This is a weekend roundup of Bloomberg Tax Insights, written by practitioners and featuring expert analysis on current issues in tax practice and policy. The articles featured here represent just a handful of the many Insights published each week. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and Financial Accounting.
This week we look at leadership lessons learned during the pandemic, digital services taxes, relocating to Florida, the pandemic relief legislation, and more. We’ll hear from:
- Kathryn Kaminsky of PwC on what she learned while leading the tax group in a uniquely challenging year
- Amie Ahanchian, Donald Hok, Philippe Stephanny, and Elizabeth Shingler of KPMG on the DST proposals around the globe
- Connie Eckerle of Smolin on the tax considerations of relocating to Florida
- Tony Nitti and Amie Kuntz of RubinBrown on the key provisions of the pandemic stimulus legislation
- Steve Gallucci and Banks Edwards of Deloitte on whether President-elect Joe Biden will get his proposed tax policies enacted into law
- David Hunt and Daniel Witt of the International Tax and Investment Center on how a value-added tax policy can bring in much-needed government revenue
- Marina Vishnepolskaya on beneficial ownership disclosure requirements
- Henry Montag of The TOLI Center East on supplemental retirement plans for executives and small business owners
Kathryn Kaminsky, Vice Chair - Tax Leader at PwC, shares what she learned about leadership in the perpetually challenging year of 2020. Read: What I Learned About Leadership in 2020
The digital economy is growing two and a half times faster than global GDP, and governments are trying to tax the resulting revenue—mostly jurisdictions that are not home to the largest companies in the digital economy. Amie Ahanchian, Donald Hok, Philippe Stephanny, and Elizabeth Shingler of KPMG LLP summarize the various DST proposals globally and discuss potential duty mitigation strategies should the U.S. choose to respond with retaliatory tariffs. Read: Digital Services Tax: Why the World is Watching
The combination of warm weather and no personal income tax makes Florida a desirable place to relocate. Connie Eckerle of Smolin outlines what you need to keep in mind to make a clean break from your current domicile—and its taxes. Read: What You Need to Know About Relocating to Florida
Late last month Congress finally passed—and President Trump eventually signed—much-awaited pandemic stimulus legislation. Tony Nitti and Amie Kuntz of RubinBrown outline the key provisions of the 5,500-page act, which includes allowing deductions for expenses paid with Paycheck Protection Program loan proceeds. Read: Congress Strikes a Stimulus Deal
Biden has expressed his intent to increase taxes for large corporations and wealthy individuals. Steve Gallucci and Banks Edwards of Deloitte examine whether Biden will actually get his proposed tax policies enacted into law. Read: The Path Ahead for President-Elect Biden’s Tax Policies
Economic recovery from the Covid-19 pandemic will require adroit tax policy in both developed and developing countries. David Hunt and Daniel Witt of the International Tax and Investment Center explain how a value-added tax policy can bring in much-needed revenue to governments facing falling revenue with increased spending on public health and stimulus measures. Read: Restarting the Growth Engine: Tax Policy After the Pandemic
The National Defense Authorization Act, 2021 (NDAA), passed by the Senate over a presidential veto, provides for disclosure of beneficial ownership of entities formed or registered to do business under U.S. state laws. Marina Vishnepolskaya outlines whose information must be reported, the scope and manner of information reporting, and the timing of implementation of the reporting requirements. Read: Corporate Transparency Act and Disclosure of Beneficial Ownership
Henry Montag of The TOLI Center East explains how to structure a supplemental retirement plan for executives and small business owners with tax deferred accumulations and tax-free distributions using life insurance. Read: Supplementing Retirement Income for the Executive or Business Owner
From the Archive
Bloomberg Tax contributors closely followed and analyzed proposals to enact and enactments of digital services taxes.
Substantive progress on tax and digitalization faces many obstacles and doesn’t look promising as we enter 2021. Will Morris examined the challenges, considered the possible outcomes, and concluded that a workable—and improvable—multilateral agreement is preferable to a free-for-all of DSTs, tariffs, and revenue grabs.
Many parties outside of the U.S. argue the leading digital services businesses—most of which are U.S.-based—are not paying their “fair share” of taxes in jurisdictions where the services are used and want to impose a special tax on those services. Jeff VanderWolk noted that heavier taxes are usually applied to activities that cause harm to society, and questioned whether it makes sense to penalize the services that have played a large part in keeping businesses, education, and social lives functioning during the pandemic.
Emine Constantin of TMF Group discussed the challenges digital technology has created for the global tax system, and looked at how different countries are addressing this through digital services taxes.
BDO International Tax Partner Ross Robertson reacted following the OECD’s release of over 900 pages of documents on Oct. 12, 2020, regarding its ongoing effort to address the challenges of taxing the digital economy.
What’s happening outside the world of tax?
In some states, including Georgia, it is legal for one party of a phone call to secretly tape record the conversation. But Stroock’s Joel Cohen says attorneys should think twice about recording conversations—even when legal—and looks at the ethics and propriety of doing so, especially since almost everyone has a recorder on their cell phone. Read: Is It a Good Idea to Tape Record Another Individual?
A disorganized response by bar examiners to the Covid-19 pandemic disadvantaged many prospective bar exam takers this year, say four members of the Collaboratory on Legal Education and Licensing for Practice. The 2020 process reduced the number of new lawyers, lessened diversity among them, and shows why the profession needs to pay more attention to the licensing process. Read: Pandemic Bar Exams Left Many Aspiring Lawyers Behind
Members of Congress should be prohibited from owning publicly traded securities while in office, say Donna M. Nagy, Indiana University Maurer School of Law professor, and Richard W. Painter, University of Minnesota Law School professor and former chief White House ethics lawyer under President George W. Bush. Passing a law requiring divestiture should be a number one priority under the Biden administration. Read: It’s Time for Senators, House Members to Divest Stocks in Individual Publicly Traded Companies
Exclusive Content for Bloomberg Tax Subscribers
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Although the international tax system was radically reshaped by the Tax Cuts and Jobs Act of 2017 (TCJA), the underlying (and imperfect) mechanism for taxing the income of foreign subsidiaries was not only retained but was adopted generally for all foreign income. Michael J. Caballero of Covington & Burling LLP discusses the complications and distortions created and suggests at a minimum modifications to the global intangible low-taxed income (GILTI) rules.
Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute, please contact Erin McManus at email@example.com.