Posted by Jessica Englert on Apr 3, 2014
On March 24th, the Organisation for Economic Cooperation and Development (OECD) released its discussion draft on e-commerce, as part of its base erosion and profit shifting (BEPS) project. The draft is a result of BEPS Action 1: address the tax challenges of the digital economy.
After 58 pages describing the digital economy and the tax challenges it presents, the discussion draft presents different options on how to potentially address the issues, but confirms the view of the OECD that “ring fencing” the digital economy and applying a separate set of tax rules from the traditional...
Posted by Jonathan Goldman on Apr 3, 2014
On March 14, the Organisation for Economic Cooperation and Development (OECD) released a public discussion draft on Action 6 of its Base Erosion and Profit Shifting (BEPS) project, on how to prevent treaty abuse. The discussion draft covers many issues, but five key recommendations stand out. The first four are changes to the OECD Model Tax Convention itself (the “Model Convention”), and the fifth is an addition to the introduction of the Model Convention:
A limitation-on-benefits clause
A general anti-abuse rule
A savings clause
A new title and preamble
A discussion of tax policy...
Posted by Tory O'Connor on Apr 1, 2014
House Ways & Means Chairman Dave Camp (R-Mich.) formally announced that he would retire at the end of the current Congress. Many saw this decision coming, as House Republican conference rules will require Rep. Camp to relinquish his chairmanship of the powerful Ways & Means Committee after this Congress. As Chairman, Rep. Camp has pushed hard for comprehensive tax reform, a goal which has eluded him to date and he is unlikely to achieve in his last 9 months in office. In yesterday’s press release, Camp promised that during his remaining time in Congress he would “redouble...
Posted by Taylor Kiessig on Apr 1, 2014
Update 2: The two-year extension of the look-through provision was officially added back into
Sen. Wyden’s extenders package.
Update: Dropping look-through lasted approximately 6 hours today. The extenders package released this morning would not have extended the related party look through rule as discussed in the original post, but by 4 PM, a two-year extension of the look-through provision was included on a list of provisions the Senate Finance Committee said may be added to the extenders package either before the mark up or as amendments.
Original Post: On April 1, Senate Finance...
Posted by William Pauls on Apr 1, 2014
On March 28, the IRS released the final version of Form W-8BEN-E for use by entities to meet the reporting and withholding requirements under the Foreign Account Tax Compliance Act (FATCA). With FATCA’s initial compliance deadline of July 1, 2014, quickly approaching, the release of the final Form W-8BEN-E is a welcome event for those striving to meet the requirements of the new regime. Although the instructions to the new form are pending, the form nevertheless should be completed in accordance with the rules of the final and temporary FATCA regulations.
Notably, the final...
Posted by Jonathan Goldman on Mar 26, 2014
The IRS released guidance on March 25 that Bitcoins and other virtual currency should be treated as property for U.S. federal income tax purposes, and not as a currency. In addition to the determination that virtual currency is property, the IRS notice made clear that some of the typical rules on transactions in property apply to virtual currencies. For example, the recipient of virtual currency as payment for goods or services is treated as having received income equal to the fair market value of the virtual currency. In addition, under the guidance, payments made in virtual currency...
Posted by Daniel Nicholas on Mar 21, 2014
The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) action plan is moving forward. On March 19, 2014, the Organisation for Economic Co-operation and Development (OECD) released two discussion drafts on “action 2” of the OECD’s BEPS action plan (Action 2).
Action 2 is targeted at neutralizing the potential tax advantages, including elimination of taxation, double deduction and long-term deferral, of certain instruments or entities that are treated differently under domestic laws of two countries, so-called “hybrid mismatch...
Posted by Mikka Gee Conway on Mar 20, 2014
Conventional wisdom states that Representative Dave Camp’s (R-Mich.) comprehensive tax reform proposal has zero chance of passing in the current Congress. Nevertheless, experts are praising the Camp proposal for its specificity, transparency, and thoroughness. In a recent blog post, TaxVox editor and Urban Institute fellow Howard Gleckman and Urban-Brookings Tax Policy Center co-director William Gale opined that the Camp proposal—“in all its gory detail”— sets a bar that future reform proposals must meet in order to be taken seriously.
By specifying exactly what he would cut and...
Posted by Jonathan Goldman on Mar 19, 2014
Energy tax reform has been the subject of three recent, and very significant, administrative and legislative proposals:
The President’s 2015 budget, released on March 4, 2014;
The comprehensive tax reform plan released on February 26, 2014, by Representative Dave Camp (R-Mich.), chairman of the House Ways and Means Committee; and
The energy tax discussion draft released on December 18, 2013, by then-Senator Max Baucus (D-Mont.), then-chairman of the Senate Finance Committee.
In this legal alert, we: (1) review the most noteworthy energy tax provisions in each of those proposals; (2)...
Posted by Jonathan Goldman on Mar 11, 2014
The Obama Administration has corporate “inversions” in its sights. On March 4, the Administration’s 2015 budget was released, and it includes a provision which would significantly lower the ownership thresholds to keep “inverted” companies within the U.S. taxing power.
The budget would make changes to section 7874, which was enacted in 2003 and targets “inversion transactions.” Under current law, an inversion transaction generally involves the acquisition by a foreign corporation of substantially all of the properties of a domestic corporation, if the shareholders of the...
Posted by Jonathan Goldman on Mar 5, 2014
On February 26, Representative Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, released his much-awaited comprehensive tax reform plan (the “Camp Proposal”). That proposal seeks to cut marginal tax rates on individuals and corporations by dramatically reducing the number of available deductions and credits, and proposes significant other changes to the tax code that would affect taxpayers across tax brackets and industries.
Many view this proposal as the most comprehensive tax reform plan released by a member of Congress since 1986, and its breadth is hard to...
Posted by Jonathan Goldman on Mar 5, 2014
On March 4, the President released the 2015 annual budget, which included both new and old tax proposals. We will be posting further on some of these proposals, and the Administration’s entire explanation of the revenue proposals, aka the Greenbook, can be found here.
Posted by William Pauls on Mar 5, 2014
On February 26, House Ways and Means Committee Chairman Dave Camp (R-Mich.) released a “Discussion Draft” of the Tax Reform Act of 2014, which sets forth his much-anticipated tax reform proposals. Of note, the Discussion Draft aims to transition the corporate tax rate to a flat 25% rate beginning in 2019 and to repeal the corporate alternative minimum tax. However, as part of the revenue raisers for these proposed changes, the Discussion Draft includes a number of proposals that target insurance companies or that otherwise would have a direct effect on them. In particular, those...
Posted by Jonathan Goldman on Mar 2, 2014
Representative Dave Camp (R-Mich.) has released a comprehensive tax reform plan. Links to key materials are included here.
The legislative text
The section-by-section summary
The executive summary
The press release
The Joint Committee on Taxation...
Posted by Jonathan Goldman on Feb 25, 2014
Even as the prospects for comprehensive tax reform dim, House Ways and Means Chairman Dave Camp (R-Mich.) and President Obama are pushing forward with proposals to change the tax code.
Rep. Camp has said that he is going to release a comprehensive tax reform plan, a move that House GOP leadership has thwarted in the past. The Chairman’s plan could be released as early as the week of February 24th. While his past discussion drafts give some idea of what will be in Rep. Camp’s plan, he has not yet provided any details.
President Obama is also reportedly targeting the offshore profits of...