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Insights Vol. 3 No. 3: F.A.T.C.A. 24/7

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This month, Galia Antebi and Philip R. Hirschfeld discuss (i) changes to F.A.T.C.A. regulations designed to ease burdens on F.F.I.’s; (ii) continued I.R.S. interest in public comments; (iii) finalization of domestic entity reporting regulations under Code §6038D; (iv) an exemption from F.A.T.C.A. for a Swiss attorney’s confidential client escrow accounts; (v) competent authority agreements that have been reached with Brazil, Colombia, and Italy; and (vi) an updated list of I.G.A. partner countries.

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Corporate Matters: Anatomy of a Limited Liability Company Agreement – Part I

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Simon H. Prisk and Nina Krauthamer begin a series on the reasons why a carefully crafted L.L.C. agreement is important in a joint venture.  Commonly referred to as an operating agreement, this governance tool addresses the purpose, management, and overall operation of an L.L.C. and the obligations of members to make capital contributions.

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Tax 101: Corporate Reorganizations Part II – Types C, D, E, & F

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Continuing their series on the basic rules that must be met for a transaction to be treated as tax-free reorganization under U.S. tax law, Rusudan Shervashidze and Andrew P. Mitchel discuss practical mergers, acquisitive D-reorganizations, recapitalizations, and changes to the identity, form, or place of organization of a single corporation.

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2016 Model Treaty – B.E.P.S. and Expatriated Entities

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.

The 2016 Model Treaty adopts certain B.E.P.S. provisions, including those that eliminate double non-taxation through a splintered operation which divides a long-term project among several related parties and each party maintains the project for a limited time. That type of planning no longer works. Other B.E.P.S.-related revisions are missing. Sheryl Shah and Elizabeth V. Zanet explain what is out and what is in. They also address the way payments from expatriated entities are treated. It is not all bad news.

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2016 Model Treaty – Mandatory Arbitration

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.

Taking a cue from the U.S.-Canada Income Tax Treaty, the 2016 Model Treaty provides for mandatory arbitration as part of the article on Mutual Agreement Procedure. I.R.S. statistics indicate that under the Canadian treaty 80% of cases were resolved by the competent authorities in lieu of risking an adverse decision through arbitration. Kenneth Lobo explains the revised provision and places it in context.

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2016 Model Treaty – Limitation on Benefits Revisions

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.

Those who thought that the limitation on benefits (“L.O.B.”) provision under the U.S.-Netherlands Income Tax Treaty was complex will find that the level of complexity in the 2016 Model Treaty has been raised several levels. Some taxpayers will be losers and others will be winners. Philip R. Hirschfeld and Galia Antebi explain how the revised provision will work.

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2016 Model Treaty – Special Tax Regimes

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.

A new provision of the 2016 Model Treaty attacks special tax regimes. Treaty benefits are denied for payments to connected persons who benefit from such provisions. Patent box regimes and regimes that allow for notional interest deductions are specifically targeted. Christine Long and Stanley C. Ruchelman explain.

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2016 Model Treaty – Introduction

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.  

Stanley C. Ruchelman examines several provisions, pointing out various areas of super-complexity that are encountered in the 2016 Model Treaty in order to prevent double non-taxation. This shift in policy is a byproduct of the O.E.C.D.’s B.E.P.S. initiative.

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U.S. Treasury Announces New U.S. Model Income Tax Treaty

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On February 17, 2016, the Treasury Department released its 2016 Model Treaty. The model serves as the baseline from which the U.S. initiates treaty negotiations. Various provisions are discussed in detail in this month’s Insights.

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Exchange of Information: Israel Inches Toward International Norms

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The State of Israel depends on immigration for growth in population and capital. Favorable tax rules and confidentiality rules are key pillars of the policy to promote immigration. In a world that is obsessed with B.E.P.S., Israeli policy towards confidentiality is experiencing change. Boaz Feinberg and Ofir Paz of ZAG-S&W, Tel Aviv discuss the scope of that change.

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India Budget 2016-17

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On February 29, 2016, the Indian Finance Minister presented Budget 2016-17 and Finance Bill, 2016 to the Indian Parliament. Significant amendments to the tax law reflecting several B.E.P.S. recommendations and key economic policy proposals were announced. Jairaj Purandare, the Founder and Chairman of JPM Advisors Pvt. Ltd. explains the winners and losers.

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Insights Vol. 3 No. 2: Updates & Other Tidbits

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This month, Insights looks at the latest development in the deferred prosecution agreement with Swiss banks, a property tax increase in Jerusalem for “ghost apartments,” Canadian procedures to exempt foreign employers from withholding tax on salaries paid to certain individuals that are resident outside of Canada but work in Canada from time to time, and the adverse effect outside the U.S. of deferred CbC reporting for U.S.-based multinationals.

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Insights Vol. 3 No. 2: F.A.T.C.A. 24/7

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This month, Insights looks at the I.G.A. experience in Mexico; updated Form W-8BEN-E and instructions; an announcement on forthcoming regulations that will ease burdens on F.F.I.’s; new I.G.A. competent authority arrangements signed with Norway, Barbados, Romania, Spain, Italy, and Costa Rica; a new I.G.A. with St. Lucia; and the most recent list of I.G.A. partner countries.

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Field Procedures for Handling Foreign-Initiated “Specific” Requests Under E.O.I. Agreements

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Once again, Insights looks at the I.R.S.'s International Practice Units, this time focusing on how the I.R.S. deals with information exchanges at its field level. Sheryl Shah and Stanley C. Ruchelman explain the procedures followed by the Large Business & International (LB&I) division.

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Tax 101: Corporate Reorganizations Part I – Types A & B

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Tax 101 is back, this time addressing the basic concepts of tax-free A- and B-reorganizations. The first relates to statutory mergers and the latter relates to share-for-share exchanges. Rusudan Shervashidze and Andrew P. Mitchel explain the basic concepts for non-tax savvy readers.

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3M Case to Test “Foreign Legal Restrictions” Regulations Under Code §482

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Who knows best, the I.R.S. or the U.S. Supreme Court? Refusing to give up on its position that Code §482 trumps a foreign law that caps amounts used in related-party transactions, the I.R.S. is challenging 3M, a corporation that is acting in compliance with Brazilian law. Elizabeth V. Zanet and Galia Antebi delve into a legal issue that most adviser though was settled years ago by the U.S. Supreme Court.

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A Concise Guide to Acquisition Vehicles for Purchase of U.S. Real Estate by Foreign Individuals

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Question: How many ways are there to structure an investment in U.S. real property by a foreign person? Answer: Many. Nina Krauthamer describes five.

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Partnership Tax Traps and Recent Guidance

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At the end of 2015, the I.R.S. issued a notice designed to limit the instances in which contributions of property to foreign partnerships benefit from nonrecognition of gain. In January, the I.R.S. came under pressure to modify its announced position in final regulations that are currently being developed. Philip R. Hirschfeld explains.

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Apple in Europe – The Uphill Battle Continues

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U.S. multinationals are the target of a global trade war initiated by the European Commission, resulting from its attack on State Aid in the form of advance rulings. Christine Long and Beate Erwin explain the latest developments and the brewing response in the U.S. Congress.

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B.E.P.S. Initiative Spawns Unfavorable Permanent Establishment Court Decisions

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Two court cases in different parts of the world attack tax plans premised on the absence of a permanent establishment. Pertinent U.S. income tax treaties, with Japan and India respectively, were effectively ignored in each case. Taketsugu Osada, Christine Long, and Stanley C. Ruchelman explain.

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