Int'l Tax News
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U.S. Taxation of Cross-Border Investment -- 12 Questions
by Jamesw.wetzler (Tax Analysts, Tax Notes Today)
Everyone agrees that the U.S. system of taxing cross-border investment needs repair, but the problem is that there is little agreement on how to fix it. U.S. tax laws affect the behavior of both taxpayers and foreign governments along several decision-making margins, all ofwhich should be taken into account by the thoughtful policymaker. The following are 12 questions policymakers should be asking before they initiate reform measures.
For the article, go here. (Subscription required)
Everyone agrees that the U.S. system of taxing cross-border investment needs repair, but the problem is that there is little agreement on how to fix it. U.S. tax laws affect the behavior of both taxpayers and foreign governments along several decision-making margins, all ofwhich should be taken into account by the thoughtful policymaker. The following are 12 questions policymakers should be asking before they initiate reform measures.
For the article, go here. (Subscription required)
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Lilian Faulhaber to advise OECD on ways to curb tax avoidance by global companies
by Boston Univ, School of Law
Associate Professor of Law Lilian Faulhaberwill bring her tax law expertise to an international effort to curb the practice of corporations paying little or no taxes in the various countries inwhich they conduct business. Starting September 1, Faulhaberwill take a two-year leave of absence from BU Law to serve as an Advisor to the Organisation for Economic Co-operation and Development (OECD).
For the release, go here.
Associate Professor of Law Lilian Faulhaberwill bring her tax law expertise to an international effort to curb the practice of corporations paying little or no taxes in the various countries inwhich they conduct business. Starting September 1, Faulhaberwill take a two-year leave of absence from BU Law to serve as an Advisor to the Organisation for Economic Co-operation and Development (OECD).
For the release, go here.
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A Holiday From Taxes, and Often From the Strings Attached
by Victor Fleischer (New York Times)
Large multinationals based in the United States among them General Electric, Pfizer, Apple and Citigroup have been hoarding record amounts of cash overseas, mainly because of the 35 percent tax theywould have to pay if they brought it back to the United States.
The American Jobs Creation Act of 2004 offered a temporary tax holiday that allowed firms to repatriate cash at about a 5 percent tax rate, but therewere strings attached. The repatriated moneywas to be used only on permissible activities like research and development, capital expenditures and pension funding. Itwas not to be used for shareholder dividends or share repurchases.
The purported goal of the legislationwas to create jobs, not simply to enrich shareholders at the expense of federal tax revenue. In recent years, companies have lobbied for another tax holiday.
For the story, go here.
Large multinationals based in the United States among them General Electric, Pfizer, Apple and Citigroup have been hoarding record amounts of cash overseas, mainly because of the 35 percent tax theywould have to pay if they brought it back to the United States.
The American Jobs Creation Act of 2004 offered a temporary tax holiday that allowed firms to repatriate cash at about a 5 percent tax rate, but therewere strings attached. The repatriated moneywas to be used only on permissible activities like research and development, capital expenditures and pension funding. Itwas not to be used for shareholder dividends or share repurchases.
The purported goal of the legislationwas to create jobs, not simply to enrich shareholders at the expense of federal tax revenue. In recent years, companies have lobbied for another tax holiday.
For the story, go here.
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News Analysis: Picking Apart the OECD BEPS Action Plan
by Lee A. Sheppard (Tax Analysts, Tax Notes Today)
"Transfer pricing is collapsing under its ownweight,"will Morris of General Electric remarked at the August 28 session of the International Fiscal Association's annual congress in Copenhagen, Denmark.
This and other admissions against interest flavored a panel discussion of the OECD base erosion and profit-shifting (BEPS) action plan ,which featured Pascal Saint-Amans, head of the OECD Centre for Tax Policy and Administration, and Mikewilliams, director of business and international tax at HM Revenue & Customs.
Morriswas referring to transfer pricing documentation and compliance, but could just as easily have been referring to other aspects of the current system that the action plan proposes to fix. Businesseswant mutual agreement procedures addressed quickly, but Saint-Amans cautioned that reformswould take time.
For the story, go here. (Subscription required)
"Transfer pricing is collapsing under its ownweight,"will Morris of General Electric remarked at the August 28 session of the International Fiscal Association's annual congress in Copenhagen, Denmark.
This and other admissions against interest flavored a panel discussion of the OECD base erosion and profit-shifting (BEPS) action plan ,which featured Pascal Saint-Amans, head of the OECD Centre for Tax Policy and Administration, and Mikewilliams, director of business and international tax at HM Revenue & Customs.
Morriswas referring to transfer pricing documentation and compliance, but could just as easily have been referring to other aspects of the current system that the action plan proposes to fix. Businesseswant mutual agreement procedures addressed quickly, but Saint-Amans cautioned that reformswould take time.
For the story, go here. (Subscription required)
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Economic Analysis: New Insight on Repatriation Holiday Not a Game Changer
by Martin A. Sullivan (Tax Analysts, Tax Notes Today)
The most common use of the $312 billion of funds repatriated under the provisions of the American Jobs Creation Act of 2004was for cash acquisitions and not, aswidely believed, distributions to shareholders. That is the finding of a new study by professor Thomas J. Brennan of Northwestern University Law School.
For the article, go here. (Subscription required)
The most common use of the $312 billion of funds repatriated under the provisions of the American Jobs Creation Act of 2004was for cash acquisitions and not, aswidely believed, distributions to shareholders. That is the finding of a new study by professor Thomas J. Brennan of Northwestern University Law School.
For the article, go here. (Subscription required)
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Where the Money Really Went: A New Understanding of the AJCA Tax Holiday
by Thomas J. Brennan (Northwestern Univ. School of Law)
International tax policy debate has been informed by a belief based on prior research that, notwithstanding legal prohibitions, shareholder payouts in 2005 accounted for $0.60-$0.92 per dollar repatriated under the AJCA tax holiday. The author analyzes total payouts that year and prove that this belief is actually false. He uses constrained regressions to determinewhat spending really occurred. Legal restrictions mattered. Twenty firms represented 56% of repatriated cash and spent heterogeneously during 2005-2009,with $0.78 per repatriated dollar going to AJCA-permissible uses, including cash acquisitions ($0.54) and debt reductions ($0.16). Smaller repatriators spent at least $0.61 per dollar on AJCA-permissible uses.
For the paper, go here.
International tax policy debate has been informed by a belief based on prior research that, notwithstanding legal prohibitions, shareholder payouts in 2005 accounted for $0.60-$0.92 per dollar repatriated under the AJCA tax holiday. The author analyzes total payouts that year and prove that this belief is actually false. He uses constrained regressions to determinewhat spending really occurred. Legal restrictions mattered. Twenty firms represented 56% of repatriated cash and spent heterogeneously during 2005-2009,with $0.78 per repatriated dollar going to AJCA-permissible uses, including cash acquisitions ($0.54) and debt reductions ($0.16). Smaller repatriators spent at least $0.61 per dollar on AJCA-permissible uses.
For the paper, go here.
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Tax Policy: Debate Lingers on Repatriation Tax, as Study Suggests Tax Break Benefits U.S. Operations
by Marc Heller (Bloomberg)
Companies that return profits to the United States may see a lighter tax burden if Congress passes rewrite of the tax code. But howwould they use that money?
That question is at the heart of the congressional debate over how best to tax repatriated earnings of U.S. companies' foreign operations, and a new study takes aim at congressional Democrats' assertion that corporate shareholders stand to benefit the most.
Thomas J. Brennan, a law professor at Northwestern University, found that during the last repatriation tax holiday, in 2005, companies spent most of the repatriated money on cash acquisitions and debt reduction,with lesser amounts on research and development, share repurchases and dividends. That finding contrastswith an earlier study embraced by some lawmakers that estimated as much as 60 cents to 92 cents on each repatriated dollarwent to shareholder payouts thatwere not permissible under the federal tax holiday.
For the story, go here. (Subscription required)
Companies that return profits to the United States may see a lighter tax burden if Congress passes rewrite of the tax code. But howwould they use that money?
That question is at the heart of the congressional debate over how best to tax repatriated earnings of U.S. companies' foreign operations, and a new study takes aim at congressional Democrats' assertion that corporate shareholders stand to benefit the most.
Thomas J. Brennan, a law professor at Northwestern University, found that during the last repatriation tax holiday, in 2005, companies spent most of the repatriated money on cash acquisitions and debt reduction,with lesser amounts on research and development, share repurchases and dividends. That finding contrastswith an earlier study embraced by some lawmakers that estimated as much as 60 cents to 92 cents on each repatriated dollarwent to shareholder payouts thatwere not permissible under the federal tax holiday.
For the story, go here. (Subscription required)
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Tax Evasion: G-20 Leaders Set to Endorse OECD Anti-Base Erosion Plan
by Daniel Pruzin (Bloomberg)
The Group of 20 leaders are on track to endorse a new global initiative to crack down on questionable tax practices of major corporations, according to officials involved in the talks.
The Base Erosion and Profit Shifting (BEPS) Action Plan drawn up by the Organization for Economic Cooperation and Developmentwas endorsed by the finance ministers of the 20 most industrialized nations at their July 20 Moscow meeting and is set to be approvedwithout changes, the officials said as they gathered Sept. 3 in St. Petersburg, Russia.
For the article, go here. (Subscription required)
The Group of 20 leaders are on track to endorse a new global initiative to crack down on questionable tax practices of major corporations, according to officials involved in the talks.
The Base Erosion and Profit Shifting (BEPS) Action Plan drawn up by the Organization for Economic Cooperation and Developmentwas endorsed by the finance ministers of the 20 most industrialized nations at their July 20 Moscow meeting and is set to be approvedwithout changes, the officials said as they gathered Sept. 3 in St. Petersburg, Russia.
For the article, go here. (Subscription required)
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The Slaughter & Rees Report: Counting theGimmick-Hungry Yobs Digging Gold from Rock and Roll
from Slaughter & Rees Report
The Bureau of Economic Analysis of the U.S. Department of Commerce released comprehensive revisions to America's GDP accounts. Tracking the value of a country's total output of goods and services has long required a judicious amount of art beyond science. For example, the basic framework for most countries GDP accountswas set generations agowhen outputwas predominantly agriculture and manufacturing. As services have grown more important—often through the creation of entirely new industries, such as information technology—statistical agencies have endeavored to keep pace.
Lastweek's data revisionswere massive (dating back to 1929)while also extremelywell designed and executed (the leaders and staff of the BEA have long set a standard towhich other countries aspire). The most important changewas to treat spending on research and development and on entertainment, literary, and artistic originals as an investment rather than an expense.
We think these new data carry at least three important policy messages for all countries.
First, any comprehensive tax reform should not favor a specific type of business or income. In particular, many voices argue that manufacturing is special and should receive tax preferences, such as a lower corporate tax rate. Butwhy should the fruits of intangible assets, many ofwhich are embodied in services, not manufactured goods (e.g., software), be taxed more heavily?
For the report, go here.
The Bureau of Economic Analysis of the U.S. Department of Commerce released comprehensive revisions to America's GDP accounts. Tracking the value of a country's total output of goods and services has long required a judicious amount of art beyond science. For example, the basic framework for most countries GDP accountswas set generations agowhen outputwas predominantly agriculture and manufacturing. As services have grown more important—often through the creation of entirely new industries, such as information technology—statistical agencies have endeavored to keep pace.
Lastweek's data revisionswere massive (dating back to 1929)while also extremelywell designed and executed (the leaders and staff of the BEA have long set a standard towhich other countries aspire). The most important changewas to treat spending on research and development and on entertainment, literary, and artistic originals as an investment rather than an expense.
We think these new data carry at least three important policy messages for all countries.
First, any comprehensive tax reform should not favor a specific type of business or income. In particular, many voices argue that manufacturing is special and should receive tax preferences, such as a lower corporate tax rate. Butwhy should the fruits of intangible assets, many ofwhich are embodied in services, not manufactured goods (e.g., software), be taxed more heavily?
For the report, go here.
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How treaty changes and high taxes are harming Argentina
by Matthew Gilleard - ITR
Companies operating in Argentina face high levels of tax and uncertainty because of treaty changes, meaning low foreign investment figures are unlikely to change anytime soon.
For the article, go here. (Registration required)
Companies operating in Argentina face high levels of tax and uncertainty because of treaty changes, meaning low foreign investment figures are unlikely to change anytime soon.
For the article, go here. (Registration required)
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Japan: Multinationals in Japan More Cautious, Unlikely Affected by BEPS, Practitioners Say
by Yuriko Nagano (Bloomberg)
While Japan's finance minister has declared support for the Organization for Economic Cooperation and Development's action plan on base erosion and profit shifting (BEPS), corporations based in the country might not feel much of an impact, partners at two Big Four firms told BNA Aug. 7.
“Japanese multinationals tend to be a little more cautious in their tax planning than foreign multinational corporations and so, as a group, they may be less impacted than foreign multinationals that have adopted structures outlined by OECD, said Ryann Thomas, partner at PricewaterhouseCoopers Tax in Japan. Japan Minister of Finance Taro Aso issued a statement of support for the OECD BEPS project July 19.
For the article, go here. (Subscription required)
While Japan's finance minister has declared support for the Organization for Economic Cooperation and Development's action plan on base erosion and profit shifting (BEPS), corporations based in the country might not feel much of an impact, partners at two Big Four firms told BNA Aug. 7.
“Japanese multinationals tend to be a little more cautious in their tax planning than foreign multinational corporations and so, as a group, they may be less impacted than foreign multinationals that have adopted structures outlined by OECD, said Ryann Thomas, partner at PricewaterhouseCoopers Tax in Japan. Japan Minister of Finance Taro Aso issued a statement of support for the OECD BEPS project July 19.
For the article, go here. (Subscription required)
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Company Profits Without Borders Spurs Government Scrutiny
by Alison Bennett (Bloomberg)
Policymakers around theworld are stepping up efforts to tighten rules because a growing slice of corporate profits isnt taxed in any country.
Multinational companies can legally structure transactions so they dont pay tax anywhere, creatingstateless income that is coming under attack as countries seek to fill budget gaps. The Obama administration, Organization for Economic Cooperation and Development and tax officials from other countrieswant to reach a consensus on how to combat the issue,with more than a dozen proposals beingweighed, Bloomberg BNA reported.
For the story, go here.
Policymakers around theworld are stepping up efforts to tighten rules because a growing slice of corporate profits isnt taxed in any country.
Multinational companies can legally structure transactions so they dont pay tax anywhere, creatingstateless income that is coming under attack as countries seek to fill budget gaps. The Obama administration, Organization for Economic Cooperation and Development and tax officials from other countrieswant to reach a consensus on how to combat the issue,with more than a dozen proposals beingweighed, Bloomberg BNA reported.
For the story, go here.
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Microsoft, IBM Top List of U.S. Tech Firms with Biggest Overseas Profit Hauls
by Jordan Robertson (Bloomberg)
When it comes to the politically inflammatory issue of U.S. companies holding trillions of dollars in profits overseas, two tech firms get the lion's share of attention and blame for the practice: Apple and Cisco Systems.
That's because their chief executive officers, Tim Cook and John Chambers, have been among the most vocal lobbyists for a tax holiday to bring the cash home at a rate lower than the 35 percent currently required by the U.S. government.
Yet Apple and Cisco aren't the biggest hoarders of overseas cash. According to Bloomberg Rankings,which looked at the regulatory filings of the 70 companies in the S&P 500 Information Technology Index and the five in the S&P 500 Internet & Catalog Retail Index, the distinction belongs to Microsoft and IBM.
For the story, go here.
When it comes to the politically inflammatory issue of U.S. companies holding trillions of dollars in profits overseas, two tech firms get the lion's share of attention and blame for the practice: Apple and Cisco Systems.
That's because their chief executive officers, Tim Cook and John Chambers, have been among the most vocal lobbyists for a tax holiday to bring the cash home at a rate lower than the 35 percent currently required by the U.S. government.
Yet Apple and Cisco aren't the biggest hoarders of overseas cash. According to Bloomberg Rankings,which looked at the regulatory filings of the 70 companies in the S&P 500 Information Technology Index and the five in the S&P 500 Internet & Catalog Retail Index, the distinction belongs to Microsoft and IBM.
For the story, go here.
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Q&A: Essential facts about US tax inversions
by Anousha Sakoui (Financial Times)
A tax inversion is a legal transactionwhereby a company becomes the subsidiary of another company in another country and, as a result, the original company becomes subject to the tax laws of the foreign country instead.
These inversions can take different forms. The first casewas a cosmetics company called Helen of Troy in 1993. Incorporated in the US, it created a shell company in the tax haven of Bermuda, and made it the parent company of the US business.
However, following the deal, the US Internal Revenue Service (IRS) issued a clampdown against such transactionswhere theywere being carried out purely to avoid US taxes. It issued the first rules against anti-inversion in 1996.
Why arewe still talking about this today, then?
For the story, go here.
A tax inversion is a legal transactionwhereby a company becomes the subsidiary of another company in another country and, as a result, the original company becomes subject to the tax laws of the foreign country instead.
These inversions can take different forms. The first casewas a cosmetics company called Helen of Troy in 1993. Incorporated in the US, it created a shell company in the tax haven of Bermuda, and made it the parent company of the US business.
However, following the deal, the US Internal Revenue Service (IRS) issued a clampdown against such transactionswhere theywere being carried out purely to avoid US taxes. It issued the first rules against anti-inversion in 1996.
Why arewe still talking about this today, then?
For the story, go here.
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Tax bills help drain US corporate base
By Anousha Sakoui in London and James Politi inwashington (Financial Times)
For Doug Holtz-Eakin an adviser to Senator John McCain during his 2008 presidential campaign the relocation of some of the USs biggest companies to overseas tax domiciles brings back memories of Inbevs takeover of Anheuser-Busch that year.
When the Belgian brewer completed the deal, it not only cut jobs at the American groups headquarters in St Louis, Missouri it turned the operation into a mere US subsidiary of a global group based in Belgium.
When international mergers and acquisitions occur, the headquarters are not in the US, notes Mr Holtz-Eakin. Youre not going to see anyone do inbound headquarter investment [into the US]. I think its a big deal.
For the story, go here.
For Doug Holtz-Eakin an adviser to Senator John McCain during his 2008 presidential campaign the relocation of some of the USs biggest companies to overseas tax domiciles brings back memories of Inbevs takeover of Anheuser-Busch that year.
When the Belgian brewer completed the deal, it not only cut jobs at the American groups headquarters in St Louis, Missouri it turned the operation into a mere US subsidiary of a global group based in Belgium.
When international mergers and acquisitions occur, the headquarters are not in the US, notes Mr Holtz-Eakin. Youre not going to see anyone do inbound headquarter investment [into the US]. I think its a big deal.
For the story, go here.
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US acquirers cut taxes by relocating to Europe after mergers
by Anousha Sakoui in London and James Politi inwashington (Financial Times)
Michigan-based pharmaceuticals group Perrigo has said its acquisition of Irish biotech company Elanwill lead to re-domiciling in Ireland
A growing number of US companies are set to save hundreds of millions of dollars in tax by relocating to Europe after completing takeovers on the continent.
For the story, go here.
Michigan-based pharmaceuticals group Perrigo has said its acquisition of Irish biotech company Elanwill lead to re-domiciling in Ireland
A growing number of US companies are set to save hundreds of millions of dollars in tax by relocating to Europe after completing takeovers on the continent.
For the story, go here.
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Tax Evasion: Global Scrutiny of Stateless Income Growing Among Officials, Lawmakers, World Leaders
by Alison Bennett (Bloomberg)
The phenomenon of stateless income is growing in prominence on theworld stage,with lawmakers, key officials in the Obama administration, the Organization for Economic Cooperation and Development, and tax officials from other countries all throwing a spotlight onwhat is perceived as a growing problem.
For the article, go here. (Subscription required)
The phenomenon of stateless income is growing in prominence on theworld stage,with lawmakers, key officials in the Obama administration, the Organization for Economic Cooperation and Development, and tax officials from other countries all throwing a spotlight onwhat is perceived as a growing problem.
For the article, go here. (Subscription required)
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Corporate Tax Reform: Will the Third Time Be the Charm?
by Clint Stretch (Tax Analysts, Tax Notes Today)
Congress has reformed the corporate income tax not once, but twice, since President Reagan called for tax reform in his 1984 State of the Union address. Business leaders contemplating the next corporate tax reform effortwillwant to ask many questions, but at the core there is one essential question:will it be any different this time around?
For the article, go here. (Subscription required)
Congress has reformed the corporate income tax not once, but twice, since President Reagan called for tax reform in his 1984 State of the Union address. Business leaders contemplating the next corporate tax reform effortwillwant to ask many questions, but at the core there is one essential question:will it be any different this time around?
For the article, go here. (Subscription required)
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Economic Analysis: Another Pharmaceutical Inversion to Ireland; More on the Horizon
by Martin A. Sullivan (Tax Analysts, Tax Notes Today)
Another U.S. company has sidestepped the anti-inversion rules of section 7874 and is moving its legal domicile to Ireland. Perrigo Co., a Michigan-based provider of healthcare products, and Elan Corp. PLC, a Dublin-based biotechnology company, jointly announced July 29 that they intend to merge into a new Irish companywith the Perrigo name.
This news follows the May 20 announcement by New Jersey-headquartered Actavis Inc. and Dublin-basedwarner Chilcott that the two companies agreed to combine into a single company called Actavis PLC domiciled in Ireland. As in the proposed Perrigo-Elan deal, the U.S. party in the Actavis-Warner Chilcott deal is significantly larger than its Irish counterpart.
The announcements of these two similar deals are noteworthy because they are only the most visible part of a larger phenomenon. One recent news report described a behind-the-scenes frenzy of mergers and acquisitions activity motivated by U.S. companies seeking to lower their taxes by mergingwith Irish companies. About prospective mergers in the pharmaceutical industry, onewall Street analyst is quoted as saying, "Everyone's trying to find these strategies to lower their tax rates."
For the article, go here. (Subscription required)
Another U.S. company has sidestepped the anti-inversion rules of section 7874 and is moving its legal domicile to Ireland. Perrigo Co., a Michigan-based provider of healthcare products, and Elan Corp. PLC, a Dublin-based biotechnology company, jointly announced July 29 that they intend to merge into a new Irish companywith the Perrigo name.
This news follows the May 20 announcement by New Jersey-headquartered Actavis Inc. and Dublin-basedwarner Chilcott that the two companies agreed to combine into a single company called Actavis PLC domiciled in Ireland. As in the proposed Perrigo-Elan deal, the U.S. party in the Actavis-Warner Chilcott deal is significantly larger than its Irish counterpart.
The announcements of these two similar deals are noteworthy because they are only the most visible part of a larger phenomenon. One recent news report described a behind-the-scenes frenzy of mergers and acquisitions activity motivated by U.S. companies seeking to lower their taxes by mergingwith Irish companies. About prospective mergers in the pharmaceutical industry, onewall Street analyst is quoted as saying, "Everyone's trying to find these strategies to lower their tax rates."
For the article, go here. (Subscription required)
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VAT: OECD VAT Guidelines Need Clear Definition Of Permanent Establishment, Businesses Say
by Rick Mitchell (Bloomberg)
Recent draft international guidelines on value-added tax should be revised to clearly definewhat a businessestablishment is for the purpose of applying VAT to services and intangible goods across multinational enterprises, and to clearly explain how the guidelines interactwith existing transfer pricing rules, practitioners, business groups and multinationals said in comments released Aug. 5.
The Paris-based Organization for Economic Cooperation and Development,whose 34 member countries include theworld's advanced economies, released some 31 comment letters regarding the 63-page consolidated version of the draft OECD International VAT/GST Guidelines that it published Feb. 4 and accepted comments on until May 4.
For the story, go here. (Subscription required)
Recent draft international guidelines on value-added tax should be revised to clearly definewhat a businessestablishment is for the purpose of applying VAT to services and intangible goods across multinational enterprises, and to clearly explain how the guidelines interactwith existing transfer pricing rules, practitioners, business groups and multinationals said in comments released Aug. 5.
The Paris-based Organization for Economic Cooperation and Development,whose 34 member countries include theworld's advanced economies, released some 31 comment letters regarding the 63-page consolidated version of the draft OECD International VAT/GST Guidelines that it published Feb. 4 and accepted comments on until May 4.
For the story, go here. (Subscription required)
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Ending the Lockout of Overseas Earnings: An Update
by Douglas Holtz-Eakin & Gordon Gray (American Action Forum)
In 2011, the American Action Forum produced an analysis assessing the benefits of corporate tax reform. Among the reforms examined in the paperwas a temporary tax holiday on foreign earning by U.S. multinationals to encourage the repatriation of those funds. In order to inform the current debate, this update reexamines that analysis. At the time, the temporary policywas estimated to produce an increase of $360 billion in GDP and add 2.9 million jobs. Over the past year and a half, some key elements underpinning that analysis have changed. Those changeswould combine to, on net, increase the effect on the economy from a repatriation policy. Based on these revisions, a future repatriation policy could be expected to add $440 billion to GDP and 3.5 million jobs. Of course,with a permanent reform, the pace of the return of fundswould likely be lower and stretch out the timing of these impacts.
The underlying methodology of this update remains consistentwith the initial estimate.
For the report, go here.
In 2011, the American Action Forum produced an analysis assessing the benefits of corporate tax reform. Among the reforms examined in the paperwas a temporary tax holiday on foreign earning by U.S. multinationals to encourage the repatriation of those funds. In order to inform the current debate, this update reexamines that analysis. At the time, the temporary policywas estimated to produce an increase of $360 billion in GDP and add 2.9 million jobs. Over the past year and a half, some key elements underpinning that analysis have changed. Those changeswould combine to, on net, increase the effect on the economy from a repatriation policy. Based on these revisions, a future repatriation policy could be expected to add $440 billion to GDP and 3.5 million jobs. Of course,with a permanent reform, the pace of the return of fundswould likely be lower and stretch out the timing of these impacts.
The underlying methodology of this update remains consistentwith the initial estimate.
For the report, go here.
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Think-tank urges US to switch to territorial tax system
by James Politi (Financial Times)
US companieswould repatriate as much as $1.6tn or the bulk of the cash they have stashed overseas if America overhauls the treatment of international earnings in a sweeping reform of the corporate tax code, a Republican-leaning think-tank said on Tuesday.
The American Action Forum led by Doug Holtz-Eakin, a former director of the Congressional Budget Office during the Georgew. Bush administration is trying to build the case for the US to switch to a territorial tax system that imposes minimal taxes on foreign earnings.
For the story, go here.
US companieswould repatriate as much as $1.6tn or the bulk of the cash they have stashed overseas if America overhauls the treatment of international earnings in a sweeping reform of the corporate tax code, a Republican-leaning think-tank said on Tuesday.
The American Action Forum led by Doug Holtz-Eakin, a former director of the Congressional Budget Office during the Georgew. Bush administration is trying to build the case for the US to switch to a territorial tax system that imposes minimal taxes on foreign earnings.
For the story, go here.
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Tax Treaties: U.S., Belgian Competent Authorities Agree To Authorized OECD Approach to PE Profits
by Molly Moses (Bloomberg BNA Daily Tax Report )
The United States and Belgium have agreed to attribute profits to permanent establishments consistentwith the approach in the Organization for Economic Cooperation and Development's 2010 Model Tax Convention, according to an agreement made public Aug. 6.
For the story, go here. (Subscription required)
The United States and Belgium have agreed to attribute profits to permanent establishments consistentwith the approach in the Organization for Economic Cooperation and Development's 2010 Model Tax Convention, according to an agreement made public Aug. 6.
For the story, go here. (Subscription required)
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Rodriguez Continues Narrow Interpretation of Subpart F
by Andrew Roberson, David Noren, and Genevieve Tokic
Andrew Roberson, David Noren, and Genevieve Tokic provide observations on the Fifth Circuit's recent decision in Rodriguez v. Commissioner,which upholds a literal application of the rules under subpart F.
For the article, go here. (Subscription required)
Andrew Roberson, David Noren, and Genevieve Tokic provide observations on the Fifth Circuit's recent decision in Rodriguez v. Commissioner,which upholds a literal application of the rules under subpart F.
For the article, go here. (Subscription required)
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Convenient Myths
by Georgewhite (Tax Analysts, Tax Notes Today)
Georgewhite rebuts the myth that unrepatriated earnings of multinational corporations' foreign subsidiaries are trapped overseas.
For the article, go here. (Subscription required)
Georgewhite rebuts the myth that unrepatriated earnings of multinational corporations' foreign subsidiaries are trapped overseas.
For the article, go here. (Subscription required)
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Importance of Location Savings Called Into Question
by Matthew R. Madara (Tax Analysts, Tax Notes Today)
Recent interest in location savings may be misplaced, according to empirical analysis examiningwhether multinational corporations (MNCs) experience increased profitability after entering low-cost jurisdictions. Shanto Ghosh of Deloitte Tax LLP explained on July 31 that preliminary research he has performed to date indicates that few MNCs have a statistically significant increase in profitability after entering into China and India.
Location savings has become an increasingly important transfer pricing issue andwas among several items added to the OECD's discussion draft on the transfer pricing aspects of intangibles. David Ernick of PricewaterhouseCoopers LLP said the addition of the new section in the revised draft addressing location savings and other factors is important.whereas the prior draft merely stated that the added factors are not intangibles but are more like comparability factors, the new draft better defines the terms and how to account for them in a comparability analysis, he said.
For the story, go here. (Subscription required)
Recent interest in location savings may be misplaced, according to empirical analysis examiningwhether multinational corporations (MNCs) experience increased profitability after entering low-cost jurisdictions. Shanto Ghosh of Deloitte Tax LLP explained on July 31 that preliminary research he has performed to date indicates that few MNCs have a statistically significant increase in profitability after entering into China and India.
Location savings has become an increasingly important transfer pricing issue andwas among several items added to the OECD's discussion draft on the transfer pricing aspects of intangibles. David Ernick of PricewaterhouseCoopers LLP said the addition of the new section in the revised draft addressing location savings and other factors is important.whereas the prior draft merely stated that the added factors are not intangibles but are more like comparability factors, the new draft better defines the terms and how to account for them in a comparability analysis, he said.
For the story, go here. (Subscription required)
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News Analysis: Repatriation: Don't Try This at Home
by Lee A. Sheppard (Tax Analysts, Tax Notes Today)
The dirty little secret about multinationals'whinges about reducing residual taxation on repatriation of lightly taxed foreign earnings is that they do findways to repatriate tax free.
But after the Barnes Groupmemorandum decision, hokey repatriation strategies seem more difficult to sustain. Repatriationwas the subject of a panel at the July 30 meeting of the IFA USA Branch New York chapter.
Barnes Groupwas awell-chosen case on the government's part. All kinds of yuck factor evidencewas in court. The accounting firm that planned the dealwas compensatedwith a success fee of a percentage of the amount of tax saved. Therewas a draft opinion letterwith an assumed business purpose. The two tax haven vehicles formed for the transaction had no employees or earnings and ran flat. The judge accused the taxpayer of failing to follow its form.
For the article, go here. (Subscription required)
The dirty little secret about multinationals'whinges about reducing residual taxation on repatriation of lightly taxed foreign earnings is that they do findways to repatriate tax free.
But after the Barnes Groupmemorandum decision, hokey repatriation strategies seem more difficult to sustain. Repatriationwas the subject of a panel at the July 30 meeting of the IFA USA Branch New York chapter.
Barnes Groupwas awell-chosen case on the government's part. All kinds of yuck factor evidencewas in court. The accounting firm that planned the dealwas compensatedwith a success fee of a percentage of the amount of tax saved. Therewas a draft opinion letterwith an assumed business purpose. The two tax haven vehicles formed for the transaction had no employees or earnings and ran flat. The judge accused the taxpayer of failing to follow its form.
For the article, go here. (Subscription required)
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Employment Taxes: Multinationals Seek Tax Strategies to Grow Global Workforce, Offset Compliance Burdens
by Lydia Beyoud (Bloomberg BNA)
As multinational corporations increasingly seek to employ a mobile, globalworkforce to support their businesses across developed and developing markets, many companies are encountering a host of difficult tax compliance issues as governmentsworldwide become more tax-savvy, practitioners told BNA.
“There are a host of employer responsibilities and obligations, primarily, but not exclusively, on the tax side that can be daunting to organizations, Gardiner Hempel of Deloitte Tax LLP told BNA July 29. Permanent relocation of employees from their home country to another has been a growing trend, said Hempel, a partner in Deloitte's Global Employee Services practice.
For the article, go here. (Subscription required)
As multinational corporations increasingly seek to employ a mobile, globalworkforce to support their businesses across developed and developing markets, many companies are encountering a host of difficult tax compliance issues as governmentsworldwide become more tax-savvy, practitioners told BNA.
“There are a host of employer responsibilities and obligations, primarily, but not exclusively, on the tax side that can be daunting to organizations, Gardiner Hempel of Deloitte Tax LLP told BNA July 29. Permanent relocation of employees from their home country to another has been a growing trend, said Hempel, a partner in Deloitte's Global Employee Services practice.
For the article, go here. (Subscription required)
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BEPS Project Not Intended to Eviscerate Arm's-Length Principle, OECD Official Says
by Matthew R. Madara & Randall Jackson (Tax Analysts, Tax Notes Today)
The OECD Committee on Fiscal Affairs' base erosion and profit-shifting (BEPS) projectwasn't intended to remove the arm's-length principle from transfer pricing, as the committee recognizes the principle provides a basis for clarity and certainty, according to an OECD official.
The arm's-length principleworks directlywithin a system of legal personality that domestic tax systems depend on to administer tax systems, Michael McDonald, financial economist, Treasury Office of International Tax Counsel, said on August 1 during the 2013 National Association for Business Economics transfer pricing seminar in Arlington, Va.
For the story, go here. (Subscription required)
The OECD Committee on Fiscal Affairs' base erosion and profit-shifting (BEPS) projectwasn't intended to remove the arm's-length principle from transfer pricing, as the committee recognizes the principle provides a basis for clarity and certainty, according to an OECD official.
The arm's-length principleworks directlywithin a system of legal personality that domestic tax systems depend on to administer tax systems, Michael McDonald, financial economist, Treasury Office of International Tax Counsel, said on August 1 during the 2013 National Association for Business Economics transfer pricing seminar in Arlington, Va.
For the story, go here. (Subscription required)
Posted on
New Study: 82 of Top 100 Companies Used Tax Havens in 2012
by U.S. PIRG
The "vast majority" of large companies are avoiding U.S. taxes by using offshore tax havens,with $90 billion in taxes uncollected every year, according to a July 31 report from U.S. PIRG, a federation of state public interest research groups.
For the report, go here.
The "vast majority" of large companies are avoiding U.S. taxes by using offshore tax havens,with $90 billion in taxes uncollected every year, according to a July 31 report from U.S. PIRG, a federation of state public interest research groups.
For the report, go here.
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News Analysis: Does Revised OECD Intangibles Guidance Signal a Shift?
by Jaime Arora, Lee A. Sheppard, and Matthew R. Madara (Tax Analysts, Tax Notes Today)
In its revised discussion draft on transfer pricing aspects of intangibles and itswhite paper on transfer pricing documentation released on July 30, the OECD Centre for Tax Policy and Administration made good on its objective in the action plan on base erosion and profit shifting (BEPS) to make it easier for tax administrators to look beyond the form of taxpayers' intragroup contracts in the difficult area of transfers of valuable intangibles.
The revised draft may even signal a move away from the arm's-length standard toward formulary apportionment, David Ernick of PricewaterhouseCoopers LLP told Tax Analysts, adding that the changes to the transfer pricing rules could be the most significant in a lifetime. However, recent statements by OECD officials indicate that the arm's-length standard remains the foundation of theirwork.
For the story, go here. (Subscription required)
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Transfer Pricing: OECD Releases Revised Intangibles Draft, Along With White Paper on Documentation
Article by Kevin A. Bell (Bloomberg)
The Organization for Economic Cooperation and Development July 30 released its revised discussion draft on intangibles,which includes extensive changes from the earlier June 2012 draft, and awhite paper on transfer pricing documentation.
According to OECD, revisions to Section Badopt a more transactional approachwhile preserving a clear focus on the importance of functions performed, assets used, and risks assumed.
For the story, go here. (Subscription required)
For the discussion draft, go here.
For thewhite Paper, go here.
The Organization for Economic Cooperation and Development July 30 released its revised discussion draft on intangibles,which includes extensive changes from the earlier June 2012 draft, and awhite paper on transfer pricing documentation.
According to OECD, revisions to Section Badopt a more transactional approachwhile preserving a clear focus on the importance of functions performed, assets used, and risks assumed.
For the story, go here. (Subscription required)
For the discussion draft, go here.
For thewhite Paper, go here.
Posted on
August 2013 edition of PwC's International Tax News
International Tax News is designed to help multinational organisations keep upwith the constant flow of international tax developmentsworldwide. Among the topics featured in this month's edition are:
For the August 2013 issue of International Tax News, go here.
- New German tax legislation could affect multinationals
- US Congress considers international tax reform
- Saudi Arabia's tax treaty application simplified
- Hong Kong-Jersey double tax treaty enters into force
For the August 2013 issue of International Tax News, go here.
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Testimony of Dr. Laura DAndrea Tyson (before US Congress Joint Economic Committee)
Testimony of Dr. Laura DAndrea Tyson (before US JEC)
Tax reform should lower the corporate tax rate, broaden the base by eliminating tax expenditures, and shift to a hybrid international tax system to improve U.S. competitivenesswithout increasing the deficit, Laura D'Andrea Tyson of the University of California said at a July 31 Joint Economic Committee hearing.
For the testimony, go here.
Tax reform should lower the corporate tax rate, broaden the base by eliminating tax expenditures, and shift to a hybrid international tax system to improve U.S. competitivenesswithout increasing the deficit, Laura D'Andrea Tyson of the University of California said at a July 31 Joint Economic Committee hearing.
For the testimony, go here.
Posted on
UK House of Lords Comm Report: "Tackling corporate tax avoidance in a global economy: is a new approach needed?"
by UK House of Lords Economic Affairs Committee
The UK faces a serious problem of avoidance of corporation tax, due in part to the complexity of the tax regime in the UK, but mainly because the international tax system gives multinational companies opportunities to shift profits between countries inways that reduce their liabilities in the UK. This damages the economy and undermines trust in the tax system.
The UK and the G8 support the Organisation for Economic Cooperation and Development (OECD)'s Action Plan to tackle base erosion, published on 19 July 2013. It sets out a two-year programme to address the most egregious forms of tax avoidance. But it is not yet clear how effective the proposed solutionswill be or whether they can be achievedwithin the timescale.
The UK House of Lords Economic Affairs Committee decided to carry out a short inquiry to see how matters stood and to put forward proposals to help to reduce avoidancewhich the Government could adopt itself at the same time as it pursues agreement to reform the OECD framework governing where multinational companies pay corporation tax.
For the report, go here.
The UK faces a serious problem of avoidance of corporation tax, due in part to the complexity of the tax regime in the UK, but mainly because the international tax system gives multinational companies opportunities to shift profits between countries inways that reduce their liabilities in the UK. This damages the economy and undermines trust in the tax system.
The UK and the G8 support the Organisation for Economic Cooperation and Development (OECD)'s Action Plan to tackle base erosion, published on 19 July 2013. It sets out a two-year programme to address the most egregious forms of tax avoidance. But it is not yet clear how effective the proposed solutionswill be or whether they can be achievedwithin the timescale.
The UK House of Lords Economic Affairs Committee decided to carry out a short inquiry to see how matters stood and to put forward proposals to help to reduce avoidancewhich the Government could adopt itself at the same time as it pursues agreement to reform the OECD framework governing where multinational companies pay corporation tax.
For the report, go here.
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Meaningful Corporate Tax Residence
by Omri Marian (Tax Analysts, Tax Notes Today)
Omri Marian is an assistant professor of law at the University of Florida Levin College of Law.
This report summarizes some conclusions from a coming Boston College Law Review article inwhich Marian recommends a fresh look at corporate tax residence. Marian argues that the perception of meaninglessness is a result of misguided normative discussion and that it cannot be avoided by adopting a territorial system. In his report, Marian develops a functional model underwhich corporate tax residence tests are designed to support the policy purposes of corporate taxation, and the tests are not independently justified in normative terms. A functional approach suggests that the United States should adopt a corporate tax residence test underwhich domestic corporations for tax purposes are corporationswhose securities are listed for public trading in the United States, orwhose place of central management and control is in the United States.
For the article, go here. (Subscription required)
Omri Marian is an assistant professor of law at the University of Florida Levin College of Law.
This report summarizes some conclusions from a coming Boston College Law Review article inwhich Marian recommends a fresh look at corporate tax residence. Marian argues that the perception of meaninglessness is a result of misguided normative discussion and that it cannot be avoided by adopting a territorial system. In his report, Marian develops a functional model underwhich corporate tax residence tests are designed to support the policy purposes of corporate taxation, and the tests are not independently justified in normative terms. A functional approach suggests that the United States should adopt a corporate tax residence test underwhich domestic corporations for tax purposes are corporationswhose securities are listed for public trading in the United States, orwhose place of central management and control is in the United States.
For the article, go here. (Subscription required)
Posted on
Too Much Tax? Move To Ireland, From the Comfort of Your Home.
by Kate Linebaugh (Wall Street Journal)
American companies looking for lower taxes used to move to Bermuda. These days, they are heading to the Emerald Isle. At least in spirit.
"It is certainly a trend in the making," said Reuven Avi-Yonah, director of the international tax program at theUniversity of Michigan's law school.
For the story, go here.
American companies looking for lower taxes used to move to Bermuda. These days, they are heading to the Emerald Isle. At least in spirit.
"It is certainly a trend in the making," said Reuven Avi-Yonah, director of the international tax program at theUniversity of Michigan's law school.
For the story, go here.
Posted on
ACT Statement on President Obamas Comments on Tax Reform
by Alliance for Competitive Taxation (ACT)
President Obama's corporate tax reform proposal "is another clear sign of growing momentum" for tax reform,which should be revenue-neutral, reduce the corporate tax rate, and shift to a new international tax system, the Alliance for Competitive Taxation said in a July 30 statement.
For the release, go here.
President Obama's corporate tax reform proposal "is another clear sign of growing momentum" for tax reform,which should be revenue-neutral, reduce the corporate tax rate, and shift to a new international tax system, the Alliance for Competitive Taxation said in a July 30 statement.
For the release, go here.
Posted on
US PIRG: "Offshore Shell Games -- The Use of Offshore Tax Havens by the Top 100 Publicly Traded Companies"
by U.S PIRG
Many large U.S.-based multinational corporations avoid paying U.S. taxes by using accounting tricks to make profits made in America appear to be generated in offshore tax havens countrieswith minimal or no taxes. By booking profits to subsidiaries registered in tax havens, multinational corporations are able to avoid an estimated $90 billion in federal income taxes each year. These subsidiaries are often shell companieswith few, if any employees, andwhich engage in little to no real business activity.
This study reveals that tax haven use is ubiquitous among the largest 100 publicly traded companies as measured by revenue.
For the report, go here.
Many large U.S.-based multinational corporations avoid paying U.S. taxes by using accounting tricks to make profits made in America appear to be generated in offshore tax havens countrieswith minimal or no taxes. By booking profits to subsidiaries registered in tax havens, multinational corporations are able to avoid an estimated $90 billion in federal income taxes each year. These subsidiaries are often shell companieswith few, if any employees, andwhich engage in little to no real business activity.
This study reveals that tax haven use is ubiquitous among the largest 100 publicly traded companies as measured by revenue.
For the report, go here.
Posted on
As The Simpler Taxes for America Tour Comes to Pennsylvania, Americas Business Leaders Detail Benefits for Keystone State
by Business Roundtable (website)
Tax reform that reduces corporate tax rates and modifies international tax rules to stimulate investmentwould help Pennsylvania's economy, Business Roundtable said in a July 29 release on the tax reform tour visit to the state by Houseways and Means Committee Chair Dave Camp, R-Mich., and Senate Finance Committee Chair Max Baucus, D-Mont.
For the release, go here.
Tax reform that reduces corporate tax rates and modifies international tax rules to stimulate investmentwould help Pennsylvania's economy, Business Roundtable said in a July 29 release on the tax reform tour visit to the state by Houseways and Means Committee Chair Dave Camp, R-Mich., and Senate Finance Committee Chair Max Baucus, D-Mont.
For the release, go here.
Posted on
Tax Evasion: The OECD's Base Erosion Action Plan and Developing Countries
by Michael C. Durst (Bloomberg Daily Tax Report)
The Organization for Economic Cooperation and Development released its recommendations July 19 for global efforts to counter the much-publicized phenomenon ofbase erosion and profit shifting (BEPS).
Although the OECD's membership consists of countrieswith advanced economies, the OECD has taken efforts to consultwith representatives of developing countries, and its report makes special note of the damage that base erosion inflicts on developing economies.
Base erosion is indeed a serious problem for many developing countries, and the OECD is correct in highlighting this fact. Much economic activity in developing countries takes place in the informal sector,where the resulting income is largely immune from taxation. Therefore, an especially large proportion of developing countries' potential revenue base tends to consist of income generated by multinational enterprises' business in the countries.
For the report, go here. (Subscription required)
The Organization for Economic Cooperation and Development released its recommendations July 19 for global efforts to counter the much-publicized phenomenon ofbase erosion and profit shifting (BEPS).
Although the OECD's membership consists of countrieswith advanced economies, the OECD has taken efforts to consultwith representatives of developing countries, and its report makes special note of the damage that base erosion inflicts on developing economies.
Base erosion is indeed a serious problem for many developing countries, and the OECD is correct in highlighting this fact. Much economic activity in developing countries takes place in the informal sector,where the resulting income is largely immune from taxation. Therefore, an especially large proportion of developing countries' potential revenue base tends to consist of income generated by multinational enterprises' business in the countries.
For the report, go here. (Subscription required)
Posted on
Australia keen to lead way on BEPS issues
by Matthew Gilleard (ITR)
Australia is gearing up to try and achieve meaningful outcomes on action to tackle base erosion and profit shifting (BEPS) during its chairmanship of the G20 next year.
For the story, go here. (Registration required)
Australia is gearing up to try and achieve meaningful outcomes on action to tackle base erosion and profit shifting (BEPS) during its chairmanship of the G20 next year.
For the story, go here. (Registration required)
Posted on
Quick Deliverables Possible From BEPS Action Plan, Practitioner Says
by Randall Jackson (Tax Analysts, Tax Notes Today)
Aspects of the OECD's base erosion and profit shifting (BEPS) action planwill help accelerate the creation of deliverables, answering the charge that the need for domestic legislationwill prevent the action plan from facilitating real change, Manal Corwin of KPMG LLP said in a July 26webcast put on by her firm.
For the story, go here. (Subscription required)
Aspects of the OECD's base erosion and profit shifting (BEPS) action planwill help accelerate the creation of deliverables, answering the charge that the need for domestic legislationwill prevent the action plan from facilitating real change, Manal Corwin of KPMG LLP said in a July 26webcast put on by her firm.
For the story, go here. (Subscription required)
Posted on
Tax Reform: Tax Reform Could Be Fueled by OECD BEPS Action Plan, KPMG Practitioners Say
by Alison Bennett (Bloomberg)
Tax reform in the United States could be fueled by the action plan to curb base erosion and profit shifting recently unveiled by the Organization for Economic Cooperation and Development, KPMG LLP practitioners said July 26.
“The OECD report could form a basis for U.S. legislation, Hank Gutman, principal-in-charge of KPMG's Tax Legislative and Regulatory Services group, said on awebcast sponsored by KPMG.
For the story, go here. (Subscription required)
Tax reform in the United States could be fueled by the action plan to curb base erosion and profit shifting recently unveiled by the Organization for Economic Cooperation and Development, KPMG LLP practitioners said July 26.
“The OECD report could form a basis for U.S. legislation, Hank Gutman, principal-in-charge of KPMG's Tax Legislative and Regulatory Services group, said on awebcast sponsored by KPMG.
For the story, go here. (Subscription required)
Posted on
IRS pursuing 'stateless income' tax enforcement: official
by Patrick Temple-West (Reuters)
The U.S. Internal Revenue Service is pursuing tax enforcement cases against companies over the issue of "stateless income," a senior agency official said onwednesday in a reference to corporate profits that are not taxed by any country.
Erik Corwin, an IRS deputy chief counsel, said therewere international tax disputeswith companies, "most involving consequences of complex restructurings designed either to create stateless income or to affect a tax efficient repatriation."
For the story, go here.
The U.S. Internal Revenue Service is pursuing tax enforcement cases against companies over the issue of "stateless income," a senior agency official said onwednesday in a reference to corporate profits that are not taxed by any country.
Erik Corwin, an IRS deputy chief counsel, said therewere international tax disputeswith companies, "most involving consequences of complex restructurings designed either to create stateless income or to affect a tax efficient repatriation."
For the story, go here.
Posted on
Tax Evasion: OECD's BEPS Plan Proposes New Groups On Digital Economy, Aggressive Tax Planning
by Rick Mitchell & Alison Bennett (Bloomberg)
The Organization for Economic Cooperation and Development released an action plan July 19 proposing a new task force on taxation of the digital economy and aworking party on aggressive tax planning, as part of the action plan itwill present to finance ministers from theworld's leading economies to reduce abusive base erosion and profit shifting (BEPS).
Among a range of actions, the plan calls for a variety of changes to transfer pricing guidelines to prevent tax evasion, and it says OECDwill devise rules to require taxpayers to disclose aggressive tax planning arrangements. A key focus of the action plan is a crackdown onharmful tax practices,with an emphasis on compulsory, spontaneous exchange of information on rulings related to preferential regimes.
For the article, go here. (Subscription required)
The Organization for Economic Cooperation and Development released an action plan July 19 proposing a new task force on taxation of the digital economy and aworking party on aggressive tax planning, as part of the action plan itwill present to finance ministers from theworld's leading economies to reduce abusive base erosion and profit shifting (BEPS).
Among a range of actions, the plan calls for a variety of changes to transfer pricing guidelines to prevent tax evasion, and it says OECDwill devise rules to require taxpayers to disclose aggressive tax planning arrangements. A key focus of the action plan is a crackdown onharmful tax practices,with an emphasis on compulsory, spontaneous exchange of information on rulings related to preferential regimes.
For the article, go here. (Subscription required)
Posted on
Tax Evasion: Top U.S. Officials Praise OECD Action Plan As Step to Avoid Base Erosion, Profit Shifting
by Alison Bennett
Top U.S. officials praised an action plan unveiled by the Organization for Economic Cooperation and Development July 19 as an important step to address base erosion and profit-shifting.
Both Treasury Secretary Jacob J. Lew and Sen. Carl Levin (D-Mich.), chairman of the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, said July 19 the action plan is a key step in preventing cross-border tax avoidance.
For the article, go here. (Subscription required)
Top U.S. officials praised an action plan unveiled by the Organization for Economic Cooperation and Development July 19 as an important step to address base erosion and profit-shifting.
Both Treasury Secretary Jacob J. Lew and Sen. Carl Levin (D-Mich.), chairman of the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, said July 19 the action plan is a key step in preventing cross-border tax avoidance.
For the article, go here. (Subscription required)
Posted on
G20 sharpens attack on international corporate tax avoidance
by Vanessa Houlder (Financial Times)
Finance ministers from the Group of 20 leading nations plan to launch a new phase of the international crackdown on corporate tax avoidance thisweek even as UK business leaders arewarning their government to resistradical new solutions to profit shifting by multinationals.
For the story, go here.
Finance ministers from the Group of 20 leading nations plan to launch a new phase of the international crackdown on corporate tax avoidance thisweek even as UK business leaders arewarning their government to resistradical new solutions to profit shifting by multinationals.
For the story, go here.
Posted on
US blocks crackdown on tax avoidance by net firms like Google and Amazon
by Simon Bowers (The Guardian)
France has failed to secure backing for tough new international tax rules specifically targeting digital companies, such as Google and Amazon, after opposition from the US forced thewatering down of proposals thatwill be presented at thisweek's G20 summit.
For the story, go here.
France has failed to secure backing for tough new international tax rules specifically targeting digital companies, such as Google and Amazon, after opposition from the US forced thewatering down of proposals thatwill be presented at thisweek's G20 summit.
For the story, go here.
Posted on
OECD Proposes Plan for Crackdown on Companies Tax Avoidance
by Jesse Drucker & Rainer Buergin (Bloomberg)
The Organization for Economic Cooperation and Development proposed a blueprint for cracking down on tax-dodging strategies used by companies such as Google, Apple, and Yahoo!.
German Finance Ministerwolfgang Schaeuble called the OECD's plan amajor step. The proposal aims to develop rules over the next two years preventing companies from escaping taxes by putting patent rights into shell companies, taking interest deductions in one countrywithout reporting taxable profit in another, and forcing them to disclose to regulatorswhere they report their income around theworld.
“It's a matter of justice and fairness that multinational companies pay their fair contribution to national budgets, Schaeuble told reporters today before a meeting of Group of 20 finance chiefs and central bankers in Moscow.withoutfair burden sharing, in the endwewill destroy even a global, open economy, he said.
For the story, go here.
The Organization for Economic Cooperation and Development proposed a blueprint for cracking down on tax-dodging strategies used by companies such as Google, Apple, and Yahoo!.
German Finance Ministerwolfgang Schaeuble called the OECD's plan amajor step. The proposal aims to develop rules over the next two years preventing companies from escaping taxes by putting patent rights into shell companies, taking interest deductions in one countrywithout reporting taxable profit in another, and forcing them to disclose to regulatorswhere they report their income around theworld.
“It's a matter of justice and fairness that multinational companies pay their fair contribution to national budgets, Schaeuble told reporters today before a meeting of Group of 20 finance chiefs and central bankers in Moscow.withoutfair burden sharing, in the endwewill destroy even a global, open economy, he said.
For the story, go here.
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