Int'l Tax News

Taxing repatriated foreign earnings to fund the Highway Trust Fund "would imperil the ability to achieve meaningful tax reform" if done in a stand-alone manner as opposed to comprehensive tax reform that could include repatriation proposals as part of international tax reform, Markweinberger of the Business Roundtable said in a June 24 statement.
For the BRT statement, go here.

The OECD and the Global Forum on Tax Transparency and Exchange of Information,which it organises, have moved to assert their preeminence as the international bodies that discuss and decide on transparency and exchange of information standards.
For the ITR story, go here.

At a June 24 Houseways and Means Select Revenue Measures Subcommittee hearing, Thomas Barthold, Joint Committee on Taxation chief of staff, summarized three proposals by former Houseways and Means Committee Chair Dave Camp, President Obama, and Sens. Rand Paul, R-Ky., and Barbara Boxer, D-Calif., to tax foreign income at a reduced rate.
For the testimony, go here.

The leading European Parliament political group urged the European Commission to expedite legislative plans for a revamped Common Consolidated Corporate Tax Base and release a new version of the proposal by the end of 2015 to take advantage of the political climate supportive of corporate tax law change.

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

In the search for away to finance the dwindling Highway Trust Fund, some House Republicans are considering a transition toward a territorial tax system in combinationwith taxing repatriated foreign earnings.

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

The U.S.won't need to issue new regulations to implement changes to the OECD transfer pricing guidelines proposed under actions 8, 9, and 10 of the base erosion and profit-shifting project, according to Brian Jenn, attorney-adviser in the Treasury Office of International Tax Counsel.
For the TNT story, go here. (subscription required)

It is "crunch time" for the Organization for Economic Cooperation and Development to reach consensus on the transfer pricing action items under its international project to combat base erosion and profit shifting, a U.S. Treasury Department official said.

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

While lawmakers have raised questions aboutwhether the U.S. Treasury Department has the authorityÔøΩas it has claimed it doesÔøΩto implement the OECD's country-by-country reporting template, practitioners say the administration probably is on solid ground.

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

The debate resumes over making credits for R&D investments permanent, as the U.S. House of Representatives endorsed a bill to that effect in May before it heads to the Senate and then maybe on to thewhite House.
Key questions on the best approach to credits, according to experts atwharton and New York University, include: Should incentives encourage some kinds of research over others? Should investments simply be fully expensedwhen made? And, should the credits be made permanent?
For thewharton article, go here.

With China poised to complete its VAT roll-out in the second half of this year and India hoping to introduce GST in 2016, the next few yearswill see 2.5 billion people paying consumption tax more efficiently than ever before.
For the ITR story, go here.

Jenswittendorff analyzes the key changes in the new OECD discussion draft that aims to align the guidelines on cost sharingwith recent changes regarding intangibles and risk allocation.
For the TNI viewpoint, go here. (subscription required)

Multinational entities from the banking and energy industries avoid the aggressive tax policies common in the digital economy for straightforward business reasons, industry representatives told the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect in Brussels June 23.
For theworldwide Tax Daily story, go here. (subscription required)

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.