Int'l Tax News

The United States is prepared to act if the United Kingdom and other countries press aheadwith digital services taxes (DSTs),which are attempts to grab extra revenue, a top U.S. House taxwriter has said.

The IRS has issued proposed regulations (REG-114540-18) that reduce the amount determined under section 956 for some domestic corporations that own, or are treated as owning, stock in foreign corporations.

When it comes to changes in long-standing policy of taxation of a controlled foreign corporation's investment in U.S. property, the IRS and Treasury have proven that big things come in small packages.

Kenneth Hayduk of General Dynamics has requested guidance providing that documents typically created in the ordinary course of a taxpayer's business are sufficient to establish a presumption of foreign use to satisfy the foreign use requirement in section 250(b)(4)(A)(ii).

The U.S. Chamber of Commerce has urged Treasury to redouble its efforts to get the European Union to engage in multilateral discussions regarding any plan for a digital services tax, saying in part that proposals from individual EU member states improperly target large American technology companies.

In this article, the author discusses trade and competition and compares U.S. efforts to regulate monopolieswith EU attempts to regulate state aid.

U.K. Chancellor of the Exchequer Philip Hammond's budgetwas "a bit of a gamble" that offered "sticking plasters rather than long-term solutions" to tax issues, according to the Institute for Fiscal Studies (IFS).

The potential parade of horribles from changes to the U.S. downward attribution rule continues to grow as new anxieties arise over the burdens it imposes on information reporting andwithholding.

The IRSwill revise the inclusion date definitionwithin its guidance on the global intangible low-taxed income provision, according to an official.

In this report, Ram discusses the history of the enactment of subpart F and reviews crucial documents and ideas that helped shape it.

Looking behind the headlines from the Chancellor's speech, the U.K. government's Budget sets out a number of important tax changes for business. Has the U.K.'s business tax code become more complex as a result of the Budget measures?

While tech companies and investors digested the finality of a digital services tax, announced in the U.K.'s budget, the fact that the government quietly amended its royaltieswithholding tax ruleswithin its 106-page red Budget book escaped their attention. Now, U.K. income linked to intellectual property in low-tax regionswill be taxedwhichwill further effect tech firms already hurting from digital services tax.

Pfizer posted a 45 percent jump in third-quarter profit, as it benefited from sharply lower taxes due to this year's federal tax cut and slightly higher revenue.

China may try to dress thewounds of global carmakers, but itwill be able to provide little more than a Band-Aid. The country's top economic-planning body is consideringwhether to cut in half the 10% tax that customers pay on new cars thereÔøΩthat might help prop up falling demand, but the industry has bigger problems.

Britain said itwould tax the revenue that online platforms such as Google, Facebook and Amazon make in the country to update a system that had not kept pacewith changing digital business models.

HM Treasury has issued a brief regarding the 2 percent tax on the revenues of specific digital businesseswhose revenues are linked to the participation of U.K. users; the taxwill take effect April 2020 barring a globally agreed solution on digital economy taxation.

The American Bar Association Section of Taxation has requested changes to proposed transition tax regulations (REG-104226-18), focusing its comments on passthrough entities and individuals (but not S corporations), the netting of accumulated post-1986 deferred foreign incomewith deficits in other related entities, and the foreign tax credit.

Although Brazilians have elected a new president, some practitioners and analysts say it's not clearwhether the country's controversial new leader can deliver on his ambitious tax plans, or evenwhat his specific plans are.

The government of the Netherlands has launched a six-week consultation on legislation targeting hybrid mismatches ÔøΩ including the infamous Dutch CV/BV structure ÔøΩ in linewith the EU's second anti-tax-avoidance directive.

A new report estimates that five U.S. multinational technology companies avoided a combined £5 billion in U.K. tax over the last several years, but at least one commentator says the report's conclusions are dubious.

EU member states in favor of the European Commission's proposal for a digital services tax (DST) are trying to demonstrate that the taxwould not fallwithin the scope of member states' tax treaties.

The U.K. moved on Monday to extract more tax from the likes of Google and Facebook, even as London pushes aggressively to make itself aswelcoming as possible to the tech industry as the country prepares to leave the European Union next year.

The U.K. government plans on introducing a new digital services tax (DST) in April 2020 ÔøΩ butwould consider dropping the tax if a globally agreed solution on digital economy taxation emerges from the OECD's discussions.

Ever since the Tax Cuts and Jobs Act introduced the term "foreign-derived intangible income" (FDII) into the popular tax lexicon, there's been some disagreement about how to pronounce the acronym ÔøΩ so much so that even the national media took note.

Colombiawill seek to raise income tax on high earners and lower duties on businesses, among other tax measures, to raise 14 trillion pesos ($4.4 billion) to finance next year's budget, the head of the DIAN tax agency said on Monday.

The U.K. said itwill move aheadwith plans to introduce a first-of-its-kind tax on locally generated revenue by large technology firmsÔøΩthe most concrete attempt yet by an industrialized nation to rewrite theworld's tax code for the digital era.

Among all the measures announced in U.K. Budget 2018, perhaps the most significantwas the one the Chancellor did not mention - the U.K. corporation tax ratewill fall from 19 percent to 17 percent in 2020. Many people thought this cut could be delayed or reversed, but nothingwas said and so itwill go ahead as planned.

Shares of U.S. automakers rose on Monday after a report that Chinawas considering halving its car purchase tax to 5 percent to support its struggling auto industry,which has been hit hard by the ongoing Sino-U.S. tradewar.

Britainwill levy a new tax on thosewho make or import plastic packagingwith less than 30 percent recycled material, finance minister Philip Hammond said on Monday.

Britain's Treasury chief unveiled Monday a new tax on big internet companies' revenues, insisting it is time that the global tech giantswith profitable business in the U.K. pay their fair share for public services.

British Chancellor of the Exchequer Philip Hammond is likely to give a 900 million pound ($1.15 billion) tax cut to small high-street retailers in his annual budget on Monday to help them compete against online competition, the government said late on Friday.

A majority of euro zone countries favour the single currency area adopting a fiscal capacity, or common budget, French Finance Minister Bruno Le Maire said on Friday. After meeting German Finance Minister Olaf Scholz in Berlin, Le Maire said they had also made progress towards achieving a compromise position on plans for a digital services tax.

Dozens of countries are stepping up efforts to levy new taxes on technology giants such as Alphabet Inc. and Facebook Inc., hoping to capture revenue from digital services as economic activity increasingly shifts online. Inspired by European Union proposals to impose a tax based on the revenue of tech companies rather than their profit, South Korea, India and at least seven other Asian-Pacific countries are exploring new taxes. Mexico, Chile and other Latin American countries too are contemplating new taxes aimed at boosting receipts from foreign tech firms.

The government of the U.K. island dependency of Jersey, responding to a European Union crackdown against offshore tax havens, has filed draft legislation to require local companies to show they're engaged in matters of "adequate economic substance."

Tech sector groups urged Chancellor of the Exchequer Philip Hammond to avoid unilateral taxation of the digital economy in his budget announcement,warning that itwould damage competitiveness and the United Kingdom's reputation.

The new focus on control of risk in OECD transfer pricing guidance is prompting the U.S. competent authority and its foreign counterparts to reassess old approacheswhen considering advance pricing agreement renewals.

On October 16 the OECD used the latest installment of its Tax Talkswebcast to provide an update on developing a solution for taxing the digital economy. The organization is under pressure to meet a 2020 deadline for the G-20 but also to show meaningful improvements in 2019, and during thewebcast, it reported progress.

A year ago,we told readers to forget everything they had ever learned about international tax planning. Five months ago,we made predictions for the U.S. midterm elections.we stand by both.

The economic impact of special financial institutions, or SFIs or letterbox companies, on the Dutch economy "seems to be limited," the Dutch central bank said in a statement.

An Australian anti-tax avoidance task force collected more than A$2.8 billion ($1.9 billion) in 2017-18,with nearly half of that amount coming from multinational companies.

Confidentialworking papers from the European Union indicate the bloc's lawmakers are consideringways towind down its controversial 3 percent digital tax. The strategy could allay fears from countrieswhoworry the proposal could become permanent. The logicwas laid out in a document obtained by Bloomberg News, dated Oct. 22 and prepared in advance of a November meeting of the bloc's finance ministers.

Multinationals need to provide all documents related to global tax disputes to both governments involvedÔøΩor risk having their cases set back by six months, an IRS official John C. C. Hughes said.

EU member nations remain at loggerheads over the proposed 3 percent tax on digital companies, after a high-stakes meeting of the bloc's tax specialists.

A majority of euro zone countries favour the single currency area adopting a fiscal capacity, or common budget, French Finance Minister Bruno Le Maire said on Friday. After meeting German Finance Minister Olaf Scholz in Berlin, Le Maire said they had also made progress towards achieving a compromise position on plans for a digital services tax.

Karen Sowell of the New York State Bar Association Tax Section has submitted a report on the new section 245A dividends received deduction for dividends distributed by a controlled foreign corporation

In this article, the authors discuss China's post-BEPS international tax landscape.

After a federal oversight board rewrote Puerto Rico's five-year fiscal plan, the island's government said itwill challenge the decision by amending its court appeal of the board's earlier rejection of the 2019 budget.

U.S. Treasury Secretary Steven Mnuchin issued a freshwarning against the EU's digital services tax (DST) proposal, urging countries against unilateralism on digital economy taxation and to engage at the OECD to find answers instead.

The Australian Taxation Office has issued practical compliance guidelines regarding the application of retroactive anti-hybrid legislation currently pending in Parliament to arrangements that have been restructured by taxpayers to avoid hybrid mismatch classification.