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Economic Analysis: Proposed FTC Regulations Melded Into a GILTI Spreadsheet


With many questions answered by the proposed foreign tax credit regulations released November 30, modeling by international tax practitioners involves far less guesswork (REG-105600-18). Herewe describe and introduce (with an example) a spreadsheet that calculates tax liability on global intangible low-taxed income (and the associated section 78 gross-up). The spreadsheet incorporates FTC calculations described in the proposed regulations. (The spreadsheet may be downloaded.)

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CJEU Examines 'Deferred Taxation' Under the Merger Directive and the Freedom of Establishment


In this article, the author discusses the Marc Jacob judgment, inwhich the Court of Justice of the European Union consideredwhether French rules on taxing an exchange of shares, in particular rules on deferred taxation,were compatiblewith the EU merger directive and the freedom of establishment.

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U.S. House Bill Proposes Residency-Based Tax Regime


Seeking to alleviate the unique burden of citizenship-based taxation and provide individualswith some measure of territoriality, a new House billwould introduce a residence-based tax system in the United States.

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U.K. DST Not Intended to Resolve Business Rates Issue


There is no formal link between a digital services tax and reductions in business rates, members of Parliamentwere told two days after they asked Amazon UK to disclose its U.K. sales and tax liabilities.

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IRS and Treasury Release Proposed Foreign Partner Sales Regs


The IRS and Treasury, responding to a change in the law that overturned a Tax Court decision, have proposed new rules on foreign partners' sales of U.S. partnership interests.

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Proposed Hybrid Regs Link Causality to Denial of Deduction


Treasury and the IRS on December 20 issued proposed regulations addressing hybrid and branch mismatch arrangements under sections 245A and 267A.

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Romanian stock market dives almost 12% after new tax proposal


Romania's stock market faced one of its biggest falls on record after the government announced a plan to raise 10 billion lei (ÔøΩ2.1bn), or 1 per cent of GDP, in partwith new levies on banks, most ofwhich are foreign-owned.

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Canada's Nutrien Ordered to Pay $1 Billion Chile Tax Bill


Fertilizer giant Nutrien must pay Chile about $1 billion in taxes related to the company's sale of a stake in one of theworld's largest lithium producers, Chile's Finance Minister Felipe Larrain said Dec. 19.

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Dutch Tax Changes May Hurt Companies With Real Estate


Two Dutch tax measures thatwill take effect next year could hurt corporations that own real estate and companieswith heavy losses in the coming years.

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Vodafone Could Face More India Tax Trouble After Court Ruling


Vodafone faces a possibly larger tax bill and continued scrutiny from Indian tax authorities after a recent court ruling, increasing financial pressure on the troubled telecom giant.

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U.S. Cash Repatriation Plunges 50%, Defying Trump's Tax Forecast


The amount of offshore cash corporations are bringing back to the U.S. dropped sharply for a second straight quarter, falling short of the trillions of dollars President Donald Trump had promisedwould result from his tax overhaul.

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French Digital Tax Faces Practical Hurdles, Court Challenge


The French plan to hit big digital companieswith a national tax starting Jan. 1, rather thanwait for an EU measure, looks set for practical and legal hurdles and could face court challenges, tax practitionerswarn.

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EU Orders Gibraltar to Reclaim Illegal Eu100m Tax Breaks


The European Commission ordered Gibraltar to reclaim around 100 million euros ($114 million) of illegal tax breaks it gave to multinational companies.

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High Taxes Could Hasten Bank Moves From Britain After Brexit

  • By Reuters

Britain risks driving banks overseas if current high levels of taxation on the industry are maintained after Brexit, a bank lobby group said onwednesday.

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'Netflix Tax' Plan in Georgia Part of Bigger Digital Revenue Push


A Netflix tax proposalwill be on the agenda for the Georgia legislature in 2019ÔøΩpart of a larger movement of states to broaden their sales tax bases to tap into the increasingly digital economy.

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How Data Should (Not) Be Taxed


The core problemwith taxing the digital economy is that some business models allow firms to produce in a given countrywithout a physical presence and avoid (adequate) source taxation in that country. This mismatch of value creation and taxation may require an adjustment of international tax standards. The authors analyze all major digitalization trends as towhether and, if so, towhich extent they allow for value creationwithout taxable nexus in the above sense.while some trends are still adequately covered by the existing set of international tax rules, others allow for remote access to local data sources and networkswithout being liable to source taxation. The authors propose a systematic and administratively feasible approach to allocating taxing rights based onwhat the authors call a sustained user relationship.

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Why the European Council Directive Proposal for a Digital Services Tax Should be Thrown Out


A European Union plan to tax certain digital services has encountered opposition from a number of member states and no agreement has been reached on a final proposal. In the authors' view, such a taxwould be a serious mistake.

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China to Companies: Show Tax Compliance or Risk Punishment


Companies in China face higher tax compliance costs as the country rolls out the tax portion of its "social credit system," but the extra outlay may beworth itÔøΩor even necessaryÔøΩto stay in business.

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Australia Allays Fears on Timing of Tax Mismatch Rules


New guidance from Australia on cross-border financing arrangements has allayed fears of a tax hit for multinational companies in the event of structured arrangements being prematurely scooped up by upcoming anti-tax avoidance rules.

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Lack Of Noncash Exceptions In BEAT Rules Has Wide Scope


Proposed base erosion and anti-abuse tax regulations provide U.S. multinationalswith much-needed answers to calculation questions, but the inclusion of noncash transactionswithout any exceptions ÔøΩ includingwhen there aren't recognized gains or losses ÔøΩ could take companies by surprise.

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Those Paid In Bitcoin Will Owe Income Tax, UK Confirms


U.K. authoritieswednesday described how they intend to tax individuals' use of virtual currencies such as bitcoin, noting that income tax and national insurance are due for anyone paid in the virtual currency. As officials across theworld grapplewith the tax implications of an ever more popular asset class, the guidance from Her Majesty's Revenue and Customs said the governmentwould use existing law to determine how virtual assets that use distributed ledger technologywill be treatedwhen people use them to pay for goods, buy them as an investment or receive them as salary.

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BREAKING: IRS Floats Rules On Share Sales By Foreign Partners


The U.S. Department of Treasury on Thursday proposed rules to treat income from the sale of a foreigner's interest in a U.S. partnership as taxable U.S.-sourced income, counter to a U.S. Tax Court decision that mandated the opposite result.

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European Commission Explores Tax System Intricacies in Report

  • By Tax Analysts

The European Commission has issued a report on tax policies in the European Union, focusing on the performance of the national tax system, policy options, and reforms in member states.

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CJEU Finds German Property Transfer Tax Exemption Isn't State Aid

  • By Tax Analysts

The Court of Justice of the European Union in Germany v. A-Brauerei, C-374/17 (CJEU 2018), held that a real property transfer tax exemption that may be available to companies that acquire a right of ownership to property in the context of corporate group restructuring procedures doesn't constitute state aid under article 107(1) of the Treaty on the Functioning of the EU.

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Canada Finalizes International Tax Proposals: An Update on Conduit, Tracking, and Foreign Affiliate Rules


In this article, the author examines the final version of a package of international business taxation rules that Canada released in late October, including antiavoidance rules that target the use of tracking shares, provisions on controlled foreign affiliate status, alleviating rules for some corporate divisions, and amendments to the cross-border surplus-stripping rules.

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The FDII Regime OECD Headache or Opportunity?


In this article, the author reviews the new foreign derived intangible income regime and links it to discussions regarding the broader direct tax challenges.

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U.K. Tops List of Treaty-Shopping Destinations


Corporate tax avoidance is estimated to cost EU member states around ÔøΩ36 billion annually,with the United Kingdom taking the top spot as an appealing locale for multinational companies looking to treaty shop.

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EU Finds Gibraltar Gave MNEs $100 Million in Illegal State Aid


Between 2011 and 2013 Gibraltar violated EU state aid ruleswith a corporate tax exemption regime for interest and royalties and five tax rulings that favored multinational enterprises, the European Commission has found.

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French Protests Highlight Difficulty Of Taxing Carbon


French President Emmanuel Macron's reversal on a proposed fuel tax increase in the face of violent protests has cast doubt on the political viability ofwide-ranging consumption taxes that may be necessary to combat climate change.while debates continue over how best to discourage carbon emissions, the French experience highlights the political consequences of using broad-based taxes on gasoline and carbon to combat climate change, and the challenges certain communities face,which policies imposed by central governments may exacerbate.

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The Trump Tax Cuts Boosted Growth and Jobs, but at What Cost?


It has been nearly a year since President Trump signed sweeping tax changes into law. The macroeconomic data already rule out some of the more extravagant claims about immediate jumps inwages and capital. But the more serious debate over the tax cuts' long-run impact is still far from decided.

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Tax chiefs pleased that Netherlands will publish tax rulings


Heads of tax at multinational companies havewelcomed the Dutch government's announcement that itwill publish anonymised summaries of all its tax rulings from July 2019. The measures are designed to allow public scrutiny of rulings and prevent the use of shell companies, and is part of a broader drive by the Netherlands to prevent itself being seen, and used, as a pipeline to tax havens.

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U.S. Tax Review (6)


In this article, the authors discuss recent U.S. international tax developments, including IRS proposed regulations on U.S. corporations that own stock in foreign corporations and comments from the New York State Bar Association on the 100 percent dividends received deduction under section 245A.

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The EU Directive on Aggressive Tax Planning: The Wrong Approach


In this article, the author discusses EU Council Directive 2018/22, otherwise known as DAC6, addressing the automatic exchange of information regarding reportable cross-border arrangements for intermediaries.

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High taxes could hasten bank moves from Britain after Brexit (1)


Britain risks driving banks overseas if current high levels of taxation on the industry are maintained after Brexit, a bank lobby group said onwednesday.

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Protesters, Police Scuffle in Anti-Tax Protests in Jordan

  • By The Associated Press

Hundreds of people have protested in Jordan's capital against the government's planned tax increases and high youth unemployment.

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France accelerates plans for its own digital tax


Francewill move to collect a tax on digital giants from the start of Januarywithoutwaiting for an agreement on a European levy, as its finances come under pressure from measures taken to appease thegilets jaunesprotesters.

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France Pushes to Enact Digital Tax Jan. 1, 2019: Le Maire


Francewill push aheadwith its own digital tax as of Jan. 1, rather thanwaiting for Europe-wide consensus, finance minister Bruno Le Maire said.

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EU Leaders Back Corporate Tax Reform for 2019


European Union leaders agreed on a plan to advance corporate tax reforms next year that they believe are vital in response to U.S. tax law changes adopted a year ago.

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Japan Tackles Tax Avoidance, Base Erosion in Reform Package


Japan's ruling coalition approved a tax reform package for fiscal 2019 that includes new tax avoidance measures for multinational corporations and limits on interest deductions. The reform package includes a mix of international and domestic tax rules, including a 2% consumption tax hike, auto-related tax and housing-loan credits, and revised application of Japan's controlled-foreign-company rules to Japanese multinationals' subsidiaries in the U.S.

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Colombia Faces Downgrade Risk and 'Tax Hell' as Bill Falls Short


As president, Ivan Duque is looking to sign into law a tax bill similar to the ones he used to criticize as a senator,which raises enough to patch a hole in the budget for a year,while kicking other cans down the road. But the tax bill is sowatered down that it may not achieve its main goal of preventing a downgrade to the nation's credit rating, according to Nomura Holdings.

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New U.K. Tax on Overseas Intangibles


A new U.K. tax charge on multinationals using intangibles held in low tax jurisdictions to generate revenue in the U.K. could have a greater impact than the U.K.'s proposed new digital services tax.

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Major Court Cases Shaping IRS Approach to Tax Law Rules


The IRS is making it a point to fully explain the proposed rules it issues on 2017 tax law changes, after being challenged in court for not doing so. In recent litigation over intercompany pricingÔøΩcaseswhich often involve very large sums of moneyÔøΩthe companies have challenged theway the IRS issued regulations in the past, using the Administrative Procedure Act to argue that the agency didn't fully take taxpayer comments into account. The IRS is in the process of releasing major guidance to implement the 2017 tax law. Avoiding extensive litigationwould be a boon for the agency and the companies it ends up against.

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Next Wave of Tax Guidance Will be 'Cleanup' of Old Rules


The IRSwill begin next summer to revisit the old guidance "that needs to be conformed to the newworld" after the 2017 tax overhaul. The first priority is building the "newworld core structure"with guidance on new international provisions such as the tax code Section 965 transition tax and the base erosion and anti-abuse tax said David Kautter, assistant Treasury secretary for tax policy.

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Rules Limiting Anti-Base Erosion Tax a Win for Companies


Internal Revenue Service rules clarifying that companieswon't have to pay an unpopular anti-base erosion tax on some payments for services arewelcome news. The Dec. 13 proposed rules brought companies the answer that theywanted: only the markup, not the entire payment, is eligible for the BEAT.

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Taxation of Global Business Models: Restore Confidence in the System? A More Balanced Approach Please!


Eric Vroemen of PWC Netherlands argues thatwhile the OECD's Base Erosion and Profit Shifting initiative may restore the confidence of governments in the system for taxing multinational enterprises, the same confidence isn't being achieved for the MNEs. The current proposed measures are likely to result in double taxation and an excessive compliance burden for MNEs, the author says.

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Big Law Strikes Back: Firms' Consulting, Crisis PR Test Big Four


Global law firms are turning the tables on the Big Four accounting firms' incursions into the legal industry by setting up consultancies that assist clientswith non-legal matters. Top law firms have branched outwith new units that help clients manage cyber risks, provide intelligence and security assessments, boost crisis communications, and develop new forms of legal technology-which are designed to compete directlywith Big Four offerings

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Starr International's $38 Million Tax Refund Suit Reinstated


The U.S. appeals court inwashington, D.C., revived a 2014 lawsuit filed by Maurice "Hank" Greenberg's Starr International Co., challenging an Internal Revenue Service denial of claim. Zurich-based Starr sought a 2007 tax refund on U.S.-source dividend income under the U.S.-Swiss tax treaty.

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How U.S. Multinationals Can Win from China Trade Dispute


Shanghai transfer pricing economist Glenn DeSouza posits a contrarian view that the massive trade dispute bedeviling theworld's two greatest trading nationswon't necessarily hurt U.S. multinational investment in the middle kingdom. Instead, tax directors of U.S. multinationals have a unique, nuanced, opportunity, to map out a holistic strategy to exploit the business and tax opportunities that lay below the surface.

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Distributions From the U.S.: Withholding Tax Considerations


Stephen Jackson and Julia Tonkovich of Ernst & Young discuss the considerations and potential complications involved in makingwhatwould appear to be a simple cash distribution from a U.S. corporation to a non-U.S. parent corporation shareholder.

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Canada focus: how Uber v Quebec tax tussle was resolved


When tax investigators raided the Montreal offices of Uber in 2015, it marked a flashpoint after years of tension between the ride-sharing service and authorities in Quebec. Eventually, the Canadian province's government issued an ultimatum: Uber and its drivers must become fully tax compliant or be barred from operating in the jurisdiction.

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