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Opinion today: Time to crack down on buybacks?


Corporate America is on a spending spree. Flushwith cash from President Donald Trump's 2017 tax cuts, companies are on track to shell out more than $1tn on stock buybacks this year. Critics such as US senator Elizabethwarren say this is bad news. Buybacks may boost prices in the short run, they claim, but a betterway to boost the value of a corporation is to invest in the future. Ought the US to be making moves to restrict the rush of activity?

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Swedish Political Crisis Deepens as Opposition Get Its Budget Passed

  • By Reuters

Sweden's political crisis deepened onwednesday as parliament rejected the caretaker government's budget in favor of a tax-cutting one from the opposition.

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Australia Government Launches Strategy to Develop Itself as Battery Hub

  • By Reuters

Australia is seeking investment to develop a battery industry towring more value from its mineralswealth. Under the strategy, the governmentwill offer yearly tax offsets of up to A$200,000 (113,105 pounds) per year for investors and a 10-year exemption on capital gains taxes for investments held for at least a year.

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Justin Trudeau's Carbon Tax Push Finds Critics on All Sides


When Mr. Trudeau came to office three years ago, combating climate changewas near the top of his agenda and putting a price on carbon pollutionwas his government'sweapon of choice. But Mr. Trudeau's climate program has increasingly been targeted by critics at both ends of the political spectrum, and conservative governments in several provinces have refused to participate, forcing federal intervention.

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Big Firms Could Help Rein in French Deficit: Minister

  • By Reuters

Finance Minister Bruno Le Maire said onwednesday he favored calling on big companies to contribute to efforts to keep France's budget deficit as close as possible to the EU limit next year.

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Taxpayers Always Lose Industry's Shell Game With Jobs

  • By NYT Editorial Board

Federal, state and local governments have gotten into the habit of providing corporationswith incentives to move, incentives to stay, bailouts to stave off failure and tax benefits to build on success and create more jobs. All are based on promises about job creation and economic development that more often than not prove hollow.

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Fiat Chrysler May Review $5.7 Billion Plan if Italy Taxes Diesel, Petrol Cars

  • By Reuters

Fiat Chrysler could review its 5 billion euro ($5.7 billion) Italian investment plan,which includes a shift to cleaner engines, if Rome raises taxes on petrol and diesel cars.

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Tax Treaties Create $4.2 Trillion Cash Flow Through Netherlands

  • By Reuters

A network of favorable tax treaties and an industry devoted to minimizing tax bills has made the Netherlands the conduit for an annual flow of capital five times the size of its own economy. Statistics show that the country had received 4.6 trillion euros ($5.2 trillion) in "foreign direct investment" in 2017.

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European Commission Issues Decision in Luxembourg Case

  • By Tax Analysts

In a case concerning the double nontaxation of profits earned by McDonald's, the European Commission found that the Luxembourg-U.S. tax treatywas not misapplied by Luxembourg.

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McDonald's Tax Rulings From Luxembourg Aren't Unique


McDonald's cited information obtained through LuxLeaks to show that tax rulings it obtained from Luxembourg didn't convey a selective advantage or constitute illegal state aid.

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Three Sens. Target GILTI, Ask GM To Halt Stock Buybacks


Three senators from states affected by General Motors' recent decision to shutter manufacturing plants have asked the company to demonstrate how it has benefited from the federal tax overhaul's global intangible low-taxed income provision and to cancel planned stock buybacks. Sens. Chris Van Hollen, D-Md., Amy Klobuchar, D-Minn., and Tammy Duckworth, D-Ill., asked the auto manufacturer to provide a country-by-country breakdown of how the company has used the Tax Cuts and Jobs Act's GILTI and to not follow through on proposed stock buybacks in a letter sent Friday.

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Proposed Section 250 Deduction Regs at OMB


Proposed section 250 regulations,whichwill address the deductions available under the global intangible low-taxed income and foreign-derived intangible income (FDII) regimes, have been sent to the U.S. Office of Management and Budget for review.

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Treasury Pairs Certainty, Higher Compliance Burden in PTI Notice


The U.S. Treasury Department's latest tranche of guidance dealingwith previously taxed earnings and profits (PTEP) provides taxpayerswith awelcome bit of certainty, but comeswith the cost of a significant compliance burden.

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Top 5 International Tax Cases Of 2018


The past year saw a number of important international tax cases, including rulings about conflicting statutory and regulatory language involving U.S.-held foreign financial accounts and $608 million paid by Boston Scientific Corp. in a transfer pricing dispute.

The article picks the top five international tax cases of 2018.

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Trump Administration Blocks Tax Break for Alcohol Companies


The Trump administration on Monday finalized a regulation limiting the ability of U.S.wineries and global alcohol companies to reduce import taxes. In the government's view, the new rules stopwine and spirits companies from double-dipping on tax breaks.

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Rubio's Buyback Tax


Sen. Marco Rubio (R., Fla.) is rolling out a new plan for business tax hikeswhile simultaneously acknowledging the recent success of business tax cuts. Even inwashington, aren't people supposed to learn from their mistakes? In 2017, Mr. Rubio held up passage of the historic reduction of the federal corporate income tax rate to 21% from 35% until his fellow Republicans agreed to expand "refunds" for peoplewho don't pay any federal income taxes.

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Germany Least Attractive for Digital Investment, PwC Study Says


Germany's burdensome tax system makes it the least attractive place for digital investment,while Italy has replaced Ireland as the most attractive, according to a study by professional-services firm PwC.

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India Says Global Digital Tax Proposals Fall Short


Recent proposals by countries to tax digital services don't go far enough, an Indian government official said, arguing that tax officials need broader tools to address how the internet has transformed the economy.

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India Isn't Backing Down on Digital Taxes: Official


Indiawill continue pursuing digital taxes on foreign online companies unless they set up shop in the country, a government official said.

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Trump Tax Promise of Trillions Back to U.S. Fails to Materialize


The amount of offshore cash U.S. corporations have returned home so far this year is just a fraction ofwhat President Donald Trump had promised.

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Previously Taxed Income Guidance May Come by Christmas


Guidance thatwill likely come before Christmas could help companies figure out how they should dealwith previously taxed earnings and profitswhen calculating their U.S. taxes under the 2017 tax law.

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Foreign Banks Get a Break from IRS in Trump Tax Law's New Levy


The IRS is giving foreign-based bankswith U.S. operations some leewaywhen calculating a major new international tax aimed at preventing global companies from shifting profits abroad.

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P&G Tax Head: OECD's Global Risk Assessment Pilot 'Gratifying'


Procter & Gamble Co. and Canadian tax officials are optimistic about an OECD global pilot program that assesses multinationals' transfer pricing risks.

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Treasury May Rethink Benefit Denial for Smaller Multinationals


The Treasury Department may reconsider a measure in proposed debt interestwrite-off rules that denies a favorable election to some small or mid-sized multinationals. Lawmakers in the 2017 tax overhaul capped the amount of debt interest deductions corporations can take at 30% of adjusted taxable income, under amended tax code Section 163(j).

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Revised Tax Bill Would Help Private Equity Firms, Multinationals


The U.S. House's revised lame-duck tax billwould provide relief to some multinationals and private equity firms facing additional taxes on offshore earnings because of the 2017 tax law. An apparent glitch in the law could subject certain U.S. taxpayers to tax on the offshore earnings of foreign entities even though those taxpayers don't control the entities generating the earnings.

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U.S. Thinks It Has Solution to Avoid Global Digital Tax Chaos


A U.S. proposal could answer the digital tax questions vexing policymakersworldwide. The plan,which gives more tax revenue to the countrieswhere companies do business, could "satisfy a political need and obviate the need to take unilateral measures," such as the digital services taxes many countries are considering or have already enacted, said Brian Jenn, deputy international tax counsel at the Treasury Department.

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EU's Expanded Tax Haven Blacklist Could Apply to U.S.


The European Union plans to update its year-old blacklist of tax havens to include new criteria and an expanded geographic reachÔøΩpossibly all theway to the U.S.

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France Is Said to Weigh Delay in 2019 Tax Cuts for Big Companies


France's government is said to beweighing a delay in a planned tax cut for large companies in 2019 as part of an effort to maintain the country's public deficit under the 3 percent ceiling imposed by the European Union after President Emmanuel Macron unveiled measures to appease Yellow Vests protesters.

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European Parliament Wants Netflix, Apple Covered by Digital Tax


The European Parliament voted overwhelmingly in favor of a temporary digital services tax aimed not only at large internet companies such as Google Inc. but also streaming services such as Netflix Inc., Spotify Technology S.A. and Apple Inc.

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Tax Contribution of U.K.'s Largest Companies Drops


The U.K.'s largest corporations paid more taxes than last year, but their share of all tax collected continues to fall. The 100 largest companies paid 84.1 billion pounds ($106 billion) in tax in 2017-18, growing by 1.2 billion pounds year on year. But the share of tax these companies pay annually has dropped 1 percentage point over the past three years.

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Amazon, EBay to Collect Taxes From Foreign Sellers Under EU Rules


Online marketplaces including Amazon.com Inc. and eBay Inc.will be required to collect value-added taxes from foreign e-commerce markets selling goods into the European Union under new rules adopted by the European Commission.

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Merkel's Successor Means Tweaks, Not Overhaul of German Tax Law


The choice of Annegret Kramp-Karrenbauer to lead the ruling Christian Democrats means the same cautious and incremental tax-policy making characterizing Germany for more than a decade even as it faces competitive challenges from Anglo-Saxon tax reform and uncertainties resulting from the looming Brexit.

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Brazil Companies May Face 200 Percent Tax Penalty


A surprise announcement from Brazil's revenue service creates the possibility of a 200 percent tax penalty, and the country's leading business association is scrambling to respond. The revenue service announced on Dec. 5 that itwon't accept monthly tax payments companies make after May 31 in relation to a measure that took effect in June that barred companies from using accumulated tax credits to pay income taxes on a monthly basis.

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EBay Says New Zealand Tax Plan Would Raise Consumer Costs


Global e-commerce giant eBaywarned that the costs of goods purchased online by New Zealand customerswould increase come Oct. 1, 2019,when online marketplaces like Amazon.com Inc. and Alibaba.comwould have to collect the country's goods and services tax if a government proposal takes effect.

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EU Lawmakers Back Plan to Combat Letterbox Company Tax Evasion


A European Parliament committee voted to adopt a strict "economic substance test" that corporations must pass before moving from one EU member state to another.

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Test Ahead for India's Intercompany Pricing Pacts


India is bolstering its advance pricing agreement tax programwhichwas designed to reduce costly disputeswith multinationals after it came under criticism for being too burdensome.

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Australian Tax Gap for Large Corporate Groups Shrinks


The Australian Taxation Office (ATO) said large corporate groups underpaid their taxes by an estimated AUD 1.8 billion (approximately $1.3 billion) during fiscal 2015-2016, or 4.4 percent of the total amount owed.

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Split Decision for Brazil in WTO Appeal Brought by Japan and EU


AwTO appeals body has returned a split decision on rulings by a dispute resolution panel acting on complaints brought by the EU and Japan that some Brazilian tax programswere prohibited subsidies.

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U.S. Downward Attribution Changes Are a Conundrum for Treasury


U.S. Treasury officials continue to assess the scope of their authority to help alleviate headaches associatedwith the increase in controlled foreign corporations under the Tax Cuts and Jobs Act (P.L. 115-97).

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No Regulatory Authority for Further BEAT Relief


Although the proposed base erosion and antiabuse tax regulations take a taxpayer-favorable approach to the services cost method (SCM) exception, officials concluded that the statute doesn't support netting or a cost of goods sold (COGS) exception.

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PTI Notice Acknowledges Need for Greater Simplicity


The first tranche of guidance on previously taxed income (PTI) since the enactment of the Tax Cuts and Jobs Act (P.L. 115-97) may need greater simplicity to prevent "hyper-complexity," a senior Treasury official said.

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News Analysis: The TCJA and Partnerships


While the Tax Cuts and Jobs Act makes only a few revisions directly to subchapter K, it introduces many rules uniquely applicable to partnerships. Guidance in TCJA-related notices and proposed regulations clarifies how partnerships should apply these new provisions. The interest deduction limitation, gain on sales of partnership interests, and international provisions are just a few of the new TCJA rules that require special attention from partnerships.

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News Analysis: EU Year in Review


Embattled French President Emmanuel Macron,whose approval rating is at 23 percent, has repealed the fuel tax hike that sparked the protests. Itwould have been about 30 cents on $7 per gallon ÔøΩ more than half ofwhich is tax already.

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Proposed Regs Reduce Burdens Under FATCA, Chapter 3

  • By Tax Analysts

The IRS has issued proposed regulations (REG-132881-17) eliminatingwithholding on payments of gross proceeds and on some insurance premiums, deferringwithholding on foreign passthrough payments, and clarifying the definition of investment entity. The regs also provide guidance on some due diligence requirements ofwithholding agents and on refunds and credits of amountswithheld.

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European Parliament Votes for Strong Digital Services Tax


The European Parliament voted in plenary to support a broader digital services tax (DST) than the one proposed by the European Commission. The commission's proposal has failed to gain the support of EU finance ministers.

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OECD Peer Reviews Push to Mend Tax Ruling Exchanges


The OECD released a report on its second round of peer reviews examining countries' spontaneous exchange of tax rulings, finding that the review process has facilitated positive changes.

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Competitiveness Concerns Rampant in Post-TCJA World


Countries remain uneasy overwhether businesseswill flee their markets given the United States' recent tax reforms.

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IRS Considering Presumptions to Ease FDII Proof of Foreign Use


Acknowledging that guidance is needed to better definewhat constitutes foreign use under the foreign-derived intangible income (FDII) provision, the IRS is contemplating presumptions to aid taxpayers.

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ICAP Participant Countries Working Toward Convergence


Although total uniformity may be unrealistic, the eight countries participating in the Forum on Tax Administration's international compliance assurance program (ICAP) pilot are trying to develop common risk assessment standards for country-by-country reporting data.

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Treasury Reassessing GILTI Net Used Tested Loss Rule


The U.S. Treasury has indicated that the door may be open to revisiting its controversial net used tested loss amount rule under its guidance to the global intangible low-taxed income provision.

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