On June 24th, Ways and Committee Chairman Brady released a blueprint for tax reform labeled as “A Better Way for Tax Reform.” The agenda is a result of a committee formed to study and develop policy recommendations under Speaker Ryan’s direction to create new jobs, grow the economy, raise wages by reducing tax rates, and to make the code simpler and fairer.
The result is a blueprint of the current House’s view of tax reform. The intent of the blueprint is to be ready for legislative action in 2017. Key provisions of the reform blueprint include: (more…)
By Sylvia Chan, Tax Senior
There has been much discussion about restructuring the California Tax System. Currently, California relies significantly on personal income tax collection to fund its state expenditures. Tax revenue based on personal income relies heavily on the unpredictability of capital gains which makes it impossible to forecast the state’s future revenue. This puts California in a very vulnerable situation should the stock market collapse, creating an abrupt shortfall in the State budget. Most people would agree that the California tax system is outdated, unfair, unreliable and long overdue for tax reform. (more…)
Facebook may have understated the value of intangible property transferred to its Irish holding company by “billions of dollars.” That’s according to a petition the U.S. Justice Department and the IRS filed in the U.S. District Court for the Northern District of California.
The petition was filed to enforce certain summonses served on the social media company in connection with outstanding information requested as part of an IRS audit. It makes the following claims: (more…)
By Guest Writer: Andy Dawnbarn, Wilkins Kennedy LLP
Andy Dawbarn is partner at Wilkins Kennedy (WK) in the UK. WK is one of the largest accounting and consulting firms in the UK and a new member of Allinial Global. Andy specializes in Value Added Taxes (VAT) having spent over 30 years in VAT, including HM Customs and Excise.
As Britain is left waiting to see what the future holds as an independent nation, many businesses will be asking questions about what to expect following the Brexit result and key timings as to when those changes will be taking place. VAT is one area where the UK could see more significant changes after leaving the EU and out of all the taxes is likely to be the most affected. (more…)
All 28 European Union (EU) member states reached political agreement on the European Commission’s (EC’s) Anti-Tax Avoidance Directive designed to combat multinational corporation tax avoidance.
During negotiations, some amendments were made to the proposal, including the deletion of the controversial “switch-over clause” to prevent double nontaxation of certain income.
The approval came before Britons voted to leave the EU, a move that has significant tax implications (see sidebar below).
The final Anti-Tax Avoidance Directive includes the following: (more…)
U.S.-disregarded entities that are owned by a foreign person would be treated as domestic corporations under proposed regulations issued on May 6 by the IRS.
The proposed new rules would apply for purposes of the reporting, record maintenance, and other compliance requirements that apply to 25% foreign-owned domestic corporations. These changes are intended to provide the IRS with improved access to information that it needs to satisfy its obligations under U.S. tax treaties, tax information exchange agreements and similar international agreements, as well as to strengthen the enforcement of U.S. tax laws. (more…)
India’s Central Board of Direct Taxes (CBDT) recently clarified that income from the transfer of unlisted shares will be taxed as a lower rate capital gain rather than as business income.
The tax department’s move is aimed at avoiding tax disputes/litigation and maintaining a uniform approach. However, such treatment isn’t applicable in situations where:
- The genuineness of transactions in unlisted shares itself is questionable,
- The transfer of unlisted shares is related to an issue pertaining to lifting of the corporate veil, or
- The transfer of unlisted shares is made along with the control and management of the underlying business.
In a new International Practice Unit (IPU), the IRS provides audit tips to its examiners on a taxpayer’s affirmative use of Internal Revenue Code Section 482, “Allocation of Income and Deductions.” That section of tax law gives the IRS the authority to make adjustments between or among members of a “controlled group,” if a controlled taxpayer hasn’t reported its true taxable income. (more…)
Delphi Automotive PLC, one of the leading suppliers of technology and devices allowing development of self-driving vehicles, won an appeal with the IRS allowing the company to be treated as a U.K. tax resident for U.S. federal tax purposes. The tax agency claimed in 2014 that Delphi, whose top executives are still in Troy, Mich., should be treated as a U.S. corporation for income tax purposes even after it reincorporated in the U.K. (more…)