Int'l Tax News

Lawrence Axelrod of Morgan, Lewis & Bockius has commented on proposed regulations (REG-104390-18) on global intangible low-taxed income, addressing the application of the consolidated return rules to section 951A and seeking changes regarding some methods under the regs.

An individual has advised Treasury that the base erosion antiabuse tax should not apply to regulatory capital instruments issued by U.S. regional banks, saying federal tax rules should be applied to support the capital rules of regional banks as mandated by the Federal Reserve and the Office of the Comptroller of the Currency.

Two law firms have urged Treasury to issue regulations to make clear that, for purposes of calculating the base erosion antiabuse tax in a modified coinsurance-based transaction, the base erosion payment is the cash settlement payment from the U.S. life and annuity insurance company to the reinsurer.

Sen. Lindsey Graham, R-S.C., has submitted information on the base erosion and antiabuse tax provision of the Tax Cuts and Jobs Act (P.L. 115-97) concerning reinsurance payments by domestic life insurers to foreign affiliated reinsurers to ensure that Treasury has clarity regardingwhatwas intended by the act and the nature of the specific reinsurance payment towhich the language refers.

The Court of Justice of the European Union has published the reference for Luxembourg's application (T-516/18) to annul the European Commission's decision (C(2018) 3839 final) to order Luxembourg to recover ÔøΩ120 million in unlawful state aid granted to French fuel supplier Engie.

The Spanish company that operates Zara and other clothing stores is closing an Irish subsidiary that has been criticized for its role in allowing the group to pay less tax elsewhere in Europe.

IMF staff have recommended that Italy undertake comprehensive tax reform in lieu of its historical piecemeal approach to improve on a dire growth outlook.

Germany and France are touting their global anti-base-erosion (GLOBE) proposal,which includes a tax on base-eroding outbound payments, as a long-term approach to tax the digital economy,while OECD discussions on the subject continue.

A research firm is questioningwhether rules changing taxation of controlled foreign corporations' investment in U.S. propertywill fully resolve, in practice, consequences that limit the credit that offshore subsidiaries may provide to U.S. companies.

Regulations implementing the Tax Cuts and Jobs Act's rules targeting hybrid entities and hybrid transactions have been sent to the Office of Management and Budget for review, indicating that proposed regulations may soon be released.

France's prime minister says there'll be no U-turn in the government's policy of hiking taxes on fossil fuels to encourage the take-up of cleaner energies, despite planned protests by vehicle drivers thisweekend.

China is contemplating a secondwave of corporate tax reforms, likely to be passed next year, to combat the effects of U.S. tax cuts and tariffs.

The Treasury Department and thewhite House Office of Management and Budget agreed to fast-track rules thatwill tell companies the scope of foreign tax credits, opening the door for the guidance to come out after Thanksgiving.

Paul Forster proposes, in a letter to Financial Times, an alternative to a digital sales tax dilemmaÔøΩlegislate to ensure that all sales of such services are attributable to the countries inwhich their customers reside, and to place a cap ÔøΩ based on a percentage of revenue ÔøΩ on allowable intellectual property royalties

French Finance Minister Bruno Le Maire said on Monday that a European Union plan to tax big internet firms such as Google and Facebookwas close to being struck, despite several EU governments having pushed back against the idea.

German Finance Minister Olaf Scholz said he favors getting a binding deal on a European Union digital tax at a meeting of EU finance ministers in December, and that he supports the French model for the move.

The Dutch government is planning to roll out a new measure to prevent requests for advance tax rulings involving arrangements that use shell companieswithin the country's vast trust sector to reroute profits.

EU nations share a sense of urgency to agree on taxing digital companieswhile disagreeing "on how to do it in a cleverway," Danish Finance Minister Kristian Jensen said in an interview at parliament.

Changes to Britain's centuries-old trust regime are looming after the government announced a review ofwhether it could be made "simpler, fairer and more transparent". Thisweek, HM Revenue & Customs launched a consultation on trustswhichwill seek views and evidence onwhether there is a need for reform of trust taxation.

A multinational healthcare company headquartered in the United Kingdom is moving to Ireland to protect the financial benefits it accruedwhen it inverted in 2015 from the uncertainty of a post-Brexit United Kingdom.

EU member state representatives did not discuss Germany's request to delay implementation of the proposed digital services tax (DST) at a recent meeting, instead focusing on a new compromise proposal that amends several technical elements.

Treasury hopes to assuage the disparate global intangible low-taxed income tax rules,which put individual U.S. shareholders of controlled foreign corporations at a disadvantage compared to corporate shareholders, but some challenges exist.

The U.K.'s annual finance bill has set out, over 300 pages of laws, to implement global measures against tax avoidance and introduce a new environmental tax on carbon emissions.

Spain's digital services tax (DST) is slated to enter into force in January 2019, despite the criticism and concerns of multinational technology companies. Following the path of the European Commission, the Spanish government has recently filed a preliminary bill to create the DST, an indirect tax on digital serviceswhere there is an essential contribution by the users to the value creations are monetized by the companies. In accordancewith the government's forecast, the DSTwould collect $1.4 billion in FY2019.

The Israel Tax Authority is maintaining its strict approach to the tax treatment of intellectual property transferred abroad following the purchase of an Israeli company by a multinational.

Top tax officials from five countries concluded aweek-long effort to uncover financial crime enablers and identify new targets of criminal tax investigations. The Joint Chiefs of Global Tax EnforcementÔøΩfrom the U.S., U.K., Canada, Australia, and the NetherlandsÔøΩsent data experts to Amsterdam to increase information sharing and identify patterns to aid future investigations.

Brazil's President Michel Temer on Thursday signed into law hundreds of millions of dollars in incentives for automakers such as General Motors Co and Volkswagen to produce locally and continue developing engines that run on both gasoline and ethanol.

Ford Motor Co. and its foreign subsidiary aren't the same taxpayer,which prevents the use of a tax interest-netting benefit, a federal appellate court ruled November 9.

EU Tax Commissioner Pierre Moscovici said hewants a "decision" on his proposal for a digital services tax (DST) at the December 4 Economic and Financial Affairs Council meeting.

Proposed regulations on business interest deductions could be releasedwithin days, according to a Treasury official.

The OECD is under pressure on taxing the digital economy, but its tax chief remains optimistic that the debatewill not only yield a solution but also extend the base erosion and profit-shifting project.

Both the House and Senate versions of bills thatwould become the Tax Cuts and Jobs Act (P.L. 115-97) proposed repealing for corporate shareholders the application of section 956 ÔøΩwhich, in conjunctionwith section 951(a)(1)(B), generally requires U.S. shareholders of controlled foreign corporationswith investments in U.S. property to include a corresponding amount in current income. (For the Joint Committee on Taxation's comparison of the bills, see JCX-64-17.)

The data analysis group in the new international tax enforcement collaboration between the United States, Australia, Canada, and the Netherlands has developed ideas for new investigation targets and cooperation techniques.

The Office of Management and Budget officially acknowledged receipt of proposed foreign tax credit regulations, starting the clock on their expedited review.

Taxpayers in Poland should take stockÔøΩthe planned tax incentive gives an opportunity to apply a lowered 5 percent corporate income tax rate. The tax incentive ("Innovation Box"), is part of a number of comprehensive changes aimed at supporting the innovations of entities investing in Poland.

The Netherlands has plans to implement EU Anti-Tax Avoidance Directive 1 from 2019. Howwill this impact multinational corporations that do business in the Netherlands or have holding companies in the Netherlands?

Small export companies in Israel are set to receive generous tax breaks previously provided to only larger companiesÔøΩa move that is likely to attract more foreign investment.

U.S. banks and insurance companies may face significant, backdated value-added tax bills in the U.K. amid moves to tighten rules that previously permitted exemptions for serviceswithin the same company, tax adviserswarn.

Taxpayers are a step closer to seeing guidance on one of the 2017 tax overhaul's anti-abuse measures. The Treasury Department Nov. 6 sent proposed regulations on the law's base erosion and anti-abuse tax to the Office of Management and Budget for review.

Houseways and Means Committee Democrats are preparing for a series of hearings on the 2017 tax law in the new year afterwinning the House in the midterm elections.

French President Emmanuel Macron said he still hopes to persuade Germany to back a European Union-wide digital turnover tax, despite Berlin's preference for a global minimum corporate tax to stop firms shopping around for tax havens.

When police raided the Munich office of BlackRock, theworld's largest asset manager, thisweek it underlined how a long-running German criminal investigation into alleged tax fraud is gathering pace.

EU competition chief Margrethe Vestager isweighing upwhether there are grounds to open a probe into Facebook's European tax arrangements as she deepens her multinational investigation into sweetheart tax deals, two people close to the case saidwednesday.

The U.K. government has launched a consultation on the design, implementation, and the administration of the proposed digital services tax,which is intended to be an interim tax on digital businesses pending international agreement on a long-term approach to tax the digital economy; interested parties should submit comments by February 28, 2019.