Annual reviews are now being discussed, with employees wondering what technical goals and objectives lie ahead.
Most importantly, the art of leadership skills and training should be a required attribute on everyone’s agenda. There are books for self-learning, and also real-time training can be conducted via leading small cross-functional meetings, being a champion on projects for coordination, and team activities
Leadership and developing leadership skills, in addition to requisite technical abilities, are what will make the difference for everyone.
The Italian Budget has enacted a 3% web tax, and a new PE definition based on economic, vs. physical, presence.
The Tax is due by the buyers of the above services unless the supplier declares in the invoice that it has not reached the threshold of 3,000 transactions in the calendar year.
The PE definition goes beyond the OECD’s intent, and will certainly lead to additional disputes in Italy and other countries developing such a subjective measure that also attracts double taxation.
EY’s global tax alert provides additional details as reference.
As a further update to the US Tax Act, SEC has provided a 1-year window to provide a reasonable estimate with continual true-ups for a 1-year period to finalize the complex tax accounting effects. Note that APB 23 is still alive, which has prompted several questions on its application against the background of the deemed repatriation transition tax.
The Act will significantly change earnings disclosures in the near future and the US debt market where debt may be more expensive due to interest limitations.
EY’s update provides details and relevant links for reference.
McDermott Will & Emery highlights the state tax effects of the deemed repatriation and GILTI tax; some of which may not may be intuitive. The deemed repatriation income is included under Sec. 951(a), whereas the GILTI inclusion is includable under new Sec. 951A.
The concept of special deductions also is highlighted for further analysis.
Note, as different technical details of this bill are further reviewed, the SIT aspect becomes even more complex with timing issues by states not uniform from the federal changes.
The deemed repatriation inclusion will be includable in 2017 US federal income tax returns for calendar-year taxpayers, whereas most provisions will take effect in 2018 or later.
The House and Senate conferees agreed at the end of last week on a reconciliation bill to be forwarded this week for a final vote, and then signature (i.e. “enactment”) by President Trump. An excellent summary of some key corporate provisions is included by McDermott, Will & Emery, and the actual text of the bill is linked for reference.
The complexity is abundant for year-end public company reporting, especially by US MNE’s, including a complex calculation of the accumulated foreign earnings upon which the one-time transition tax will apply.
It is not too soon to begin a discussion with auditors re: expected deliverables, especially concerning the practical aspects of the calculations that will be involved for year-end and the first quarter of 2018.
It is both a challenging and exciting time to be an international tax practitioner/advisor, as this is a revolutionary change in the history of US tax reform for all.
The French Parliament has announced rules for the transmission of the French Country-by-Country (CbC) reports by US MNE’s, although it is yet not 100% certain whether such rules are penalty proof or 100% certain.
As the US has not formally named France as a partner exchanging such information, these dialogues apparently continue. Thus, all taxpayers should be monitoring this important area through year-end for future developments and additional certainty.
EY’s Global Tax Alert summarily describes the applicable procedures.