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Int'l Tax News

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Toward a 21st-Century International Tax Regime (1)

  • By Reuven S. Avi-Yonah and Kimberly A. Clausing

Tax AnalystsBy Reuven S. Avi-Yonah and Kimberly A. Clausing

In this article, the authors argue that the United States should consider adopting sales-based formulary apportionment and applying it to all large enterprises because it is more likely to lead to a stable outcome than recent OECD proposals and has important advantages relative to other proposals such as residual profit allocation by income or the destination-based cash flow tax.

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Comparing CFC Rules Around the World

  • By Sebastian Due√ɬ±as

Tax AnalystsBy Sebastian Dueñas

Sebastian Dueñas examines controlled foreign corporation tax regimes in Japan, France, Germany, the United Kingdom, Colombia, the Netherlands, China, and Spain, regarding the possible expansion of existing anti-base-erosion CFC regimes or the potential adoption of a minimum tax.

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Macron Embraces Leadership Role in Digital Taxation

  • By Teri Sprackland

Tax AnalystsBy Teri Sprackland

Allowing tech giants to avoid taxationwhere they make money is a "crazy" system that provides for a "constant tax haven," French President Emmanuel Macron said.

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Tech Giants" Digital Tax Headache Aggravated by Location Tracking

  • By Isabel Gottlieb

BloombergBy Isabel Gottlieb

Tech companies said they face steep challenges to collect the data they'll need to pay France's new digital taxÔøΩwhich could strengthen the U.S.'s trade case against it.

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Ireland Can't Rely on Its Tax Allure After BEPS 2.0, Group Warns

  • By Stephanie Soong Johnston

Tax AnalystsBy Stephanie Soong Johnston

OECD-ledwork on taxing the digital economy may radically change the Irish business regime, so Ireland should focus on its nontax attractiveness to remain competitive once those changes are in place, a business group said.

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U.S. Companies United Against French DST

  • By Annagabriella Colon

Tax AnalystsBy Annagabriella Colon

Representatives of major U.S. tech companies and others testifying at a hearing on France's digital services tax alleged that the tax is discriminatory and creates uncertainty for taxpayers.

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New Jersey Scraps Controversial GILTI Apportionment Method

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

New Jersey has announced that itwill revise its controversial method for apportioning global intangible low-taxed income and foreign-derived intangible income.

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Retired CPAs Suggest Changes to Cloud Transaction Regs

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

Two retired CPAs have commented on proposed regulations (REG-130700-14) on cloud transactions and digital content, suggesting changes to some examples to reflect industry practice, an additional example to reflect profit-shifting structures, and the retention of an example regarding an application service provider.

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Lawmakers Want BEAT Carveout for Captive Finance Model

  • By Andrew Velarde

Tax AnalystsBy Andrew Velarde

A bipartisan group of four members of Congress is asking Treasury to expand the exclusion from the base erosion and antiabuse tax for captive finance companies.

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Multinational Air Organization Reviews Aviation Carbon Tax

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

The International Air Transport Association issued an analysis of Switzerland's proposal for an aviation carbon tax, outlining concernswith controlling emissions through taxation and the affect an emission increasewould have on Swiss families using air transportation.

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The OECD's Digital Economy Taxing Rights Allocation Mash-Up

  • By Tatiana Falc√ɬ£o

Tax AnalystsBy Tatiana Falcão

Tatiana Falcão examines the status of the OECD'swork program on the digitalization of the economy and considerswhat a consensus solution might look like.

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Explainer: Macron's Quest for an International Tax on Digital Services

  • By Reuters

French President Emmanuel Macron is pressing aheadwith a digital tax in France, a move U.S. President Donald Trump described as "foolishness", and the French leader is keen to reach an international agreement on taxing big tech companies. Late onwednesday, Macron urged the Trump administration to help reform global corporate taxes.

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OECD's Digital Tax Work Has Broad Ramifications For Ireland


As a small open economy, Ireland may be affected significantly by the OECD's proposals to modify how taxing rights are allocated among countries, Irish business association Ibec has said. The OECD is developing new digital tax rules thatwould be presented for adoption internationally at the end of 2020,whichwill focus on two central pillars.

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Cayman Explains How To Comply With New Economic Substance Rules


The Cayman Government has set out how companies should complywith new economic substance requirements,which must be met for certain companies to access the territory's tax regime. Under new requirements dictated in large part by the EU, companies that are tax resident in a low or no tax jurisdiction, and are engaged in key activities identified by the EU, must demonstrate that they meet minimum substance requirements as part of their annual tax return to access the territories' tax regimes.

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Brazil aims to reform complex tax system


The Brazilian tax system is globally known for its enormous complexity. Not only is the tax burden very high, but there are five different indirect taxes: ICMS, ISS, IPI, PIS and COFINS. This leads to innumerous ancillary obligations not to mention conflicts of jurisdiction between the federal government, states and municipalities on the tax levied on a great number of activities.

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Ninth Circuit Affirms Tax Court in Amazon Transfer Pricing Case

  • By Ryan Finley

Tax AnalystsBy Ryan Finley

The Ninth Circuit affirmed the Tax Court's 2017 decision in favor of Amazon, holding that the transfer pricing regulations' definition of the term "intangible property" excludes goodwill, going concern value, and other residual business assets.

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Economic Analysis: Quantifying the Benefits of Profit Shifting Under GILTI, Part 2

  • By Martin A. Sullivan

Tax AnalystsBy Martin A. Sullivan

In economic analysis, Martin A. Sullivan examines the overall tax effect of a U.S. multinational shifting profit among its controlled foreign corporations and finds that, due to a quirk in the basic architecture of the Tax Cuts and Jobs Act rules, moving income from the high-tax jurisdiction to the low-tax jurisdiction is not always a tax minimizing strategy and may in fact backfire.

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From TCJA Guidance, a New Regime Begins to Emerge

  • By Mindy Herzfeld

Tax AnalystsBy Mindy Herzfeld

In the third in a series on guidance addressing the Tax Cuts and Jobs Act, Mindy Herzfeld examines possible themes in that guidance.

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BEPS Implementation in China: Review and Outlook

  • By Wei Zhuang

Tax AnalystsBywei Zhuang

In this article, the author discusses the major regulations to implement the base erosion and profit-shifting project in China and analyzes the impact on tax administration and tax compliance. She also provides an outlook on China's tax administration in combating BEPS.

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International Tax Rules for the Digital Era

  • By Francois Chadwick

Tax AnalystsBy Francois Chadwick

In this article, the author proposes a multilateral solution to the tax challenges of the digital economy.

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GOP senator: Reduce taxes to offset tariffs on Chinese goods


Sen. Rick Scott (R-Fla.) on Monday called for tax cuts to offset the costs to American consumers of tariffs on Chinese goods during a CNBC appearance. "Anythingwe raise in tariffs,we should give back to the rank and public in tax reductions," Scott said Monday on CNBC's "Squawk Box," acknowledging the "short-term pain" from the ongoing tradewar between the U.S. and China.
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IRS Regs To Treat Cloud-Computing Transactions As Services


Cloud-computing transactions should be considered services, rather than a lease of property, according to long-awaited regulations proposed Friday by the U.S. Treasury ÔøΩ rules that could significantly affect how the income is classified under international provisions of the federal tax code. The rules generally confirm how companies have already been handling income from services such as digitally streamed content orweb hosting, but they leave to a future regulatory package the trickier issues of how taxpayers should determine the exact sourcing.
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US companies gain benefits under tailored carbon taxes


Multinational companies, including ExxonMobil and Microsoft, are supporting a corporate-friendly US carbon taxwith trade-offswhere they pay more tax in exchange for tax certainty, including protection from emission disputes.
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Trump's Push to Bring Back Jobs to U.S. Shows Limited Results


Mr. Trump's tax cuts unquestionably stimulated the American economy in 2018, helping to push economic growth to 2.5 percent for the year and fueling an increase in manufacturing jobs. But statistics from the government and other sources do not support Mr. Trump's claim about his policies' effectiveness in drawing investment and jobs from abroad.

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As President, Warren Could Shatter Global Tax, Trade Divide


Sen. Elizabethwarren, a Democratic presidential contender,wants to use U.S. trade agreements as leverage to ensure compliancewith international standards on preventing tax avoidance ÔøΩ an approach that could make both trade and tax negotiations much more complicated.

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U.S. Tech Industry Leaders: French Digital Service Tax Harms Global Tax Reform

  • By Reuters

Major tech firms and U.S. tech industry groups said on Monday that France's new digital services tax undermines the global tax regime and multilateral efforts to reform it. Alphabet Inc's Google, Facebook Inc andAmazon.comInc and major trade associations testified Monday against the tax at a hearing before the U.S. Trade Representative's office and other government officials.
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Facebook, Amazon Blast French Digital Tax In USTR Hearing


Representatives from Facebook, Amazon and Google said complyingwith a new French digital services taxwill present significant challenges, including creating new measures to track individual user data,while testifying at a U.S. trade representative public hearing Monday.
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US digital giants worried about domino effect from French DST


Tax heads at Amazon and Facebook said France's digital services tax (DST) adds uncertainty to an already ambiguous international tax environment because other countries can opt to undermine a multilateral solution too.
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U.S. Plotting Strategy to Strike Back at French Digital Services Tax

  • By Peter Menyasz

BloombergBy Peter Menyasz

Canada plans to hike taxes on stock options that top-paid executives receive from large companies. The changes proposed in draft legislationwould bring Canada's tax treatment of stock options more in linewith U.S. tax treatment of options and restore the tax break's focus on helping small companies, like start-ups.

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Apple, EU Set for September Showdown Over Record Tax Bill

  • By Stephanie Bodoni

BloombergBy Stephanie Bodoni

Apple Inc.'s 13 billion-euro ($14.4 billion) battlewith the European Union reaches the bloc's courts next month in a hearing set to throw the spotlight on antitrust commissioner Margrethe Vestager's crackdown on tax deals doled out to big companies.

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Singapore Summarizes Responses to Draft Income Tax Consultation

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

The Singapore Ministry of Finance issued a summary of responses to its consultation on proposed income tax changes thatwould, among other things, increase the deemed expense ratio and clarify the revocation of tax incentive awards.

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Norway Proposes Expanded Group Contribution Deduction

  • By Ryan Finley

Tax AnalystsBy Ryan Finley

The Norwegian government has proposed amended intragroup contribution rules to complywith a ruling by the European Free Trade Association Court,which held that the regime's residence restrictions violate the right to freedom of establishment.

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An Economic Analysis of Corporations" Reserves for Tax Audit Adjustments

  • By Thomas Horst

Tax AnalystsBy Thomas Horst

Thomas Horst continues his assessment of the effect the Tax Cuts and Jobs Act has had on the effective tax rates of large U.S. nonfinancial corporations based on information corporations provide in the financial statements they includewith their annual SEC Forms 10-K.

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ATO Says Tough Transfer Pricing Enforcement Approach Is Working

  • By Ryan Finley

Tax AnalystsBy Ryan Finley

The Australian Taxation Office's focused and transparent transfer pricing enforcement approach is paying off as many multinationals are abandoning high-risk arrangements and engaging more in the compliance process, according to an ATO official.

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GLOBE and the Supranational "Nudges" Affecting Domestic Tax Policy

  • By Lucas De Lima Carvalho

Tax AnalystsBy Lucas De Lima Carvalho

Lucas de Lima Carvalho discusses pillar 2 of the OECDwork program,which is intended to address base erosion and profit-shifting issues that have remained unresolved after the conclusion of the OECD's BEPS initiative.

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Amazon Issues Testimony for French DST Investigation

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

In testimony provided regarding the U.S. Trade Representative's investigation into the French digital services tax, Peter Hiltz, director of international tax policy and planning at Amazon, outlined the negative effect of the turnover tax and the inconsistency of unilateral digital tax laws as Amazon's primary concernswith the French DST.

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Using IPA 2015 as a Model for OECD Market Intangible Consultation

  • By William C. Barrett

Tax AnalystsBywilliam C. Barrett

William C. Barrett proposes a profit allocation approach to match the concepts under the OECD's pillar 1with the guiding principles previously established under the base erosion and profit-shifting project.

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Treasury's Proposal on Digital Content Sales May Cause Problems

  • By Kristen A. Parillo

Tax AnalystsBy Kristen A. Parillo

While Treasury's proposed rules for characterizing cloud computing transactions contained no big surprises, some practitioners say the draft sourcing rule for sales of digital content could present big problems for some foreign companies.

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U.S. Chamber of Commerce Opposes Tariff Response to French DST

  • By Annagabriella Colon

Tax AnalystsBy Annagabriella Colon

The U.S. Chamber of Commerce says the French digital services tax is the result of unsound tax policy, but it has recommended dispute proceedings at thewTO rather than tariffs on French imports.

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How the Vodafone Magyarország Opinion Affects EU Debate on Turnover-Based Digital Taxes

  • By Leopoldo Parada

Tax AnalystsBy Leopoldo Parada

Leopoldo Parada analyzes the EU advocate general's opinion in Vodafone Magyarország, explaining how the analysis of a Hungarian telecommunications tax affects ongoing debates regarding the legality of digital turnover-based taxes unilaterally passed by member states and then presenting an alternative technique for evaluating digital services taxes.

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OECD MAP Review Calls for U.S. Treaty Changes

  • By Ryan Finley

Tax AnalystsBy Ryan Finley

The OECD has released a second peer review monitoring report on U.S. mutual agreement procedures urging the United States to promptly amend its treaties that do not meet minimum dispute resolution standards.

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CJEU to Consider Double Taxation of Dividends

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

The Court of Justice of the European Union has published the reference for a case (C-403/19) onwhether EU law allows for the double taxation of dividends paid to a company subject to corporation tax in its state of residence and in another member state inwhich it must paywithholding taxes.

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U.S. Think Tank Responds to French DST Investigation

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

In their response to the section 301 investigation of France's digital services tax, U.S. think tank group the Tax Foundation, outlines the structure of the French digital services tax, the impact of the tax on foreign firms, and the costs of escalation using tariffs.

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U.S. Advocacy Group Says French DST Will Hurt Innovation Ecosystem

  • By Tax Analyst

Tax AnalystsBy Tax Analyst

In their response to the U.S. Trade Representative's investigation into the French digital services tax, U.S. advocacy group Americans for Tax Reform said the French taxwill harm consumers and small businesses more than large technology companies, the French DST violates international tax policy standards, and the French DSTwill harm the innovation ecosystem.

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Observers Express Support for U.S. Investigation of French DST

  • By Annagabriella Colon

Tax AnalystsBy Annagabriella Colon

Joe Kennedy, senior fellow at the Information Technology and Innovation Foundation, is among several observerswho have expressed support for the U.S. Trade Representative's section 301 investigation of France's new digital services tax.

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Taxing the Digital Economy: Will New Zealand Tread Where Most Will Not Go?

  • By Adrian Sawyer

Tax AnalystsBy Adrian Sawyer

In this article, the author discusses New Zealand's proposed digital services tax, outlines the government's goals in implementing a DST, and analyzes the potential implications.

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The Concept of Substance in a Post-BEPS World

  • By Oliver R. Hoor

Tax AnalystsBy Oliver R. Hoor

In this article, the author analyzes the importance of substance in international tax law and how it has been reshaped by the OECD's base erosion and profit-shifting project.

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Digital Services Taxes and Internation Equity: A Tribute to Peggy Musgrave

  • By Allison Christians

Tax AnalystsBy Allison Christians

In this article, the author considers the late economist Peggy Musgrave and herwork's lasting influence on modern-day tax and public finance policy, especially regarding efforts to tax the digital economy.

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How Section 245A Temporary Regs Limit Dividends Received Deductions, Part 2

  • By Carrie Brandon Elliot

Tax AnalystsBy Carrie Brandon Elliot

In the second part of her series, Carrie Brandon Elliot describes how the section 245A temporary regulations limit dividends received deductionswhen domestic corporate shareholders have extraordinary reductions in their CFC stock ownership.

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Inverters Return to the U.S., and Not Just for the Tax Rate

  • By Amanda Athanasiou

Tax AnalystsBy Amanda Athanasiou

Earnings-season announcements of major pharmaceutical firms undertaking multibillion-dollar deals may be a sign of the increased flexibility enjoyed by U.S. multinationals considering cross-border mergers and acquisitions since the Tax Cuts and Jobs Act.

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