Category: Profit Shifting

Guest Post: Transfer Prices Are an Evidentiary Gold Mine for Patent Defendants

Guest Post by Andrew Blair-Stanek, Assistant Professor of Law at University of Maryland Carey School of Law Patent owners routinely tell the IRS, under penalties of perjury, that their patents have little value.  Litigators representing defendants should take advantage of these remarkable admissions. IP has become the world’s leading tax… – Continue reading

MTC Puts Designs on Increasing State Transfer Pricing Revenues

This past December, the Multistate Tax Commission’s (MTC) transfer pricing advisory committee and its project facilitator Dan Bucks recommended what it calls the “preliminary design” approach for a proposed Arm’s Length Adjustment Services (ALAS) program.  While still subject to approval, states have already put designs on increasing state transfer pricing… – Continue reading

Big companies need to tell the public how much tax they pay, says business lobby group CTA

The group that represents most of the ASX 200 on tax issues, the Corporate Tax Association, has emerged as a surprise advocate of increasing transparency about the amount of taxes big companies pay. The Corporate Tax Association’s submission to the inquiry into corporate tax avoidance said it had concerns about… – Continue reading

Grappling with inversions: UK “Google tax” addresses corporate diverted profits

In November 2012, a startled TV audience watched coverage of the House of Commons Select Committee questioning Google’s chief executive about why his business, with ostensibly billions of pounds in sales generated in the UK, accounted for UK corporation tax in an amount equivalent to the price of a single… – Continue reading

Grappling with inversions: UK “Google tax” addresses corporate diverted profits

In November 2012, a startled TV audience watched coverage of the House of Commons Select Committee questioning Google’s chief executive about why his business, with ostensibly billions of pounds in sales generated in the UK, accounted for UK corporation tax in an amount equivalent to the price of a single… – Continue reading

Congress Should Pass the Stop Tax Haven Abuse Act to Combat International Tax Avoidance

Each year U.S. multinational corporations avoid an astounding $90 billion in corporate income taxes by booking their profits on paper through international tax havens. At a time of growing inequality and budget austerity, it is outrageous that we allow the world’s richest companies to get away with not paying their… – Continue reading

New Brief: Representative John Delaney’s New Proposal Lets Corporations Off Easy

On Dec. 12, 2014, Rep. John Delaney (D-MD) proposed a new version of his “repatriation holiday” tax plan. The latest version would require multinational corporations to pay a token amount of taxes on their accumulated offshore profits and exempt those profits from any further U.S. income tax. Delaney’s new plan… – Continue reading

Patent Box still a potent tool – accountants

Midlands businesses can still benefit from the Patent Box, according to international accountancy firm Mazars. It follows plans to amend it – resulting in a narrower focus on UK R&D. That is the verdict from Birmingham professionals Peter Jelfs, senior tax manager at international accountancy firm Mazars, and Nicholas Braddon,… – Continue reading

European Commission lays bare Amazon tax deal with Luxembourg

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. Luxembourg’s unorthodox tax deal with Amazon was laid bare by European Commission investigators on Friday, who believe it artificially lowered and “capped” the online retailer’s tax bill,… – Continue reading

How an Obscure Tax Loophole Brought Down Obama’s Treasury Nominee

(Bloomberg) -– So how did the previously obscure term tax inversions become part of Washington parlance, fodder for the next presidential campaign and the issue that helped derail a U.S. Treasury nominee? Thank, or blame, depending on your perspective, cutting-edge tax lawyers, populist Democrats, a banana seller, a drugmaker, a… – Continue reading

Senator Whitehouse hopes compromise will close tax loopholes used by large corporations + Poll

PROVIDENCE — With tax reform one issue that congressional Republicans and Democrats might agree on this year, U.S. Sen. Sheldon Whitehouse announced Monday his plans to introduce three bills aimed at making the super rich pay more through a “fairer” tax system and closing loopholes that allow some corporations to… – Continue reading

Canada Launches Anti-Evasion Electronic Funds Transfer Initiative

New Electronic Funds Transfer (EFT) rules have entered into force in Canada, requiring certain financial intermediaries to report incoming and outgoing transfers of CAD10,000 (USD8,446) or more to the Canada Revenue Agency. On January 7, 2015, Revenue Minister Kerry-Lynne D. Findlay announced the launch of the CRA’s EFT initiative. Effective… – Continue reading

Billions of rands leave SA under the radar

South Africa has lost out on billions in tax revenue in the past decade as large corporations, wealthy individuals and criminal syndicates slipped nearly R1-trillion out of the country. A Washington DC research and advocacy group, Global Financial Integrity, believes South Africa suffered “illicit financial flows” totalling more than $122-billion… – Continue reading

UK Parliamentary Hearing Held On BEPS Response

British Members of Parliament (MPs) have questioned the Government’s unilateral decision to push for the introduction of a Diverted Profits Tax (DPT) ahead of the completion of the Organisation for Economic Cooperation and Development’s (OECD’s) work on base erosion and profit shifting (BEPS). In a debate held in Parliament on… – Continue reading

A two-minute nutshell on the UK’s proposed “Google Tax” – the “diverted profits tax” or “DPT”

The UK is proposing to introduce a unilateral, non-OECD co-ordinated anti-BEPS provision, referred to in the media as the “Google Tax”, with effect from 1 April 2015. The draft provision is very complex, and it will be time consuming to assess its potential impact on many common cross-border business structures…. – Continue reading

SARS ‘already fighting tax erosion’

THE South African Revenue Service (SARS) has already begun to tackle the erosion of the tax base through profit shifting, which was addressed in an interim report of the Davis tax committee that was released last month for public comment. SA loses billions of rand in revenue annually through the… – Continue reading

Digital tax increase to take effect in Europe

Europe’s tax showdown could be headed straight to people’s wallets. With the new year, a change in fiscal rules in the European Union is increasing the tax on many purchases of digital content like e-books and smartphone applications. Under the new rules, first approved in 2008, the tax rate on… – Continue reading

News Round Up

Currently, there is a tendency among those who take an interest in international tax developments to look to the future and try to guess how the international tax landscape will look in, say, three of four years, once countries begin to implement the OECD’s base erosion and profit shifting (BEPS)… – Continue reading

Move to stop multinationals artificially loading debt overseas to dodge tax

The OECD is urging governments to tackle interest payments made by multinationals and their subsidiaries as part of a global crackdown on profit shifting. The aim is to also stop companies artificially loading debt in no-tax or low-tax jurisdictions to reduce their tax bills. It comes as the government backs… – Continue reading

IRS demands Ballmer, other Microsoft leaders testify in corporate tax audit

The Internal Revenue Service has sued former Microsoft CEO Steve Ballmer and a slate of other former and current executives, seeking to compel them to testify in a long-running investigation into how the company’s sales through subsidiaries affected its taxable income. The Internal Revenue Service has sued former Microsoft Chief… – Continue reading

US Business Attacks Proposed UK Diverted Profits Tax

The United States Council for International Business (USCIB) has warned that the United Kingdom’s proposal to impose a new tax on so-called “diverted profits” (DPT) would, if implemented, have a major impact on US-based multinational companies. The rules, contained in UK Government’s recent Autumn Statement, propose a 25 percent DPT… – Continue reading

Policy of inaction on multinational tax

Heading into the G20 in Brisbane last month, Treasurer Joe Hockey thundered that multinational companies who avoided paying tax were akin to “thieves” whose actions rendered it harder for governments to tackle poverty. Sadly however the government’s actions have failed to match its rhetoric. This week’s crafty back-down on Section… – Continue reading

Financial Group Wants More Limits on Corporate Inversions

The FACT (Financial Accountability and Corporate Transparency) Coalition today submitted comments to the Treasury Department praising their previous actions to limit inversions while also calling for additional measures. The proposals come as a part of the open comment period for Notice 2014-52, Rules Regarding Inversions and Related Transactions, originally issued… – Continue reading

Government renegotiating tax treaties to curb flow of black money abroad, says Finance Ministry

To check illicit financial flows across borders, the government is renegotiating bilateral treaties with many countries to limit tax benefits to genuine investments and curb the routing of Indian money to safe havens, a senior Finance Ministry official said on Wednesday. While noting that the quantum of domestic black money… – Continue reading

ATO chief identified tax ‘abuse’ by multinationals before Joe Hockey backed away from reform pledge

The head of the Australian Tax Office, Chris Jordan, has described a tax lurk for multinational companies that is being retained by the Abbott government as having been “abused” by foreign corporations at a cost of “hundreds of millions of dollars” a year to the Commonwealth. As revealed by Fairfax… – Continue reading

UK clamps down on tax avoidance

(CNS Business): The British government has published draft legislation for a new Diverted Profits Tax (DPT), dubbed the “Google tax”, by which it intends to sidestep Britain’s existing tax treaties with low-tax jurisdictions by levying a charge that would fall outside the corporate tax system. The government hopes to raise… – Continue reading

Multinationals rob Kenya of Sh78b in tax evasion, says US research firm

Kenya was conned of more than Sh78 billion through corruption and tax evasion between 2003 and 2012, a US-based research firm has reported. Researchers from Global Financial Integrity (GFI) compiled the losses, which they describe as “modest” considering gaps in information, but could be bigger than all mega-scandals, including Goldenberg,… – Continue reading

Proposed offshore tax evasion offence could “quietly disappear” following omission from draft Finance Bill clauses

Proposals which would introduce automatic criminal penalties for those who fail to declare taxable offshore income may “quietly disappear” following their omission from draft clauses for the 2015 Finance Bill published for consultation, an expert has said.15 Dec 2014 Tax Disputes and Investigations Tax Corporate tax Private wealth tax UK… – Continue reading

The inversion backlash

Something strange happened in 2014 — Americans became very interested in corporate tax policy. It started in the spring, when U.S.-based pharmaceutical giant Pfizer, which produces blockbuster drugs like Lipitor and Viagra, floated a possible merger with its British-based rival AstraZeneca. Normally a merger of that size would make a… – Continue reading

Packer’s PBL in latest tax leak: report

Publishing and Broadcasting Limited (PBL) allegedly negotiated a secret deal with the Swiss government when James Packer was chief executive officer, which set a tax rate of less than 2.15 per cent for the media group’s intra-company loans, The Australian Financial Review reports. According to correspondence obtained by the newspaper,… – Continue reading

Inversions Are Often Last Stop for Avoiding U.S. Taxes

The surge in U.S. companies avoiding taxes by taking a foreign address has been condemned by President Barack Obama and stirred a policy debate in Congress. What’s often overlooked is that these “inversions” are typically a final step in a hopscotch of multinational tax dodging. Many companies invert after years… – Continue reading

ACCA raises concerns with Diverted Profits Tax

The government’s plans to implement a Diverted Profits Tax (DPT) have been questioned by the Association of Chartered Certified Accountants (ACCA). Chas Roy-Chowdhury, head of taxation at the body, said nobody wants profits that should be subject to UK tax “escape the net”. As a result, he believes it is… – Continue reading

The UK Diverted Profits Tax – a unilateral approach to an international problem

Given the publicity surrounding the practices of multinationals in structuring their affairs to minimise their tax liabilities, it is not completely surprising that the UK Government has chosen to act by introducing a new tax, called the Diverted Profits Tax (“DPT”), which applies at the rate of 25% (rather than… – Continue reading

5 fat roadblocks in the way of tax reform

Some of the best tax minds in the country agree on one thing: Corporate tax reform will be a very, very heavy lift. Sure, the White House and top lawmakers who will be in charge of writing tax law next year have signaled their openness to the idea. And, yes,… – Continue reading

New Luxembourg leaks reveal James Packer’s PBL in secret Swiss tax deal

A secret deal with the Swiss government negotiated by media group Publishing and Broadcasting Ltd when James Packer was chief executive set a tax rate of less than 2.15 per cent on PBL’s intra-company loans. “We do have good news for you!” Ernst & Young Swiss partner Markus Huber wrote… – Continue reading

How Google and Apple Make Their Taxes Disappear

Around the world, countries are desperately seeking ways to stop multinational companies from earning profits within their borders without paying taxes on them, while stashing trillions in tax havens like the Cayman Islands. The British government, after a search, says it knows how to tax the profits Google earns in… – Continue reading

Corporate transparency The openness revolution

As multinationals are forced to reveal more about themselves, where should the limits of transparency lie? HOWARD SCHULTZ, the head of Starbucks, said last year that “the currency of leadership is transparency.” If so, bosses should be feeling ever more qualified to command their troops. Business is being forced to… – Continue reading

Bombardier among companies using legal tax havens at expense of home country

MONTREAL – The problem is not that Bombardier Inc. played a complex shell game since at least 2010 by refinancing and redirecting US$500 million of its financing activities to Luxembourg, a notorious tax haven. It’s that it does so legally — and is hurting its home country despite being one… – Continue reading

American lawmakers will put their rubber stamp on global profit-shifting

All those Dutch sandwiches, double Irishes and Luxembourg, uh, lunchboxes that US multinational companies use to defer taxes and shift profits abroad are expected to be re-empowered today when the Senate votes to enact a one-year tax extension package. Included in the package is a renewal of two breaks, one… – Continue reading

Taxing Diverted Profits: The Empire Strikes Back

There’s big news from across the pond. The U.K. government’s Autumn Statement (formerly known as the pre-Budget report), released December 3, promises to change how multinational corporations will be taxed – and offers a cautionary tale for would-be U.S. tax reformers. Britain will introduce a “diverted profits” tax, targeting corporations… – Continue reading