Int'l Tax News

Suranjali Tandon of the National Institute of Public Finance and Policy, New Delhi, looks at the OECD Secretariat's "unified approach,"with a focus on the stancewhich has been taken by India so far, and the potential elements of the approachwhich may not be acceptable to India.

The U.S.wants the OECD's plan to revamp global tax rules to apply to more companies, but limit the countries that can tax them, a Treasury official said.

The IRSwants to know how it can help companies that are looking to unwind pre-tax law transactions to bring intangible property back to the U.S., according to a top agency official.

Corporations have brought back more than $1 trillion of overseas profits to the U.S. since Congress overhauled the international tax system and prodded companies to repatriate offshore funds, a report showed Thursday.

By Jennifer Blouin and Leslie A. Robinson

Putting an end to the base erosion and profit shifting (BEPS) activity of multinational enterprises (MNEs) is on the national agenda of nearly every country in theworld.while many influential papers suggest that the scope and magnitude of the BEPS problem is quite large,we show that these magnitudes are likely overstated due to the accounting treatment of indirectly-owned foreign affiliates in the BEA's U.S. international economic accounts data.we explain how this accounting treatment leads to double counting of foreign income and to misallocations to the incorrect jurisdiction.we demonstrate an appropriate correction, and show that the correction significantly reduces the magnitude of the BEPS estimates. For instance, our correction reduces an estimate of the U.S. fiscal effects of BEPS from 30-45% to 4-15% of corporate tax revenues lost to BEPS activity of MNEs (Clausing 2016). Ourwork has far-reaching implications, as the U.S.' national statistics have a unique accounting convention that can make comparisons of the U.S. national statistics to those of other countries difficult to interpret.

By David Elkins

Neutrality plays a central role in the literature on international taxation. In its most prevalent form, the concept of neutrality posits that in order to maximize aggregate globalwelfare, capital needs to flow towhere itwould produce the highest pretax return. The thesis of this Article is that neutrality is ordinarily inapplicable in the field of international taxation.

Ninety-one of America's biggest firms paid no federal taxes, the report found.

Carrie Elliot describes how final regulations narrow the Subpart F-related definition of related persons and the applicationof active rents exception for CFCs payments to property owners.

The OECD continuesworking on economic analysis and impact assessments of the pillar 1 and pillar 2 proposals thatcountries are considering and hopes to start publishing some findings in early 2020.

Mindy Herzfeld examines alternatives to the OECD's pillar 1 proposal following a stepping back from the process by the United States

A pillar 1 safe harbor regime is not a path the OECD is actively pursuing, but it isn't precluding the option of a safe harborregime, according toan OECD official

While muchwork remains on the Organization for Economic Cooperation and Development's new global taxing approach, a deal on reallocation of taxing rights and a minimum tax is likely because failure to agreewould cause chaos, an OECD official told Law360.

All members of the Organization for Economic Cooperation and Development inclusive framework on tax reform remain committed to the process, an OECD official told stakeholders attending a public consultation held Monday near Paris.

A group of 10 European Union countries is approaching an agreement on a financial transaction tax, Germany's finance minister, Olaf Scholz, has said in a letter to fellow ministers.

The UK's political parties have taken different stances onwhether and how to introduce a digital services tax (DST) despite the threat of US retaliation.

The Brazilian government has announced that itwill start presenting proposals to congress to overhaul the country's complex tax system starting in 2020.

Tax revenue as a percentage of GDP in OECD countries remained unchanged from 2017 to 2018, the first time in recent years that the ratio didn't increase, according to a report. Link:

If the U.S. cannot agree to a global deal on digital taxes, Francewill try for an agreementwith Europe, the French minister for digital affairs says on Bloomberg Television.

The 135 member countries in the OECD/G20 Inclusive Framework on BEPS are considering the adoption of a global minimum corporate income tax for taxing multinationals as part of the Pillar Two (GloBE) proposals for taxing the digital economy. Lorraine Eden of Texas A&M University provides a detailed analysis of the global minimum tax proposal, discussed its benefits and costs, and provides policy recommendations.

The European Union's chief trade negotiator Phil Hoganwill sit downwith U.S. Trade Representative Robert Lighthizer next month to discuss an American threat to hit Francewith tariffs on $2.4 billion of its exports.

Professorwei Cui of the University of British Columbia looks at the attempts to introduce a new international tax framework, and considers how effective current proposalswill be in addressing the challenges posed by the digital economy.

There is no point forcing all companies to do complex calculations proving they are outside the scope of proposed OECD minimum-tax rules, Rio Tinto's global head of tax said.

Democratic presidential candidate Joe Biden plans to pay for $3.2 trillion in policy proposalswith new and higher taxes on thewealthy and corporations, including a measure targeting companies like Amazon.com Inc. and Netflix Inc. that have reported paying no federal income taxes in recent years.

Italy's claim that Fiat Chrysler Automobiles NV underestimated the value of its U.S. business is just the latest installment in the country's campaign to reap billions of euros in unpaid taxes from multinational corporations.

It is realistic and makes an honest effort to limit any negative impact on economic growth.

French Finance Minister Bruno Le Maire urged the U.S. to support a global overhaul of how the digital economy is taxed.

By Darien Shanske and David Gamage

This essay argues that the states should conform to the post-2017 federal tax law's provision for Global Intangible Low-Taxed Income (or "GILTI"). This essay is directed at state legislators and their staffs and presents the argument as succinctly as possible. The authors' argument can be summarized in three sentences. First, states should conform to GILTI because there is significant evidence that profit shifting is substantially eroding their corporate tax bases. Second, GILTI is a tool for identifying shifted profits. Third, there are many legally and analytically soundways to apportion GILTI income to a state. The authors also ÔøΩ briefly ÔøΩ counter the standard objections to state conformitywith GILTI.

The General Court of the EU has upheld the decision of the European Commission in the Fiat case, confirming that a tax ruling by the Luxembourg tax authorities conferred an advantagewhich constituted illegal state aid. Oliver R. Hoor and Keith O'Donnell of ATOZ Tax Advisers (Taxand Luxembourg) discuss the Court's decision andwhat itwill mean for Luxembourg going forward.

French Finance Minister Bruno Le Maire says itwould be "incomprehensible" for the U.S. to sanction France for the introduction of a tax on digital revenue.

Companies are making the case they shouldn't face new rules and standards to complywith a global minimum tax plan.

The Treasury Department offered some relief to companies that lost foreign tax credits after investing in research and development operations in the U.S.

Mexican President Andres Manuel Lopez Obrador's administration may speed up plans for a tax overhaul to generate more revenue if 2020 budget assumptions turn out to be overly optimistic, a top official said.

The European Unionwill still pursue a digital tax even if a global push at the OECD fails, the EU's new digital czar told Bloomberg TV.

Japanese retail sales plunged in October after a sales tax hike and a super-typhoon kept shoppers at home, a factor the government is likely to consider as it mulls the size of a spending package to support growth.

Ireland is too reliant on corporation tax from a small number of international operations to fund spending, the state's fiscalwatchdogwarned.

The U.S. proposed tariffs on roughly $2.4 billion in French products, in response to a tax on digital revenues that hits large American tech companies including Google, Apple Inc., Facebook Inc. and Amazon.com Inc

Big internet companies have long been the target of complaints that they don't pay enough in taxes. Fed up, France imposed a 3% levy on the digital revenue of companies that make their sales primarily in cyberspace, such as Facebook Inc. and Alphabet Inc.'s Google. Other countries also are targeting companies, most ofwhich are American, that have multinational earnings that often escape the taxman's grip. The U.S. isn't taking this sitting down.

By Michael P. Devereux and Rita de la Feria

The authors argue that the current international tax system based upon the principles of source and residence is no longer suited to a globalisedworld economy, and the fundamentals of the international tax system need to be re-examined. They propose an R+F based cash-flow tax based on the principle of destination as a suitable alternative to taxing corporations in an international setting. The paper's aim is to discuss the legal and practical issueswhichwould arise in the implementation of such a tax, namely how a destination-based tax could be effectively designed and implemented. For this purpose the authors draw on experienceswith designing VAT systemsworldwide. It is proposed that the destination principle should be implemented through use of the customers' location as the main legal proxy.

Mindy Herzfeld considerswhat steps the United Stateswould need to take for the OECD's pillar 1 proposals to becomeworkable for theIRS, aswell as for other tax authoritieswhen applied to U.S. taxpayers.

In economic analysis, Martin A. Sullivan examines the OECD's attempt to rewire the international source rules so that more taxable profitsare allocated to marketjurisdictions than currently allowed under the arm's-length rules.

France strongly supports the OECD pillar 1 proposal for allocating more taxing rights to market countries and suggests a 12.5 percent ratefor global minimumtaxation under pillar 2, according to a top official.

The U.K. Labour Party pledged Thursday to return the corporation tax rate to 26% by 2022 and abandon the arm's-length standard ÔøΩ the traditional international approach for pricing transactions between related companies ÔøΩ if itwins next month's general election.

Representatives from business groups pressed the Organization for Economic Cooperation and Development on Thursday to simplify its proposed new international tax system by using the tax administrationswhere large companies are headquartered as a "one-stop shop" for payment.

By Mattias Cruz Cano

The growing number of countries introducing a digital services tax (DST) could lead to "taxwars" rates, trade sanctions and disputes,warned senior tax professionals debating the issue.

Amazon is pressing the OECD to change the scope of the unified approach to apply to all businesseswith explicit exemptions for specific sectors.

Amazon has suggested the OECD should adopt existing VAT principles to simplify the compliance and administration of its digital tax proposals under pillar one. It believes VAT rules on customer location could help, butwarns that privacy laws and VPNs mean it can only be part of the solution.

The retail banking sectorwants to be exempted from the pillar one proposals under the OECD's digital tax plan because of existing, heavy financial regulations and possible mismatcheswith OECD policy considerations under pillar one.

In this article, the author tracks the development of the EU and OECD actions to combat harmful tax competition and assesses the current state of play.

In this article, the author considers the OECD's "unified approach" proposal on the tax challenges of the digital economy, and questionswhether it represents a true international consensus.

The head of a Philippine business association said a tax reform program might be one of the reasonswhy 10 to 15 multinational companies' regional operating headquarters have pulled out of the country.