Int'l Tax News

The new R&D Tax Incentive is opening up opportunities for more businesses doing R&D in New Zealand. Anand Reddy, Jill Somerfield and Nadinewilliams of PwC New Zealand consider how to maximize the benefits for your business.

U.S. multinationals got a mixed bag of IRS guidance today on new international measures under the 2017 tax overhaul that includes a much-requested exclusion under a new category of foreign income and proposed anti-abuse rules thatwould restrict tax deductions related to foreign-source dividends.

New IRS anti-abuse regulations limit a tax break available under the 2017 tax law for certain dividends a U.S. company receives from a foreign company inwhich it owns shares. The IRS released the rules in temporary and final form June 14. The agency also released proposed regulations that cross-reference the temporary rules.

U.S. multinationals now have guidance on a 2017 tax law provision intended to ensure that companies pay at least a minimum amount of tax on overseas profits.

Ten European Union countries have agreed on a revenue-sharing plan for the bloc's proposed financial transaction tax thatwould reimburse the administrative costs of countries that have small stock markets and few large companies.

Pierre Moscovici, the EU's top tax official, said that tax policy is crucial in the European Commission's efforts to curb income inequity as it seeks to battle populism among its member countries.

The Trump administration is deep in talkswith 129 other countries on implementing a new standard for taxing digital companies, including Alphabet Inc.'s Google, Facebook Inc. and Amazon.com Inc.ÔøΩbut its heart lies elsewhere in the discussions.

Germany and Francewill push European Union finance ministers June 14 to rally around a financial transaction tax that could help fill a potential EU Brexit budget hole.

Dutch opposition lawmakers lambasted a senior finance official for dialing down a motion aimed at ensuring that multinational corporations are taxed more fairly in the Netherlands.

Robert Goulder critiques the Ninth Circuit's revised opinion in the Altera litigation,which breathes new life in the commensurate-with-income language of section 482.

Citing pressure from adverse EU case law, the Dutch government has opened a public consultation on amending or abolishing the country's tax consolidation regime to complywith the EU's freedom of establishment rules.

Treasury's new anti-abuse rule on the dividends received deduction that addresses a timing mismatch between the participation exemption regime and other international tax rules has teed itself up as a target of future taxpayer litigation.

The IRS and Treasury's change of approach in newly proposed regs navigating partnerships under the global intangible low-taxed income provision could result in significantly less income inclusions for some taxpayers.

The Treasury Department has narrowed the reach of a new tax aimed at technology and pharmaceutical companieswith overseas income,wiping out an unintended consequence of President Donald Trump's 2017 tax overhaul.

The New Zealand tax office is preparing to take aim at some of theworld's biggest tech giants,with Google, YouTube, Uber, Facebook and Instagram allwithin its sights. In consideringwhether to enact a new digital services tax, New Zealand is following the lead of numerous other countries. Simon Akozu and Zoe Barnes, of MinterEllisonRuddWatts, considerwhether it is the right time for New Zealand to follow suit.

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.

France plans to scrap 1 billion euros (890.15 million pounds) of tax breaks for companies to help fund a pledged 5-billion-euro reduction in personal income taxes, Budget Minister Gerald Darmanin said on Sunday.

The European Union should allow Italy to cut tax and invest in the green economy to boost the country's economy, Deputy Prime Minister Luigi Di Maio said on Monday.

A group of 75 conservative organizations and leaders on Monday sent a letter to Congress expressing their opposition to a carbon tax, pushing back at an idea that has received support from politicians and policy experts on both sides of the aisle as away to combat climate change.

A group of national security specialists urged a U.S. House of Representatives committee Monday to adopt legislation thatwould target shell companies, citing a report that says the anonymous ownership of businesses can facilitate tax evasion and other crimes.

U.S. corporate balance sheets continue to feel the impact of the 2017 U.S. tax overhaul, as companies pivot their capital allocation strategies in response to the new law. Companies funneled record amounts of cash to stock buybacks, dividends, capital spending and acquisitions last year. As a result, U.S. corporate cash holdings fell to a three-year low of $1.685 trillion in 2018, according to a report from Moody's Investors Service Inc.

Britain's next Prime Ministerwill have the dual challenge of leaving the European Union and setting up the newly independent country for economic success. So it's a good sign that some top contenders for the Conservative Party leadershipÔøΩthewinnerwill replace Theresa MayÔøΩstartedwith tax reform as campaigning began on Monday.

Alexandra Readhead investigateswhether IMF and OECD proposals on how to tax the digital economy, apply formulary apportionment, shift taxing rights and address profit shifting could apply to the natural resources sector. Alternatively, could source-based taxation improvements hold the answer?

As G20 countries ratify the OECD'swork on taxing the digital economy, tax executives expressed their concerns to International Tax Review that the body has not moved beyond proposals that they find problematic.

The European Parliament is expected to continue to push progressive legislation on tax matters following an election last month that saw eroded support for centrist parties. In recent years the Parliament has advocated laws requiring big corporations to publish their tax affairs and has voted for a common corporate tax base in Europe. It has also expressed support for taxing large digital corporations and pushed for laws that require tax advisers to disclose more of their activities to authorities.

Some US taxpayers are considering inversions because they fear negative tax implications if the Democrats gain control of the presidency and Congress in the 2020 elections and raise tax rate.

Whilewe'rewaiting for the big Tax Cuts and Jobs Act regulations on June 22, section 956 is still in the law, so there are final section 956 regulations to think about. To recapitulate, global intangible low-taxed income and section 245A regulations are expected by June 22. The GILTI ruleswill be accompanied by a notice of proposed rulemaking, the scope ofwhich is unclear, according to Raymond Stahl, senior counsel, IRS Office of Associate Chief Counsel (International). Practitioners are particularly concerned about the effective date of the section 245A rules, because companies made interim distributions that they hopewill qualify for the dividends received deduction (DRD).

The article assesseswhat effect the Tax Cuts and Jobs Act had on the effective tax rates (ETRs) of large U.S. nonfinancial corporations based on information in the generally accepted accounting principles financial statements corporations includewith their annual SEC Forms 10-K. I evaluate both the TCJA's one-time adjustments,which mainly affect corporations' ETRs for 2017, and the TCJA's permanent adjustments,which mainly affect corporations' ETRs for 2018.

Costa Rica's Ministry of Finance has released a draft resolution implementing VAT rules for nonresidents supplying cross-border digital services in Costa Rica. The country is in the process of converting its sales tax to a VAT, effective July 1. The VATwill be levied on all supplies of goods and services. The standard ratewill be 13 percent, but reduced rates of 4 percent, 2 percent, and 1 percent, aswell as some exemptions,will apply to specific supplies. Export saleswill be zero-rated.

The OECD's goal by fall is to release an initial report assessing the impact of various proposals for overhauling the international tax system in the digital age, according to officials.

Each country comes from different economic backgrounds, so it's no surprise that they have different views and opinions on how to address the tax challenges of digitalization, Asō added. For countries to reach consensus on a solution by the end of 2020, "we must all bring a spirit of compromise to the table," Asō said. The G-20 should lead by example, he said, because "high-level political engagement and endorsement by G-20 memberswill make it possible to overcome this hurdle and to close the remaining gaps in our views."

Global foreign direct investment (FDI) fell by 13 percent last year because of government intervention, Brexit uncertainty and U.S. President Donald Trump's tax and trade policies, the United Nations trade and development agency UNCTAD said onwednesday.

Dutch lawmakers have launched an inquiry into how to make multinationals pay their fair share of tax, after public criticism that government reforms do not go far enough.

U.S. Senate Republican leaders have decided to bring several bilateral tax treaties that have languished for years to a vote in the full chamber this year, the chairman of the Senate Foreign Relations Committee told Law360 on Tuesday.

A proposed financial transaction tax in the European Union should be set at "no less than 0.2%" of the value of the transaction, according to a note from the German delegation to the EU's Economic and Financial Affairs Council,which is due to meet Friday in Brussels.

Danny Houben, project lead for Shell's ICAP team, talks to International Tax Review about how his company got ready to participate in the OECD's International Compliance Assurance Programme (ICAP).

Although public and political opinion has shifted regarding the Dutch tax system's favorability to multinationals, not that much has changed in practical terms, according to practitioners. The Dutch parliament voted June 11 to establish a six-month expert committee to advise legislators on how to structure the country's tax system to ensure that multinational enterprises pay more taxes in the Netherlands.

A carbon tax is part of the climate plan that Democratic presidential candidate John Hickenlooper is backing. He's the latest candidate to outline a plan to combat globalwarming. Alongwith the carbon tax, the former Colorado governorwould spend $350 billion on green infrastructure and efficient cars, rejoin the Paris climate accords and invest more in green technology research.

European Union finance ministers have discussed on Friday a plan for a 0.2% tax on shares,which Germany sees close to be agreed, although furtherwork remains to be done. Plans for an EU financial transaction tax (FTT) have stumbled over the past years. After an initial proposal in 2011was blocked by member governments, a group of states pressed ahead,while the majority of the 28 EU states backed down.

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.

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.