Int'l Tax News

Luxembourg's parliament has passed the 2019 budget, confirming a corporate tax rate cut and a more flexible interest expense limitation for consolidated corporate groups in linewith the 2016 EU anti-tax-avoidance directive (ATAD).

This article provides a detailed and structured synthesis of the discussion that took place in the context of the "fireside chat" event held by thewU Global Tax Policy Center at the Institute of Austrian and International Tax Law on December 17, 2018, atwhich Hellersteinwas the guest speaker. The eventwas one of the initiatives of the Digital Economy Tax Network, a multi-stakeholder forum,which organized aworkshop on the VAT/goods and services tax and the digital economy December 17-18, 2018, in Vienna.

Mindy Herzfeld describes debates about corporate taxes andwhether multinationals pay their fair share, focusing on recent legislative, business, and academic contributions.

The Manitoban government has decided to take legal action against the federal government's carbon tax, claiming that itwas unconstitutionally enforced since the province had created its own plan.

An appeals court has upheld a 2017 decision by a lower court that Google Ireland Ltd. did not have a permanent establishment in France based on activities performed by Google France.

An opportunity to reallocate global taxing rights and introduce a minimum corporate tax rate is upon us, and it may be the OECD's last chance to prove itself, according to the Tax Justice Network.

Neither territoriality nor freedom of establishment require an exemption from the United Kingdom's controlled foreign company regime for intragroup financing profitwhen the significant people functions take place domestically, according to the European Commission.

For a long time, Ireland has used taxes to aggressively attract incoming investment. Now this strategy is being questioned.

French President Emmanuel Macron announced tax cuts for middle-classworkers and plans for a more representative parliament Thursday as part of a promised response to theweekly yellow vest protests that damaged his presidency.

In this article, the author discusses the proposed U.S. foreign-derived intangible income regulations and highlights important areas that the regs clarify for taxpayers.

After reviewing Ireland's energy policies, the International Energy Agency (IEA) has recommended that the country implement an automatic increase of its carbon taxes to deter sectors from failing to meet their predetermined emissions limit.

Policymakers should continue the rapid global trend toward tax transparency by embracing public country-by-country reporting for multinationals across all industry sectors, according to a report by the Financial Accountability and Corporate Transparency (FACT) Coalition.

States that have incorporated the international provisions of the federal Tax Cuts and Jobs Act into their tax base could be challenged in court, according to practitioners.

Multistate Tax Commission general counsel Helen Hecht on April 24 floated the idea that states trying to tax global intangible low-taxed income deem as their base the amount of federal tax actually due on GILTI.

Taxation influences nonfinancial firms' survival prospects across advanced and developing countries, according to an IMFworking paper.

The U.N.will consider issues linked to value creation, such aswhether demand-side factors should be taken into account, as part of itswork plan for drafting guidance on the taxation of the digital economy.

The Philippines has introduced a special tax deduction for expenses incurred for the training and research and development expenses of companies that contribute to the preservation or restoration of the environment.

Martin A. Sullivan examines a new paper describing a profit-split method for the taxation of multinational business profit and explainswhy residual profit splits are going to be important in solving the planet's increasingly unstable system of international tax.

François Hellio and Rosemary Billard-Moalic, Attorneys-at-law at CMS Francis Lefebvre Avocats, look at some of the most significant amendments and new measures designed to secure the compliance of French key tax regimeswith the OECD and EU standards on the fight against aggressive tax planning,while maintaining the attractiveness of France as a place to invest.

The Organization for Economic Cooperation and Development recently released a discussion draft that addresses issues related to the transfer pricing aspects of financial transactions, including intra-group loans. Clive Jie-A-Joen, Monique van Herksen, and Fan Bai of Simmons & Simmons discuss two major issues regarding the OECD's financial transactions' discussion draft,which addresses related party debt instruments.

A proposal from Democratic presidential candidate Elizabethwarren to impose a surtax on large corporations' profitswould raise hundreds of billions of dollars butwould also lead to a smaller economy, according to an analysis released Thursday by the right-leaning Tax Foundation.

A provincial election in Canada isn't usually big news, but Tuesday's victory by the conservatives in thewestern province of Alberta is an exception. Voters elected as premier Jason Kenney,who had promised that his government's first actwould be to repeal the carbon tax imposed by incumbent Rachel Notley.

India's Central Board of Direct Taxes (CBDT) is seeking public input on proposed formulas to calculate profits attributable to multinational companies' operations in India.

The Czech Republic is moving aheadwith its own digital tax, citing slow OECD progress on finding a long-term approach to taxing the digital economy, a Czech finance ministry spokesman has confirmed.

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.