US Congress Throws Tax Benefits At Project Finance Community
The “Framework Convention on Climate Change,” adopted at the United Nations Earth Summit in 1992, envisions long-term solutions to a long-term problem...
Project Finance NewsWire
September 1999
IN THIS ISSUE
NOx Reduction Plans in Turmoil
US efforts to reduce nitrogen oxide emissions from power plants and other facilities that burn fossil fuels in 22 states east of the Mississippi River are in turmoil after two recent court decisio...
US Action Closer On Corporate Tax Shelters
US companies with deals that might not close until very late this year should take into account the possibility that Congress might pass legislation this fall to penalize corporations and outside ...
“Lite Regulation” Is Not “Deregulation”
Project developers and lenders should remember that the term “deregulation” is not completely accurate when applied to electric utility generation and sales...
Ukraine To Sell Off Utility Assets
Ukraine is expected to release details this fall for a planned selloff of 31 “voblast Energos,” or regional electric utilities. Ukrainian President Leonid Kuchma issued a decree (Decree No...
Latest Tax Angles For Latin American Projects
Infrastructure projects have the potential to be very costly in terms of taxes. Latin America is no exception, especially with income tax rates generally increasing across the region...
IN OTHER NEWS
THE US TREASURY BELIEVES IT HAS AUTHORITY TO DISALLOW INTEREST DEDUCTIONS on new debt instruments like PHONES and DECS.
PHONES are a form of debt instrument a corporation might use to monetize shares it holds in another company. The acronym stands for “participating hybrid option note exchangeable securities...
PURPA CONTRACTS WON ANOTHER ROUND in court this summer.
A federal district court in Michigan ordered a reversal of orders the Michigan Public Service Commission had issued restructuring the state’s electric utility industry to the extent the orders jeo...
Tax Havens are Expected to Come under Fire
Tax havens are expected to come under fire next year in reports by the organization for economic cooperation and development (OECD) and a special tax force on money laundering of the G-7 countries.
THE UNITED STATES TEMPORARILY SHELVED RULES THAT WOULD HAVE MADE IT HARDER FOR US MULTI-NATIONALS TO “STRIP EARNINGS” from other countries
A multinational corporation can usually reduce its tax base in another country by having its subsidiary in that country pay out earnings in a deductible form...
Colombia
Colombia ruled that technical services that an offshore company performs for a Colombian company are not subject to value-added taxes if the services are performed offshore.
THE US STATE DEPARTMENT IS UNDER PRESSURE TO IMPOSE SANCTIONS AGAINST A SPANISH HOTEL CHAIN that is developing hotels in Cuba.
The sanctions would bar executives and their families of the hotel chain from entry into the United States. The pressure is coming from Republicans in Congress...
Pennsylvania
Pennsylvania enacted a new tax credit to encourage projects to make synthetic fuels from coal.
THAILAND ANNOUNCED PLANS TO CUT CUSTOMS DUTIES ON 326 CAPITAL GOODS to 3% from current rates of from 5% to 20%
THAILAND ANNOUNCED PLANS TO CUT CUSTOMS DUTIES ON 326 CAPITAL GOODS to 3% from current rates of from 5% to 20%...
Brazil Terminated its Tax Treaty with Portugal
Brazil terminated its tax treaty with Portugal, effective next January 1.
Indonesia
Indonesia is expected in November to unveil a new set of tax incentives to lure foreign investors.
A DANGER IN COMPLICATED TAX STRUCTURES is that the IRS will invoke section 269 of the US tax code to deny benefits from the structure.
Section 269 gives the agency broad authority to deny tax benefits when a taxpayer acquires a corporation for the principal purpose of “evasion or avoidance of Federal income tax by securing the be...
DEBT-EQUITY SWAPS in Latin American deals continue to face scrutiny from the IRS. However, the agency lost a case this summer in the US Tax Court.
A US auto-parts manufacturer, CMI International, planned to set up a manufacturing operation in Mexico. CMI bought Mexican government debt at a 51.5% discount from face value in the market...
BRIEFLY NOTED - September 1999
BRIEFLY NOTED: President Clinton created an interagency panel in August to report back in eight months on how to increase use of biomass, including for generating electricity...
