Tax Talks

The Proskauer Tax Blog

Proskauer Bolsters International Tax Practice with Addition of Stephen Pevsner in London

The Proskauer Tax Department is pleased to announce that Stephen Pevsner has joined as a partner in our London office.

Stephen’s practice focuses on UK and international M&A and private equity transactions, corporate reorganizations, and new business formations. Offering a broad range of corporate tax strategy experience, his clients include global corporations, investment banks, and private equity sponsors and investors. In addition to his wealth of transactional knowledge he also has substantive experience advising on the formation of private investment funds and the establishment of investment management and advisory limited partnerships.

According to Chambers UK, Stephen is a notable practitioner in the corporate tax field, praised for “his ability to master the intricacies of tax law and understand the commercial aspects of the deal”.

Please click here for Stephen’s complete biography and contact information.

Extension of FBAR Filing Deadline for Certain Filers

As noted in our January 5, 2017 client alert, FinCEN issued Notice 2016-1, which extends the filing deadline for the Report of Foreign Bank and Financial Accounts, FinCEN Form 114 (FBAR), for certain individuals with signature or other authority over (but no financial interest in) employer-owned foreign financial accounts to April 15, 2018. Please click here for our full client alert.

BEPS: OECD Releases Multilateral Tax Treaty Convention

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “Convention”) was released by the Organisation for Economic Co-operation and Development (“OECD”) on November 24, 2016. The Convention is the latest in an ongoing series of releases related to the OECD/G20 Project addressing Base Erosion and Profit Shifting (the “BEPS Project”), which is a major and continuing effort described as “aiming to realign taxation with economic substance and value creation, while preventing double taxation.”[1]  The Convention is the result of multilateral negotiation by over 100 member states (including the United States and the United Kingdom) and observers. While the Convention will not come into force at all until five countries have formally ratified the Convention, once in force the Convention will come into effect for an existing income tax treaty after both contracting parties to that treaty have signed the Convention and any other required home-country ratification processes are completed. The Convention is accompanied by a detailed explanatory statement describing its provisions. The OECD announced that a signing ceremony for the Convention will be held in June of 2017, although a list of expected signatories has not yet been released.

Continue reading for further background on the Convention and a discussion of issues relating to the Convention’s interaction with existing tax treaties, substantive highlights and timetable for implementation. A complete version of the Convention, and the explanatory statement, are linked here and also can be found on the OECD website, http://www.oecd.org. If you would like to discuss any details of the Convention or its impact on multinational enterprises, please contact any of the authors listed here or any member of the Proskauer Tax Department whom you usually consult on these matters.

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Potential for Tax Reform in 2017: Insight from Proposals of the President-Elect and Congressional Republicans

In the U.S. general election held on November 8, 2016, Donald J. Trump was elected to become the 45th President of the United States. Republicans also retained their majorities in both the U.S. House of Representatives and the U.S. Senate for the new Congress convening in January, meaning that Rep. Paul Ryan (R-WI) is likely to remain the Speaker of the House and Sen. Mitch McConnell (R-KY) is likely to remain the Majority Leader of the Senate. For the benefit of non-U.S. readers, this result means that Republicans will control of all three lawmaking bodies of the U.S. federal government, although the current rules of the Senate give Senate Democrats some limited ability to block proposals and legislation in that body.

During 2016, the President-Elect and Congressional Republicans have issued white papers outlining their respective proposals for U.S. tax reform, both of which would affect the U.S. federal taxation of individuals and businesses both domestically and internationally. It is obviously too soon to say whether, when or in what form any tax reform legislation will be advanced in the next Congress. In the ordinary course the Treasury Department would release in early 2017 the new administration’s tax proposals (the “Green Book”); the Congress could introduce a bill embodying either a partial or comprehensive tax reform proposal at any time. Below is a summary of the most important elements of both tax reform proposals.

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Final and Temporary Debt-Equity Regulations Issued by the IRS

On October 13, 2016, the Treasury Department and the Internal Revenue Service issued final and temporary regulations under section 385 of the Internal Revenue Code. The final and temporary regulations recharacterize certain debt instruments as equity for all federal income tax purposes.

The final and temporary regulations narrow considerably the scope of the proposed regulations and will principally apply to debt issued by domestic corporations to foreign corporations that are part of the domestic corporation’s “expanded group” (generally corporations related by an 80% vote or value ownership test). Please click here for our client alert, which analyzes the new final and temporary regulations and their impact on related party debt issuances.

Key Takeaways from IBA Annual Conference Panel

Robert Gaut, the head of our UK tax practice and a partner in the London office of Proskauer, spoke on 20th September on a panel at the International Bar Association’s annual conference in Washington, D.C. The panel was entitled “Practical Issues in Entity Classification and Claiming Tax Treaty Benefits for Transparent Entities”.

Along with co-panelists from the U.S., Argentina, Spain, Canada and the Netherlands, Robert looked at:

  • Mismatches of treatment between those countries in how partnerships are treated for tax purposes
  • Issues created by the current OECD BEPS project in relation to the ability of taxpayers to claim double tax treaty benefits through partnerships, LLCs and other transparent and hybrid structures
  • The continuing implications of the UK Supreme Court judgment in Anson v. Commissioners for Her Majesty’s Revenue and Customs
  • The EU Anti-Tax Avoidance Directive and its effect on hybrid entities

Materials from the presentation are available to IBA members on their website.

Proposed New UK Penalties Regime Precipitated by CRS

Many people will be familiar with the information gathering and reporting requirements the OECD’s Common Reporting Standard (“CRS”) places on financial institutions. The first exchanges of information between tax authorities will take place next year, with all CRS jurisdictions exchanging information by 2018. And we are now starting to see how tax authorities expect this information to change the taxpayer/tax authority dynamic. Continue Reading

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