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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....

Seven Bps or Just a Blip – Obama Proposes New Fee on Financial Institutions

On Saturday, January 17, 2015, President Obama released a Fact Sheet outlining a new plan to “to simplify our complex tax code for individuals, make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy.”  The fact sheet is sparse on details but is...

New York Tax Reform Made Easy: A Recap

When the ball drops in Times Square on New Year’s Eve, New Yorkers won’t just be celebrating a change in the calendar – they’ll also be figuring out how to address a slew of tax changes under New York state law.  On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-2015 New York State Budget (Budget), which results in the most significant...

Finance Chairman Releases Extenders Package; Drops Look-Through (or Maybe Not)

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...

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...

The IRS: Taking the “Coin” Out of Bitcoin

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...

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...

Republican Party Platform: Ditch FATCA

Apparently, the reporting requirements of foreign financial institutions have now become partisan red meat. On Friday, the Republican National Committee made repeal of the Foreign Account Tax Compliance Act (FATCA) part of its party platform. A resolution passed by voice vote at the RNC’s annual winter meeting in Washington, D.C., establishing a party position on the anti-tax-evasion...

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...

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’...

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...

The Next Target for a Financial Transaction Tax: High-Frequency Trading

On September 2, Italy moved beyond the traditional financial transaction tax imposed on certain types of equity-based transactions and introduced an additional 0.02% tax on “high-frequency trading.”  High-frequency trading is algorithmic or automated trading, and the Italian tax applies to trades that occur in 0.5 second or smaller increments.  High-frequency trading has often...

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...

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