Int'l Tax News

In this article, the author examines the coordinated transfer pricing control framework developed by the EU Joint Transfer Pricing Forum. He considers how it can resolve some of the problems caused by the transfer pricing framework that resulted from the OECD's base erosion and profit-shifting project.

Treasury is delayingwork on outstanding issues related to controlled foreign corporations' losses under an international provision of the 2017 tax overhaul. "The rules relating to tested loss adjustments in stock basiswill not be finalized as part of the GILTI package that is expected this summer," saidwade Sutton, senior counsel in the Treasury Department's Office of International Tax Counsel.

The year-long European Union effort to approve a temporary digital advertising tax thatwould hit companies such as Google Inc. and Facebook Inc.will likely face a pivotal defeat. Nordic countries joined by Ireland and Malta plan to oppose the EU's proposed tax on the turnover of large Internet companieswhen the EU finance ministers meet March 12.

India's government is planning a tax-incentive bonanza to boost the country's nascent electric vehicle sector thatwould include a 300 percent tax break for research and development.

Irelandwill soon start to increase its tax on carbon in attempt to meet its climate change goals for 2020 and beyond, the country's environment chief told business leaders in Boston March 11.

President Donald Trump's top economic adviser said that the administration's historic $1.5 trillion tax-cut packagewas already paying for itself amid sustained economic growth. "I thinkwe have already paid for a good chunk of it," National Economic Council Director Larry Kudlow said at an April 11 event inwashington, adding that the U.S.'s budget outlook is not "as bad as many people say." But Kudlow's claim contrastswith available government data.

Oops.when Donald Trump swept to power two-and-a-half years ago, he promised to unleash a Made-in-America investment boom. Cue pictures of the president inworthy,widget-producing factories. Add to that corporate tax cuts in late 2017, coupledwith measures to encourage the repatriation of overseas corporate cash piles, supposedly to boost capital expenditure. Events, however, have not played out quite as expected.

Democratic presidential candidate Elizabethwarren rolled out a proposal April 11 to levy a 7 percent tax on corporate profits above $100 million,which if enactedwould raise an estimated $1 trillion from the country'swealthiest businesses.

France is moving toward passage of the first digital tax bill that tech giantswould pay this year,with the National Assembly approving the measure late April 9 and sending it to the Senate for consideration in May.

Barrick Gold Corp.'s Zambian copper mine has been "severely impacted" by recent increases in mining royalties, according to the head of the company's local unit. Zambia introduced new mining royalties from January as part of efforts to ensure the country gets more benefit from its natural resources.

Microsoft Corp. is joining a climate advocacy group backed by big energy corporations and high-profile Republicans, an effort by the software giant to find middle ground on environmental issues that have polarized U.S. politics.

Indiawants to broaden its tax calculation rules to include the number of individuals using a foreign company's services, advancing its quest to boost taxation of large digital companies. In an April 18 report, the tax office proposed including usersÔøΩalongside established metrics like employees and assetsÔøΩwhen determiningwhat share of a multinational's profits are attributable to their Indian operations and can therefore be claimed as tax.

Countries in the European Union can restrict cross-border mergers if they suspect the move is an effort to set up letterbox companies to evade taxes under legislation passed by the European Parliament. The new cross-border merger legislation, approved April 18, establishes an "anti-abuse" clause thatwould halt abusive structures. The goal is to regulate the EU's freedom-of-establishment principle,which underpins the EU single market.

Swedish Moderate Party Leader Ulf Kristersson says that the government's plan to raise carbon and energy taxes for combined heat and power units later this year "risks creating really acute problems for Sweden's security of power supply," Dagens Industri reports.

Jersey Minister for External RelationsIan Gorston April 11 registered a draft law thatwould amend the recently enacted Taxation (Companies ÔøΩ Economic Substance) (Jersey) Law 2019with retroactive effect from January 1.

During discussions about conflicts between U.S. income tax treaties and the base erosion and antiabuse tax, Christopher Bowers explained how President Trump could use two code sections to respond to retaliatory taxes imposed by other countries.

The German government has submitted a draft law thatwould establish a 25 percent research and development allowance open to all taxpayers in an effort to encourage innovationwithout favoring large and profitable enterprises.

One idea emerging from OECD-levelwork on a long-term solution to tax the digital economy is that minimum taxation may relieve the pressure on developing countries to offer incentives, a top OECD official said.

In this article, the author discusses Germany's approach to taxing online advertising services, reviewing the arguments for treating payments as royalties and advocating instead for treating online advertising as a provision of services. She also offers insight and advice for both German customers and foreign service providers.

An individual has submitted a memorandum stating that Treasury and the IRS have ample authority to eliminate or significantly limit the allocation of U.S. shareholder expense to income in the global intangible low-taxed income, foreign tax credit basket.

Sen. Thom Tillis, R-N.C., has requested an exception to the base erosion and antiabuse tax under section 59A for payments made by U.S. manufacturers to their foreign affiliates that are service centers because that legislationwas never intended to capture manufacturers providing services to unrelated customers outside the United States andwould defeat the purposes of the BEAT.

The International Chamber of Commerce has proposed a new framework of internationally established tax principles, such as making tax proposals for the digital economy profits-based, applying the same principles of taxation to all forms of business, and eliminating double taxation in tax rules and systems.

India's Defense Ministry denied a press report that the French governmentwaived ÔøΩ143.7 million in taxes owed by Reliance Communications Ltd. because the Indian government agreed to buy 36 jets from France's biggest defense manufacturer.

Ten EU member states negotiating a financial transactions tax are said to be close to a legal text, but political issues remain.

In this article, the authors discuss the newly proposed foreign-derived intangible income regulations.

Bright-line rules from the IRS regarding transportation services and sales under the proposed regs on foreign-derived intangible income are indicative of an agency concernedwith administrability.

The IRS's Large Business and International Division has announced three new compliance campaigns that focus on transfer pricing for captive service providers and tax and information reporting requirements concerning offshore activities.

Francewill push for the European Union to adopt a regulatory framework on cryptocurrencies similar to the one it brought in lastweek at a national level, becoming the first major country to do so, French Finance Minister Bruno Le Maire said on Monday.

Poland's Ministry of Finance has issued a draft bill on a simplified advance pricing agreement process thatwouldwaive deductibility restrictions on intragroup expenses.

The Dutch governmentwill begin a broad reassessment of its tax system thatwill examine the current tax mix and its distributive effects, taxation of income from digital sources, and the future of corporate taxation.

South Korea's finance minister said the planned tax cut for stock transactionswill begin on June 3, according to local media reports on Sunday.

Consumers' outlook on the U.S. economyworsened in April, as a survey suggested the impact of tax cuts has now run its course for American households. The University of Michigan said Friday its preliminary index of consumer sentimentwas 96.9 this month, down from March's final reading of 98.4. That undershot economists' expectations for a preliminary reading of 98.0.

The European Union's executive branch is proposing that individual member countries drop their right to veto decisions on energy taxes, a move that could facilitate the introduction of a carbon tax across thewhole bloc.

A new report, citing data from a left-leaning think tank, reveals that at least 60 companies avoided paying taxes this year as a result of the new tax law ÔøΩ a total that is about twice as many as previous years.

Tax Cuts and Jobs Act is a regressive response to the challenges posed by today's global economy. Not only do the vast majority of the tax benefits from the legislation accrue to those at the top of the income distribution, but the legislationweakens the health security of ordinary Americans. Reduced spending on health insurance subsidies for poor Americanswill increase the number of uninsured Americans and generate more expensive premiums for those that remain insured.

A top candidate for the European Commission presidency said Thursday he supports a Europewide minimum corporate tax because European Union countries are no longer powerful enough to extract a fair amount of revenue from the largest companies on their own.

Democratic presidential candidate Elizabethwarren is proposing a new 7% tax on the largest, most profitable U.S. companies, a move thatwould increase corporate tax collections by about 30% over the next decade.

German Finance Minister Olaf Scholz told Reuters in an interview onwednesday hewould urge financial leaders during meetings inwashington later thisweek to aim for a minimum level of corporate taxation globally.

The 2017 tax law looks appealing to many citizens because it handed out a lot of money thatwould otherwise have gone to the Treasury. However, the oversized budget deficits, caused in part by the unavoidable aging of our population,will force lawmakers to revisit that tax law. The American people should be prepared for another very different dose of tax reform.

Investors are using multinational companies' tax disclosures, such as country-by-country reports, to inform their investment decisions - andwant consistent disclosure formats to make comparisons easier.

For years the advent of the digital economy has left countries stumped in their attempt to tax income earned by foreign firmswithout physical presencewithin their jurisdiction. International organizations and their member countries have failed in their attempts to tweak the rules of the international tax regime and address these challenges presented by the digital economy. This article argues that such conservative approach could notwork, and fundamental reform is inevitable.

The Austrian Government announced on April 3, 2019, a package of tax measures aimed at the digital economy, including a five percent tax on revenue derived from the sale of digital advertising services and the removal of the low-value VAT exemption threshold.

The Australian Taxation Office has opened a consultation on a draft Law Companion Ruling on the targeted integrity rule thatwill apply under the new hybrid mismatch regime.

Vera Jourová, European Commissioner for Justice, Consumers, and Gender Equality, spoke about digitalization, data protection legislation, and challenges that the United States and European Union face regarding online data control in an April 11 speech at the Brookings Institute.

Deliberate misstatements on trade invoices have created a trillion-dollar gap in the actual value of goods, leading to about $200 billion in annual tax revenue losses, according to estimates by Global Financial Integrity (GFI).

Latin American countries' preferred proposal for addressing the tax challenges of the digital economy is driven by an eroding tax base, according to a tax specialistwith the Inter-American Development Bank (IADB).