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Int'l Tax News

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OECD Fleshes Out Int'l Tax Reform Plans During BEPS Webcast


During awebcast on June 11, the OECD provided a technical update on itswork to develop new, modernized international tax rules for the digitalized economy. Under a mandate from countries that have agreed to implement the BEPS minimum standards – the BEPS Inclusive Framework – the OECD is developing new digital tax rules thatwould be presented for adoption internationally at the end of 2020. At its January 23-24, 2019, meeting, the BEPS Inclusive Framework agreed that the OECD'swork should focus on two central pillars.

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Brazil's challenge to becoming a member of the OECD


Brazil made a formal application to join the OECD in 2017, but the process is still miredwith political uncertainty. Base Firma's Davi Stantana de Jesus outlines how the economy can expedite its application by reforming its transfer pricing framework.

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Shell to Publish CbC Report This Year


Royal Dutch Shell PLCwill publish its profit and tax by country this year, a Shell executive told Dutch legislators. At a May 29 hearing of the Dutch House of Representatives Finance Committee, Alan McLean, Shell's executive vice president of taxation, also confirmed that the company pays no corporate income tax in the Netherlands because of favorable tax laws benefiting multinationals.

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Netherlands Announces 2019 Fiscal Agenda


On May 28, 2019, Dutch State Secretary for Finance Menno Snel issued an update on the Government's 2019 fiscal agenda. According to the document, in the second quarter of 2019, the Government intends to submit the following proposals to parliament: a bill for a minimum CO2 price for electricity generation; a bill to introduce a national aviation tax; and legislation implementing the second European Union Anti-Tax Avoidance Directive (ATAD 2) regarding hybrid mismatch arrangements.

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Trump's Tariffs Could Nullify Tax Cut, Clouding Economic Picture


President Trump's tax cuts provided a temporary jolt to the United States economy by putting more money into taxpayers' pockets. The tariffs that Mr. Trump has grown so fond of may have the opposite effect.

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Netherlands to Put Minimum Price on Carbon Emissions

  • By Tax Analysts

As of 1 January 2020 the governmentwants to introduce a minimum price for CO2 emitted in the Netherlands during the production of electricity. State Secretary for Finance Menno Snel and Minister of Economic Affairs and Climate Policy Ericwiebes submitted a bill on this matter to parliament today. A minimum carbon pricewill encourage businesses to make their operations more sustainable. The measurewill give electricity producers long-term certainty about their minimum costs, stimulating them to consider the effects of carbon emissions for people and the environment in their investments.

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Luxembourg's Amended Definition of a Permanent Establishment: Is It Really Something New?


Luxembourg's 2019 tax reform implements the EU anti-tax-avoidance directive (Council Directive (EU) 2016/1164, ATAD) and other base erosion and profit-shifting-related measures into domestic tax law, including an amendment of the permanent establishment definition. The new provision concerns the interpretation of the PE conceptwhen Luxembourg taxpayers have a PE in a treaty country.

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OECD Navigating Design Labyrinth for Minimum Tax Proposal


The United States' global intangible low-taxed income provision may provide some pointers as the OECD mulls a minimum tax proposal that could later serve as a model for changes to the GILTI regime.

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IRS and CRA Mulling Informal Consultations on APA Programs


The IRS and the Canada Revenue Agency are consideringworking together on informal consultationswith stakeholders about how to improve their respective advance pricing agreement programs, an IRS official said.

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Merkel Says International Corporate Tax Situation Unfavorable for Germany

  • By Reuters

The international corporate taxation landscape has changed to Germany's disadvantage recently, Chancellor Angela Merkel said on Tuesday, adding that her ruling coalitionwould try to address this.

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EU to Focus on Trade Tensions at G20, Seek Tax on Digital Firms-Document

  • By Reuters

Resolving global trade tensions must be a top priority to preserve an expected modest rebound in global growth, European Union finance ministerswill tell G20 counterparts thisweek amid an escalating U.S.-Chinese trade conflict.

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Germany's Scholz Views G20 Meeting as Milestone for Minimum Corporate Tax

  • By Reuters

German Finance Minister Olaf Scholz told Reuters onwednesday that he expects progress in tax cooperation at a G20 meeting in Japan thisweekend as a growing number of countries support a German-French proposal for a minimum corporate tax level.

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South African Carbon Tax Introduced On June 1


On May 26, 2019, South African President Cyril Ramaphosa signed into law the Carbon Tax Act No 15 of 2019,which came into effect on June 1, 2019, as announced by the Minister of Finance in the 2019 Budget.

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Profit Split Is Tough Solution To Digital Tax, Experts Say


The profit split method stands a decent chance of becoming the internationally agreed approach to taxing the digital economy, but itwill be far from easy to apply, according to transfer pricing specialists speaking at a conference Tuesday.

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Global Digital Economy Work Partly a Product of U.S. Tax Overhaul


The 2017 tax overhaul "set the stage" for U.S. participation in the OECD'swork to adapt global tax rules to the digitalization of the economy said Brian Jenn, Treasury's deputy international tax counsel, said at the U.S. Council for International Business/OECD International Tax Conference inwashington.

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Aim OECD Tax Work at 'Above-Normal' Profits, U.S. Official Says


Global negotiations on taxing the digital economy should focus on "reallocating out of above-normal profits," according to Lafayette "Chip" G. Harter, deputy assistant secretary of international tax affairs at Treasury.

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Achieving Global Minimum Tax at OECD a 'Slippery Slope': Harter


Establishing a global minimum tax for multinationals' foreign entities at the OECD level could become tricky as countries try to define that rate, a Treasury official said.

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Global Tax Plan Could Stifle R&D, Former Microsoft Tax Exec Says


The OECD's plan to rewrite global tax rules to give more taxing rights to additional countries could harm investment in research and development, a former vice president forworldwide tax at Microsoftwarned.

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Digital Tax Still on the Horizon for New Zealand, Official Says


New Zealand's government is still mulling adoption of a digital service tax like one being considered by several European Union countries, a senior tax official said.

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Accounting Group Calls on Senate to Ratify Bilateral Tax Treaties


The Senate should approve eight pending bilateral tax treaties, the American Institute of CPAswrote in a May 23 letter to the chair and ranking member of the Senate Committee on Foreign Relations.

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Solo Digital Taxes Exacerbate Trade Tensions, Irish Minister Says


Unilateral digital tax planswill increase trade tensions and hurt efforts to reach global consensus on how to tax the digital economy, Irish Finance Minister Paschal Donohoe said.

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Trudeau Faces Carbon Tax Fight as Alberta Prepares to End Levy


Alberta's new United Conservative Party government introduced a bill to repeal the oil-rich province's carbon tax, setting up a legal showdownwith Prime Minister Justin Trudeau over a cornerstone of his environmental policy.

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Intangibles-Focused Digital Tax Fix Most Likely From OECD: CPAs


The OECD's rewrite of global tax rules should focus on a plan that uses brand-related assets to shift more taxing rights to countrieswhere companies' consumers are, the Association of International Certified Professional Accountants said.

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Poland Says Tax Award Shouldn't Pause For Appeal In France


The Polish government's bid to enforce a $2.6 million arbitration award against American investorswho sued over the country's tax laws should not be paused pending a challenge to the taxes in France, Poland has told a Massachusetts federal court.
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A new chapter in Brazil's tax reform


A new Brazilian proposal for tax reform,which is extremely important for the country's development, is under discussion. A broad tax reform is necessary and claimed by the Brazilian society because the current system leads to uncertainty, risks and many conflicts.
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SEC filings show US MNE uncertainty over long-term impact of TCJA


Financial reports show businesses such as Target and JPMorgan Chase lowering their effective tax rates, but they remain uncertain about the long-term impact of US tax reform,which has limited corporate planning and restructuring.
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Long-Awaited Crypto Guidance Coming


Federal guidance on the tax treatment of cryptocurrencies ÔøΩ guidance that practitioners have beenwaiting on for years ÔøΩwill be released soon, Internal Revenue Service Commissioner Chuck Rettig has told Congress.
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Conflicts rise over which OECD pillar should come first


Businesses and tax experts involved in the digital tax debate cannot agree overwhich of the OECD's proposed pillars ought to be implemented first, andwhether there is a real need for either.
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Microsoft, other business leaders head to Capitol Hill in support of carbon tax


Representatives for business giants including Microsoft, Capital One and Johnson & Johnson, are heading to Capitol Hill thisweek to push for a carbon tax, Roll Call reported Monday. Officials from more than 75 companieswill meetwith Congresswednesday to call for a "meaningful" national price on carbon emissions, a sustainable investment group behind the effort told Roll Call.

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Trump's tax law had small effect on economy, wages: Study


President Trump's signature tax law, the 2017 Tax Cuts and Jobs Act, leftwages growing less quickly than the overall economy,which itself got only a minimal boost, according to a Congressional Research Service (CRS) report released Tuesday. "On thewhole, the growth effects tend to show a relatively small (if any) first-year effect on the economy," the report found.

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Intangibles: Re-engineering substance


The BEPS project has had a fundamental impact on how multinational companies are structuring their intangible assets. Joshwhite investigates how businesses are reorganizing their tax arrangements to meet their commercial needs.

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Profit attribution to Indian PE: Treading a different path Author: International Tax Review

  • By International Tax Review

Arvind Singal and Nitin Kapoor of RBS Services India analyzes India's move away from transfer pricing norms and the global consensus on taxing rights, andwhat it could mean for companies.

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Johnson & Johnson's Amos discusses her BEPS 2.0 proposal


The tax directorwho stunned participants at the OECD's digital tax consultationwith a fleshed-out proposal for formulary apportionment of corporate profits speaks to International Tax Review in an exclusive interview.

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Survey results: Effective IP management


Multinational companies told ITR how they dealtwith the challenge of restructuring their intellectual property in aworld of tax disputes, greater transparency and new rules.

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New ranking reveals corporate tax havens behind breakdown of global corporate tax system; toll of UK's tax war exposed


Decades of taxwars among theworld's richest countries are unravelling the century-old global corporate tax system, new research finds. Forty per cent of today's cross-border direct investments reported by the IMF – $18 trillion in value – are being booked in just 10 countries that offer corporate tax rates of 3 per cent or less.

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Belgium Expects Big Losses From Consolidated Corporate Tax Base


Belgiumwould lose 9,400 jobs and ÔøΩ2.3 billion of GDPwith the introduction of a common corporate tax base, according to a recent study.

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EU Finance Ministers to Discuss New FTT Proposal


A new compromise proposal for a financial transaction tax (FTT) patterned after the French FTTwill be on the tablewhen the Economic and Financial Affairs Council meets June 14.

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Countries Greenlight OECD Digital Tax Workplan


More than 100 countries have approved an OECD program ofwork for tackling the tax challenges of the digital economy, taking one step closer toward a potential internationally agreed solution by 2020.

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Spain proposes EU carbon tax on energy imports

  • By Reuters

Spain's acting government has called on the European Union to assess a potential carbon tax on power imports to protect the bloc's interests and help it to pursue its environmental targets amid growing public concern over climate change.

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U.K. Government Refines IP Offshore Receipts Legislation


HM Revenue & Customs has opened a consultation on amendments to rules regarding taxation of the digital economy that aim to keep large multinationals from taking advantage of low-tax jurisdictions to stow their intellectual property.

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Economic Analysis: Fixing GILTI, Part 2: The Rate and the Foreign Tax Credit

  • By Sullivan. Martin A.

In economic analysis, Martin A. Sullivan argues that Congress should pay for a lower effective tax rate on global intangible low-taxed income by increasing the 20 percent haircut on foreign creditable taxes, increase the haircut on foreign tax credits in 2026 instead of reducing the section 250 deduction, and reduce foreign tax creditability instead of raising the rate.

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Two Interest Expense Deduction Limits for Effectively Connected Income


Carrie Brandon Elliot reviews how the section 163(j) proposed regulations intersectwith section 882 and impose two limits on interest expense deductions that reduce effectively connected income.

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Tariffs, Taxes, and Trade: Shifting Dynamics


In news analysis Mindy Herzfeld looks at the turbulent relationship among tariffs, taxes, and trade and its influence on multinational business decision-making.

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FDII Challenges Likely Shelved Pending Digital Economy Project


Complaints against the U.S. foreign-derived intangible income regime may become moot depending on the outcome of the OECD's project addressing the tax challenges of the digital economy.

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Ireland Sees Hope in OECD Pillar 1 Work on Digital Taxation


Minimum taxation proposals under pillar 2 of the OECD-ledwork on taxing digitalization are problematic for Ireland, but discussions on taxing intangibles and intellectual property under pillar 1 hold promise, Ireland's finance minister said.

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Digital Work Plan Advancing to OECD Inclusive Framework


The OECD inclusive framework could soon sanction a roadmap for cultivating a potential global consensus on reshaping the international tax system, according to an OECD official.

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Ireland must be open to some international tax changes - finance minister


Ireland must be open to considering a broader concept of how companies are taxed in the modern digitalizedworld, Finance Minister Paschal Donohoe said on Thursday, setting out his country's stall in a debate that is key to its economy.

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Ride-Hailing, Food Delivery Platforms to Withhold Mexican Taxes


The Mexican government said it has reached agreementwith several online ride-hailing and food delivery companies over thewithholding of VAT and corporate income tax (ISR) on their services.

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New CIOT President Talks U.K. Business 'Cultural Change' on Tax


Taxation of large companies in the United Kingdom is now comprehensive and "more robust than it has ever been," Glyn Fullelove said in his inaugural speech as president of the Chartered Institute of Taxation.

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French Finance Minister Defends DST Against Concerns in Senate


France's proposed 3 percent digital services taxwill not be challenged by the European Commission as state aid because it closely follows the commission's recent proposal, Finance Minister Bruno Le Maire told French legislators.

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