International

Expert Analysis

• New Unified High-Tax Election Brings Planning Challenges

  

  The U.S. Department of the Treasury's recently released high-tax election regulations for global intangible low-taxed income create unwanted planning challenges by conforming to the stricter Internal Revenue Code Subpart F high-tax exclusion, rather than aligning with the GILTI election rules as many hoped, say attorneys at Mayer Brown.

• EU's Tax-Centered State Aid Campaign May Have Peaked

  

  The European Commission's recent tax-related state aid investigations of the likes of Apple, McDonald's and Nike may have reached their limit as changes in international tax rules, the rapid growth of digital companies and COVID-19 reprioritize the commission's anti-competitive initiatives to broader issues focused on tech giants, says Joyce Beebe at Rice University.

• Get Ready For IRS Repatriation Enforcement

  

  Beginning this fall, taxpayers should expect to see IRS enforcement efforts with respect to their repatriation tax liabilities, including audits that will likely focus on taxpayers' earnings and profits calculations, classification of assets as cash versus noncash, and how taxpayers determined foreign tax credits, say David Fischer and Teresa Abney at Crowell & Moring.

• Canadian Tax Ruling Boosts Cross-Border Deal Confidence

  

  The Queen v. Cameco Corp., a recent Canadian appellate decision and the first case to test Canada's transfer pricing recharacterization rules, has significant implications for cross-border intragroup transactions and the intersection of Canadian tax law with the Organization for Economic Cooperation and Development’s guidance, says Matt Billings at Duff & Phelps.

• HSBC Suit Shows Challenge Of Designing Tax Relief Laws

  

  Investors' recent lawsuit against HSBC over film-related tax avoidance schemes spotlights the difficult balancing act of crafting practical tax relief legislation while safeguarding against abuse, says Andrew Parkes at Andersen Tax.

• Regulatory Concerns For US Cos.' Offshore Service Centers

  

  As more U.S. companies open and use offshore service-delivery centers amid the pandemic, assessment of important tax, intellectual property, cybersecurity and employment considerations can help mitigate regulatory risk and maximize the company's return on investment, says Sonia Baldia at Baker McKenzie.

• 5 Biz Tax Reforms To Aid Long-Term Pandemic Recovery

  

  As Congress negotiates another COVID-19 relief package, it should consider business tax measures that provide liquidity and encourage economic recovery by focusing budgetary resources on activities and circumstances connected to the pandemic and associated economic slowdown, says George Callas at Steptoe & Johnson.

• Altera Could Bolster State Transfer Pricing Scrutiny

  

  The reasoning of the Ninth Circuit's Altera v. Commissioner decision — which the U.S. Supreme Court recently declined to review — could provide state tax authorities with an argument for additional discretion when challenging transfer pricing arrangements between affiliated entities, say attorneys at Eversheds Sutherland.

• 10 Tips For A Successful Remote Arbitration Hearing

  

  As I learned after completing a recent international arbitration remotely, with advance planning a video hearing can replicate the in-person experience surprisingly well, and may actually be superior in certain respects, says Kate Shih at Quinn Emanuel.

• VAT Cuts Won't Save Economies, Will Burden Businesses

  

  Although value-added tax cuts may seem attractive for governments looking to stimulate economies in the wake of the pandemic, their implementation costs and inefficiencies can cause significant trouble for businesses, says Richard Asquith of Avalara.

• COVID-19 May Make Incomplete Contracts Renegotiable

  

  Intercompany agreements on transfer pricing that do not include a pandemic eventuality might be argued to be incomplete from an economics perspective, providing justification for controlled parties to negotiate a remediation, say Robin Hart and Steven Schwartz at Charles River Associates.

• How To Handle Congressional Queries On COVID-19 Relief

  

  Despite their informal nature, congressional inquiries regarding CARES Act implementation should not be taken lightly as these requests may be precursors to more formal and invasive investigations, say attorneys at Baker Donelson.

• Congress Must Create More Private Rights Of Action

  

  In light of the Trump administration's efforts to limit the enforcement of regulations during the pandemic and beyond, and the U.S. Supreme Court's severe limitations on private rights of action, Congress must take swift action, says attorney Todd Phillips.