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FY 2016 Budget Tax Proposals Target Insurance Companies

On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S. corporations and their controlled foreign corporations (CFCs) and (ii) a one-time 14% tax on earnings accumulated in CFCs and not previously subject to U.S. tax....

Representative Levin Targets Earnings Stripping

Inversion transactions are making waves, and politicians are taking notice, with the number of legislative proposals dealing with inversions and other international tax issues growing at a fast rate. Of particular note, Representative Sander Levin (D-Mich.), the ranking member of the House Ways and Means Committee, released a discussion draft of the Stop Corporate Earnings Stripping...

Time for a Little Spring Cleaning: IRS Releases Final Version of Form W‑8BEN-E for FATCA Compliance

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...

Potential Impact of the Tax Reform Act of 2014 on Insurance Companies

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...

Impact of International Tax Reform Proposals on U.S. Insurance Companies

On November 19, retiring Senate Finance Committee Chairman Max Baucus (D-Mont.) released a “Discussion Draft” setting forth his international tax reform proposals.  Of note, the Discussion Draft includes several proposals that target the international operations of U.S. insurance companies and international insurance groups with U.S. owners.  Specifically, those proposals would: Make...

Tides of Change: Dutch Budget Amendment Targets Holding Companies

On October 4, the Netherlands’ State Secretary for Finance Frans Weekers proposed an amendment (the Amendment) to that country’s 2014 budget that would require Dutch holding companies that collect and remit interest or royalty payments to meet “substantial activity” requirements in the Netherlands or face monetary penalties.  The Amendment forms part of the Netherlands’ efforts to...

Tides of Change: Bermuda and Cayman Islands Seek Admission to the Convention on Mutual Administrative Assistance in Tax Matters

By William Pauls During September, both Bermuda and the Cayman Islands announced their respective intentions to join the multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention).  By joining the Convention, the countries will become parties to a tax information exchange network that already includes many jurisdictions, rather than having to negotiate...

Agents of Change: EU Tax Commissioner Insists that Discussions Concerning the Proposed Financial Transaction Tax Will Continue Despite Concerns Over Legality

Coming on the heels of the uproar caused by an opinion of the Legal Service of the Council of the European Union (the CLS Opinion) that raised doubts as to the legality of the proposed financial transaction tax (FTT) (for background on the CLS Opinion, click here), EU Tax Commissioner Algirdas Semeta insisted that negotiations to finalize the terms of the FTT will continue. Speaking...

Agents of Change: EU Council Opinion Raises Concerns Over Legality of Proposed Financial Transaction Tax

An opinion prepared by the Legal Service of the Council of the European Union (the CLS Opinion) has raised concerns that the proposed financial transaction tax (FTT) may have an extraterritorial reach that infringes on the rights of non-participating member states (for background on the proposed FTT, click here).  Although the CLS Opinion may dim the hopes of those pushing for the...

Tides of Change: Barbados Finance Minister Proposes Temporary Tax on Banks

On August 13, Christopher Sinckler, the Minister of Finance and Economic Affairs for Barbados, presented to the Barbados House of Assembly (the lower house of the Barbados Parliament) a proposal for a temporary 0.2% tax on bank financial assets (the Financial Assets Tax). The measure was one of several tax proposals submitted by Minister Sinckler as part of the 2013 Financial Statement...

Tides of Change: Cayman Islands Announces Completion of FATCA Accord with the United States

On August 13, the Cayman Islands announced the conclusion of negotiations with the United States on an intergovernmental agreement (IGA) to implement the U.S. Foreign Account Tax Compliance Act (FATCA) and a new tax information exchange agreement (TIEA).  According to media reports, the countries will adopt a Model 1B nonreciprocal FATCA IGA, which will require the Cayman Islands...

Tides of Change: CARICOM Announces Progress on FATCA Compliance and Other Financial Matters

The Caribbean region came one step closer to conformity with the U.S. Foreign Account Tax Compliance Act (FATCA) at the Fifteenth Meeting of the Council for Finance and Planning (the Council) of the Caribbean Community (CARICOM) held on August 7.  During that meeting, the Council agreed upon a coordinated approach to negotiations with the U.S. concerning compliance with FATCA that will...

Tides of Change: Senators Introduce Bill to Increase Transparency of U.S. Corporate Ownership

In an effort to increase transparency and combat tax evasion, Senators Charles Grassley (R-IA) and Carl Levin (D-MI) introduced legislation on August 1 that would require states to obtain the identities of individuals who organize corporations and other business entities under their laws.  Sen. Grassley is ranking member of the Senate Judiciary Committee and a past chairman of the...

Tides of Change: British Virgin Islands Releases Action Plan to Prevent Misuse of Legal Persons and Legal Arrangements

On July 5, the British Virgin Islands (BVI) released an action plan aimed at preventing the misuse of its financial system by supporting the development and implementation of international standards against the misuse of legal persons and legal arrangements. The action plan is built on the BVI government’s recognition of the need to build international standards applicable to all...

Agents of Change: European Parliament Approves Amended Financial Transaction Tax Proposal

On July 3, the European Parliament endorsed an amended directive on the proposed financial transaction tax (FTT) to be implemented among 11 of the 28 EU member states through an enhanced cooperation procedure (for background on the proposed FTT, click here).  The EU law-making body, which only has an advisory role on tax issues (including the proposed FTT), but wields significant...

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