blogger visitor

Tuesday, April 22, 2014

ARTICLE ABSTRACT - The Baucus International Business Tax Reform Discussion Draft: Key Design Issues

TITLE

The Baucus International Business Tax Reform Discussion Draft: Key Design Issues

AUTHOR(S)

David G. Noren, Esq.

PUBLICATION

43 TM International Journal 199 (April 2014)

PUBLISHER

BNA

ABSTRACT (Key Points & Discussions)

    • General discussion of terms and relevance of Max Baucus November 19, 2013 staff discussion draft of reform of U.S. international tax rules.
    • Option Y proposal - minimum tax of 80% of U.S. statutory rate on CFC income on low taxed income.
    • Option Z proposal - all CFC income subject to minimum tax regardless of foreign rates, with differences between active and passive income.
    • The proposals impose high levels of minimum tax on a broad base, trying to avoid income-shifting at the risk of burdening U.S.-based multinationals.
    • Author discussion of suggested modifications to these options.
    • Proposal singles out CFC income from serving U.S. markets for adverse treatment.
    • Proposal to override check-the-box regulations for entities owned by CFCs.
    • Proposal for a current-year item-by-item foreign tax credit for taxes attributable to taxable Subpart F income, and creates new separate baskets and complexity.
    • 20% transition tax on mandatory deemed repatriation of pre-effective-date earnings accumulated by CFC's.
    • Proposal to expand disallowance of deductions for related-party base erosion payments for inbound structures, including hybrid instruments/transactions, hybrid entities, conduit financing arrangements, or preferential taxation in hands of the recipient.
    • Overall, the Baucus proposal is too harsh, but does advance the debate on these issues.

RESEARCH TAGS

Baucus proposed reforms; territorial taxation; anti-base erosion proposals; CFC proposed modifications

 

These abstracts are provided as a service to the readers of Rubin on Tax to advise them of articles that may be of interest to them, both as they are published and as a research tool using the blog's Search function. Note that many of these articles are available by subscription only.

Post a Comment