Ideas for Responding to Global Climate Change
The “Framework Convention on Climate Change,” adopted at the United Nations Earth Summit in 1992, envisions longterm solutions to a long-term problem. With the adoption of the “Kyoto Protocol” to the convention
Saudi Arabia Overhauls Electricity Supply
The Council of Ministers in Saudi Arabia approved proposals for a significant restructuring of its electricity sector on November 30...
Claiming R&D Tax Credits On Projects
The Internal Revenue Service issued final rules in January on how to define “research” that qualifies for a 20% federal tax credit...
Trouble Getting Lender Liens Over Reserve Accounts
Differences of opinion are cropping up in project financing deals where lenders seek security interests in collateral accounts set up to hold reserves to service debt, satisfy maintenance obligati...
Power Marketers Are Up in Arms about a January 1 Letter from the Deputy Commissioner of Taxes in New York
The letter said fees paid to power marketers for delivery of electricity are subject to state sales tax. This reverses a position the state took in 1997...
BRAZIL INCREASED SOME TAXES and is considering reforming others
The Brazilian Senate voted on January 6 to extend a financial transactions tax, called CPMF, for three years and to increase the rate from the current 0.2% to 0.38% in 1999 and 0...
MCI found a way to eliminate sales and use taxes on construction costs for a project
The company is building a telecommunications switching station in Westchester County...
THE IRS CRACKED DOWN ON “FAST-PAY STOCK.
This is stock that pays such large dividends that the dividends represent not only a return on the shareholder’s investment, but also at least partly a return of that investment...
SECTION 861 STRUCTURES COME UNDER FIRE
Lee Sheppard urged the government, in an article in late December in Tax Notes magazine, to attack so-called 861 structures that many US companies are using to burn off “overall foreign losses...
THE UNITED STATES IS RETHINKING WHEN US MULTINATIONALS should be allowed to defer US taxes on foreign earnings
The current rules date back to 1962. Donald C...
The IRS is expected to Shut Down LILO Transactions by February
LILOs are a form of lease financing where a foreign company or US municipality leases rail cars or a power plant to a US equity and then subleases it back.
“CHECK-THE-BOX” rules will be tightened further.
MEXICO INCREASED TAXES after Congress approved the government’s budget on New Year’s Eve
The corporate income tax rate increased from 34% to 35%. However, companies that reinvest profits can defer up to 3% of the tax, for a 32% rate this year...
ARGENTINA ALSO INCREASED TAXES effective January 1, but there have been calls to overturn the changes when Congress reopens in March
The corporate income tax rate increased from 33% to 35%. Argentina will impose a withholding tax for the first time on dividends. The rate is 35%...
Look for Guidance Later This Year
LOOK FOR GUIDANCE LATER THIS YEAR on the US tax treatment of international telecoms income.
“SOLID WASTE” may be redefined for tax purposes.
Landfill Gas Producers
LANDFILL GAS PRODUCERS want a tax credit for companies that consume landfill gas.
Most Economic Sanctions Against India and Pakistan
MOST ECONOMIC SANCTIONS AGAINST INDIA AND PAKISTAN have been waived until October 21.
INDIA is expected to levy a new tax on electricity consumption, with 66% of the money to go to local ...
Bulgaria Reduced its Taxes
BULGARIA REDUCED ITS TAXES effective January 1 in the hope of spurring more investment.
The Romanian Parliament
THE ROMANIAN PARLIAMENT voted in late November for a 10-year tax holiday on income from new investments exceeding the equivalent of US$50 million.
Russia Renegotiated its Tax Treaty with Cyprus
RUSSIA RENEGOTIATED ITS TAX TREATY WITH CYPRUS after threatening last summer to cancel the treaty unilaterally.
INLAND REVENUE issued interim guidance in December for companies with global trading desks in London on how much income from trades should be
allocated to the United Kingdom.
Water Utilities Charge
WATER UTILITIES CHARGE that the US government reneged on a deal involving tax treatment of water interties.
BELL ATLANTIC lost a dispute in federal district court last month over investment tax credits.
New Jersey Enacted Legislation Requiring Municipal Utilities
NEW JERSEY ENACTED LEGISLATION REQUIRING MUNICIPAL UTILITIES to pay corporate business tax if they make sales within a franchise area served by another electric utility.
An Executive Who Agrees to Act as the "Responsible Person"
AN EXECUTIVE WHO AGREES TO ACT AS THE “RESPONSIBLE PERSON” for payment of local taxes for his employer in a foreign country may be in for
US COMPANIES WITH OPERATIONS IN MEXICO may want to seek rulings on Mexican asset taxes.
Many countries in Latin America impose minimum taxes on asset value to ensure that some tax is paid even in cases where a company is otherwise reporting tax losses. The asset tax in Mexico is 1...
Peruvian President Alberto Fujimori
PERUVIAN PRESIDENT ALBERTO FUJIMORI said recently that Peru will reduce its minimum tax from 0.5% to 0.2% of a company’s assets.
Inbound Investments into Canada
INBOUND INVESTMENTS INTO CANADA should not be made with US LLCs, according to two Canadian lawyers.
Italy Adopted Carbon Taxes
ITALY ADOPTED CARBON TAXES in November in order to discourage use of fossil fuels other than natural gas
Foreign Sales Corporation
“FOREIGN SALES CORPORATIONS” are under attack before the World Trade Organization in Geneva.
The IRS said “strong proof” is not required to disavow the form of certain transactions between related parties
The government usually holds taxpayers to the form of a transaction when reporting tax results...
TEXAS confirmed that manufacturing companies in the state do not have to pay sales taxes on natural gas they purchase to generate their own electricity.
MINOR MEMOS - January 1999
The Joint Tax Committee in Congress reported in December that 47.8 million Americans will escape income tax liability in 1998 due to deductions and credits. Most are in lower income brackets...