By: Jerald David August, Chair, Fox Rothschild LLP International Taxation and Wealth Planning Group

The Internal Revenue Service recently issued proposed regulations, REG-10476-18, 2019-27 IRB 63, with respect to withholding and information reporting for certain dispositions of partnership interests by non-US persons who are partners in a partnership that is engaged in the conduct of a US trade or business. Under the Tax Cuts and Jobs Act, P.L.… Continue Reading

By Jerald David August, Chair, International Taxation and Wealth Planning Group

The government recently issued temporary regulations under section 245A which provides a 100% dividends received deduction (DRD) for certain dividends received by a US corporation from a current for former controlled foreign corporation (CFC) defined in section 957. The provision is frequently referred to as the participation exemption which many countries have already had in place with respect to their domestic corporations in investing in subsidiary or affiliate corporations overseas.… Continue Reading

By: Jerald David August, Chair, International Taxation and Wealth Planning Practice Group

The Tax Cuts and Jobs Act, P.L. No. 115-97, §13923, added new Sections 1400Z-1 (Qualified Opportunity Zones) and 1400Z-2 (Gains Invested in Qualified Opportunity Zones (“QOZs”), to the Internal Revenue Code (“Code”) under the Tax Cuts and Jobs Act. The new tax deferral provision has received much attention from taxpayers realizing large capital gains.… Continue Reading

Taxpayer’s Constitutional Challenges Denied

In Interior Glass Systems Inc. v. United States, No. 17-15713 (9th Cir. 2019), a three judge panel of the Ninth Circuit, per the opinion of Judge Watford, affirmed the holdings of the trial court below that the Service’s imposition of four penalties under section 6707A against the taxpayer for engaging in a transaction that was “substantially similar” to a “listed transaction” was proper.… Continue Reading

The international business press has recently reported that India has promulgated stricter rules pertaining to tax evasion and related offenses in an effort to limit the number of investigations for tax evasion, including the willful non-disclosure of off-shore bank accounts, which result with taxpayers paying an additional fee in avoiding prosecution and a period of incarceration. In the past, Indian resident taxpayers who did not disclose their foreign bank accounts and other foreign investments required to be disclosed have also avoided prosecution by a special relief rule referred to as “compounding” with the Central Board of Taxes.… Continue Reading

On March 4, 2019 in REG-104464-18, the government released proposed FDII regulations under section 250. The rules provide important computational and definitional provisions in applying section 250. The much-awaited proposed rule-making also contains rules coordinating the deduction for FDII with the  deduction also allowed under section 250 with respect to global intangible low-taxed income (GILTI). Under section 14202(a) of the Tax Cuts and Jobs Act, P.L.… Continue Reading

The Tax Cuts and Jobs Act of 2017, P.L. 115-87 (TCJA), [1] enacted into law on December 22, 2017, introduced numerous reforms to international taxation which changes have already had a profound impact on tax planning for multinational business enterprises (MNEs) as well as domestic businesses engaged in foreign business ventures or investments.[2] The most significant reform enacted in the TCJA includes extends beyond the international tax provisions contained in the Code.… Continue Reading

In Martin Wächtler v. Finanzamt Konstanz, C-581/17 (CJEU 2/26/2019), the Court of Justice of the European Union (CJEU) determined that application of the German exit tax rules were incompatible with the Agreement on the Free Movement of Persons (AFMP) of June 21, 1999, between the EU and its member states on the one part, and between the EU and Switzerland on the other.… Continue Reading

Section 199A, as added by the Tax Cuts and Jobs Act, P.L. 115-97, §11011 (12/22/2017), allows a non-corporate taxpayer to deduct up to 20% of its qualified business income, subject to applicable limitations, in reducing taxable income. Qualified business income from a domestic source income attributable to a domestic business operated as a sole proprietorship or through a passthrough entity including a partnership, S corporation, trust, or estate referred to collectively as a “relevant passthrough entity” under the final regulations issued in early February of this year.… Continue Reading