Int'l Tax News

Members of Congress on both sides of the aisle are introducing competing bills that aim to put a tax on carbon. The push to regulate greenhouse gas emissions come as both Democrats and Republicans face pressure from their constituents, and in some cases the fossil fuel industry itself, to regulate carbon emissions that lead to climate change.

Global drinks giant Diageo expects to make a payment next year of as much as £275 million ($340 million), it has said, to cover a U.K. tax break that the European Union has deemed an illegal subsidy to multinational companies.

President Trump promised to take "substantial reciprocal action" against France after the nation's President Emmanuel Macron thisweek signed into law a tax on American tech giants like Alphabet Inc. 's Google andAmazon.com Inc. "France just put a digital tax on our great American technology companies," Mr. Trump said on Twitter on Friday.

By Victor Adegite and Nwakaego Oguerionyeukwu

Victor Adegite and Nwakaego Ogueri-Onyeukwu discuss Nigeria's new transfer pricing regulations, focusing on how the rules treat transfers of the right to use intangible assets andwhether the rules contradict the arm's-length principle.

By Jennifer Mcloughlin and Stephanie Soong Johnston

Austria, Denmark, and Ireland are in the European Commission's crosshairs for not implementing measures under the 2016 anti-tax-avoidance directive.

By Teri Sprackland and Stephanie Soong Johnston

France's bill to introduce a 3 percent digital services tax has become law despite concerns that itwill distort competition in the EU and disadvantage U.S. companies.

By Tax Analyst

U.S. corporations repatriated $776.5 million in 2018 following the enactment of the Tax Cuts and Jobs Act,with $231 billion brought back from affiliates in Bermuda and $138.8 billion repatriated from affiliates in the Netherlands, according to a July 24 release by the Commerce Department's Bureau of Economic Analysis.

By Tax Analyst

S. 2140, the Stop Corporate Inversions Act of 2019, introduced by Senate Democraticwhip Richard J. Durbin of Illinois,would amend the tax code to discourage corporate inversions by treating combined foreign corporations as domestic corporations under specific circumstances.

By Andrew Velarde

Taxpayers looking to plan theirway out of the base erosion and antiabuse tax using the cost of goods sold exclusion should be mindful of the potential IRS response.

By Tax Analyst

Vietnam's Ministry of Planning and Investment released a draft regulation thatwould provide tax and other incentives in connectionwith a VND 1.7 trillion (about $73 million) National Innovation Center being built in Hanoi.

By Tax Analyst

The Organization for Economic Cooperation and Development has issued a review of jurisdictional domestic law regarding preferential tax regimes, finding 11 jurisdictions in linewith BEPS Action 5 minimum standardswhile the United Arab Emirates has committed to further legislative changes to alignwith minimum standards.

By Stephanie Soong Johnston

Eleven low- and no-tax jurisdictions, including the Bahamas, the Cayman Islands, and Jersey, have met the OECD's new substance requirements, according to the latest results from the organization's Forum on Harmful Tax Practices.

By Tax Analyst

Rep. Pete Stauber, R-Minn., has expressed support for regulatory clarity provided by final regulations (T.D. 9866) on global intangible low-taxed income, noting that the regswill provide needed relief to U.S. small businesses and shareholderswho have interests in controlled foreign corporations.

By Tax Analyst

The Organization for International Investment has followed up a 2018 letter, reiterating support for the removal of final regulations under reg. section 1.385-1, the per se recast rule under reg. section 1.385-3, and the U.S. consolidated group rules under reg. section 1.385-4, because the Tax Cuts and Jobs Act addressed Treasury's policy concerns underlying those rules.

By Andrew Velarde

Final rules on the Tax Cuts and Jobs Act's global intangible low-taxed income provision related to disqualified basis are likely to come under fire from some practitioners for exceeding statutory authority.

By Tax Analyst

The Irish Department of Finance has issued a summary of response to its November 2018 consultation on hybrid mismatch and interest limitation measures to be introduced as part of the implementation of the anti-tax-avoidance directives; thosewishing to address possible approaches to technical aspects of proposed rules should submit comments by September 6.

By Stephanie Soong Johnston

The United Kingdom is pressing forwardwith adopting EU legislation requiring promoters, intermediaries, and taxpayers to notify HM Revenue & Customs of cross-border arrangements that bear hallmarks of aggressive tax planning.

By Annagabriella Colon

Researchers focusing on a broad sample of public and private firms recently debunked the popular assumption that privately held firms engage in more tax planning than their public counterparts.

By Carrie Brandon Elliot

Carrie Brandon Elliot describes how section 904(b)(4)'s rules provide a more generous FTC limitation to section 245A dividend received deductions than section 250 GILTI and FDII deductions.

By Lee A. Sheppard

Lee A. Sheppard looks at section 245A from the Tax Cuts and Jobs Act,which implemented a territorial system for the United States, and explains how potential court challenges to the provision might emerge.

Bywilliam Hoke

A key official in Spain's caretaker government said stalled legislation to implement a digital services taxwill be pushed through once a new government is formed.

By Stephanie Soong Johnston

In a G-7 milestone, finance ministers have agreed a minimum level of corporate taxation is necessary to stamp out tax avoidance but have not yet come to a consensus on rates or taxation levels.

By Lauren Loricchio

Businesseswithout enough federal taxable income couldwind up ineligible for an IRC section 250 deduction, resulting in their owing the full amount of global intangible low-taxed income, according to a tax practitioner.

By Stephanie Soong Johnston

An EU advisory body has proposed a method to allocate residual profits from marketing intangibleswith a four-factor formula as away to adapt global tax rules for the digital age.

By Tax Analyst

Finance ministers of the G-7 nations may be close to reaching an agreement on minimum taxation principles, but morework is needed for a compromise on options to tax the digital economy, a French G-7 presidency source said.

By Ryan Finley

The largely complete forthcoming chapter on financial transactions to be added to the OECD transfer pricing guidelineswill likely defer to individual countries' laws on debt-equity characterization instead of prescribing any particular approach.

By Tax Analyst

"I urge France to focus their energies on reaching a consensus solutionwithin the OECD's Inclusive Framework for a sustainable international tax system that recognizes innovation and production and minimizes the adverse impact of the costs of double taxation on business investment and growth," said Bill Sample, chair of United States Council for International Business Tax Committee, following the announcement that Francewill implement a digital services tax.

By Tax Analyst

The Stop Corporate Inversions Act and the American Business for American Companies Actwould "end the corporate shell game that allows some companies to shift their address abroad" to avoid taxes by imposing various measures to stop inversions, Senate Democraticwhip Richard J. Durbin of Illinois and Sen. Jack Reed, D-R.I., said in a July 17 release.

By Ryan Finley

Any new international tax regime that emerges from the OECD'swork on taxing the digital economywill continue to rely heavily on the arm's-length principle, according to the Treasury Department's top international tax official.

By Johannes Frey

Johannes Frey and Florian Schmid examine recently released draft legislation thatwould introduce a new research and development tax incentive regime into German law.

By Tax Analyst

Ursula von der Leyen said shewill review the EU energy tax directive, reform the international corporate tax system, make the common consolidated corporate tax base a reality, and continue the fight against tax fraud in the political guideline agenda issued on behalf of her candidacy for president of the European Commission.

By Barry Larking

Barry Larking considers recent CJEU judgments that develop a general solution to tax avoidance, analyzes the Court's reasoning and how it has defined the general tax avoidance rule, and suggests some practical implications going forward.

By Tax Analyst

A drug company, supporting its motion for partial summary judgment in a U.S. district court, countered the government's assertions that the company's assignment of a contract to a limited liability companywas not an economic sham and that the outcome of its refund case should turn on section 482 transfer pricing issues.

By Andrew Velarde

Plaintiffs in a suit challenging the validity of the transition tax are seeking to make legal history in taking aim at the Justice Department's argument that the controversy should be dismissed for lack of jurisdiction.

Online advertising group Adevinta said the newly introduced digital tax in France lacked clarity butwould likely hit the Norwegian company's earnings as it posted second-quarter earnings roughly in linewith expectations. France's Senate gave final approval to a tax on big technology firms on Thursday. The 3% levywould apply to digital revenues from digital services earned in France by firmswith more than 25 million euros ($28 million) in French revenue and 750 million eurosworldwide. It is due to kick in retroactively from the start of 2019.

Last Thursday, the French Senate passed a digital services tax,whichwould impose an entirely new tax on large multinationals that provide digital services to consumers or users in France. Digital services include everything from providing a platform for selling goods and services online to targeting advertising based on user data, and the tax applies to gross revenue from such services. French politicians and media outlets have referred to this as a "GAFA tax," meaning that it is designed to apply primarily to companies such as Google, Apple, Facebook and Amazon ÔøΩ in otherwords, multinational tech companies based in the United States.

The U.S. on Monday offered more detail on its investigation of France's plan to raise taxes on foreign tech companies thatwas announced lastweek, laying out exactlywhich aspects of the plan it believes may run afoul of global trade rules. Following U.S. Trade Representative Robert Lighthizer's July 10 announcement of the probe, his office has formally launched an investigation to determinewhether the French "Digital Services Tax" planwould hurt American technology companies.

Cryptocurrencies are still capturing the attention of investors, traders and enterprises around the globe, lauded for their potential as a radically transformative force on the existing financial playing field. But legal systems are yet to catch up.

Multinational businesses are simplifying structures to navigate the rules that target controlled foreign corporations (CFCs) and their shareholders. ITR asked those tax headswho have adopted this approach to share their business's operational changes.

Germany's Ursula von der Leyen, seeking to become the first female head of the European Commission, has said shewants U.S. tech giants to pay "fair taxes" in the EU instead of gaming the different systems across the bloc to cut their bills. If she shouldwin the European Parliament's backing for the job, and implement the policy, it could further strain ties between the European Union and the United States, already troubled by differences over trade, antitrust and politics.

Finance officials from the Group of Seven rich democracieswillweigh risks from new digital currencies and debate how to tax tech companies like Google and Amazonwhen they meet at a chateau north of Paris startingwednesday. Those issues, raised by the impact of digitalization on theworld economy, are at the top of the agenda for a two-day gathering hosted by French Finance Minister Bruno Le Maire and including U.S. Treasury Secretary Steven Mnuchin.

The business tax reforms embedded in the Tax Cuts and Jobs Act (TCJA)remain the crown jewel of the Trump administration's economic policy. They are part of the reason that year-over-year macroeconomic growth has ramped up from 1.3 percent in the second quarter of 2016 to over 3 percent in early 2019, that labor productivity growth has rebounded to 2.4 percent in the first quarter of 2019 and that there is reason to expect an upshift from the previous trend growth rate of 2 percent or below. That crown jewelwill be at riskwhen Treasury Secretary Mnuchin attends thisweek's G7 Finance Minister summit in France.

Rule No. 1 for international economic affairs ought to be "Don't give Donald Trump a legitimate excuse for a tradewar." French President Emmanuel Macron missed the memo,which explainswhy Paris is pushing a new digital tax that even the Germans don'twant for Europe. The digital services tax approved by the National Assembly lastweek imposes a 3% levy on sales by global tech companies in France. If the companies have no profits, theywill still pay the tax. The theory is that 80-year-old global agreements that tax profits in a company's home country are outdated in the digital era.

By Tax Analyst

The European Commission explores challenges in the digital economy, protection of price competitionwith EU antitrust rules, and the fight against selective tax advantages in the competition policy 2018 report issued July 15.

By Tax Analyst

The Organization for Economic Cooperation and Development has encouraged taxpayers to complete a mutual agreement procedure questionnaire as part of the ongoing peer review process under action 14 of the BEPS Action Plan; comments on MAP access and availability of relevant guidance should be submitted by August 12.

By Stephanie Soong Johnston

The OECD has recommended that countries increase green taxation and eliminate harmful tax breaks to not only ensure sustainable growth but also reduce pollution and protect the environment.

By Stephanie Soong Johnston

The United Kingdom intends to introduce legislation in the next parliamentary session thatwould set up a public register of property beneficial ownership information so that it starts operating in 2021.

Bywilliam Hoke

Mexico's state-owned oil company, Petroleos Mexicanos (Pemex),will see its tax liability reduced if a proposal announced by President Andrés Manuel López Obrador is approved by the country's congress.

By Annagabriella Colon

The German Council of Economic Experts has delivered a report to Chancellor Angela Merkel highlighting the need for temporary carbon pricing in the transportation and building sectors until the EU emissions trading system is updated.

By Slim Gargouri

Bangladesh's Finance Act 2019 entered into force July 1, providing partial corporate income tax exemptions for selected manufacturing sectors and establishing new rules regarding dividends and retained earnings.