With Donald Trump firmly in office as the U.S. president and a Republican majority in Congress, it’s widely expected that 2017 will bring significant tax reform.
The Congressional Research Service (CRS) recently published a report highlighting several considerations that lawmakers may take into account in tax reform discussions.
Although tax reform often seems like a moving target, congressional Republicans and President Trump have each set out a number of ideas about how to modify the U.S. international corporate system.
Reports indicate that the President and congressional Republicans have begun tax reform discussions. However, what will ultimately be introduced as proposed laws remains to be seen. (more…)
Moscow enacted a law ordering certain foreign companies engaged in online sales of electronic content in Russia to pay the value-added tax (VAT). (Foreign providers of electronically supplied services.)
The law, informally known as the “Google Tax,” stipulates the introduction of an 18% VAT for foreign companies providing services to Russians in electronic form. Foreign companies will need to register on the Russian tax service’s special electronic index and pay taxes on an equal footing with Russian companies operating in the same market segment. Before the law was passed by the Russian Parliament, no VAT was imposed on electronic services supplied by foreign companies. This tax break wasn’t available to Russian companies.
If a foreign company has a Russian division or a contractor in the country, it will be responsible for paying the tax irrespective of whether it has an appropriate agreement with foreign corporations or not.
If the buyer carries out activities on the territory of the Russian Federation and acquires the “services in electronic form,” the place of supply of these services is the territory of the Russian Federation. Delivery of physical goods ordered over the internet is not subject to the VAT. (more…)
The IRS issued final regs that affect U.S. taxpayers who transfer property to foreign corporations in nonrecognition transactions.
The regs are aimed at preventing taxpayers from avoiding recognition of gains or income attributable to high-value intangible property by claiming that a large share of the transferred property’s value is foreign goodwill or going concern value.
The regulations contain the following changes to Section 367 of the Internal Revenue Code. They: (more…)