Int'l Tax News

Spain's Socialist governmentwants to introduce new taxes on big Internet companies and on financial transactions as away of paying for improved pensions and public services.

The Tax Cuts and Jobs Act's shift toward a territorial tax system and its provisions on global intangible low-taxed income and foreign-derived intangible income increase incentives for U.S. companies to move jobs overseas and punish U.S.workers, according to an October report from the Joint Economic Committee Democrats.

Baker McKenzie has recommended a change to proposed transition tax regulations (REG-104226-18), urging that section 965(c)(1)(ii),which disallows certain foreign tax credits, be left out of the final regs because it exceeds Treasury's regulatory authority, resulting in an unauthorized taking of a tax asset granted to taxpayers by Congress.

A congressionally mandated fiscal board has said itwill closely evaluate the Puerto Rican government's latest tax reform plan,which the board said has the potential to "significantly impact" the island's revenues and tax structure.

Mineral resources harbor awealth of opportunity to improve the tax take of many developing countries, and the OECD is aiming to helpwith industry-specific recommendations concerning interest deductions, tax incentives, and valuation.

Negotiations on Gibraltar's future after Brexit have delivered "a fairly final protocol," but tax is one of several issues still to be resolved, Chief Minister Fabian Picardo said.

The press has obtained a list of companies that the proposed EU digital services tax (DST)will reportedly target, but the European Commission has clarified that the listwas created for analysis purposes only.

The European Commission has recommended that EU member states use all available legal mechanisms to improve coordination in transfer pricing enforcement in an effort to reduce double taxation and nontaxationwithin the EU.

There are several options for addressing rules on the new branch basket in proposed regs on the U.S. foreign tax credit, but despite the regs' imminent release, it's unclearwhichway the IRS is leaning.

The IRS's proposed business interest deduction ruleswill address issues that could affectwhether a U.S. multinational decides to incur debt at the level of the parent or the controlled foreign corporation.

A few months before the interim proposal to tax U.S. tech companies more heavily, the European Union launched a colorfulwebsite designed to teach children about taxation. Announcing "Tax builds my future," the site cheerfully explains in shades of teal and hot pink that taxes pay for playgrounds and parks and encourages children to learn about taxes by doing internet searches, considering a scenario about intellectual property rights and digital music, and connectingwith TAXEDU on Facebook. The only thing missing is a chirpy directive to little Europeans to ask Alexa about taxation. Europe has a complicated relationshipwith U.S.-developed tech.

Italian tax officials visited the recent International Bar Association annual meeting in Rome to discuss tax administration. An OECD base erosion and profit-shifting project graduate, Paolo Valerio Barbantini, deputy director general of the Italian Revenue Agency, told participants that his agency is looking for an enhanced relationshipwith taxpayers and their representatives.

The OECD's base erosion and profit-shifting projectwas the first populist phenomenon, according to Raffaele Russo of the Italian Ministry of Economy and Finance. Readerswill remember Russo as the OECD official in charge of BEPS. His audience, at the recent International Bar Association (IBA) annual meeting in Rome, could be forgiven for notwelcoming this observation.

The U.K. Diverted Profits Taxwas introduced to target unacceptable tax planning arrangements. How successful has it been?

Europe's highest courtwill likely still have sway on tax cases after Brexit, according to a report by the U.K. Parliament considering how disputes between the EU and U.K.will be resolved after Brexit.

India may need to proceed cautiously as it finalizes a provision to ensure digital companies pay tax, evenwithout a physical presence in the country. The measure is broad enough that it could ensnare brick-and-mortar companies instead of the intended digital targets.

Energy companies and green groups havewritten separate letters thisweek to Britain's finance minister asking for the country's strong carbon price to be maintained to prevent a rise in coal-fired power generation and greenhouse gas emissions.

Europe has talked long enough aboutwhether to make internet giants like Google, Apple and Facebook pay more taxes and it is time for a decision, French Finance Minister Bruno Le Maire said on Thursday.

A group of media outlets led by Germany's non-profit Correctiv are reporting traders have manipulated transactions in multiple European countries over years, draining tax coffers of some 55.2 billion euros ($63.5 billion). In Germany alone traderswere able to garner 31.8 billion euros in so-called "Cum-Ex" trades, involving receiving multiple reimbursements for capital gains taxes paid only once.

In this article, the authors discuss recent U.S. international tax developments, including the proposed global intangible low-taxed income regulations, foreign tax credit carryforwards, transfer pricing and value creation, and BEPS financial transactions.

More than 50 tax regulation projects on the Office of Management and Budget's new regulatory agenda have been deemed significant, a sharp increase from the six in the prior agenda.

Canada needs to reform its tax system to remain competitivewith the United States in thewake of the Tax Cuts and Jobs Act, according to a Canadian Senate committee report.

The Liberal Democrats have proposed publishing multinational companies' tax returns to expose and tackle tax avoidance in the UK.

Over the past few years, the OECD, the European Commission and, indeed, the U.S. government have been steering (and continue to steer) the ship of international tax law at unprecedented speed into a Bermuda Triangle of sorts, inwhich the compass of the typical, seasoned tax crew no longer points north and the charts don't exist. This article considers several risks for multinational corporationsÔøΩ BEPS implementation, U.S. Tax Cuts Act changes, aswell as digital taxation proposals and European state aid investigation.

Germany is planning to roll out measures to give comfort to companies fearful of an immediate increase in their tax burden due to Brexit. Existing corporate and individual tax rules may still apply "in caseswhere Brexitwould cause an inappropriate and possibly unjust legal consequence," according to a new bill, published by Germany's Federal Ministry of Finance.

The Dutch government's abrupt decision to retain its 15 percent tax on dividend distributions means it can use the freed-up funds to ax or amend other unpopular measures. The center-right government, led by Prime Minister Mark Rutte, is funneling 1.9 billion euros ($2.2 billion)ÔøΩthe cost of ending the taxÔøΩtoward abolishing or mitigating the impact of proposed changes that have drawn the ire of local corporations and investors in recent months.

Seventeen regulations implementing the 2017 tax law are at the top of the Treasury Department's action list for fiscal year 2019, according to a new regulatory plan. The list includes high-profile rules on the tax overhaul's limit on the amount of debt interest payments businesses canwrite off and guidance on foreign tax credit issues arising from new international-tax changes.

Britain is looking at four options for carbon pricing once it leaves the European Union, including launching its own emissions trading system said Emily Briggs, deputy head of emissions trading at Britain's Department for Business, Energy and Industrial Strategy. Britain could remain in the EU's Emissions Trading System; launch a UK ETSwhich links to the European scheme; set up a stand-alone UK ETS, or revert to a carbon tax.

German Finance Minister Olaf Scholz said onwednesday that Germany did not need to take a new approach to corporate tax reform but should look atwhether some aspects need to be adjusted.

PWC, on behalf of Saltchuk Resources Inc., has commented on proposed transition tax regulations (REG-104226-18) involving the election to pay the net tax liability under section 965 in installments and has urged that "covered acceleration events" be extended to include specified transactions so theywill not be precluded from use of the termination group exception.

Baker McKenzie has commented on proposed regulations (REG-104226-18) implementing section 965, suggesting that Treasury and the IRS extend the previously taxed income concept for distributions in 2017 to cover sales covered by section 1248 and to add specific language to the final regs to avoid double taxation.

Miller & Chevalier has requested clarification in proposed transition tax regulations (REG-104226-18) that a controlling interest in a corporation is not treated as actively traded property forwhich there is an established financial market for purposes of determining the cash position of a specified foreign corporation under section 965(c)(3).

The United States Council for International Business has suggested changes to and clarifications of proposed regulations (REG-104226-18) on the section 965 transition tax, addressing issues on the definition of section 965 earnings and how those earnings interactwith deficits and previously taxed income, how cash is defined, and how foreign taxes are determined.

Cargill Inc. has urged that proposed regulations (REG-104226-18) clarify that amounts determined under section 965 for section 958(a) shareholders that are members of a U.S. consolidated group are aggregated across consolidated group members prior to calculating the "greater of" such amounts for determining the consolidated group aggregate foreign cash position.

The FACT Coalition has asserted that proposed transition tax regulations (REG-104226-18) tilt strongly in favor of multinational companies over smallwholly domestic ones or individual taxpayers and, thus, any changes should strengthen rather thanweaken the rules as some commentators argue.

KPMG LLP has suggestedways to diminish confusion and complexity in proposed transition tax regulations (REG-104226-18) regarding the transfer by a U.S. shareholder of specified foreign corporation stock to an S corporationwhen the transaction doesn't result in a change in the net tax liability of the transferring U.S. shareholder.

Covington & Burling LLP has requested changes to examples in proposed transition tax regulations (REG-104226-18) to illustrate the application of section 318 to avoid expanding the downward attribution rules beyond their "long-understood scope"while also continuing to illustrate the application of the special attribution rule.

In this article, the authors discuss the base erosion and antiabuse tax implemented under the U.S. Tax Cuts and Jobs Act, focusing on its relationshipwith U.S. tax treaties currently in force.

Guernsey's Policy & Resources Committee has released the draft 2019 budget,which includes a couple of proposals thatwould amend the corporate tax regime.

Data storage giantwestern Digital has petitioned the U.S. Tax Court challenging $516 million in deficiencies, most ofwhich relate to a $1.4 billion transfer pricing adjustment for intangibles licensed to an Irish subsidiary.

France's Parliament is considering amendments to the country's patent box regime ÔøΩwhich doesn't complywith OECD requirements ÔøΩ to lower the tax rate from 15 percent to 10 percent and include softwarewithin its scope.

The 11th-hour abandonment of a Dutch dividendwithholding tax repeal coincideswith a more aggressive plan to cut corporate taxes thanwas previously considered.

International discussions about a long-term solution on digital taxation continue to take shape as the OECD aims to update the incoming Japanese G-20 presidency on the subject in 2019, the organization's tax chief said.

Pascal Saint-Amans, the Organization for Economic Cooperation and Development's director of tax policy, expressed optimism Tuesday that a task force chargedwith creating recommendations on how to dealwith digital tax issueswould agree on "some form of recommendation" in the next few months.

Dutch Prime Minister Mark Rutte abandoned a proposal to end a dividend-withholding tax in an about-face triggered by Unilever's decision to forgo a plan to consolidate its headquarters in the Netherlands.

U.S. corporations have largely abandoned the contentious deals that allowed them to shift their addresses abroad for a lower tax rate. Yet a key part of the transactions is continuing quietly even after President Donald Trump's tax overhaul. Although shifting headquarters abroad is less common, the move of intellectual property continues because the U.S. corporate rate cut isn't enough to change tax planning.

The so-called sixth Directive on Administrative Co-operation ("DAC6", the "Directive"), adopted by the Economic and Financial Affairs Council on May 25, 2018, requires EU member states to introduce in their national law mandatory disclosure rules for cross-border arrangements. Part 1 of this two-part series looks at the key features of the new regime and the requirements it introduces.

More companies may start tying tax policies into their corporate governance structures after unions accused Chevron Corporation of tax avoidance.