Int'l Tax News

Glencore Plc. has revealed it is in a $680 million disputewith the U.K. tax office over audits for the 2008-2017 tax years. The mining giant,which noted the dispute in its Jan. 20 preliminary annual report, said the audit includes tax assessments for inter-company transactions, or transfer pricing.

The Netherlands may become the next European country to charge aheadwith a digital tax proposal of its own, following the example of France and Spain, two Dutch lawmakers hinted Feb. 20.

Internet retailers such as Amazon.com Inc., Asos Plc and Boohoo Group Plc should pay higher U.K. taxes to help save ailing shopping districts that are losing revenue to e-commerce, according to a government report.

New Zealand's Taxworking Group has proposed the introduction of a capital gains tax, a contentious issue that could play a major role in the 2020 general election.

The European Commission suffered a defeat on Thursday in its drive to tackle illegal tax deals for multinationals after an EU court annulled its state aid decision against a Belgian tax schemeworth about ÔøΩ700m.

Do verbal confirmations have any binding effect on the Luxembourg tax authorities? A recent judgment provides the answer. The Luxembourg Administrative Tribunal, in a decision of December 13, 2018, ruled on the potential binding effect of verbal comments of the Luxembourg tax authorities regarding the tax qualification (as equity vs. debt) of equity tainted loans ("ETL"s) granted by a Luxembourg corporate taxpayer to its Luxembourg subsidiaries.

Spain's plan to impose a 3 percent digital tax on companies such as Facebook Inc. and Amazon Inc. is on hold until after the country holds a general election April 28.

The OECD's Forum on Harmful Tax Practices iswaiting for the U.S. Treasury Department to release proposed rules for a new tax deduction that encourages exports before it can begin a formal assessment, a Treasury official said.

The Treasury Department is aiming for spring or "very, very early summer" to issue final regulations on a new category of foreign income created under the 2017 tax overhaul, a Treasury official said.

The OECD solution to rewriting global tax rules for the modern economywill likely involve allocating more taxing rights to market jurisdictions, a Treasury official said

Countries that signed up for the OECD's super tax treaty in 2018 have changed their tax treaty networks and are on the road to eliminating abusive provisions, the OECD's first-ever peer review of tax agreements said Feb. 14.

European Union antitrust chief Margrethe Vestager's crusade against unfair tax breaks suffered a setback as Belgiumwon a bid to overturn an order to recoup about 800 million euros ($900 million) from 35 companies, including Anheuser-Busch InBev NV.

The OECD is rethinking the rules that determine how much tax multinational companies should pay andwhere they should pay it as the organizationworks to reform global tax rules for the increasingly digital modern economy.

The cost of Sweden's plan to raise taxes on fossil fuels and certain chemicals, seen by some as away to finance planned income tax cuts,will probably fall to consumers, attorneys and industry representatives told Bloomberg Environment Feb. 13.

Canada's constitution doesn't allow the federal government to create a uniform carbon tax across the country, lawyers for Saskatchewan argued in a Regina courtroom Feb. 13.

Spain's ruling left-wing coalition government failed to gain cross-party support for its budget,which included a proposal to impose a 3 percent tax on digital companies.

Italy has recently been very active in trying to introduce rules to tax digital companies. Initially, the 2018 Budget Law included a provision aimed at applying aweb tax on digital transactions. However, no implementation ruleswere approved in order to start collecting the tax. There may have been many reasons behind Italy's decision to postpone implementation and collection of theweb tax. The main onewas certainly the desire to coordinatewith the possible outcome of the discussions of the OECD and the EU,whichwould hopefully have arrived at a common and harmonized solution.

Singapore's so-called "Netflix tax" is still nearly a year out, but e-retail, streaming, and other digital companies should start trial runs and ready their technology now, tax advisers say. Once the goods and services tax expands on Jan. 1, 2020, Singaporewill start applying it to almost all cross-border services, from video subscriptions to call-center outsourcing.

S. 779, the Stop Tax Haven Abuse Act, introduced by Senate Finance Committee member Sheldonwhitehouse, D-R.I.,would modify various tax provisions to deter offshore tax evasion and remove incentives for corporations to use tax havens.

Bermuda's Parliament recently passed the Financial Services Tax Amendment Act 2019, increasing the tax rates for banks and domestic insurers effective April 1 and May 1, respectively.

New rules for documentation requirements under proposed regs for the foreign-derived intangible income provisionwill require some companies to reassess how they manage their business.

Although practitioners and nongovernmental organizations differ sharply on the need for an internationally coordinated anti-base-erosion regime as proposed by the OECD, they agree that reducing complexitywill be critical to ensuring its relative success.

A Houseways and Means Committee Republican intends to reintroduce legislation this spring exempting U.S. nationals living abroad from being taxed on their foreign-source income.

In this article, the author examines recent changes to international tax dispute mechanisms, including the mutual agreement procedure and arbitration, from the perspective of the EU and the OECD. He comments on similarities and differences in the European and international frameworks in an era of increasing globalization.

Despite varying opinions about minimum taxation to tackle the tax challenges of the digital economy, countries may start adopting U.S.-style minimum taxeswithout OECD-level coordination,which could affect business, an academicwarned.

Under conventional economic thinking, a government that spends more than it collects has two unpleasant choices: borrow or raise taxes. An alternative view, Modern Monetary Theory, is more accommodating of deficit spending. MMT is taking hold among U.S. politicianswhosewish lists include guaranteeing everyone a job, fixing infrastructure, making higher education loan-free and ensuring everyone has access to health care. The invigorated progressivewing of the U.S. Democratic Party is using MMT to push back against decades of fiscal hawks saying the nation can't afford large-scale social projects such as the recently proposed Green New Deal.

The European Commission has raised concernswith proposed base erosion and antiabuse tax regulations (REG-104259-18), seeking an exemption for foreign affiliate reinsurance transactions to alleviate discriminatory elements of the BEAT and, to diminish double taxation, a provision that applies the BEAT to transactions netted of any related amounts included in taxable income from the same transaction.

The National Foreign Trade Council has asked in part that section 15 not apply to the first-year 5 percent base erosion and antiabuse tax rate in proposed BEAT regulations (REG-104259-18) and that payments to a related foreign party for contract research and development services should be specifically included in the services cost method exemption.

The Organization for International Investment has requested many changes to proposed base erosion and antiabuse tax regulations (REG-104259-18), including a change to provide that section 15 doesn't apply to tax years beginning in calendar year 2018 and asserting that payments to a controlled foreign corporation shouldn't be treated as base erosion payments.

International tax practitioners believe that any revisions to existing nexus and profit allocation principles that emerge from the OECD's digital economywork should be carefully designed and implemented,with a focus on administrability and proportionality.

In this article, the author discusses the design of an effective digital taxation system, arguing that the system's theory and goals must bewell defined.

Although the OECD is still in the early stages of finding a long-term, consensus-based solution to address the tax challenges of the digital economy, it is also doingwork on assessing potential options' economic impacts.

The German government does not expect European Union finance ministers to unanimously agree to a digital tax on Tuesday and is continuing to strive for minimum corporate tax rates at the global level, a source said on Monday.

Uber has been fighting on multiple fronts over its VAT obligations in different jurisdictions. ITR examines how a settlementwith the Egyptian authorities and an ongoing legal drama in the UK signal two different approaches to making the 'platform economy' subject to VAT rules.

A regulatory project regarding passive foreign investment companies had been "languishing" for decades, but a minor change under 2017's federal tax overhaul paved theway for a comprehensive draft of proposed rules, a U.S. Treasury Department official said Thursday.

The French cabinet has cleared theway for Europe's first active digital service tax (DST). Experts say the proposals are still not detailed enough for the affected companies to prepare to pay the tax, despite its retroactivity and the quick turnaround before the first payment is due.

The Silicon Valley Tax Directors Group has criticized aspects of proposed foreign tax credit regulations (REG-105600-18) that affect technology companies, asserting in part that a foreign branch income rule is too harsh and that a new proposed rule iswarranted to address the allocation and apportionment of research and experimentation expenses.

PwC has submitted comments on behalf of a group of companies on an issue arising from the interaction of section 267(a)(3)(B)with the repeal of section 958(b)(4), seeking guidancewith retroactive effect to mitigate an unintended consequence of the repeal that could have tax and financial statement implications for many foreign-parented multinationalswith U.S. subsidiaries.

The Court of Justice of the European Union has published the reference for a case (C-749/18) onwhether Luxembourg tax integration rules applicable to multinational corporate groups infringe upon the EU freedom of establishment.

U.K.-based Cairn Energy PLC's claims brought under the India-U.K. bilateral investment treaty over a retroactive tax dispute likelywon't be resolved until late 2019.

A new IMF policy paper says many proposals for taxation of the digital economy fail to adequately address profit shifting and tax competition ÔøΩ concerns that it says persist despite the OECD's base erosion and profit-shifting project.

Anticipation is building as stakeholders, including businesses, academics, and civil society organizations, prepare to speak at the OECD's public consultation on the tax challenges of the digital economy.

In this article, the author examines allegations by European finance ministers that the deduction for foreign-derived intangible income violates thewTO rules, and he explainswhy ÔøΩ based on the eligibility requirements of section 250 and the scope of thewTO subsidy disciplines ÔøΩ those concerns are misplaced.

Robert Goulder critiques Open, the latest offering from Kimberly Clausing,which argues against protectionist trade policies and for stricter rules on corporate profit-shifting.

The Kansas House has amended and passed a comprehensive tax bill thatwould exempt global intangible low-taxed income from state taxation and impose sales tax collection obligations on remote sellers.

With the recently proposed U.S. foreign tax credit regulations prompting calls for an update, Treasury and the IRS are consideringwhether to issue proposed regulations on the allocation of research and experimentation expenses.

Government officials from the United States, France, and Italy are optimistic that OECD negotiations concerning the tax challenges of digitalizationwill ultimately lead to an international consensus on new principles for allocating taxing rights.

The European Commission has opened an in-depth state aid investigation into a ruling allowing a Finnish multinational group's Luxembourg financing subsidiary to deduct "fictitious interest payments" associatedwith interest-free intragroup loans.

EU member states have unanimously rejected the European Commission's expanded blacklist of 23 jurisdictionswith deficient safeguards against money laundering and terrorist financing.

The Romanian presidency of the EU Council conceded March 1 that "all possibilities to make progress" at the technical level on its digital advertising tax (DAT) proposal have been exploredwithout success.