Law Commons^™

Can A Cost Sharing Arrangement Prevent A Tax Shelter Label?, Jeffrey M. Kadet

Articles

In connection with an ongoing effort of the government to examine certain Microsoft documents, the government on October 12, 2016, stated in a filed document that one of the transactions at issue is "unquestionably" a tax shelter for purposes of section 7525. The significance of that is in whether some written communications should be protected from IRS scrutiny by the section 7525 confidentiality privilege that may apply to tax advice between a taxpayer and tax practitioners. Under section 7525(b)(2), written communications will not qualify if they are "in connection with the promotion of the direct or indirect participation of the …

Profit-Shifting Structures: Making Ethical Judgments Objectively, Part 2, Jeffrey M. Kadet, David Koontz

Articles

MNCs and their advisors have seemingly taken ethics out of the mix when considering the profit-shifting tax structures they have so prolifically and enthusiastically implemented over the past several decades. There may be a variety of reasons for this. First, U.S. tax law is a self-assessment system, meaning that in most cases taxpayers compute and pay tax without advance approval of their tax positions from the IRS. No third party technical test or propriety standard has to be passed on the front end for any tax strategy or structure. Second, direct personal benefits accrue to management and advisors from implementing …

The Luxembourg Effect: Patent Boxes And The Limits Of International Cooperation, Lilian V. Faulhaber

Georgetown Law Faculty Publications and Other Works

This article uses patent boxes, which reduce taxes on income from patents and other IP assets, to illustrate the fact that the jurisprudence of the European Court of Justice has a longer reach than has previously been recognized. This article argues that, along with having effects within the European Union, the ECJ’s decisions can also have effects on countries outside of the EU. In the direct tax context, the ECJ’s jurisprudence has hampered the ability of both EU and non-EU countries to police international tax avoidance.

In 2015, the Organisation for Economic Co-operation and Development (OECD) proposed restrictions on patent …

Profit-Shifting Structures: Making Ethical Judgments Objectively, Part 1, Jeffrey M. Kadet, David Koontz

Articles

MNCs and their advisors have seemingly taken ethics out of the mix when considering the profit-shifting tax structures they have so prolifically and enthusiastically implemented over the past several decades. There may be a variety of reasons for this. First, U.S. tax law is a self-assessment system, meaning that in most cases taxpayers compute and pay tax without advance approval of their tax positions from the IRS. No third party technical test or propriety standard has to be passed on the front end for any tax strategy or structure. Second, direct personal benefits accrue to management and advisors from implementing …

Profit-Shifting Structures And Unexpected Partnership Status, Jeffrey M. Kadet, David Koontz

Articles

Many U.S.- and foreign-based MNCs that have implemented carefully researched tax strategies to reduce their income taxes are coming under increased scrutiny. Most MNC tax strategies involve businesses they conduct worldwide, but which are managed from the U.S. These strategies have several factors in common:

(i) Companies established in tax havens or otherwise structured to attract little if any tax;

(ii) Intercompany agreements placing commercial risk and intangibles in such companies, thereby shifting profits to such companies;

(iii) Conduct of centralized activities and functions in the U.S. (in addition to group senior management), which are integral to and which critically …

Beps - A Primer On Where It Came From And Where It’S Going, Jeffrey M. Kadet

Articles

Governments throughout the world have been losing many billions of dollars of tax revenues from “legal” tax avoidance conducted by many multinational groups (MNEs) through aggressive structuring of operations and transactions that often lack economic reality so as to earn profits that are subjected to zero or low-taxation. The success of this “legal” tax avoidance motivated the G-20 and the OECD to initiate the two-year Base Erosion and Profit Shifting (BEPS) project, which took place from 2013 to 2015.

This discussion of the BEPS project is intended to give the reader an understanding of the project’s origin, its objectives, and …