Political risk insurance coverage expands
Several recent developments in the area of political risk coverage will help developers, equity participants and lenders in private infrastructure projects...
Hybrid Debt Survives Test Case; The US tax authorities upheld a form of hybrid debt in April that many large US corporations use to borrow, but that the Clinton administration has
The debt is called MIPS, or monthly income preferred securities. MIPS have rapidly displaced preferred shares in corporate capital structures since they were first introduced in 1993...
New US rules cut NOx from power plants and target haze
Stringent new rules for reducing nitrogen oxide emissions took effect in most northeastern and mid-Atlantic states on May 1...
Progress On Shared Pledge Dilemma
Among the more intractable challenges in structuring and closing infrastructure project financings in emerging markets has been the tug-of-war between project lenders and political risk insurers (...
IRS addresses tax effects of contract restructurings
Two recent tax rulings offer ideas for how to restructure contracts while minimizing the tax consequences. The rulings are private letter rulings...
Obstacles to Privatizing Sewage Treatment
Municipalities thinking of contracting out operation of their sewage treatment plants to private companies quickly run up against two barriers...
Congress is expected to begin writing a tax bill in July. The project finance community will be affected by some of the changes
Deadlines for House and Senate action are in a budget resolution. The House Ways and Means Committee has until July 16 to report a bill. The Senate Finance Committee has until July 23...
A GOVERNMENT CRACKDOWN IS LOOMING AGAINST CORPORATE TAX SHELTERS. A US Treasury “white paper” is expected in May
A depreciation case may have opened the door to claiming faster tax writeoffs on some assets.
Most equipment at a project is depreciated over an average useful life for the entire project based on the industry in which the project is used...
Favorable financing terms are not a separate asset, the IRS said
Many utilities are divesting generating assets...
A SENATE BILL WOULD ALLOW TAX-EXEMPT FINANCING FOR US HIGHWAY PROJECTS
Senators John Chafee (R.-R.I.) and Daniel Patrick Moynihan (D.-N.Y...
Utility Asset Divestitures
Utility asset divestitures may have the effect of increasing property taxes for independent power projects.
CHILE WANTS MORE FROM ELECTRIC GENERATING COMPANIES
Chilean President Eduardo Frei has proposed, and a congressional committee has approved, a proposal to require Empresa Nacional de Electricidad SA, Gener SA, Colbun SA and other privately-held com...
India Imposed a Ten Percent Surcharge
The proposal was included in the budget the Hindu nationalist government presented to parliament on February 27.
China Announced Changes
The changes were in circulars issued by the State Administration of Taxation in November, but only available recently.
BACK-TO-BACK WARRANTS MAY BE A WAY TO REPATRIATE EARNINGS from foreign operations to the United States without triggering US taxes
A US parent company sold warrants for $X to an unrelated investor. The investor then sold similar warrants to an offshore subsidiary of the US parent...
A Coalition of Companies
A coalition of companies is lobbying to eliminate withholding taxes on interest between the US and Canada.
A US PARENT THAT MADE A LOAN TO A SUBSIDIARY DID NOT HAVE TO ACCRUE INTEREST because the subsidiary only had to the repay the loan out of positive cash flow, the IRS said
The case opens the door to possible tax planning...
DEBTS by electing to be treated as “securities dealers” for US tax purposes.
Brazil will Resume Collecting CPMF Tax
Brazil will resume collecting CPMF tax on financial transactions from June 17.
Ecuador Increased Taxes
Ecuador increased taxes in March.
Company Cannot Claim Attorney-Client Privilege
A company could not claim attorney-client privilege for documents prepared by its accountant who is also a lawyer.
Hungary Won't Introduce Major Tax Reforms
Hungary will probably not introduce major tax reforms next year, despite past promises.
THE US PLANS NO CHANGE IN ECONOMIC SANCTIONS AGAINST LIBYA, INDIA AND PAKISTAN
US sanctions against Libya remain in place, despite a decision by the United Nations last month to lift UN sanctions...
Czech Government Proposes Reduction in Corporate Tax Rate
The Czech government is proposing to reduce the corporate tax rate from 35% to 33%.
IRS Issued Conflicting Rulings
The IRS issued conflicting rulings on payments to terminate interest rate swaps.
The IRS Adjusted Section 29 and 45 Tax Credits
The section 29 tax credit was $1.055 an mmBtu during 1998.
A CALIFORNIA COALITION WANTS CONGRESS TO DENY SECTION 45 TAX CREDITS on electricity sold to utilities under power purchase agreements that were signed before 1987. It also supports
Only new power projects placed in service after June 1999 would be affected. However, there would be an exception...
Indiana explains how to Apportion Joint Venture Income
Most states figure the income a company has from doing business in the state by applying a three-factor formula.
New York Postponed Collecting Sales Taxes
New York postponed collecting sales taxes on unbundled electricity transmission and distributions services until June 1.
Discriminatory taxes against telephone companies were struck down in two states
The US Supreme struck down an Alabama tax in late March in the case South Central Bell Telephone Co. v. Alabama...
A Gas Utility Had Unexpected Income from Demand-Side Management Programs
People’s Gas System set up a number of energy conservation programs as required by Florida law with the aim of reducing electricity and oil consumption.
Telephone Companies Shortchanged on Depreciation
MCI and Telecom*USA both qualified for investment tax credits in 1986.
Another Company Claimed Investment Credits
Scott Paper Company spent money in the late 1980’s on improvements, equipment and furnishings at its headquarters in Philadelphia.
The US Treasury received a letter from Irvin N. Gleim of Gleim Publications, Inc. in
Gainesville, Florida recently enclosing copies of newspaper articles ...