Transfer Pricing News for the Week of May 17, 202117th May 2021
The U.S. Passes Disclosure of Tax Havens and Offshoring Act
The U.S. is turning into legislation nation—around tax transparency, that is. The House Committee gave the thumbs-up on The Disclosure of Tax Havens and Offshoring Act. It will require public corporations to spill their financial guts by sharing country-by-country subsidiary information. This information is already reported to the IRS in Form 8975, but The Disclosure of Tax Havens and Offshoring Act wants to go a step further and make this information available to the public. Amy Hanuer, executive director of the Institute on Taxation and Economy Policy, considers the legislation a “reasonable step in allowing lawmakers and the public to know what companies are up to.”
Amazon Takes Home a Win Against EU Commission
It’s the verdict we’ve all been waiting for: Amazon versus the EU Commission. And the wait is finally over. The EU General Court ruled that Amazon did not receive state aid from Luxembourg, freeing the e-commerce conglomerate from a $300-million tax bill. The court considered the Commission’s assessment “incorrect in several respects,” highlighting that it failed to demonstrate that Luxembourg provided an illegal advantage. While it’s a hard pill to swallow for the Commission, state aid cases like Starbucks, Fiat, and Amazon are laying the groundwork for the future of tax transparency. So, what does this mean for MNEs? They’re going to be spending a lot more time under the microscope. Are you really that surprised?
Italy Issues Guidance on Digital Service Tax
Pasta, pizza, and a digital service tax. It doesn’t get more Italian than that. Italy’s revenue agency recently issued guidance to help taxpayers navigate the digital service tax’s implementation and execution, which officially went into effect on January 1, 2020. It applies to groups or individuals that made 750-million euros or more in the preceding fiscal year, with at least 5.5- million euros coming from digital services in the country. The guidance clarifies which services and transactions are subject to the tax, and how to calculate it. As for the guidance—talk about better late than the never. The guidance was issued at the end of March, with the first tax payment collected on May 16th. And one more reason to mark your calendar: The digital services tax-return due date is right around the corner: June 30th.