2013-2014 and 2014-2015 Federal Budgets. The proposed new rules are aimed at restoring integrity to the consolidation regime. Most significantly, the ruleswould remove perceived 'double benefits' or 'double detriments'when an Australian target or subsidiary joins a tax consolidated group.

For the PwC Insight, go here.

Multinational enterprises involved in the development and use of intangibles under cost contribution arrangements (CCAs) should note the 29 April 2015 discussion draft proposals under Action 8 of the Base Erosion and Profit Shifting (BEPS) Action Plan. The discussion draft proposes fundamental modifications to Chapter VIII of the OECD Transfer Pricing Guidelines.

For the PwC Tax Policy Bulletin, go here.

All companies need to be thinking about taxes globally as international commerce expands around theworld, an EY LLP practitioner told Bloomberg BNA.

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