Int'l Tax News

Treasury may not be done offering relief from one of the most high-stakes issues under the global intangible low-taxed income provision.

The IRS released an international practice unit that provides a general explanation of the process for competent authority requests made to the U.S. competent authority under a mutual agreement procedure article representative of most U.S. income tax treaties.

No-tax countrieswill probably have to beef up their administrative resources to enforce the OECD's substantial activities requirements, according to a tax practitioner.

The Ninth Circuit's forthcoming decision in Altera may decide the fate of thewave of new challenges to the transfer pricing regulations that followed the release of the Tax Court's 2015 decision.

The IRS is not backing down from its disqualified imported mismatch rule under its proposed anti-hybrid regs, defending the rule as necessary.

U.S. Treasury officials' goal in moving forwardwith negotiations on new approaches for taxing the digital economy is to reach international consensus on standards that can regulatewhat many countries are already doing.

Although Treasury expects to issue final global intangible low-taxed income regulations by this summer, basis adjustment rules for the use of tested losseswill come in a later round of regs.

U.S. tax law maintains a unique and valuable tax exemption for certain sovereignwealth fund (SWF) income. The exemption can be traced to U.S. allegiance to sovereign immunity, and it is uniquewithin the international tax community.

In news analysis, Nana Ama Sarfo looks at corporate responses to the U.K.'s tax strategy disclosure requirement and how they fit into broader tax transparency trends.

The European Commission has opened an investigation to examinewhether tax rulings by Luxembourg amounted to state aid for Finnish food and drink packaging company Huhtamaki, it said on Thursday.

Research and development tax benefits require technological risk and advancement, but not necessarily a successful project, according to a recent judgment from the Canadian Tax Court.

India's direct and indirect tax regimeswill continue undergoing changes to advance the ease of doing business in the country, according to Finance Minister Arun Jaitley.

The OECD's call for input on approaches to solve the tax challenges of the digital economy elicited more than 100 submissions from a range of stakeholders that raised flags about the four options under consideration.

The following reportwas published in November 2018 by the Council on Economic Policies (CEP) as Discussion Note 2018/3.

U.S. companies deciding to invest domestically offer signs that tax provisions benefiting U.S. exporters areworking as intended, but countervailing factors still frustrate decisions to bring intellectual property home.

France plans to require large internet companies to start paying a temporary 3 percent digital services tax in October.

France movedwednesday to impose a 3 percent tax on Google, Apple, Facebook and other tech giants in a bid to advance an international agreement to clamp down on corporate tax avoidance.

The IRS has scheduled a March 25 public hearing on proposed regulations (REG-104259-18) that provide guidance on the tax on base erosion payments of corporationswith substantial gross receipts that make payments to foreign related parties and on the applicable reporting requirements. Discussion topic outlines are due by March 15.

The European Commission's blacklist of 23 jurisdictionswith insufficient money laundering and terrorist financing controls has been metwith fierce resistance from EU Council member states, according to EU Justice Commissioner Věra Jourová.

Citing the need to remain competitive, the government of Luxembourg has proposed a 1 percentage point reduction in the corporate tax rate and a more flexible interest expense limitation for consolidated corporate groups.

The U.S. Virgin Islands government is urging the U.S. Court of Appeals for the Third Circuit to clarify that the commerce clause doesn't extend to unincorporated territories of the United States.

Practitioners are applauding proposed regs on the foreign-derived intangible income provision for taking a comprehensive and reasonable approach, though some details may need to be further explained in final regs.

Recent EU court decisions may have dealt the European Commission a setback in its effort to fight tax competitionwith state aid law, but they avoid ruling on key questions involved in other high-profile cases.

In a February 25 letter to IRS Commissioner Charles Rettig and two Treasury officials, American Citizens Abroad requested relief from the "extensive expansion" of reporting requirements imposed by the revised Form 5471, "Information Return of U.S. Personswith Respect to Certain Foreign Corporations."

China's governmentwill ask the National People's Congress to cut taxes by more than CNY 1.3 trillion (about $194 billion) to stimulate manufacturing, a Ministry of Finance official told China Daily, a state-funded newspaper.

The European Commission is assessing its next steps after a court annulled its decision that Belgium's excess profit tax schemewas illegal state aid, according to EU Competition Commissioner Margrethe Vestager.

U.K. legislation that could require the crown dependencies to publish beneficial ownership registers hit a setbackwhen the British government pulled it ahead of a key parliamentary vote, prompting a mixture of outrage and relief.

A ritual among politically obsessedwashingtonians is counting how many times the president of the United States uses a particularword during the State of the Union address. Like a modern-day form of tasseography (the ancient art of reading tea leaves),we presume that verbal repetition conveys insights about the speaker's priorities and ambitions. Democrats sprinkle their remarkswith terms like "healthcare" and "climate change,"while Republicans often favorwords like "defense" and "security."

Individual shareholders of controlled foreign corporationswill be relieved to learn that Treasury and the IRS have determined they are eligible for a 50 percent deduction on global intangible low-taxed income, ending months of speculation.

Spain and Britain have reached an agreement that sets out stricter rules for companies and citizens operating from Gibraltar, a British overseas territorywhich Spain considers a colony.

Ireland collected 3.7 percent more tax in February than in the same month last year, thanks to growth in value-added tax (VAT) receipts and income tax, the finance ministry said on Monday.

Democrats are introducing legislation in the House and Senate on Tuesday to tax financial transactions, as lawmakers in the party examine variousways to raise more revenue. Under the legislation, sales of stocks, bonds and derivativeswould be taxed at a rate 0.1 percent. The taxwould apply to sales made in the U.S. or by U.S. persons, and initial securities issuances and short-term debtwould be exempt.

The IRS isn't giving more consideration to the profit split method than it has in the past, despite a recent announcement about an advance pricing agreementworkbook that tax specialists have read to suggest otherwise, an agency spokesman said Monday.

The Treasury Department proposed the final major international-tax regulation under the 2017 tax law on Monday, outlining how businesses can claim a break related to certain foreign sales.

The Commerce Department reported Thursday that real gross domestic product grew by 3.1% from the fourth quarter of 2017 to the fourth quarter of 2018ÔøΩthe largest rise in 13 years. And last month the Congressional Budget Office reported that even if the current surge in economic growth isn't sustained, the revenue residual from our current strong growth ratewill pay for some 80% of the projected cost of the 2017 tax reform.while these reports reflect only the initial impact of the tax cuts and the deregulatory effort, any objective evaluationwould give the administration's economic program high midterm marks.

The Netherlands tax environment for multinational foreign direct investment (FDI) has been characterized as 'a tax haven' or, perhaps more accurately, as a 'conduit financial centre'. Anyway,with a share of 25% in theworldwide market for tax-driven FDI diversion, the Dutch tax planning industry has become a prominent target of recent OECD and EU anti-avoidance measures. Adaptations in many of the relevant Dutch tax rules are by now underway. The paper aims at the interactions between (a) the making of the relevant tax environment and (b) the rise of a specialized industry for FDI tax planning over the last century.

European Union finance ministers are set to ditch a plan to introduce an EU-wide digital tax nextweek but agree towork on a global reform of the taxation of internet companies, an EU document shows.

European Union states have added 10 jurisdictions to a draft tax haven blacklist, including the United Arab Emirates (UAE) and Bermuda, an EU official told Reuters on Tuesday, in a move thatwould triple the number of listed countries.

The French government onwednesday introduced a new levy aimed at big tech giants, adding to momentum behind more than a dozen similar measures globally that could collectively cost Silicon Valley companies billions of dollars. The measure, likely the first in awave of proposed digital-services taxes to be applied in Europe,will apply a 3% tax on French-source revenue that companies like Alphabet Inc.'s Google or Amazon.com Inc. reap from specific services like targeted advertising or running a digital marketplace.

EU delegates meeting February 28 made no progress on a digital advertising tax (DAT) in place of a digital services tax, and remarks by the EU Council's Romanian presidency left member states puzzled.

A three percent tax on the French revenue of large internet companies could yield 500 million euros (568.5 million pounds) per year, French Finance Minister Bruno Le Maire said on Sunday.Le Maire told Le Parisien newspaper the tax is aimed at companieswithworldwide digital revenue of at least 750 million and French revenue of more than 25 million euros.

European Union finance ministers are likely to recognize at their upcoming meeting that they can't "force" even a lighter digital services tax andwill "proactively" support an international effort on taxing the digital economy, an EU official said Friday.

The recent proposal to compensate California residents for the use of their data is another sign of consumers' growing awareness of how tech giants monetize users' digital footprints, but logistical and philosophical concerns make it little more than an intriguing idea for now, experts say.

Corporate tax departments are under pressure to find aggressiveways of reducing their effective rates to take advantage of under-resourced tax authorities that are unable to tackle tax avoidance effectively.

The IRS has developed a standardized residual profit-split model for use in advance pricing agreement applications by the minority of applicants that cannot reliably use a one-sided transfer pricing method.

The OECD has issued a consultation document requesting comments on proposals that attempt to address countries' concerns about taxing the digital economy, the first pillar ofwhich involves reallocating tax rights among countries, not necessarily confined to profits of tech companies. (The second pillar,which involves the expansion of antiabuse rules, is the subject of other articles.)

In news analysis, Nana Ama Sarfo outlines discussions about U.S. tax reform and unilateral actions at the TCPI conference inwashington DC.

The European Council has called for the swift enactment of Switzerland's proposed corporate tax reform package. The recommendationwas one of a number of conclusions adopted by the Council regarding the EU's relationswith the Swiss Confederation.

Proposed rules rewriting the federal business interest deduction should be revised to narrowwhat constitutes business interest, members of an accountants trade group testifiedwednesday at a public hearing.

Bloomberg Tax - BySony Kassam

New Jersey is taking an aggressive new stance to raise taxes on foreign income from multinational companies. New Jersey is including a new federal category of foreign income in its tax base, and is the first state to tax 50 percent of that income,while choosing to grab its share of the income pool through a specialÔøΩand surprisingÔøΩcalculation involving its gross domestic product. Lobbying groups, like the State Taxes After Reform (STAR) Partnership and the Council on State Taxation (COST), are up in arms to stop states from following New Jersey and adopting similar approaches.