August 29, 2016

B.E.P.S. Action 7 – O.E.C.D. Calls for Improved International Coordination on the Allocation of Branch Profit

August 29, 2016/ Ruchelman P.L.L.C.

One of three releases on July 4, the O.E.C.D.’s Additional Guidance on the Attribution of Profits to Permanent Establishments addresses the imponderable question – how much profit should be attributed to a P.E.? The answer will make tax advisers quite happy: It depends on the facts, and the O.E.C.D. suggests that a coordinated global approach is required to avoid double taxation. Stakeholders are invited to comment. Michael Peggs examines five examples in the additional guidance.

September 15, 2015

Notice 2015-54 on Reallocation to Foreign Partners – The Beginning of the End?

September 15, 2015/ Web Admin

We address the I.R.S.’s latest attempt to shut down schemes to avoid U.S. taxation by cracking down on what some may have considered a loop-hole under applicable partnership rules. In Notice 2015-54, 2015-34 IRB 210 (8/06/2015), the I.R.S. announced that it intends to issue regulations that would change the nonrecognition rules on certain property contributions to partnerships and L.L.C.’s with foreign partners. The new regulations would require that income or gain attributable to property be taken into account by the U.S. transferor, either immediately or periodically. Regulations would also be issued under §§482 and 6662 of the Internal Revenue Code (the Code) that apply to controlled transactions involving partnerships to ensure appropriate valuation of such transactions.