Int'l Tax News

In this article, the author examines the United Kingdom's impendingwithdrawal from the European Union, discussing potential models for the future relationship between the two parties and considering the potential impact of Brexit on corporate taxation in the United Kingdom.

The newly elected Colombian government plans to lower taxes on businesses and raise more revenue from individuals, Finance Minister Alberto Carrasquilla told business leaders.

There is international consensus that transfer pricing rules should address not only how to price related-party transactions but alsowhether their structure alignswith arm's-length transactions, according to an Australian Taxation Office (ATO) official.

Income earned by providingweb hosting services is not taxable as a fee in India under the India-U.S. tax treaty, an Indian tribunal has found.

The IRS is paying heed to commentators' calls for an exclusion of global intangible low-taxed income from the calculation of exempt organizations' unrelated business taxable income.

This paper uses an alternative measurement methodology adjusting for profit shifting to empirically demonstrate how the effects of profit shifting cascade throughout a fully articulated set of economic accounts. The authors alternative methodology applied to U.S. economic data in 2014 results in a 1.5 percent and 3.5 percent increase in measured U.S. gross domestic product and operating surplus, respectively, and a 33.5 percent decrease in measured income receivable from the rest ofworld.

IMFworking Paper, ByNigel Chalk, Michael Keen, and Victoria Perry

This IMFworking Paper provides an assessment of the key provisions of the Tax Cuts and Jobs Act (TCJA), from the perspective of both the U.S. itself and thewiderworld. The paper determines that the reform has many positive aspects including steps to broaden the base of, and reduce marginal rates under, the personal income tax, reduce distortions to investment and financing decisions, and mitigate outward profit shifting. But it also says that the TCJA has a large fiscal price tag and leaves significant uncertainty as to how the U.S. tax systemwill develop. It concludes that the novel international provisions create a complex array of both positive and negative international spillovers, and have the potential to significantly reshape thewider international tax system.

The US has issued new proposals to regulate tax deductions on pass-through entities in an effort to level the playing field between corporations and partnerships.

Law 360, By Richard Crump

Denmark's tax authority has filed a suit at the High Court in London against 71 individuals and companies, including many in the financial services sector,which it alleges took part in a massive multinational fraud to cheat the Danish government out of £1 billion ($1.3 billion) in reimbursed taxes.

U.S. banks shattered earnings records in the second quarter of 2018, reeling in $60.2 billion in revenuewith the help of the corporate tax cuts passed last year, according to federal data released Thursday.

The Tax Cuts and Jobs Act (TCJA) has created significant new tax incentives to invest in automation rather than hiring more people, and some critics see tax incentives for robots as a fiscal time bomb because tax revenue could fall dramatically unless governments find newways to raise it.

Executives of North Sea oil companies are becoming increasinglyworried about a tax increase in the next UK budget as the government looks for an alternativeway of raising revenuewithout a corporate tax hike.

The Philippine government has already commenced a massive tax reform program but now taxpayers need to be ready for the TRAIN 2, the second package of tax reform,which sees a cut in corporate income tax.

The U.S. Chamber of Commerce urged the Treasury Department to give corporations that overpaid taxes on offshore profits more flexibility in how to use those refunds. The Internal Revenue Service said earlier this month that itwon't rebate excess payments or credit them toward tax bills not tied to repatriation, such as annual bills for corporate income.

Russia has decided to move away from a controversial plan to levy a new $7.5 billion tax on some of the country's largest industrial companies after an outcry from business groups and leading executives. This proposed plan sought to increase social spending by taking aim at 14 of Russia's largest metals, mining, and chemical companies.

Importers from countries outside the U.K., including giants like Amazon.com Inc., could benefit from the country's proposed value-added tax treatment in the event of a no-deal exit from the European Union. In a no-deal scenario, importers from EU and non-EU countrieswould be required to account for import VAT on their VAT return, rather than paying it at the border before any goods are sold. This change could be a balm for companies that otherwise could face cash-flow problemswhen importing large amounts into the U.K., the government said.

Taxpayers could see regulations on a new tax on international profitswithin 45 days. Thewhite House's Office of Management and Budget is reviewing proposed regulations (REG-104390-18) that provide guidance on a new tax on global intangible low-taxed income (GILTI) under tax code section 951A.

The 2017 tax act has substantially altered U.S. multinational groups' expectations about repatriation of their present and future accumulated foreign cash and earnings. This article reviews the difference between financial accounting and income tax rules as it relates to foreign subsidiaries' earnings and the impact the 2017 tax actwill have on anti-deferral rules, source ordering rules, and fluctuations in the currency exchange rate.

Chile plans to reduce its tax take from corporations,wagering itwill boost economic growth and investment, under legislation announced Aug. 21 by President Sebastian Piñera.Central to the bill is the creation of a fully integrated corporate income tax regime, allowing shareholders to discount all taxes paid by the companies they own from their own tax burden, a central tenet of Chilean tax law for most of the last three decades.

On Aug. 16, 2018, in a 3-0 decision, the Eighth Circuit overturned the Tax Court's June 2016 decision in the dispute between the Internal Revenue Service (IRS) and Medtronic, Inc. concerning the transfer pricing treatment of an intercompany licensing arrangement and remanded the case for further consideration. This is a rare victory for the IRS in a transfer pricing case. Could it herald a reversal of the IRS's long string of losses?

The Eighth Circuit has vacated the Tax Court's 2016Medtronicdecision, remanding the case for a comparability assessment of the legal settlement agreement used in the taxpayer's comparable uncontrolled transaction method analysis.

A Luxembourg legislator has released the draft law implementing the EU Anti-Tax Avoidance Directive.while the main purpose of the draft law is to implement ATAD, it also includes two additional BEPS-related tax law changes aiming at removing potential double non-taxation situations. This article provides an overview of the different tax measureswhich may still evolve throughout the legislative process.

The U.K. tax authority, HM Revenue & Customs ("HMRC") has recently published a consultation document "Amending HMRC's civil information powers" inwhich it launched a focused review of its existing third party information powers and proposed certain changes to simplify and accelerate the process bywhich it can obtain information about specified taxpayers from third parties. The proposed changes in the documentwill be of concern to taxpayers because itwill result in a considerable expansion to HMRC's information-gathering powers,with very limited restrictions or processes in place to safeguard taxpayers' rights.

The European Commission published an amendment to the Directive on Administrative Co-operation in June 2018 imposing mandatory reporting by intermediaries (e.g., accountants, lawyers and tax advisers) and potentially taxpayers of various cross-border arrangements to their respective member state tax authorities,who in turnwill automatically exchange the information obtained to each other on a quarterly basis.

Taiwan's government hopes to send the legislature a tax plan for repatriated assets by the end of the year. Asset repatriation is likely to increase in Taiwan, according to a lawmaker involved in drafting the plan, because of the ongoing trade dispute between China and the U.S., and Taiwan's looming 2019 implementation of the Common Reporting Standard.

Over the years, foreign investors have persistently shown interest in participating in the Nigerian economy. Despite recent economic upheavals, the country had received foreign direct investments of around $118 billion as at December 2017. However, foreign investors should ensure that they pay attention to certain key tax and regulatory considerations often overlookedwhich are considered in this article.

To reduce the compliance burden on taxpayers, the Indian government is seeking comments on a proposal to computerize the process for obtaining a certificate to reduce income tax deducted at source (TDS).

Economists estimate that adjusting for U.S. multinationals' shifting of profit into low-taxed foreign holding companies results in significant changes to macroeconomic statistics, including a 1.5 percent increase in U.S. GDP.

In this context, one of the most underappreciated Canadian economic success stories ÔøΩ the sustained reduction in Canada's federal corporate income tax rate from 2001 to 2012 ÔøΩ is particularly relevant for an American audience.

Imagine how high the U.S. economy can soar if President Trump resolves the arguments he startedwith America's trading partners. Already the conventionalwisdom on the tax law he signed in December is moving in his direction.whereas prior to the law critics suggested itwould provide a modest temporary boost, there's now an emerging consensus that the law may pull so much investment into the United States that it could impoverish governments across the globe.

Soy oil and soy meal producers in Argentina said the deferral of tax benefits to the massive industry may lead major players, including the local units of Cargill Inc. and Bunge Ltd., to sell unprocessed beans instead of more profitable derivatives,which is bad news in a countrywhere soybeans and its byproducts account for 25% of all exports.

Japanese railway operators and pharmaceutical companies are among the multinational firms that are highly concerned by the country's forthcoming proposal to limit net interest deductions. The changesÔøΩpart of the OECD's base erosion and profit shifting (BEPS) rules to counter corporate tax avoidanceÔøΩwould mean companies that historically relied heavily on debtwill no longer be able towrite off interest payments to the same extent, creating higher tax burdens.

This article addresses the latest legal developments on taxation of foreign e-commerce companies in Uruguay. According to recent rules, such companies shall be registeredwith the Uruguayan Tax Office, indicate a local domicile (or instead appoint a local representative), and submit annual tax returns, among other obligations. In addition, the Tax Office has established a timetable for companies catching up on their taxes accrued as from January 1, 2018.

European Union-based vendorswho use platforms like eBay Inc. and Amazon.com Inc. to sell goods into the U.K. face a compliance headache in the event of a hard Brexit, as theywould need to register for value-added tax.

South Africa's government is close to agreeing to new tax breaks for international carmakers including Toyota Motor Corp., Ford Motor Co. and BMW AG in return for initiatives to boost jobs and exports, according to Trade and Industry Minister Rob Davies.

The authors model the effects of cash-flow taxes, differing according to the location of the tax, on the behavior of a multinational producing and selling in two countrieswith three different sources of economic rent. The authors conclude thatwhile a cash-flow tax on a source basis createswelfare-impairing distortions to production and consumption, and is partially incident on non-resident owners of domestic production, a destination-based cash-flow tax, in contrast does not distort behavior, but is incident only on domestic residents.

On August 1, Treasury and the IRS released 249-page proposed regulations under Section 965 (the Proposed 965 Regulations). The Proposed 965 Regulations provide guidance relating to the 'toll tax' due upon the mandatory deemed repatriation of certain deferred foreign earnings. The Proposed 965 Regulations incorporate the rules described in prior guidance and set forth additional guidance on a range of issues relating to the implementation of Section 965.

Recently published German draft legislationwould extend the German non-resident taxation rules on capital gains from disposal of shares in a German corporation to capital gains from disposal of shares in a foreign corporation that is deemed to be 'real estate-rich.' If a 100% participation exemption is deemed available for non-resident corporations, the proposed ruleswould be expected to affect primarily non-resident individuals and partnershipswith individuals as partners.

Hot on the heels of a position paper released June 28, the Australian Treasury Department has followed upwith exposure draft legislation targeting structures set up to convert trading income into more favorably taxed passive income.

Omar Moerer, Daniel Pybus and David Ledure examine the OECD's Discussion Draft on financial transactions and concludewhilst the Draft is a small step in terms of guidance, it is a giant leap for financial transactions transfer pricing.

America's biggest companies are reporting some of the strongest earnings growth since the recession, boosted by lowered tax rates and a robust U.S. economy that is fueling demand across industries.

Pending European Union rules to protectwhistleblowers could leave companies exposed to "dangerous leaks of information" and conflictwith confidentiality obligations, leading tax adviser lobby groups havewarned.

Subaru Corp. reported a sales slide in the U.S., its largest market, and predicted a "big impact" from President Donald Trump's proposed tariffs on imported vehicles following the escalation of a global tradewar.

Altera Corp., a subsidiary of Intel Corp., might get another shot in the Ninth Circuit for its tax case. The U.S. Court of Appeals for the Ninth Circuitwithdrew its July 24 opinion in the case "to allow time for the reconstituted panel to confer on this appeal."

The U.K.'s crown dependencies have proposed rules requiring resident companies to demonstrate economic substance, to prove they aren't there merely for tax purposes.

Illinois Toolworks Inc. avoided a multimillion dollar tax billwhen the U.S. Tax Court ruled against the IRS in finding that a loan between the industrial equipment manufacturer's two foreign units is considered to be debt and not a taxable distribution.

Multinationals are currently exempt from the nation's capital gains tax exit rate of 33 percentÔøΩone of the highest in the European Union. But the Irish governmentwill have to take these privileges away at the end of 2019 to complywith EU anti-tax avoidance legislation. The Irish government should keep the rate of a future exit as low as possible to continue attracting multinational corporations, tax practitioners told Bloomberg Tax.

Spanish Prime Minister Pedro Sanchez has pledged to reform Spain's corporate tax rules so that companies pay an effective rate no lower than 15 percent.