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Tag Archive for William Byrnes

International Tax Reform & Can Wealthy Americans Move to Virgin Islands and Not Pay Federal Capital Gains Tax?

The Senate Finance Committee Modified Mark has published the modification to source rules involving possessions; the following is a description and analysis of the proposal:

The proposal modifies the sourcing rule in section 937(b)(2) by modifying the U.S. income limitation to exclude only U.S. source (or effectively connected) income attributable to a U.S. office or fixed place of business. The proposal also modifies section 865(j)(3) by providing that capital gains income earned by a U.S. Virgin Islands resident shall be deemed to constitute U.S. Virgin Islands source income regardless of the tax rate imposed by the U.S. Virgin Islands government.

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Senate Finance Committee Reduction in Retirement Savings of Public Education and Government Employees

I have been focused this past week on understanding the impact and implementation of the House Ways & Means and Senate Finance Committee proposals on U.S. businesses foreign source income.  Two proposals that interest me are the ones aimed at transfer pricing, being (1) the minimum deemed distribution of a foreign subsidiary’s earnings above a statutorily defined return on tangible capital and (2) the 20% excise tax on payment to foreign related corporations.

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OECD Launches Effective Inter-Agency Co-Operation in Fighting Tax Crimes and Other Financial Crimes

More than 200 global tax and economic crime experts have identified key areas for international action following the fifth OECD Forum on Tax and Crime, in London. In a week dominated by media coverage of offshore issues, the Forum brought experts on tax, customs, anti-corruption, anti-money laundering, policing, and prosecution together to agree priorities for action.

The Forum is the latest in a series of OECD-led events and an important opportunity for the international community to strengthen collaboration in tackling these global issues.

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Paradise Papers Expose Apple’s Discussions With Attorneys After Congressional Tax Investigation

The Paradise Papers documents include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork over nearly 50 years from inside Appleby, a prestigious offshore law firm with offices in Bermuda and beyond.

The leaked documents include files from the smaller, family-owned trust company, Asiaciti, and from company registries in 19 secrecy jurisdictions.

Political leaders, wealthy individuals, and businesses’ legal documents, emails, loan agreements, communications, financial statements, and tax strategies – are now all exposed.

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Nike Shifted Billions In Trademark Profits Between Subsidiaries to Avoid High Taxes in Europe

ICIJ reports:

In the three years after that conference call, its after-tax profits would jump by an astounding 55 percent, to $1.88 billion, thanks in substantial part to a drop in its worldwide effective tax rate from 34.9 percent to 24.8 percent – on its way to 13.2 percent last year.

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Early Christmas Gift Announcement: US Overseas Taxpayers Subject to Three New IRS Scrutiny Campaigns & Audits Next Year

Since the enactment of FATCA, US persons (citizens and green card holders) overseas have, via lobbying efforts, requested relief from the additional tax compliance burdens placed upon them that appear to be increasing their costs of living overseas (which is generally more expensive than living in the USA anyway).

Their arguments fall into the following three: (1) generally, they file foreign tax returns and pay local tax preparation services but must also pay an additional $2,000- $3,000 for a US tax preparation service specialized in foreign residence; (2) generally the foreign income exclusion and foreign tax credit wash out the U.S. tax burden but for anomalies in definitions between retirement plans that cause undue burden on foreign residents US persons; and (3) US persons must pay more for financial services because they have become the pariah of the financial world.

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Green Card Holder Pleads Guilty of Failing to File FBAR and Report UBS Account, Will Pay More than Half the Assets in FBAR and Tax Penalties

A Greenwich, Connecticut man pleaded guilty October 26, 2017, to failing to report funds he maintained in foreign bank accounts to the Department of Treasury, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Chief Don Fort, IRS Criminal Investigation.

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IRS’ Information Reporting Program Advisory Committee Issues Annual Report Recommending FATCA Delays

The Information Reporting Program Advisory Committee (IRPAC) has issued its annual report for 2017, including numerous recommendations to the Internal Revenue Service on new and continuing issues in tax administration. The report includes a discussion on how to improve some processes, such as for penalties, abatement requests and levies, as well as business master file entity addresses. The report also recommended enhancements to Form W-9 and the truncation of Social Security numbers on Form W-2, IRC § 6050S and Form 1098-T reporting.

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Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS

On June 7, 2017, over 70 Ministers and other high-level representatives participated in the signing ceremony of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“Multilateral Instrument” or “MLI”).

Signatories include jurisdictions from all continents and all levels of development. A number of jurisdictions have also expressed their intention to sign the MLI as soon as possible and other jurisdictions are also actively working towards signature.

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Peru Becomes 114th Country To Sign OECD’s Multilateral Convention On Mutual Administrative Assistance In Tax Matters

Claudia María Amelia Teresa Cooper Fort, Minister of Economy and Finance of Peru, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in the presence of the Deputy Director of the OECD’s Centre for Tax Policy and Administration, Grace Perez-Navarro.

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Governments Dismantling Harmful Tax Incentives Worldwide: BEPS Project Driving Major Changes To International Tax Rules

Governments have dismantled, or are in the process of amending, nearly 100 preferential tax regimes as part of the OECD/G20 BEPS (Base Erosion & Profit Shifting) standards to improve the international tax framework, according to a progress report released this month.

The report provides details on the outcome of peer reviews undertaken of 164 preferential tax regimes identified amongst the more than 100 jurisdictions participating in the OECD Inclusive Framework on BEPS.

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OECD Releases Country-by-Country Reporting Implementation Status And Exchange Relationships Between Tax Administrations

William Byrnes, Tax Advisor

A further step was taken to implement Country-by-Country Reporting in accordance with the BEPS Action 13 minimum standard, through activation of automatic exchange relationships under the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (“the CbC MCAA”).

Over 1000 automatic exchange relationships have now been established among jurisdictions committed to exchanging CbC Reports as of mid-2018, including those between EU Member States under EU Council Directive 2016/881/EU.

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