Members of Ruchelman P.L.L.C. contribute to publications throughout the world and the Firm’s monthly tax journal, Insights.
What is an earnout? When is it used? How long a term should be considered when computing an earnout? Simon H. Prisk explores the ins and outs of this useful corporate acquisition tactic that makes a portion of the purchase price contingent on a target company achieving certain milestones.
Read MoreRusudan Shervashidze and Andrew P. Mitchel continue their examination of U.S. tax rules applicable to cross-border reorganizations, formations, and liquidations. This month, they review rules applicable to the liquidation of a wholly-owned domestic subsidiary corporation into its foreign parent corporation. Also discussed is the toll charge imposed on asset reorganizations that result in the domestication of a foreign subsidiary.
Read MoreOne of the fallouts of the Panama Papers is a European call for a blacklist of countries that fail to meet the O.E.C.D. C.R.S. standards. The European Parliament and several E.U. Member States contend that if the U.S. should be declared a tax haven and added to the European Commission’s new blacklist if it does not implement the C.R.S. and B.E.P.S. Project recommendations. Are these contentions based on fact or on political agenda? Christine Long and Beate Erwin explain a trend that that is inching towards an outright trade war.
Read MoreIn a follow-up piece on newly proposed anti-inversion regulations, Phillip R. Hirschfeld offers a detailed analysis of new debt equity regulations. Mind-boggling complexity is proposed for rules in an area of the tax law that lay dormant for almost 40 years.
Read MoreIn a Circular Letter issued in March by the Agenzia delle Entrate, the Italian tax authority, rules were issued providing for rational tax treatment of costs and gains arising in the context of leveraged buyout transactions. Luca Rossi and Marina Ampolilla of Studio Tributario Associato Facchini Rossi & Soci explain the changes and bring good news to investment bankers and their clients.
Read MoreOn January 1, new income tax rules came into effect regarding the Canadian taxation of trusts and estates. Use of graduated tax rates for multiple trust, charitable donation credits for estates, and allocation of gains at death are the targets. Amanda Stacey, Nicole D’Aoust, and Rahul Sharma of Miller Thomson LLP, Toronto explain.
Read MorePublished in Taxes & Wealth Management by Thomson Reuters, Issue 9-1: February 2016. (p.14)
Read MoreIn this month’s update, Sheryl Shah and Stanley C. Ruchelman look at the following recent developments: (i) one-time payments for off-the-shelf software are not considered to be royalties in India, (ii) offshore voluntary disclosure in Greece, (iii) the movement of Slovak companies to other jurisdictions, and (iv) the effect of the Panama Papers on CbC reporting in Europe.
Read MoreThis month, Galia Antebi and Philip R. Hirschfeld discuss (i) the growing list of countries with which the I.R.S. will exchange F.A.T.C.A. information, (ii) the litigation in Canada attempting to block F.A.T.C.A. exchanges with U.S., (iii) recent developments in acceptably encryption for F.A.T.C.A. exchanges, (iv) additional competent authority agreements, and (iv) an updated list of I.G.A. partner countries.
Read MoreUnder political pressure from N.G.O. watchdogs, governments are striving to demonstrate their support for the B.E.P.S. Action Plan on a national level. Kenneth Lobo and Stanley C. Ruchelman look at implementation issues around the world. Included are issues in Germany related to exchanges of information, treatment of C.I.V.’s for income tax treaty purposes, and U.K. tax penalties for aggressive tax planning.
Read MoreThe offshore community often accuses the I.R.S. of having insufficient U.B.O. reporting for offshore companies forming single-member L.L.C.’s that serve as U.S. fronts for global business. The L.L.C. conducts business, but the I.R.S. treats the taxpayer as foreign. If no effectively connected income is generated, no U.S. tax returns are filed. The I.R.S. announced that information reporting will be required, much like partnership reporting by U.S. partnerships not having U.S. members or U.S. effectively connected income. Galia Antebi and Rusudan Shervashidze explain.
Read MoreIn the heyday of tax shelters, transactions involving transfers of low value assets with high tax bases were elevated to an art form. The fervor effectively ended when the American Jobs Creation Act of 2004 enacted anti-loss importation provisions under Code §§334(b)(1)(B) and 362(e)(1). In March, the I.R.S. issued final regulations to stop base erosion through shifting of loss property into the U.S. Christine Long and Beate Erwin explain all.
Read MoreThe U.S. has extensive rules regarding tax-free reorganizations in a domestic context. When the transaction involves cross-border exchanges, these rules are supplemented by Code §367(a). Rusudan Shervashidze and Andrew P. Mitchel explain how the rules work when shares of a U.S. corporation are transferred to a foreign corporation in a §351 exchange.
Read MoreAs Insights continues to look at various provisions of the Internal Revenue Code applicable to corporate reorganizations and divisions, Elizabeth V. Zanet and Beate Erwin delve deeper into the requirements to address an eternal question relating to a tax-free spin-off.
Read MoreMichael Peggs and Kenneth Lobo comment on the I.R.S. victory in the Guidant case where the I.R.S. applied the “one size fits all” approach to group-wide transactions. Their conclusion is that today’s I.R.S. victory may be tomorrow’s lost revenue where a taxpayer seeks competent authority relief for transfer pricing adjustments initiated abroad.
Read MoreB.E.P.S. Action 13 addresses country-by-country reporting among tax authorities as a means of ferreting out mismatches between functions and profits. Now, CbC reporting is morphing in Europe to a public disclosure tool to bring N.G.O.’s into the process. Your tax savings through planning becomes a global problem for the N.G.O.’s to redress through public outcry. Michael Peggs and Kenneth Lobo tell all.
Read MoreOn April 4, 2016, the Treasury Department issued a third round of new rules under Code §7874 aimed at halting the wave of inversions. Already, at least one inversion transaction, involving pharmaceutical giants Pfizer and Allergan, has been scuttled. Beyond that, the new rules resuscitate regulations issued under Code §385. Philip R. Hirschfeld explains.
Read MoreThink you can hide behind a corporate shell in order to avoid notoriety? Think again if you own a company or L.L.P. formed in the U.K. These entities are now being required to maintain a statutory register setting out the individuals who are considered “persons with significant control,” and beginning in July, the registers are to be made available to the public. Naomi Lawson and Melanie Jory of Memery Crystal, London, explain of this new, transparency-seeking legislation and provide commentary on the multitude of potentially adverse consequences.
Read MorePublished in GGi FYI International News No. 4, Spring 2016 (p.12).
Read MoreIn the March 2016 edition of Insights, Kenneth Lobo, Sheryl Shah, and Beate Erwin look at the following recent developments: (i) an A.B.A. recommendation for higher Cuban compensation for seized U.S. businesses, (ii) U.S. inversions and European State Aid investigations targeting U.S. companies, (iii) an increase in the stakes faced by Coca Cola in its transfer pricing dispute with the I.R.S., and (iv) the U.K. reaction to the Google Settlement tax payment.
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