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Stack: OECD Countries Support Limits On Companies Filing Reporting Template


A Treasury Department official cited significant support among the countries participating in the international project on base erosion and profit shifting to require only some, rather than all, multinational companies to file the forthcoming country-by-country reporting template.


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Britain Criticized for Plan to Target Corporate Tax Avoiders


Business groupswarned Britain's government onwednesday that it risked undermining international efforts to rewrite tax rules after officials published plans to target multinational companies, including Google, that use complex strategies to cut their British tax bills.


Details of a new measure,which has become known as the ''Googletax,''were released onwednesday, aweek after George Osborne, the chancellor of the Exchequer, promised a crackdown on tax-avoidance strategies.


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Legislative Action Needed on Inversions As Guidance Efforts Continue, Koskinen Says


Congress likelywill need to act to truly put the brakes on corporate inversions even as the IRS and Treasury Department takewhat actions they can to combat the deals, Internal Revenue Service Commissioner John Koskinen told Bloomberg BNA.
Although the issue is still being looked at "carefully and closely"within the administration and policy decisions restwith Treasury, "I think it has been clear from the start that there are limits as towhat the Treasury and IRS regulatory process can accomplish," Koskinen said in a Dec. 9 discussionwith reporters.


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Inversion Curbs Sought by Democrats Watered Down in $1.1 Trillion Spending Bill


Democrats didn't succeed in their attempt to stop the U.S. government from awarding contracts to companies that complete inversion transactionswhere they move their tax address outside the country.
The $1.1 trillion spending plan currently being debated in Congress retains a limit that a top House Republican said is already "watered down" and adds an anti-inversion rule that applies only to a few agencies and may not affect any companies.

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U.K. Details Google Tax Plans


The British government detailed planswednesday for a new 25% tax on profits of multinational technology and other companies it says are avoiding paying taxÔøΩa move that has prompted complaints from business groups andwarnings from tax specialists that it could conflictwith international tax treaties.

For the story, go here.

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Multinationals Moving Profits Out of U.K. Face Levy From April


The U.K. government published draft legislation to stop multinational companies from avoiding paying tax on profits generated in Britain.

For the story, go here.

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New Leak Shows Scope of Luxembourg Corporate-Tax Deals -- Update


A cache of secret tax documents released Tuesday shed further light on how Luxembourg has helped multinational companies to lower their tax bills, in a second major leak that could intensify pressure on the Grand Duchy to alter its tax practices.


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Tax-Leaks Tsunami Sees Luxembourg Push for Fiscal Law


Luxembourg vowed to rein in sweetheart tax deals for multinational companies after its reputation took another blow from a newwave of leaks revealing fiscal accords.

The nation's Finance Ministry is pushing to set up oversight of so-called tax rulings next month as Prime Minister Xavier Bettel promised that Luxembourg is doing all it can to clean up its "damaged image."

For the story, go here.

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Disney, Skype Among New Tax-Deal Leaks to Hit Luxembourg


Walt Disney Co. and Microsoft Corp.'s Skype unit are among hundreds of companies that benefited from lower taxes arranged in "secret" dealswith Luxembourg, according to a new report by a group of investigative journalists.

Confidential documents released by the group show that Hong Kong-based Hutchisonwhampoa Ltd. and private equity firmwarburg Pincus LLC also are among the international companies that have benefited from arrangements in the country allowing them to cut their tax bills. The International Consortium of Investigative Journalists posted the documents on itswebsite late Tuesday.

For the story, go here.

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UK's 'Diverted Profits Tax' proposes a 25% tax rate for taxpayers but leaves open questions

  • By PwC

On December 10, 2014 HM Revenue & Customs (HMRC) released the diverted profits tax (DPT) provisionswithin its draft Finance Bill 2015. Upon initial review, the new rules could affect many more companies than one might have anticipated.

The DPT is a new tax,with a 25% rate on profits that are considered to be artificially diverted from the United Kingdom. The legislationwill apply to profits arising after April 1, 2015. Furthermore, if taxpayers potentially arewithin the scope of the tax, they must notify HMRCwithin three months of the end of the relevant accounting period.

For the PwC Insight, go here.

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Workshop with developing countries to plan deepened engagement in BEPS Project

  • By OECD

On 10-11 December, officials from fourteen developing countries discussedways to maximise benefits from their recent commitment to enhanced engagement in the BEPS Project.

For the release, go here.

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Inversions Are Often Last Stop for Avoiding U.S. Taxes


The surge in U.S. companies avoiding taxes by taking a foreign address has been condemned by President Barack Obama and stirred a policy debate in Congress.what's often overlooked is that these "inversions" are typically a final step in a hopscotch of multinational tax dodging.

For the story, go here.

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France, Denmark Pushing Rise In Rich Country Taxation, OECD Says


Taxation rose to the highest level in six years,with the governments of Denmark and France extracting the most from their economies, a report by the Organization for Economic Cooperation and Development showed.

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EU Finance Ministers Back New Patent Box Rules; Financial Transactions Tax Work Stalls


European Union finance ministers have backed plans requiring EU member states to begin revising their patent box tax regimes in 2015 and approved changes to EU parent-subsidiary and administrative cooperation legislation.

"The agreement today means that virtually every EU member statewith a patent box tax regimewill have to change their legislation to comply," an EU diplomat told Bloomberg BNA on Dec. 9 at the conclusion of the Council of Economic and Financial Affairs. "Those changes should begin in 2015 and be completed by 2021," the diplomat said, speaking on the condition of anonymity.

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SEC Wants Improved Foreign Tax Disclosure in Financial Filings


by Thomas Jaworski

Many U.S. public companies are not providing sufficient information regarding their foreign earnings in corporate financial filings, and improved disclosures about the tax effects of those earnings is required to facilitate informed investor decision-making, SEC officials said December 9.

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A Brake on Reincorporating Abroad via Mergers


For much of the year,wall Street adviserswere scrambling to engineer the cross-border transactions known as inversions. The resultwas billions of dollars in mergers and acquisitions, adding fuel to a banner year for deal-making.

But an abrupt change to tax rules in September left the future of inversions in limbo. Andwhile many expect the deals to continue in some form, they are unlikely to take placewith the same frequency, or at the same size, as they did earlier this year.

For the story, go here.

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Anti-Inversion Notice: More Questions Than Answers


Devon Bodoh, Greg Featherman, and Stephen M. Massed analyze Notice 2014-52 and argue that unlike previous guidance, the notice not only tightens the application of section 7874 but also includes provisions intended to prevent inverted companies from benefiting from several types of post-inversion restructuring transactions.

For the report, go here.

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EU Finance Ministers Set to OK Anti-Abuse Clause to Tackle Evasion


by Joe Kirwin

European Union finance ministers are poised to approve changes to the bloc's parent-subsidiary directive that introduces an anti-abuse clause to reduce tax avoidance by corporate groups.

At the same time, the European Council Dec. 9will give final approval to legislation that extends EU laws regarding information exchange for financial income such as dividends.

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Ireland Softens Under Pressure To Drop Its Corporate 'Duty-Free Zone'


by Ari Shapiro

U.S. and European officials are angry about Irish rules that let some firms pay just 2 percent in corporate taxes. Ireland announced some tax code changes, but few think theywill change things much.

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Reforming our broken international tax system is smart economic policy


Now that the election season is behind us and voters have made clear theywant policymakers to break the gridlock and move our country forward, let's hopewashington can finally replace campaign promiseswith political courage.with voters crying out for action on job creation and economic growth, reforming our country's broken international tax system is a great place to start. Indeed, pre-election polling showed that 9 in 10 Americans agreed "the next Congress needs to update the tax code so that itworks better for today's families and businesses.

But two things stand in theway.

For the story, gohere.

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US Anti-Inversion Bill 'Could Save More Revenue'


The Joint Committee on Taxation has increased, from USD19.5bn to more than USD33.5bn, its estimate of tax revenue that could be saved over a ten-year period from legislation to restrict corporate inversions introduced by Democrat lawmakers in the United States House of Representatives in May this year.

For the story, go here.

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Report: EU Member States' Plan for FTT Agreement by End of 2015 Expected to Fail


A plan by 11 European Union member states to reach an agreement on a financial transactions tax by the end of 2015 is set to fall by thewayside as disagreements over scope of the levy andwho should pay it continue to block a deal, according to a report EU finance ministerswill consider Dec. 8-9.

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Intangibles, Market Data and the OECD's Action 8 Guidance


by David Jarczyk

David Jarczyk of ktMINE challenges the perception that the Organization for Economic Cooperation and Development'swork on base erosion and profit shifting represents a move away from the arm's-length standard and a surrender to the notion that insufficient market data exists for conducting comparability analyses. In fact, he says, the OECD's latest draft on the transfer pricing of intangibles, far from lamenting the lack of available comparable data, suggests a deeper analysis of independent transactions and behavior by expanding the use of data from public sources.

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Luxembourg Braces for New Wave Of Tax-Deal Revelations This Month


Luxembourg's government is on alert for a newwave of tax revelations that Prime Minister Xavier Bettel expects to hit the country this month.

Pierre Gramegna, the nation's finance minister, received a new batch of questions from a group of investigative reporters that indicate more documents revealing alleged sweetheart tax dealswith multinational companieswill be published shortly, Bettel told journalists on Dec. 5 in Luxembourg.

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CRS: Exemption-Based Plans for Taxing Foreign Income May Drive Investment Abroad


by Aaron E. Lorenzo

U.S. companies might increase spending overseas under a pair of proposals to change taxes on their foreign income, according to a report issued by the Congressional Research Service.

The proposals,which include draft legislation from retiring Houseways and Means Committee Chairman Dave Camp (R-Mich.) and a bill introduced by Sen. Michael B. Enzi (R-Wyo.), a Senate Finance Committee member,would shift to a permanent exemption of taxes on foreign income from deferral under current law.

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Government May Provide Relief From 'Harsh' Anti-Skinny-Down Rule


The government might bewilling to adopt a de minimis exception to provide some relief from the anti-skinny-down rule in the IRS's recent section 7874 anti-inversion notice (Notice 2014-52, 2014-42 IRB 712), said John Merrick, special counsel to the IRS associate chief counsel (international), December 4.

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News Analysis: Luxembourg Lubricates Income Stripping


In news analysis, Lee A. Sheppard discusses the controversy over aspects of Luxembourg's tax and ruling policies in thewake of the release of tax documents that show the nation as an enabler of aggressive tax planning.

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Tax Ruling Transparency Plan Due In Early 2015, EU Commission Says


The European Commissionwill put forward its proposals on regulating tax rulings in the first quarter of 2015, commission spokeswoman Vanessa Mock said.
Mock,who spoke to reporters in Brussels, said EU Tax Commissioner Pierre Moscoviciwill respond by the end of theweek of Dec. 1 to a letter from German, French and Italian finance ministers on corporate taxationÔøΩspecifically, curbs on tax-lowering deals for companies.
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Deputy Director of China's SAT Vows To Step Up Efforts to Fight Base Erosion


Chinawill step up itswork to combat multinationals' tax avoidance and cooperate in global efforts to build a fair international tax system "inwhich the tax matches the economic activity," a senior Chinese tax official said.
In an interview posted on the tax authority'swebsite Dec. 1, Zhang Ziyong, deputy director of China's State Administration of Taxation, said Chinawill cooperate on multilateral efforts to fight tax avoidance, increase information-sharingwith other countries and help other developing countries improve their tax collection capabilities.
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EU Takes Spain to Court on Laws Involving Foreign Bonds, Foreign Company Dividends

  • By European Union

by EU

The European Commission filed two European Court of Justice complaints against Spanish tax laws that allegedly discriminate against investments in foreign bonds and nonresident companies.

After failing to convince Spain to alter the tax laws, the EU executive body filed a complaint Nov. 26 claiming that the country's inheritance tax laws give reduced rates on bonds issued by local governments. But the reduced rates aren't availablewhen an inheritance includes bonds from a foreign country, the commission said.

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Corporation tax falls as proportion of big UK companies' levies


By Vanessa Houlder

Corporation tax has fallen from more than half to less than a quarter of the total tax paid by Britain's biggest businesses since 2007, according to a survey published onwednesday.

The findings by the 100 Group of finance directors, representing FTSE 100 companies, highlight a "consistent trend" towards the taxation of people, production and property, rather than profits.


For the story, go here.

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Liechtenstein No Whipping Boy on Taxes, Top Envoy Says


Liechtenstein is no longer the "whipping boy" of internationalwatchdogs as it seeks to shed a reputation as a blacklisted tax haven and adopts global standards on data sharing, the country's top diplomat said.

A month after the Alpine principality joined governments around theworld in signing an agreement on automatic data exchange, Liechtenstein Foreign Minister Aurelia Frick said her nation of 37,000 is changing its business model.

For the story, go here.

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Inversions Inside Out


by Robert Holo and Devin J. Heckman

In this report, the authors discuss inversion transactions inwhich a U.S. company becomes a subsidiary of a new foreign parent.while the eagerness of U.S. businesses to invert iswell known, it is often misrepresented and even more often misunderstood. Holo and Heckman provide an explanation for the recent tide of inversions by describing the benefits and risks associatedwith modern inversion transactions, including the methods throughwhich businesses formerly owned by a U.S. corporate parent may reduce their effective tax rate, and they discuss recent proposals to address those strategies.

For the report, go here. (subscription required)

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UK loses top spot in league table of company tax regimes


The UK has lost its top slot in a league table of multinational companies' favourite tax regimes, in spite of George Osborne's flagship policy of cutting taxes to attract business to Britain.

The UK's popularity increased slightly but itwas leapfrogged by Ireland,which is expected to be less affected than some rival countries by the international crackdown on tax avoidance, according to a survey by KPMG, professional services group.

For the story, go here.

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UK states that OECD agrees on substantial activity level required to benefit from preferential IP regimes

  • By PwC

The UK government released a statement on December 2 that sets out how the OECD plans to move forwardwith new rules for preferential intellectual property (IP) regimeswithin the base erosion and profit shifting (BEPS) project.

For the PwC Insight, go here.

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Battaiu highlights OECD and EU overlap on VAT


Piet Battiau, head of consumption taxes at the OECD's Centre for Tax Policy and Administration, believes the OECD isworking effectivelywith other multilateral organisations and that common ground is being found on key indirect tax issues.
For the story, go here.

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U.K. Targets Tech Firms With Google Tax

  • By Lisa Fleisher

Should profits derived from a ride in an Uber car in London be taxed in the U.K.? How about clicking on a Google ad, or buying a song on Apple's iTunes?
U.K. treasury chief George Osborne onwednesday introduced a new 25% tax on foreign companies' profits derived from economic activity in the U.K. -- aiming to rein inwhat the government says is tax avoidance by multinationals shifting their tax burden to lower-tax regimes.
For the story, go here.

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British Government Proposes a Google Tax


As some in Europe call for multinational companies to pay more taxes, Britain onwednesday proposed a new 25 percent tax on the local profits of international companies, including tech giants like Google that use complicated structures to reduce their tax burden.
George Osborne, the British chancellor of the Exchequer, said multinational companies that use these complicated tax structures to move profits from their British operations to jurisdictions like Ireland and Luxembourg,where companies pay less corporate tax, should pay more of their share.
For the story, go here.

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OECD Underestimated CbC Reporting Burdens, Practitioners Say


The OECD seems to be taking await-and-see approach on recognizing the compliance burdens associatedwith country-by-country reporting, practitioners said December 3.
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Autumn Statement 2014: UK plans to raise £1bn with Google tax


The UK announced plans to raise over £1bn over the next five years from a new "diverted profits" tax on multinationals but detailswere scanty and advisers said itwas not clear how the levywouldwork.

The measurewas unveiled by George Osborne onwednesday as part of his Autumn Statement of tax and spending measures to "make sure that big multinational businesses pay their fair share".

For the story, go here.

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Osborne Takes Aim at Multinationals Moving Profits Out of U.K.


The U.K. became the latest country to take aim at multinational tax avoidance, announcing a new levy on companies that "artificially" shift their profits into havens, a move prompted by growing international outrage at maneuvers used by businesses including Google Inc., Apple Inc. and Starbucks Corp.

In his end-of-year statement to Parliament in London today, Chancellor of the Exchequer George Osborne said the U.K. governmentwill introduce a 25 percent tax on "profits generated by multinationals from economic activity here" that are moved out of the country. He named no companies.

For the story, go here.

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Unpatriotic Loophole Targeted by Obama Costs Taxpayers $2 Billion


U.S. companies that have already carried out inversions are likely to cost the government a record $2.2 billion or more in lost tax revenue next year, double the amount in 2014, according to calculations based on companies' financial results.

That doesn't include the impact of companies that shift their legal addresses abroad in the future,which one Congressional study pegged at about $2 billion a year over the next decade. Since the first inversion in 1982, the deals have cost more than $9.8 billion in inflation-adjusted dollars, the calculations based on data compiled by Bloomberg show.

For the story, go here.

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Asia-Pacific Nations Announce Joint Task Force to Tackle BEPS

  • By Bloomberg Daily Tax Report

Tax commissioners from 17 countries in the Asia-Pacific region have agreed to establish a joint regional task force to share compliance tactics, increase tax transparency and help countries tackle base erosion and profit shifting.
At the 44th meeting of the Study Group on Asian Tax Administration and Research (SGATAR), hosted by the Australian Tax Office in Sydney Nov. 27, ministers forged a regional plan to tackle multinational profit shifting.
For the story, go here. (subscription required)

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Germany, France, Italy Push to End Corporate Tax Deals in European Union


Germany, France and Italy urged European Union regulators to speed up andwiden curbs on tax-lowering deals for companies, saying the EU should adopt rules by the end of next year.
Measures should go beyond greater transparency and company registries to a "general principle of effective taxation" to stem the EU's lack of "tax harmonization" that entices companies to cherry-pickwhere they pay, according to a joint letter by Finance Ministerswolfgang Schaeuble (Germany), Michel Sapin (France) and Pier Carlo Padoan (Italy) to the European Commission.
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Country-by-Country Reporting Inevitable, Global Leaders Say


Government officials from the United States, the U.K., Australia, and Canada, participating in a roundtable on the OECD's base erosion and profit-shifting project November 30 at the annual conference of the Canadian Taxation Foundation, agreed that the implementation of country-by-country reporting is inevitable.
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Proposed legislation for Itailan Patent Box regime

  • By PwC

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Liechtenstein No Whipping Boy on Taxes, Top Envoy Says (1)

  • By Patrick Donahue

Liechtenstein is no longer the "whipping boy" of internationalwatchdogs as it seeks to shed a reputation as a blacklisted tax haven and adopts global standards on data sharing, the country's top diplomat said.

A month after the Alpine principality joined governments around theworld in signing an agreement on automatic data exchange, Liechtenstein Foreign Minister Aurelia Frick said her nation of 37,000 is changing its business model.

For the story, go here.

Posted on

Corporation tax falls as proportion of big UK companies levies

  • By Vanessa Houlder

Corporation tax has fallen from more than half to less than a quarter of the total tax paid by Britain's biggest businesses since 2007, according to a survey published onwednesday.

The findings by the 100 Group of finance directors, representing FTSE 100 companies, highlight a "consistent trend" towards the taxation of people, production and property, rather than profits.

For the story, go here.

Posted on

European Union: EU Takes Spain to Court on Laws Involving Foreign Bonds, Foreign Company Dividends

  • By European Union

The European Commission filed two European Court of Justice complaints against Spanish tax laws that allegedly discriminate against investments in foreign bonds and nonresident companies.
After failing to convince Spain to alter the tax laws, the EU executive body filed a complaint Nov. 26 claiming that the country's inheritance tax laws give reduced rates on bonds issued by local governments. But the reduced rates aren't availablewhen an inheritance includes bonds from a foreign country, the commission said.
For the story, go here. (subscription required)

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EU 'MOSS' and sourcing: Lessons for the U.S. Sales Tax?

  • By Annette Nellen

In 2015, the European Union's new approach for administration and sourcing of value-added tax on business-to-consumer sales of telecommunications, broadcasting and electronic services begins.
This approachwill be a significant change for vendors and countries because it requires destination sourcing for all vendors for these sales. To alleviate some of the challenges of this change, a "mini One Stop Shop" (MOSS) compliance option is available.
For the story, go here. (subscription required)

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