Int'l Tax News

Thewhite House's Office of Management and Budget has concluded its review of proposed regulations implementing the new tax law's one-time repatriation tax.The next step is for Treasury to publish the rules in the Federal Register.

Diageo Plc has taken a 190 million-pound ($250 million) hit from inquiries linked to a U.K. "Google tax" investigation, marking the end of the largest publicly disclosed dispute on the controversial measure.

Greece is scheduled to exit its marathon bailout this summer after hitting the tough fiscal targets set by its creditors. But the country has done so by raising taxes so high that they are strangling the small businesses that form the backbone of its economy.

The IRS released clarified instructions on how U.S. multinational companies should complete the paperwork for their global financial data,whichwill be exchangedwith other governments.

By:Daniel Shane (CNN Money)

Beijing has announced a range of measures including tax cuts, infrastructure spending and new loans to business as its tries to reinvigorate economic growth,which has begun to slow in recent months. The tax cuts for business are relatively small ÔøΩworth about $10 billion ÔøΩ but they come on top of much bigger injections of funds into the banking system in recentweeks aimed at boosting activity.

The Internal Revenue Servicewon a court case being closelywatched by technology companies on Tuesday, as an appeals court upheld a regulation governing how corporations divide expenses between their domestic and foreign operations.

US banks are calling on the British government to cut taxes and red tape that they say could lead to financial assets and jobs pouring out of the UK afterBrexit.

Canada's Liberal governmentwill seek to address competitiveness challenges faced by the nation's businesses in a budget update later this year amid pressure to respond to U.S. tax reform.

Uber Technologies Inc. and other ride-hailing companieswould have to create local subsidiaries in Chile thatwould be liable for corporate income tax under new draft legislation. The bill, presented to Congress July 20, is the latest attempt by the Chilean government to regulate the companies amid growing tension between taxi drivers, Uber drivers, and police on Santiago's streets.

EU presidency holder Austria's goal of pushing a digital tax solution through the bloc this yearwill be a big lift. "The goalwill be to campaign for further support and to take a step forward. Obstacles are to be overcome," a spokeswoman for the Austria Ministry of Finance said July 20.

Australia's plan to expand its tax definition of a "significant global entity" is set to include members of large multinational groups headed by private companies, trusts, and partnerships, and members of groups headed by investment entities.

Australiawants feedback on plans to tighten existing rules that let offshore sellers of Australian hotel accommodation escape the country's goods and services tax net.

Poland is proposing to significantly increase its powers to challenge multinational companies' transfer pricing decisionsÔøΩso much so, in fact, that one tax practitioner likened the new powers to "an atomic bomb."

This paper presents the new OECD model for the calculation of forward-looking effective tax rates and provides first empirical results based on an OECD survey, conducted in 2016, collecting comparable cross-country information on corporate tax provisions from 36 OECD and Selected Partner Economies.

Using comprehensive data on patent filings at the European Patent Office, including information on ownership transfers pre- and post-grant, thisNBERworking Paper investigates the impact of the introduction of a patent box on international patent transfers, on the choice of ownership location, and on invention in the relevant country.

This paper shows that eliminating firms' access to tax havens has unintended consequences for economic growth. The authors analyze a policy change that limited profit shifting for US multinationals, and show that the reform raised the effective cost of investing in the US. Exposed firms respond by reducing global investment and shifting investment abroad -which lowered their domestic investment by 38% - and by reducing domestic employment by 1.0 million jobs. The authors then show that the costs of eliminating tax havens are persistent and geographically concentrated, as more exposed local labor markets experience declines in employment and income growth for over 15 years. This paper discusses the implications of these results for other efforts to limit profit shifting, including new taxes on intangible income in the Tax Cuts and Jobs Act of 2017.

This IMFworking Paper describes and tentatively quantifies likely tax spillovers from the U.S. 2017 corporate income tax reform. It calculates effective tax rates under various assumptions, and tentatively estimates that under constant policies elsewhere, the rate cutwill reduce tax revenue from multinationals in other countries by on average 1.6 to 5.2 percent. If other countries react in linewith historical reaction functions, the revenue loss from multinationals rises to an average of 4.5 to 13.5 percent. The paper also discusses profit-shifting, real location, and policy reactions from the more complex features of the reform.

Taxpayers may find it harder to mount successful challenges to old IRS regulations on procedural grounds in thewake of a Ninth Circuit opinion reversingAlteraCorp. v. Commissioner.

G-20 finance ministers and central bank governors meeting in Buenos Aires July 21-22 registered their support for implementation ofthe inclusive framework on base erosion and profit shifting, according to a communiqué issued by the G-20's Argentinian presidency.

The OECD has joined the growing contingent of stakeholders urging Canada to assess the competitiveness of its corporate tax regime following the passage of the U.S. Tax Cuts and Jobs Act.

Jurisdictionswould need to demonstratethat they are activelyworking to implement OECD tax transparency standards to avoid being labeled noncooperative under a proposal agreed on by the OECD and G-20.

Despite their theoretical appeal to some, destination-based cash flow taxes may face an insurmountable political hurdle in the global debate concerning taxation of the digital economy, according to one OECD official.

The Tax Cuts and Jobs Act contains provisions thatwill acutely affect oil and gas investments, given the industry's capital-intensive nature, high leverage, practice of reinvesting earnings, and long project lead times. Future tax planningwill take into account the industry's loss-generating downturn over the past few years, and that industry participants often owed alternative minimum tax.

With the tax community focused on how to extract revenue from the profits of tech companies, other major developments in the digital space are getting less attention. Rapid growth is being made in artificial intelligence, and in a presentation at the Oxford Academic Symposium in late June, Benjamin Alarie of the University of Toronto presented a tool he and two colleagues are developing to apply AI to tax analysis.

European Union member nations are still split over key details underpinning its proposed tax on large internet companies like Alphabet Inc.'s Google and Facebook Inc. EU presidency holder Austria had hoped to smooth some disagreements in a July 18 meeting, laying out specific topics to be discussed such as the rate and scope of the tax and definitions needed to administer it. But even after eight hours of technical discussions, members remained divided over several elements.

It's time to question the use of "risk" as away to allocate profit among corporate entities for transfer pricing purposes, said Roberto Schatan, a senior economist at the IMF in the tax policy division.

Dutch tax advisers and leading business lobbyists are calling on the government to consider alternatives to their plan to abolish the country's dividendwithholding tax.

Spain's Socialist Prime Minister Pedro Sanchez has laid out a tax policy July 17 that cracks down on corporations' use of deductionswhich allow them to enjoy lower tax rates.

The IRS and tax authorities around theworld are grapplingwith how to use and analyze multinational companies' global tax reports, especially thosewith imperfections in their data, an IRS official said.

Beyond the direct effects on intangible valuation mandated by the Tax Cuts and Jobs Act, the new law may affect how projected cash flows and discount rates should be determinedwhen valuing intangible transfers.

Despite practitionerwarnings, the OECD's base erosion and profit-shifting project has not spurred a flood of mutual agreement procedure cases, according to an IRS official.

Although some countrieswill inevitably apply the OECD's final profit-split method guidance more aggressively than intended, the actual language adopted byworking Party 6 reflects a successful U.S. effort to limit the method's scope.

In this article, the author discusses measures in Italy's 2018 Budget Law that could result in a higher capital gains tax burden on foreign companies disposing of shares in Italian entities and that may, in practice, conflictwith EU law. He offers suggestions to companies affected by the change, noting issues they should take into considerationwhen planning for and calculating Italian taxes.

In this article, the author discusses the background, significance, and potential implications of the International Compliance Assurance Programme, a pilot initiative recently launched under the auspices of the OECD.

The digitalization of the economy may create challenges in applying traditional transfer pricing methods, but the arm's-length standard is still a better approach than formulary apportionment, according to an IRS official.

The U.K. has targeted more global businesses that risk facing its "Google tax," signaling the possible impact of the government increasing its resources to enforce the controversial measure.

A unique corporate tax cutting scheme proposed by the German state of Bavaria could make the country more attractive to international business in light of a global race to alleviate the tax burden on corporations.

European lawmakers' threats to challenge the new U.S. tax law at theworld Trade Organization are still pending as they determinewhether the U.S. Treasury Departmentwill address their concerns.

U.S. companies are expected to pay billions in federal taxes to bring back cash they've built up overseas over the last three decades. But investors might not know it by reading their financial statements. Analysts told Bloomberg Tax that the ambiguity startswithwhere in their annual or quarterly reports companies are reporting the repatriation tax.

U.K. lawmakers are planning to assess the impact of the new U.S. tax law on British companies, further underlining thewide-reaching effects of the country's sweeping reforms on global businesses.

A proposal in Ireland to creating a panel to examine how companies abuse tax rules is unnecessary and could cause uncertainty for businesses, practitioners told Bloomberg Tax. Instead, the government should focus on furthering its commitments to the OECD's base erosion and profit shifting project, they said.

Austria is stepping up plans for an EU-wide digital tax on big tech companies such as Apple and Google, despite opposition fromwithin the bloc.

Corporations taking advantage of new, lower tax rates reduced their payments to the federal government last month. The Treasury Department on Thursday said government receipts fell 7% in June comparedwith the same month a year earlier, including a 33% drop in gross corporate taxes.

Wells Fargo & Co. said Friday itwas hit in the second quarterwith a $481 million tax expense related to a legal decision.whatwas behind that? Turns out itwas the recent U.S. Supreme Court ruling affecting online retailers,which is also reaching out to hit non-retailers aswell.

The OECD has invited final comments on a revised draft toolkit designed to assist developing countrieswith the tax treatment of offshore indirect transfers of assets; submissions are due September 24.

In this article, the authors discuss recent U.S. international tax developments, including guidance on late-filing penalties and the OECD's voluntary International Compliance Assurance Programme.

The Tax Cuts and Jobs Act's steep corporate rate reduction may lower the stakes of future U.S. transfer pricing disputes, but itwon't affect the growing international trend toward aggressive transfer pricing enforcement.

Governments are keeping their plans regarding the use of country-by-country reports close to the vestwhile they experimentwith the data, according to an IRS official.

In this article the author analyses the Supreme Court's landmark decision inwayfair, and its implications for foreign businesses that sell goods to U.S. consumers.

Spain's Council of Ministers on July 13 approved the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), according to information published by the Spanish government.