Int'l Tax News

In this article, the author discusses the Court of Justice of the European Union's recent judgment in N Luxembourg 1, addressing the abuse of exemptions contained in the interest and royalties directive.

An IRS official expanded on plans to introduce a new large corporate compliance program and said the agency now has a better estimate of taxpayers that should be treated as large, complicated organizations.

On April 4, 2019, Italy's government approved a Growth Decree designed to stimulate economic recovery aswell encourage foreign investment by offering foreign entities the same tax incentives available to Italian enterprises.

Tax directors are dealingwith more audits, but standardising global tax operations can greatly ease the burden because it helps tax authorities understand corporate tax positions better.

Chinawill extend preferential taxes for producers of integrated circuits and software companies, the cabinet said onwednesday. Chinawill attract more domestic and foreign investment into its information industry, the State Council, or cabinet, said after a regular meeting.

Tax professionals areworried about how to identify user participation accuratelywithin any digital business model, particularly given how easy it is for users to hide their true location.

As details emerge of digital taxes in the Czech Republic and Malaysia, corporates told ITR theywish countrieswould leave it to the OECD process - but they are fearful ofwhat might emerge from it.

UK authorities are stepping up investigations into the tax affairs of US multinationals,which account for a growing share of suspected underpayment by large businesses.

Lance Cunningham and Meera Pillai, of BDO Australia, discuss the tax measures recently announced by the Australian government in its Federal Budget: they highlight action points that overseas taxpayers transacting, investing in, tradingwith and selling to Australia, should be considering.

Most countries are opting out of adopting new OECD standards aimed at shutting down a favorite tax planning maneuver of multinationals, saying it could lead to more disputes between tax authorities. The standards aim to discourage companies from using "commissionaire structures" to avoid creating a permanent establishmentÔøΩwhich is subject to taxÔøΩin a jurisdiction. Instead of having such an entity, some companies hire agents to conclude contracts on their behalf, and avoid being taxed. Under the OECD's new standards, the use of such agentswould create a taxable presence.

A U.N. official said any approach to taxing the digital economy should prioritize the tax base of developing countries to ensure an equitable international tax system.

Italy's new 3 percent tax on digital advertising revenueÔøΩone of the first in Europe to take effect this yearÔøΩdoesn't address exactlywhowould be subject to the tax or how itwould be calculated. The lawwas passed quickly at the end of last year, leaving Italy's tax authority to hash out details in a decree that could be released thisweek.

A hallmark of U.S. tax reform is its provisions focused on deemed "intangible" income, including: a new foreign income inclusion rule for global intangible low-taxed income under new § 951A, and a new deduction for domestic corporationswith respect to their GILTI and foreign-derived intangible income under new § 250. In proposed regulations under § 250, issued on March 4, 2019, the Department of the Treasury and the IRS detail the intended interaction of these provisions to "neutralize the role that tax considerations playwhen a domestic corporation chooses the location of intangible income attributable to foreign market activity.

A deduction for exports, introduced in the 2017 tax overhaul, is "most likely breaching U.S. obligations under theworld Trade organization," the European Unionwrote in a letter to the U.S. Treasury Department and Internal Revenue Service.

The IRS provided partnershipswith some clarity onwithholding requirements for a new tax on gains from exchanges of partnership stakes involving foreign investors May 7. Publicly traded partnerships such as Blackstone Group LPÔøΩwhich recently announced its plan to switch to C corporation statusÔøΩhave eagerly anticipated the proposed rules (REG-105476-18), as keeping track of exchanges of partnership interest can be a daunting task for large entities like the private equity giant.

IRS proposed rules require companies to go to "inordinate lengths" to prove they qualify for a tax benefit for exporters, the Silicon Valley Tax Directors Groupwrote in a May 6 letter to the agency.

EU member states need to agree on a unified position as efforts to rewrite global corporate tax rules speed forward, Pierre Moscovici, a top European Commission tax official, told member state finance ministers.

Deputy Finance Minister Arturo Herrera confirmed the plans in an interview at Bloomberg News offices in Mexico City,while declining to elaborate. Bloomberg reported in November that the previous administration reached an agreementwith Uber Technologies Inc. inwhich the platformwillwithhold taxes from partnerswho gain income from both its ride-hailing and food delivery services.

Proposed regulations that require foreign partnerswho transfer interests to pay taxes via a newwithholding rule show that Treasurywas largely listening to taxpayer concerns, according to practitioners.

If the Australian Labor Party is elected, then itwill require companies to disclose to shareholders any business dealings in countries on a government tax haven blacklist,whichwill include the Cayman Islands.

The executive board of the International Monetary Fund noted the findings of a paper presented in March that stated that a tax based on a carbon emissions price is a better tool for mitigating climate change than cap-and-trade or other tax schemes because itwould lead to greater emissions reductionswhile raising far more revenue.

A tax based on a carbon emissions price is a better tool for mitigating climate change than cap-and-trade or other tax schemes because itwould lead to greater emissions reductionswhile raising far more revenue.

Robert Goulder takes a critical look at Sen. Elizabethwarren's proposal for a corporate surtax based on reported earnings drawn from financial statements.

Drafters of documentation provisions for the foreign-derived intangible income deduction for general services could learn something from other rules already on the books, lest taxpayers be saddledwith an "unduly burdensome requirement."

The Tax Executives Institute has commented on proposed regulations (REG-104464-18) on the deduction for foreign-derived intangible income and global intangible low-taxed income, addressing many issues, including the documentation requirements for "foreign use" and business services.

The Kenya Revenue Authority on May 3 issued a public notice confirming that domestic e-commerce operations are responsible for self-assessing, reporting, and paying taxes in Kenya.

Denmark's prime minister has announced general electionswill take place June 5, raising questions aboutwhether the incoming government could change the country's stance on the taxation of the digital economy.

The Canadian government is losing millions of dollars in tax revenue on digital goods from abroad and is failing to maximize sales tax revenue from e-commerce, according to a Canadian budgetwatchdog.

Reform of the "uneconomical, unsustainable, and frankly unintelligible" business rates system in England cannot come soon enough, John Allan, president of the Confederation of British Industry (CBI), intends to tell business leaders.

In this article, the author continues his consideration of the approaches that New Zealand and Fiji have taken to the taxation of remote sales of services, focusing on how Fiji's technology could improve New Zealand's statutory approach to threshold rules, remote enforcement, and double taxation.

The Polish Ministry of Finance has released for public consultation draft tax guidance for the intellectual property box that came into effect January 1. The consultationwill close May 10.

Ireland's Department of Finance has announced the new consultations on tax incentives for the small and medium-size enterprise sector, capital gains tax entrepreneur relief, and the new incentive for employee stock options.

The Court of Appeal for Saskatchewan held that Canada's Parliament had legislative authority to enact the Greenhouse Gas Pollution Pricing Act (GGPPA), but Saskatchewan's premier says the fight is not over.

The European Commission believes Luxembourg's rulings granted to subsidiaries of Huhtamäki Oyj approving deemed interest deductions on interest-free debt appear to unilaterally reduce a multinational group's tax base despite the absence of double taxation risk.

Nana Ama Sarfo outlines the changing landscape of transfer pricing discussed at a recent NYU/KPMG tax symposium.

Martin A. Sullivan argues thatwhen it comes to the future of international income taxation, all roads lead to a minimum tax.

In an April 29 letter to Senate Foreign Relations Committee Chair James E. Risch, R-Idaho, and Senate Majority Leader Mitch McConnell, R-Ky., a group of companies called for swift action on the bilateral income tax treaties and protocols pending before the committee, noting that such treaties help foster trade and investment and protect U.S. businesses from double taxation.

OECD-led efforts to adapt international tax rules for the digital agewould benefit from more involvement from tech companies, especially if they arewilling to discusswhere they create their value, Denmark's tax minister said.

In this article, the authors discuss the IRS's most recent annual statutory report on advance pricing agreements.

Invigorated by its success in the recent parliamentary elections, the governing Partido Socialista Obrero Español (PSOE) is looking for legislative support for its plans to increase taxes by ÔøΩ5.65 billion a year.

The Information Technology Industry Council, adding to prior comments, has requested further relief for the treatment of research and experimentation expenses, such as not allocating or apportioning R&E expenses to the global intangible low-taxed income basket under reg. section 904(d)(1)(A), particularlywhen using the sales method.

Multinational tobacco giant British American Tobacco PLC's aggressive tax planning schemeswill deprive developing countries of an estimated $700 million in tax revenue from 2018 through 2030, according to a Tax Justice Network report.

The U.N. Subcommittee on Environmental Taxation Issues announced that it intends to create a handbookwith recommendations and practical advice on environmental taxation for developing countries.

Ireland has launched its triennial review of the tax credit designed to encourage research and development investment in the country.

The Austrian government has announced awide-ranging set of proposals to lower taxes by ÔøΩ6.5 billion annually, including a reduction in the corporate tax rate from 25 percent to 21 percent by 2023.