Int'l Tax News

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Is U.S. Multinational Dividend Repatriation Policy Influenced by Reporting Incentives?

A study in the September 2012 issue of the American Accounting Association journal The Accounting Review concludes that an accounting technique known as permanently reinvested earnings, or PRE, reduces multinational firms' repatriation of foreign affiliates' earnings (through dividends paid to U.S. parent firms) by roughly 20% a year.while acknowledging that high U.S corporate tax rates and the ability to defer payment play a major role in keeping earnings abroad, it finds that "repatriation is more sensitive to the repatriation tax rate in the presence of reporting incentives," so much so that "firmswith high reporting incentives repatriate, on average, 16.6% to 21.4% less per year than firmswith low reporting incentives."

"Our study suggests that companieswould repatriate about 20% more than they currently do if they didn't have this accounting tool that enables them to put a gloss on their financial statements," comments Leslie A. Robinson, an accounting professor at Dartmouth College,who carried out the studywith Prof. Linda Krull of the University of Oregon and Prof. Jennifer Blouin of the University of Pennsylvania.

For a press release on the article, go here

For the full article, go here

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Treasury official: US tax reform efforts must be informed by international fight against base erosion

Appearing at the recent GW/IRS Insititute on Current Issues in International Taxation, Treasury Deputy Assistant Secretary for International Tax Affairs Manal Corwin said efforts to US international tax rules must take placewithin the context of global efforts to combat base erosion. She said in particular that the OECD project on base erosion and profit shifting (BEPS)would "inform the conversation."

For complete coverage of Corwin's remarks, go here. (Subscription required.)

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Designing an "ironclad" US territorial tax system will be difficult, Shay says

Addressing the National Tax Association on November 16, Harvard Law School professor Stephen Shay --who has extensive international tax experience in both government and private practice --warned attendees that practitionerswill findways to avoid a territorial-based corporate tax.

For coverage of Shay's remarks, go here.

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Why advanced manufacturers need tax reform

In an opinion piece published on politico.com, Intel's Peter Cleveland explains how pro-innovation tax policy "can level the playing field for American businesses, expand our advanced manufacturing base and move forward an innovation-based economy."

To read Cleveland's article, click here.

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Durst suggests changes to OECD guidance on transfer pricing for intangibles

In a Tax Notes viewpoint, international tax practitioner Michael C. Durst,who formerly served as director of the IRS advance pricing agreement program, offers suggestions for improving the OECD's proposed modifications to its transfer pricing guidance regarding the taxation of income from intangible property.

To read Durst's viewpoint, click here.

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UK and German Finance Ministers call for corporate tax coordination

In a joint statement issued at the G-20 finance ministers meeting in Mexico city, the finance ministers of the United Kingdom and Germany called for better coordination of corporate tax regimes because changes in global business practices have exposedweaknesses in the current regimes.

The Daily Tax Report story on the statement may be found here.

The joint statement may be found here.

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US corporate taxes: myths and facts

In a recentwall Street Journal op-ed piece, Business Roundtable President John Engler discusses aspects of the US corporate tax system that influencewhether US corporations choose to operate overseas and if so,whether to repatriate foreign earnings.

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Kleinbard examines tax policy implications of "stateless income"

In a Tax Notes special report, University of Southern California Gould School of Law Professor Edward D. Kleinbard examines the tax consequences and policy implications of the phenomenon of "stateless income" -- income that is derived for tax purposes by a multinational group from business activities in a country other than the domicile of the group's ultimate parent company but that is subject to tax only in a jurisdiction that is neither the source of the production factors throughwhich itwas derived nor the domicile of the group's parent company.

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Full text of UK revenue official's speech to AEI/ITPF tax reform event is now available

David Gauke of Her Majesty's Treasury delivered the central presentation at the September 27 American Enterprise Institute event -- co-sponsored by the International Tax Policy Forum -- "UK tax reform: a road map for the US?"

The full text of Gauke's presentation is now available.

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Full video of AEI/ITPF event, "UK tax reform: A road map for the US?" is now available!

  • By ITPF
On September 27, the American Enterprise Insitutute,with the International Tax Policy Forum as co-sponsor, hosted an important tax policy event, "UK tax reform: A road map for the US?"

The event featured prominent US and UK international tax policy experts -- from the private sector, academia, and government -- assessing the applicability of the UK reforms to the US situation.

To view the video, please go to: http://www.aei.org/events/2012/09/27/uk-tax-reform-a-road-map-for-the-us/

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Clausing and Hufbauer debate merits of territorial taxation

In a series of Tax Notes articles, Kimberly A. Clausing, a professor of economics at Reed College, and Gary Clyde Hufbauer, the Reginald Jones Senior Fellow at the Peterson Institute for International Economics, debate the possible effects of a U.S. move toward territorial taxation of corporations.

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