International Taxation


IRS Addresses Transfer Pricing FAQs

Posted on April 23rd, by Global Tax Weekly in International Taxation. No Comments

The tax authorities in the United States have been busy on the international tax front. On April 16, 2020, the United States Internal Revenue Service issued a set of frequently asked questions and answers to help inform taxpayers about transfer pricing documentation best practices.

The six new FAQs deal with topics such as the advantages of preparing and providing “robust” transfer pricing documentation; the IRS’s guiding principle in establishing whether arm’s-length prices were charged in intercompany transactions; areas that the IRS has identified in transfer pricing documentation reports that could benefit from improvement; and examples of a presentation of a company’s intercompany transactions for examiners to use in summary when preparing risk assessments.

The US Treasury Department and the IRS additionally recently issued for comment proposed guidance involving hybrid arrangements and the allocation of deductions attributable to certain disqualified payments under section … Read More »


United States Issues Final GILTI Regulations

Posted on June 20th, by Global Tax Weekly in International Taxation. No Comments

The US Treasury Department and the Internal Revenue Service (IRS) have issued final regulations concerning the global intangible low-taxed income (GILTI) regime under Section 951A, as well as final and proposed regulations concerning foreign tax credits, domestic partnerships, subpart F income, and the treatment of certain controlled foreign corporation (CFC) income.

According to the IRS, the final GILTI regulations provide guidance to determine the amount of global intangible low-taxed income included in the gross income of certain US shareholders of foreign corporations, including US shareholders who are members of a consolidated group.

The final GILTI regulations retain, with certain modifications, the anti-abuse provisions that were included in the proposed regulations and revise the domestic partnership provisions to adopt an aggregate approach for purposes of determining the amount of global intangible low-taxed income included in the gross income of a partnership’s partners under Section … Read More »


Australia To Reform Tax Residence Laws

Posted on July 20th, by Global Tax Weekly in International Taxation. No Comments

The main focus of national and international tax policy makers at present is on the highly mobile, hare-like nature of business income, which whizzes from one jurisdiction to another at lightning speed, leaving tortoise-esque tax regimes trailing in its wake. But let’s not forgot that people are highly mobile too, as major advances in transport and communications technology have enabled individuals to live and work in all corners of the world and stay in touch with their work and family base with relative ease.

However, personal income tax codes, specifically rules on residency, have by and large also failed to catch up with the often-peripatetic nature of modern life. Indeed, some of these laws are so ancient, I’m sure Homer would still recognize them. Although the bit in the Odyssey about how Odysseus had to fill in numerous tax returns on … Read More »


EU Announces Tax Blacklist

Posted on December 20th, by Global Tax Weekly in International Taxation. No Comments

Never underestimate the power of negative publicity. Especially in the age of social media. Words of bad deeds can travel at the speed of light these days, and if, as an individual, a company, or even a country, you are on the wrong end of a public relations backlash, you may have no choice but to appease your accusers.

Multinational companies are increasingly worried about the reputational impact of negative exposure of their tax affairs in the media. Indeed, last year, Taxand surveyed chief financial officers and tax finance directors across Europe, Asia, and the Americas and found that 91 percent of respondents felt media scrutiny of their tax planning activities had a negative impact on their public standing compared with 51 percent in 2011 and 77 percent in 2015.

Although Facebook didn’t explicitly say so, it seems likely that the increasingly … Read More »


Changes Proposed For South African Foreign Earned Income Exemptions

Posted on August 9th, by Global Tax Weekly in International Taxation. No Comments

South Africa has proposed the removal of the 183-day foreign-earned income exemption in certain situations. Those certain situations, it seems, are when an expat resides in a jurisdiction with very low or non-existent taxes, which means they could be getting away with being doubly non-taxed. But the proposal has led to inevitable concerns that expats will end up being doubly taxed instead.

The Government argues that the foreign income exemption was put in place at a time when South Africa had far fewer double tax avoidance treaties than it does today. It assures those taxpayers likely to be affected by the new rule – if introduced – that tax credits will be available to prevent situations of double taxation arising. Although I imagine applying for a foreign tax credit is unlikely to be a comforting prospect for those who currently don’t need to. What’s … Read More »


Anti-FATCA Lobbying Campaign Gathering Momentum

Posted on February 15th, by Global Tax Weekly in International Taxation. No Comments

With a Republican Congress, and a Republican (of sorts) in the White house, opponents of FATCA have probably never had a better opportunity to have the controversial law repealed. Indeed, the anti-FATCA lobbying campaign is already beginning to shift up a gear in Washington DC.

For his part, President Trump has been silent on the matter. But observers suggest that his anti-big government, power-to-the-people, “America first” message places him firmly in the anti-FATCA camp. What’s more, we can hardly expect a savvy businessman like Trump to accept a law that has cost billions to implement but will yield relatively small returns.

We can only speculate about FATCA’s future. However, obligations on US citizens to report foreign financial interests do not begin and end with this controversial law; there’s also FBAR, and a multitude of other forms that must be submitted to the … Read More »


Google Faces Tax Grab In France

Posted on May 31st, by Global Tax Weekly in Compliance, Corporation Tax, Government, International Taxation, Tax Avoidance. No Comments

Bashing big business is de rigueur these days – an appropriate use of a French phrase considering the recent early morning raid by (reportedly) around 100 investigators and five magistrates on Google’s offices in Paris. Accusations of aggravated financial fraud and money laundering abound, linked to Google’s headquarters in Ireland. That is quite a joint accusation against one the globe’s biggest businesses.

But it is no secret that France – with Germany – has long held a grudge against Ireland and its competitive business tax and streamlined regulatory environment. That grudge became most apparent when the Celtic tiger lost its teeth during the financial crash, and refused to budge on calls led by those two countries to increase its low (for EU standards) 12.5 percent corporate tax rate as a condition for a bailout.

For more information on this, and other … Read More »


Germany Goes Against The Grain

It was encouraging to see German Finance Minister Wolfgang Schäuble rebelling against European Commission proposals for public country-by-country reporting at the latest meeting of EU finance ministers, given the weight of Germany’s voice in the EU. It’s going against the grain these days to question the call for greater corporate transparency. And perhaps there’s an argument that multinational firms could benefit from being more open about their activities from a public relations point of view, in much the same way as offshore jurisdictions like Guernsey have. Yet, as Schäuble suggested, there has to be a balance between “transparency and practicality.”

As Schäuble pointed out to his counterparts in Brussels recently, publishing sensitive company information in the public domain could lead to all sorts of unintended consequences, such as “lining someone up to be pilloried publicly.”

For more information on this, … Read More »


Panama Papers Compromise Privacy?

Posted on April 11th, by Global Tax Weekly in Compliance, Individual Taxation, International Taxation, Tax Avoidance. No Comments

It’s difficult to know where to begin with the Panama Papers affair. Predictably, most people have latched on to the “us and them” angle – how the rich, powerful, and well-connected get to live by a different set of rules from those who pay tax in full. The world does seem like a very unfair place sometimes. But it’s difficult also not to highlight the hypocrisy of some of the world’s leading politicians, who seem to rule by the mantra of “do what I say, not what I do.”

That being said, it might be an unpopular thing to say, but the massive irony about all this is that the vast majority of people named in the Panama Papers probably have done nothing illegal. Yet nobody has drawn attention to the crime that was committed to create this exposé in … Read More »


BEPS Roadmap Muddies Dutch Waters

The European Council, with the Netherlands at the presidency helm, last month released its BEPS Roadmap for the short and medium term. It lays out plans for further work on the Interest and Royalties Directive to include further restrictions on interest deductions, and on the Anti Avoidance Directive, with key focus on tightening controlled foreign company rules across the EU. This is perhaps an uncomfortable position for the Netherlands to be in; during much of the BEPS initiative, it remained largely silent on the proposals being put forward, choosing to wait for recommendations. And while it has made a few changes to its laws to reflect certain BEPS developments, in part in line with EU requirements, the Netherlands has not done so with the sheer gusto demonstrated by, say, the UK.

For more information on this, and other topical international tax … Read More »





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