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An Alternative Solution for France's Digital Services Tax
ByJeff Ferry, Bill Parks, Arpan Dahal
France's new digital services tax aimed at internet companies has raised good questions about the best system fortaxing corporate income in the internet age.
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Hypothetical Distribution, Part 2: Determining Pro Rata GILTI Items
Carrie Brandon Elliot reviews how hypothetical distribution rules for determining pro rata shares of subpart F income are modified todetermine pro ratashares of GILTI items.
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TCJA Corrections: Some Technical, Some Not
In the second in a series reviewing provisions that could be included in upcoming tax legislation, Mindy Herzfeld looks at recentproposals to addressboth extenders and technical corrections to the Tax Cuts and Jobs Act.
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Court Sustains European Commission's Meddling in Transfer Pricing
In news analysis, Lee A. Sheppard examines the Starbucks and Fiat state aid cases, both decided by the General Court of theEuropean Union, askinghow to reconcile the different outcomes
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Extending Carbon Taxes to All Emissions Would Boost Revenue: OECD
Countries are far from doing enough to tax carbon emissions, especially outside of road transport, the OECD said.
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Shipping Industry Pushes for Exemption from OECD Tax Plan
A rewrite of international tax rules for the modern digital economy shouldn't apply to shipping businesses, a shipping industry group said.
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Countries Can Better Tax Gains from Offshore Sales: Economists
Developing countries often lose revenuewhen they can't tax capital gains from sales of assets in their country made offshoreÔøΩbut they could close those gaps, two IMF economists said.
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Tech Groups Press U.S. to Fight Mexico's Digital Tax Plan
Mexico's lawmakers are preparing to vote on boosting tax collection from digital companies, and major U.S. tech industry groups are trying to enlist the U.S. government to fight the effort.
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Tech Giants Hit With Digital Tax Under Italian Budget Plan
Italywill join France and Austria in taxing tech giants such as Apple Inc. and Facebook Inc. starting in 2020, the government said Oct. 16 in its budget plans.
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United Kingdom Tax Agency Issues Policy Paper on Amendments to Offshore Intangible Income Legislation
The United Kingdom HM Revenue and Customs Oct. 14 issued a policy paper on amendments to offshore intangible income legislation,which taxes the income received by entities in low tax jurisdictions from U.K. sales of intangible property.
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Digital Service Taxes and the Broader Shift From Determining the Source of Income to Taxing Location-Specific Rents
Market countries that use novel tax instruments, such as properly designed digital services taxes (DSTs) to expand their capacity to reach such location-specific rents, are not acting unreasonably.whether they prove permanent or merely transitional, DSTs look like harbingers of a new era inwhich entity-level corporate taxation rightly focuses more on locational rents, and less on decades-old doctrinal and semantic debates concerning the supposedly "true" source of economic income and value creation.
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INSIGHT: OECD Work Programme√¢$the Wider Implications (Part 1)
By Ceinwen Rees and Rhiannon Kinghallwere
The OECD has produced a "work programme" to address the tax challenges presented by the digital economy. In this two-part article, Ceinwen Rees and Rhiannon Kinghallwere of Macfarlanes look at the proposals in the OECD programme,with particular focus on the implications for investment managers, and respond to some of the most frequently asked questionswhich arise.
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INSIGHT: OECD Work Programme√¢$the Wider Implications (Part 2)
By Ceinwen Rees and Rhiannon Kinghallwere
With the Organisation for Economic Development and Co-operation (OECD) proposals in the early stages of negotiation there are more questions than answers.we have tried to answer here a few of the questionswe are commonly asked.
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Digital Tax Plans Will Boost Countries with Largest Markets: OECD
By Hamza Ali
Large market countries like India and Chinawill see their tax coffers boosted under OECD plans to improve the taxation of companieswithin the fast-growing global digital economy.
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EU Finance Chiefs Agree to Keep U.S. Off Tax Havens List
By Joe Kirwin
European Union finance chiefs agreed Oct. 10 to not list the U.S. as a tax haven, despite the country not meeting the bloc's criteria for the automatic exchange of foreign residents' bank data.
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OECD takes aim at tech giants with plan to shake up global tax
The OECD has proposed a global shake-up of corporate taxation, overturning a century of rules that have allowed digital groups such as Facebook, Apple, Amazon, Netflix and Google to shift profits around theworld to minimize their tax bills.
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Taxing Tech: The Future of Digital Taxation
The article introduces the larger context of the controversy over digital taxes, and considers the likelihood of countries reaching an international solution. It acknowledges that an effective international solution,where countries agree to the necessary technical details and not just to high-level principles, is unlikely given that many countries now benefit from the current system and concludes that, if countries cannot agree to real international reform, the international tax systemwill face many more years of countries imposing a cascade of inconsistent and overlapping digital tax measures on tech companies.
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The Geometry Of International Tax Planning After The Tax Cuts And Jobs Act
The authors provide a method to estimate the GILTI tax from a U.S. MNC's financial statementswhen such information is not publicly disclosed and illustrate the ETR and GILTI tax effects for a small sample of public firms after the TCJA, and discuss some likely changes in international tax planning going forward.
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Italy Set to Renew Tax Scheme to Spur Investment​
Italy plans to renew corporate tax breaks to support investments in innovation andwiden the measures to include spending on environmentally friendly projects, Economy Minister Roberto Gualtieri said on Monday. Italy's new government, made up of the anti-establishment 5-Star Movement and the centre-left Democratic Party, has promised an expansionary 2020 budget to try to revive chronically stagnant growth in the euro zone's third largest economy.
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EU Competition Chief: Ready to Act on Digital Tax​
EU Competition Commissioner Margrethe Vestager says the bloc should agree on a tax to ensure global digital companies pay "their fair share" in Europe. Vestager,who has been designated to continue herwork in the new European commission, said during her confirmation hearing by EU lawmakers that "wewant these taxation rules to be based on a global agreement. But if that's not possible by the end of 2020, thenwe are prepared to act."
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Tech Giants Shift Profits to Avoid Taxes. There's a Plan to Stop Them.​
Digital tax dodgers, take heed: International leaders have advanced a plan to prevent large multinational companies like Apple, Facebook and Amazon from avoiding taxes by shifting profits between countries. It's an effort to de-escalate a global battle over how to tax the digital economy. The framework proposal, releasedwednesday by the Organization for Economic Cooperation and Development,would allow countries to tax large multinationals even if they did not operate inside their borders.
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IRS Clarifies Tax Treatment Of Crypto Hard Forks, Airdrops​
The splitting of a cryptocurrency blockchain under a "hard fork" does not create taxable income if no new cryptocurrency is received, but taxable income is generated by "airdrops" that deliver new cryptocurrency, the IRS said in guidance releasedwednesday. The guidance came in the form of a revenue procedure and set of frequently asked questions addressing how virtual currency holders must report cryptocurrency transactions to the Internal Revenue Service and the calculation of gains and losses and tax basis in cryptocurrencies. The guidance also addressed the tax treatment of cryptocurrency received for services.
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Switzerland Drops Off EU Tax Gray List After Reforms​
European Union leaders confirmed Thursday that Switzerlandwould be coming off the bloc's "gray list" after passing tax reforms to bring it into linewith international standards in May. The United Arab Emirateswill be coming off the black list, and the Marshall Islands has been moved from the black to the gray list, ministers confirmed at a meeting of the EU's economic and financial affairs council. Albania and Serbia,which are both in the formal process of joining the EU, have also both dropped off the gray list, alongwith Costa Rica and Mauritius.
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OECD presents 'unified approach' to profit allocation​
The OECD has put forward a proposal to apply a new formula to residual profits in its digital tax report. The organisation hopes this compromisewill resolve the impasse, but companies don't expect radical change.
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Canada's Green Party Advocates "Robot Tax" for Large Businesses
By Annagabriella Colon
Ahead of Canada's federal election October 21, the Green Party has pledged to protectworkers in an increasingly automatedworld by imposing a tax on employers for every human replaced by a machine.
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Trudeau's Liberal Party Floats Canadian Digital Services Tax
By Stephanie Soong Johnston
Canadian Prime Minister Justin Trudeau's Liberal Party is taking aim at large tech companieswith a reelection campaign proposal for a 3 percent revenue-based levy modeled after France's controversial digital services tax.
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Preliminary Estimates of the Likely Actual Revenue Effects of the TCJA's Provisions
By Thomas Horst
Thomas Horst examines the actual revenue effects of four international provisions two years after the enactment of the Tax Cuts and Jobs Act.
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Starbucks and Fiat Bolster Commission's Case in Apple Appeal
By Ryan Finley
Although the European Commission had mixed success defending its Starbucks and Fiat state aid decisions in court, both decisions' broad endorsement of the commission's legal theories may significantly hinder the ongoing appeal of the Apple decision.
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Mexico's VAT reforms risk foreign digital platforms exiting market
Foreign companies targeted by Mexico's VAT reforms are evaluating the potential losses they face from the burdensome and costly measures. Companies may exit the Mexican market if talkswith the government fail.
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OECD statistics show continued effectiveness of MAP cases globally and in US
Mark Martin and Thomas Bettge of KPMG in the US examine recent OECD statistics on mutual agreement procedure cases, showing that such cases continue to be resolved effectively both in the US and around theworld.
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People Functions Redux: A New Approach to Profit-Splitting Factors
By Ara Stepanyan and Steven D. Felgran
Ara Stepanyan and Steven D. Felgran propose an approach to profit allocation or formulary apportionment that builds on the concept of people functions, using employees' measurable contributions on the supply side and consumers' measurable contributions on the demand side.
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Anticipating EU Tax Haven Hybrid Rules
By Lee A. Sheppard
In news analysis, Lee A. Sheppard describes how Luxembourg and Irelandwill implement the hybrid mismatch rules required by the EU's second anti-tax-avoidance directive.
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The French Digital Fig Leaf
By Mindy Herzfeld
Mindy Herzfeld examines the French digital services tax that's expected to primarily affect large U.S. tech companies and the various options the United States has to combat it.
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The von der Leyen Commission and the Direction of EU Tax Policy
By Rick Minor
In this article, the author considers incoming European Commission President Ursula von der Leyen's College of Commissioners and the formal tax priorities of her commission.
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The TCJA and the Treaties
By H. David Rosenbloom and Fadi Shaneen
H. David Rosenbloom and Fadi Shaheen examine how changes implemented by the Tax Cuts and Jobs Act interactwith U.S. tax treaties.
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EU Court Overturns Starbucks State Aid Decision, Affirms Fiat
By Ryan Finley
An EU court has annulled the European Commission's ÔøΩ26 million recovery order for aid allegedly granted by the Netherlands to Starbucks through an advance pricing agreementwhile dismissing Luxembourg's appeal of the commission's Fiat decision.
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Chile-U.S. Tax Treaty May Need Update to Fall Into BEAT
By Annagabriella Colon
Final passage of the long-pending Chile-U.S. tax treaty may hinge on its amendment via a protocol to account for the base erosion and profit-shifting provisions of the U.S. Tax Cuts and Jobs Act.
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Remaining Tax Treaties Face Strong Head Winds
By Jad Chamseddine
The Senate Foreign Relations Committee chair hopes the Senatewill approve more tax treaties this year, but he expects delays.
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New Tax Commissioner Vows to Use TFEU to End Tax Unanimity
By Elodie Lamer
The incoming EU tax commissioner has promised to use the controversial article 116 of the Treaty on the Functioning of the European Union to circumvent the EU Council's unanimity rule in taxation.
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France Proposes €1 Billion Corporate Tax Cut, Drawing Criticism
By Stephanie Soong Johnston
France's draft 2020 budget proposed billions in tax cuts, including a ÔøΩ1 billion decrease for companies, but it did not impress some business groups,which said itwas unlikely to boost competitiveness and investment.
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The BEAT of Fashion: Anticipating the Final Rules
By Lee A. Sheppard
Lee A. Sheppard previews the upcoming final BEAT regulations and predicts some of the changes that might be made to the proposed guidance.
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The GILTI High-Tax Exception: The Good, the Bad, and the Ugly
By Chetan Vagholkar and Eric Horvitz
In this article, the authors summarize some good, bad, and ugly results of making the global intangible low-taxed income high-tax exception election under the proposed regulations.
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EU Members Divided Over Scope of Corporate Tax Reform Proposals
ByJoe Kirwin
European Union member countries are divided overwhether the bloc's proposals for a common corporate tax base and new anti-tax abuse provisionswould apply to all companies or only to large multinationals.
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Internet Giants Threatened With Forced Disclosure in France
By Helene Fouquet
France's former digital affairs ministerwants to force internet giants like Amazon, Alphabet, Microsoft, Facebook and Apple to reveal how much profit they make in France, saying the companies are understating their French activities to a vast extent.
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OECD lays foundation for fairer taxing rights
Proposals from the OECD, a forum for research and debate among mostly rich countries, provide a promising basis for a new model. Theywould give governments a "tax right" over the profits of consumer-facing businesses depending on the share of saleswithin their territory.
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OECD Base Erosion Tax Faces Info-Sharing Hurdles
An under-the-radar proposal from the Organization for Economic Cooperation and Development to stem income shifting could require a new degree of information sharing, something experts saywould be either a difficult obstacle or a new chapter in theworld's shift toward tax transparency. The OECD's proposal, part of its sweeping digital tax project, is similar to the 2017 U.S. base erosion and anti-abuse tax andwould aim to reduce deductions on payments meant to shift income out of a jurisdiction. But, unlike the BEAT, itwould hinge on a calculation of how much the payment is taxed in the receiving jurisdiction.
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Netherlands Planning Slower But Deeper Corporate Tax Cut
On September 17, 2019, Dutch State Secretary for Finance Menno Snel presented the Government's 2020 Tax Plan to the House of Representatives. It includes revised plans for corporate tax cuts. Under legislation approved in December 2018, the rate of corporate tax on income exceeding EUR200,000 (USD221,000)was due to fall from 25 percent to 22.55 percent in 2020 and to 20.5 percent in 2021. However, under the new proposals, corporate tax above this thresholdwill remain at 25 percent next year, before falling to 21.7 percent in 2021.
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Chilean government introduces important changes to proposed tax on digital services
Sandra Benedetto and Fernando Binder analyse several amendments made by the Chilean government to the Tax Bill submitted to Congress in August last year, one ofwhich seeks to tax digital serviceswith value added tax (VAT).
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How could the TMT industry respond to digital tax proposals?
The technology, media and telecommunications (TMT) sector may be directly affected by the G20/OECD digital economy tax proposals. Sajeev Sidher and Kaidi Liu of Deloitte Tax LLP look at the uncertainties ahead.
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EU court rules in favour of Starbucks, but against Fiat over state aid
Starbucks haswon its case against the European Commission's 2015 state aid decision today, but the EC clawed back awin against Fiat Chrysler in two conflicting cases over the use of the transactional net margin method.