Taxation Archives

Business Remains Engaged in OECD BEPS Project

Published on June 1, 2016

Fountain pen on taxOver 75 participants attended the Business and Industry Advisory Committee (BIAC) to the OECD Committee on Taxation and Fiscal Policy meeting on April 6. Representatives from the OECD’s Centre for Tax Policy and Administration gave members an insight into future work on the Base Erosion and Profit Shifting (BEPS) agenda and took note of considerable business concerns regarding BEPS implementation. BIAC remains engaged in the ongoing BEPS work at the OECD and in particular the implementation of BEPS measures at the national level.

In a letter to the European Commissioner for Economic and Financial Affairs, Taxation and Customs, BIAC expressed concerns about the European Anti-Tax Avoidance Directive, some elements of which are inconsistent with the consensus recommendations reached at the OECD and risk the further fragmentation of the international tax system. Additionally, a new BIAC working group has been formed to consider how business can advocate on the issue of Country-by-Country reporting implementation.

Business Asks for More Time on Treasury’s Debt-Equity Regulations

Published on May 13, 2016

Fountain pen on taxUSCIB joined 22 other business organizations asking the government to delay the effective date of Treasury’s controversial earnings-stripping rules (proposed 385 regulations) and offer additional time for public comments. In a letter to Treasury Secretary Jacob J. Lew sent on May 12, the business groups explained that the new regulations would “significantly increase the cost of doing business in the United States” and change the way businesses can finance their operations using intercompany debt.

The new regulations are intended to prevent companies from shifting income outside of the United States through loans to subsidiaries by treating some of those loans as equity instead of debt. The business groups explained that although Treasury’s earnings-stripping rules are designed to reduce the number of corporate tax inversions, the regulations “go far beyond cross-border mergers and apply to a wide range of ordinary business transactions by global and domestic companies both in and outside the United States.” Once finalized, the new regulations could cost companies millions in lost tax deductions.

The groups requested that, given the broad impact of the new regulations on critical business operations, the government delay the effective date of the new regulations’ implementation, extend the public comment period from July to October and dedicate adequate time and resources for a thorough review of the public comments on the proposed regulations.

Read the letter.

OECD Tax Conference to Examine Challenges of BEPS Implementation

Published on May 9, 2016

taxconferenceWashington, D.C., May 10, 2016 – After three years of negotiations, the OECD/G20 project on base erosion and profit shifting (BEPS) designed to address corporate tax avoidance concluded last year with governments developing a framework for modernizing international tax rules. As the focus of this work shifts to implementation, in which the Organization for Economic Cooperation and Development (OECD) will invite all interested jurisdictions to become part of a dialogue that will directly shape monitoring processes on BEPS issues, government officials, company executives and tax practitioners will gather June 6-7 in Washington, D.C. to discuss the challenges of BEPS implementation and the future of global tax policy.

The 2016 OECD International Tax Conference, which will take place at the Four Seasons Hotel, will provide a unique opportunity for business experts to interact directly with key leadership from the OECD’s Center for Tax Policy and Administration (CTFA), as well as senior tax officials from the United States and other OECD countries. 

The event is the eleventh in a series of sold-out annual gatherings convened by the United States Council for International Business (USCIB), in cooperation with the OECD and the Business and Industry Advisory Committee (BIAC) to the OECD, which officially represents private-sector views in the Paris-based body. Details on the event are available at www.uscibtax.org.

“As we move into the new territory of BEPS implementation, it is important how the BEPS reports are translated into national law.  Global companies should be following these changes as carefully as they followed the development of the BEPS reports,” said USCIB Vice President and International Tax Counsel Carol Doran Klein. “Our conference is more valuable than ever as a resource to learn about and discuss a wide range of international taxation issues, and the OECD is of course a critical resource in this area.” 

Keynote remarks at this year’s conference will be delivered by U.S. Internal Revenue Service Commissioner John Koskinen. Other speakers will include:

  • Pascal Saint-Amans – Director of the Center for Tax Policy & Administration, OECD
  • Robert B. Stack – Deputy Assistant Secretary for International Tax Affairs, U.S. Treasury
  • Mike Williams – Director, Business and International Tax, HM Treasury, UK
  • Martin Kreienbaum, Director General, International Taxation, Federal Ministry of Finance, Germany
  • Grace Perez-Navarro – Deputy Director of the CTPA, OECD
  • Achim Pross – Head of International Cooperation and Tax Administration, OECD
  • Jacques Sasseville – Head of Tax Treaty Unit, OECD
  • Andrew Hickman – Head of Transfer Pricing Unit, OECD
  • Jesse Eggert – Senior Advisor, BEPS Project, OECD
  • Will Morris – Chairman, BIAC Committee on Taxation and Fiscal Affairs; Director, Global Tax Policy, GE International Inc. (United Kingdom) 

About USCIB:

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, including BIAC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, VP communications, USCIB
+1 212.703.5043 or jhuneke@uscib.org

IRS Sees Potential Problems with Surrogate Filings

Published on March 8, 2016

USCIB’s Carol Doran Klein spoke to Bloomberg BNA about the surrogate filing option of the country-by-country reporting template, recommended by the OECD’s action plan on base erosion and profit shifting (BEPS).

Tax experts cited the challenges created by differences in timing in the implementation of the country-by-country reporting requirements, part of the OECD’s plan to combat tax avoidance. Klein expressed skepticism about U.S. multinationals filing their country-by-country reporting in the UK.

Read the full Bloomberg BNA article. (Paywall)

Changes to US Model Tax Treaty “Very, Very Complicated”

Published on February 26, 2016

taxes-portLast year the U.S. Treasury department announced proposed changes to the U.S. Model Income Tax Treaty, which is the model text used by American officials when they negotiate tax treaties with other countries. According to a press release issued by Treasury in May 2015, “The revisions to the U.S. Model text are intended to ensure that the United States is able to maintain the balance of benefits negotiated under its treaty network as the tax laws of our treaty partners change over time, and to deny treaty benefits to companies that change their tax residence in an inversion transaction.”

USCIB and other business groups have expressed concern that the treaty provisions tilt too far in the direction of denying inappropriate claims of treaty benefits. Although Treasury recently narrowed some of the anti-tax evasion provisions to be more palatable to the U.S. business community, tax practitioners say that the model’s reception will be uncertain, especially among America’s treaty partners.

Speaking to Bloomber BNA, USCIB Vice President for Tax Carol Doran Klein noted that the treaty is complex and will be difficult to negotiate with other nations.

“It’s really, really complicated, which is not surprising,” Klein said. “I do think that some of the novel provisions have been modified, which is better. But it’s going to be really difficult to get this negotiated and also to apply it.”

Uncertainty also remains as to how the proposed changes to the U.S. model tax treaty might impact the OECD’s work on Base-Erosion and Profit-Shifting (BEPS).

USCIB sent a letter to the U.S. Treasury on September 14 expressing concern with proposed U.S. model tax treaty changes, which in part attempt to prevent double non-taxation of income between tax treaty partners. While acknowledging that the treaty provisions address legitimate concerns, USCIB said that the draft provisions “tilt too far in their attempt to prevent inappropriate claims of treaty benefits.”

USCIB/OECD/BIAC International Tax Conference

USCIB, OECD, and BIAC, in cooperation with IFA-USA, ITPF, NFTC, OFII, TCPI, TEI and Tax Foundation, will host its annual conference on the OECD’s new international taxation initiatives on June 6-7, 2016 in Washington, D.C. This conference will provide a unique opportunity for the U.S. business community to interact with key representatives from the OECD Centre for Tax Policy and Administration and senior tax officials from the U.S. and other key countries involved in the OECD/G-20 BEPS project.

 

The OECD’s Tax Agenda: Building a Coherent and Predictable Tax Regime

Published on February 9, 2016

taxes-portFor global business, the leading role of the OECD in international tax policy is of great importance and value. With the G20 mandate for the project on Base Erosion and Profit Shifting (BEPS), the reach of OECD tax work and policy guidance has increased considerably. All OECD/G20 countries, along with Latvia and Colombia, have pledged to follow the BEPS minimum standards, but any country could join the efforts to address BEPS. For this, the inclusive framework for the monitoring and implementation of BEPS will be essential.

At the same time, the OECD has developed Multilateral Competent Authority Agreement on Country-by-Country reporting. This agreement, signed on January 27 by 31 countries, including four non-OECD/G20 countries, is a first major step in the BEPS implementation and should facilitate a more coherent and predictable tax regime for investors. Through the Business and Industry Advisory Committee (BIAC) to the OECD, the business community will be actively involved in the further implementation process of BEPS.

But the OECD work on taxation is not only about BEPS. There are multiple streams of work with great significance for business, including International Guidelines on VAT/GST, the Global Forum on Transparency and Exchange of Information for Tax Purposes with currently 130 parties undertaking peer reviews, as well as tax and development.

To better understand the complexities of the OECD work and role in international taxation, BIAC has prepared a brief on the Tax Agenda of the OECD. We hope this brief will provide good guidance even to members who do not participate in this work on an expert level.

With valuable support and input from our members, USCIB and BIAC will continue to offer structured advice to the OECD to help develop a more coherent international tax regime that will support – and not hinder – cross border trade and investment, and growth. USCIB is the U.S. affiliate of BIAC.

Visit USCIB’s Membership page for more information on how to become a member and get involved in our Taxation Committee, which promotes sound and consistent international tax policy and advocates against government actions that result in double taxation. USCIB co-organizes an annual tax conference with BIAC and the OECD in Washington, D.C. This year’s OECD International Tax Conference will take place on June 6 and 7.

Delay in Country-by-Country Reporting Rules Incites Backlash

Published on January 13, 2016

Bloomberg BNA

“The decision to delay IRS rules implementing country-by-country reporting requirements from the OECD is stoking fears of increased administrative complexity for the upcoming year…The OECD’s language “implies that there ought to be some sort of allowance for a country to get their legislation in order, but it doesn’t explicitly say that,” said Carol Doran Klein, vice president for tax at the U.S. Council for International Business. “It’s confusing, and people would like to have certainty.””

Read the full Bloomberg BNA article.

7th Annual Pacific Rim Tax Institute

7th Annual Pacific Rim Tax Institute will be held March 9 & 10, 2017 at the Sofitel Hotel (re-named Pullman Hotel) Redwood Shores, CA. The theme will be BEPS Implementation: Deep Dive.

Panels will include Challenges and Opportunities of BEPS; Competent Authority in Light of BEPS; Implementing Substance (Actions 1. 7-10); Implementing Consistency (Actions 2-4,6); Implementing Transparency (Actions 5, 11-15); Tax Policy: Two Sides of the Coin; Impact of Brexit and EU State Aid and Potential Federal Tax Law Changes.

Invited High Level Government Tax Officials from Canada, India, Japan, Korea, China and Australia, OECD Deputy Director CTPA Grace Perez-Navarro, UN Chief of International Tax Cooperation Michael Lennard, as well Doug O’Donnell, LB&I Commissioner, Ted Setzer, Assistant Deputy Commissioner and Sharon Porter, Director of Treaty and Transfer Pricing Operations.

The conference is co-sponsored by TEI, USCIB, IFA, SVTDG, SF Foreign Tax Club and Stanford University Law School.
15 Hours of CPE/MCLE. To keep the conference informal, it will be limited to 135 corporate tax directors, managers and tax counsels as well as tax partners, principals, directors and managers. Admission for two day conference $850; Sponsor Members $750, including breakfast, lunch and Reception.

To register or for more info/ Agenda go to: www.pacifictaxpolicyinstitute.com or contact Barbara Phalen at barbara.phalen@pacifictaxpolicyinstitute.com or Stewart Karlinsky at stewart.karlinsky@pacifictaxpolicyinstitute.com