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Posts Tagged ‘digital taxation’

Leaked OECD Pillar 1 and 2 Blueprints for download

Posted by William Byrnes on September 4, 2020


OECD Leaked Pillar 1 Blue Print (pp 227)

OECD Pillar 2 Leaked Blue Print (pp 257)

This note contains a draft report on the Blueprint of the Pillar One solution expected to be delivered in October. It is distributed to the delegates of the Inclusive Framework for comments. Delegates are invited to coordinate with their teams (delegates in the TFDE and relevant working parties) to provide one consolidated set of comments per jurisdiction.

In response to repeated requests for simplifications from Inclusive Framework members, a number of simplification features were developed and discussed at the last Steering Group meeting in July and subsequently presented to the working parties. These features, which have been included in this Blueprint, have implications across different building blocks (e.g. revenue thresholds,  segmentation and profit allocation).

The draft Blueprint reflects consensus views that emerged from this work as much as possible, but recognises that certain issues, both technical and political, are still pending. There are some elements (e.g. quanta and profitability thresholds) where Inclusive Framework members will make a final decision only as part of an overall political agreement. Chapter 1 contains the executive summary of the Blueprint, and the subsequent chapters describe in more detail each building block (chapters 2 to 10). In addition, a process map illustrating how the new taxing right (Amount A) will apply in practice is provided in Annex A.

 

10 reasons to apply for Texas A&M International Tax — request a brochure here https://info.law.tamu.edu/international-tax  (or apply online https://law.tamu.edu/distance-education/prospective-students/llm-mjur-application)

  1. International Tax courses are limited to 15 students.  Many have 9 – 12 for maximum interaction with the professors and each other in real-time Zoom discussion.  No one is ‘left out’. Everyone has a substantial weekly learning experience.
  2. Courses meet twice weekly on Zoom for 90 minutes (or more) to discuss the case study and the weekly issues, and then students in teams (generally of three) roll play the case study representing a stakeholder interest assigned by the professor/s in the second meeting, ending with a recap discussion of the case study. See an example case study moot on YouTube 
  3. Courses include original authored reading and study materials, original case studies, links to the robust tax library for current articles, analytical materials, and technology/data providers.
  4. Courses include weekly instructor video-lectures and/or audio podcasts.
  5. Degree options for all tax professionals — lawyers (Master of Laws, LL.M.) and accountants, economists, financial professionals (Master of Jurisprudence, M.Jur.)
  6. The founder Professor William Byrnes is the pioneer of Online Learning for Legal Education, having initiated the original version of this program in 1994 (see his LinkedIn Group of 27,000+ member network of former students, book subscribers, webinar attendees, and career contacts).
  7. The founder Professor William Byrnes is a leading international tax author with 10 annual treatises published by Lexis and Wolters Kluwer, and three Tax Facts titles by National Underwriter.
  8. Join the Texas A&M Aggie former student network of 500,000+ to open career and social doors (and watch Saturday SEC football games).
  9. 160+ current graduate enrollment for risk management, tax-risk management, and wealth management program.
  10. All students have access to Lexis, Westlaw, Bloomberg Law, Cheetah (formerly Kluwer-CCH), IBFD, Tax Analysts, S&P, BvD-Moodys, Thomson, OECD Library, and hundreds of other information resource providers (check out our university virtual libraries here and here)

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

FALL 2020 Semester (starts Aug 24 and ends Nov 30) 

International Tax & Tax Treaties I: Residency Dr. Bruno Da Silva (Loyens & Loeff), and William Byrnes (TAMU) 3 credits (meet Monday and Friday at 8am Central Daylight Dallas time zone)

    • Week 1 Aug 23 Domestic Tax Rights; Double Taxation; Tax Treaty Allocation Of Tax Rights
    • Week 2 Aug 30 Types Of Taxes; Tax Treaty Interpretation
    • Week 3: Sept 6 Tax Jurisdiction Over Persons, Tax Treaty Interpretation
    • Week 4: Sept 13 Tax Jurisdiction of Corporations; Tax Treaty Interpretation & Application
    • Week 5: Sept 20 Tax Jurisdiction of Entities
    • Week 6: Sept 27 U.S. Tax Reform / Pillar II
    • Week 7 capstone of tax data analytics and technology

International Tax Risk Management & Domestic Systems (Inbound) (meet Tuesdays and Sunday at 8am Central Daylight Dallas time zone)

    • Week 1 Aug 23 national tax systems in general and inbound diagnostic Dr. Susana Bokobo, former global tax policy director Repsol
    • Week 2 Aug 30 Manuel Tron Mexico as an inbound diagnostic case study (President Emeritus, International Fiscal Association)
    • Week 3 Sept 6 Elis Prendergast (KPMG)
    • Week 4 Sept 13 Carson Le (KPMG)
    • Week 5 Sept 20 Dr. Maji Rhee (Waseda) Japan/Korea as inbound case studies
    • Week 6 Sept 27 Domestic Compliance Risk Matrix Hafiz Choudhury
    • Week 7 capstone of tax data analytics and technology for inbound domestic tax risk management

International Tax & Tax Treaties II: Source Dr. Bruno Da Silva (Loyens & Loeff), and William Byrnes (TAMU) 3 credits (meet Monday and Friday at 8am Central Daylight Dallas time zone)

    • Week 1 Oct 11 Tax of Business Income (PE, Nexus)
    • Week 2 Oct 18 Tax of Investment Income
    • Week 3: Oct 25 Taxation of Services and Employment Income (including DST)
    • Week 4: Nov 1 Double Taxation and Tax Credits
    • Week 5: Nov 8 Tax Accounting
    • Week 6: Nov 15 Introduction to Management of Tax and Data
    • Week 7 capstone of tax data analytics and technology

International Tax Risk Management II (Data, Analytics & Technology) 3 credits (meet Wednesday and Sunday at 8am Central Daylight Dallas time zone)

    • Week 1 Oct 11 Manufacturing I Dr. Niraja Srinivasan Pillar 1 (Dell Global Tax)
    • Week 2 Oct 18 Manufacturing II (DEMPE & Supply Chain) Niraja Srinivasan
    • Week 3 Oct 25 Manufacturing III (Customs) Niraja Srinivasan
    • Week 4 Nov 1 Tax of Patents / Technology, Dr. Brigitte Muehlmann (Daylight time ends, Wednesday and Sunday at 8am Central Standard Dallas time zone)
    • Week 5 Nov 8 Tax Risk & Tax Technology, Dr. Brigitte Muehlmann
    • Week 6 Nov 15 Tax Risk & Tax Technology, Dr. Brigitte Muehlmann
    • Week 7 capstone of tax data analytics and technology for global tax risk management

additional spring and summer courses include: 

Transfer Pricing Risk Management: Tangibles, Methods, Economics, and Data           Transfer Pricing Risk Management: Intangibles and Services

E.U. Tax Risk Management                                                                                                 U.S. Tax Risk Management

FATCA, CRS, and AEoI (Law, Data, Systems)                                                                    International Tax Risk Management I (Data, Analytics & Technology)   

VAT                                                                                                                                      Customs

 

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Release of Taxation of IP & Technology Update for 2020

Posted by William Byrnes on November 11, 2019


Taxation of Intellectual Property and Technology 2020 edition is a 1,000 page analytical treatise to the federal tax consequences of the development, purchase, sale and licensing of intellectual properties and intangibles.  Primary author William Byrnes leads a team of America’s leading tax senior counsel to analyze tax risk challenges for business and investment decisions concerning intellectual property, technology, intangibles, and the digital economy. This 2020 update published in November (next update published in June 2020) contains:

  • Expands this treatise beyond 1,000 pages of analysis and planning research.
  • Provides in-depth analysis of the 2019 final and proposed regulations that impact intellectual property and intangibles, including GILTI and FDII.
  • Analyzes the new Cloud Computing Regulations.
  • Expanded analysis of the 2018 Supreme Court Wayfarer decision and its impact on interstate digital business models and trademark holding companies.
  • Analysis of several 2019 decisions cases including Amazon, Altera, Slaughterhouse.

Major revisions this update, by chapter, include:

  • GILTI regulations. The final and newly proposed GILTI regs are analyzed in depth in § 2.04[8].
  • FDII regulations. The proposed regulations are explained in depth in § 2.04[9].
  • Cloud Computing Regulations. The proposed regulations are explained in depth in § 2.05[3] and § 10.02[2][c][iii][G].
  • International Transactions. Chapter 12 has been substantially revised and additional analysis of the Service Regulations as well as the Cost Sharing Regulations in light of Amazon and Altera.
  • Economic presence tax nexus and digital services tax. See analysis within Chapters § 11.09, § 14.07[6] and § 15.05[1].
  • Wayfarer’s Impact. On taxation of holding companies, see § 4.06. On tax nexus and sales tax, see Chapter § 11.04.
  • Taxation of Emerging Technologies for Cloud Computing, Blockchain, and Artificial Intelligence. See Chapter § 10.02[2][c].
  • Slaughter v Comm’r. IRS argued that the author’s promotion for the publisher which builds her brand is her trade or business and thus her royalties are net earnings from self-employment. Analyzed and critiqued in Chapter § 1.06[4].

New domestic and internationally focused chapters are in development by treatise author Prof. William Byrnes (Texas A&M Law) for 2020, including on the valuation of intangibles, tax considerations for entrepreneurs, and country analysis chapters. His team of internationally recognized expert practitioners provide strategic and tax risk analysis: Carlos Perez Gautrin, Yair Holtzman, Iselle Coronado-Torres, Jeffrey Trey, Arinjay Kumar Jain, Leonardo Macedo, Venetia Argyropoulou, Pamela Ann Fuller, William Seeger, Lucia Valenzuela, and Charles Lincoln. Please contact William Byrnes with chapter proposals. Taxation of Intellectual Property Publication Update (2019)

Nine seats remain for the Spring (4 teams of 3 students each) to join the current 4 teams January 13 – April 20 semester for TRANSFER PRICING course taught by Dr. Lorraine Eden, Prof. William Byrnes, TP Aggiesand several industry experts. The courses count toward the INTERNATIONAL TAX online Master curriculum of Texas A&M for tax attorneys, accountants, and economists. Taught live twice weekly using Zoom involving teams working to design positions and solutions for real-world post-BEPS client studies each week, supported by originally authored materials, videos and audio casts, PPTs, and a robust online law & business database library.  For more information, contact Texas A&M Admissions https://info.law.tamu.edu/international-tax

Posted in book, Taxation, Transfer Pricing | Tagged: , , , , | Leave a Comment »

Getting its “fair share” from the U.S., U.K. implements 2% tax on gross revenues of Google, Amazon, and Facebook

Posted by William Byrnes on July 11, 2019


From April 2020, the government will introduce a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users. Large multi-national enterprises with revenue derived from the provision of a social media platform, a search engine or an online marketplace (‘in scope activities’) to UK users.

The Digital Services Tax will apply to businesses that provide a social media platform, search engine or an online marketplace to UK users. These businesses will be liable to Digital Services Tax when the group’s worldwide revenues from these digital activities are more than £500m and more than £25m of these revenues are derived from UK users.

If the group’s revenues exceed these thresholds, its revenues derived from UK users will be taxed at a rate of 2%. There is an allowance of £25m, which means a group’s first £25m of revenues derived from UK users will not be subject to Digital Services Tax.

The provision of a social media platform, internet search engine or online marketplace by a group includes the carrying on of any associated online advertising business. An associated online advertising business is a business operated on an online platform that facilitates the placing of online advertising, and derives significant benefit from its connection with the social media platform, search engine or online marketplace. There is an exemption from the online marketplace definition for financial and payment services providers.

The revenues from the business activity will include any revenue earned by the group which is connected to the business activity, irrespective of how the business monetises the platform. If revenues are attributable to the business activity and another activity, the business will need to apportion the revenue to each activity on a just and reasonable basis.

Revenues are derived from UK users if the revenue arises by virtue of a UK user using the platform. However, advertising revenues are derived from UK users when the advertisement is intended to be viewed by a UK user.

A UK user is a user that is normally located in the UK.

Where one of the parties to a transaction on an online marketplace is a UK user, all the revenues from that transaction will be treated as derived from UK users. This will also be the case when the transaction involves land or buildings in the UK. However, the revenue charged will be reduced to 50% of the revenues from the transaction when the other user in respect of the transaction is normally located in a country that operates a similar tax to the Digital Services Tax.

Businesses will be able to elect to calculate the Digital Services Tax under an alternative calculation under the ‘safe harbour’. This is intended to ensure that the tax does not have a disproportionate effect on business sustainability in cases where a business has a low operating margin from providing in-scope activities to UK users

The total Digital Services Tax liability will be calculated at the group level but the tax will be charged on the individual entities in the group that realise the revenues that contribute to this total. The group consists of all entities which are included in the group consolidated accounts, provided these are prepared under an acceptable accounting standard. Revenues will consequently be counted towards the thresholds even if they are recognised in entities which do not have a UK taxable presence for corporation tax purposes.

A single entity in the group will be responsible for reporting the Digital Services Tax to HMRC. Groups can nominate an entity to fulfil these responsibilities. Otherwise, the ultimate parent of the group will be responsible.

The Digital Services Tax will be payable and reportable on an annual basis.

Draft legislation

Explanatory notes

Read:

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