WEEKEND INSIGHTS: Short-Term Rentals, Brazilian Investment Funds

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, and Financial Accounting.

This week we look at short-term rentals in the age of Covid, checking the box for Brazilian investment funds, the outlook for 2021, and more. We’ll hear from:

• Pam Knudsen of Avalara on the ups and downs of short-term rentals in the Covid era
• Celso Grisi and Maria Carolina Grecco Bazzanelli of Mayer Brown on Brazilian private equity investment funds
• Five EY Tax leaders on their 2021 tax outlook
• Jan Sanders and Kevin Korevaar of PKF Netherlands on using outdated VAT simplification rules
• Roderik Bouwman and Mehdi el Manouzi of DLA Piper on the Netherlands tax plan for 2021
• Shabnam Shaikh and Ipshita Bhuwania of Khaitan & Co. on the Indian government’s proposal to tax based on citizenship

After a massive drop in bookings at the beginning of the pandemic, short-term rentals have rebounded.

Photographer: Gabby Jones/Bloomberg

Short-term rentals rule the lodging sector during the Covid-19 pandemic and boosting local economies—what could possibly go wrong? Pam Knudsen of Avalara looks at where short-term rentals are experiencing a rebound and where they’re not, and what property owners, local governments, and guests need to do to make them work for everyone. Read: Short-Term Rentals and Covid—What Could Possibly Go Wrong?

Some foreign entities have the ability to take advantage of the U.S. “check-the-box” election. Celso Grisi and Maria Carolina Grecco Bazzanelli of Mayer Brown explain how Brazilian private equity investment funds would probably fall within the concept of “business entities” and could therefore be eligible for such elections for U.S. federal tax purposes. Read: Brazilian FIPs and the Check-the-Box Election for US Federal Tax Purposes

The Covid-19 pandemic has accelerated what was already an unprecedented period of digital and legislative change for the tax function. In lieu of the EY 39th annual International Tax Conference—this year held virtually—five EY Tax leaders share their 2021 tax outlook on BEPS 2.0, tax risk and controversy, supply chains and more. Read: Five EY Tax Leaders Share Their 2021 Outlook

Despite the European Commission’s efforts to combat VAT fraud, widely applied outdated national fraud-sensitive simplification rules for cross-border trade have remained untouched until today. Jan Sanders and Kevin Korevaar of PKF Netherlands open the debate on the existence of the simplification rules and discuss what businesses currently considering or applying them should do. Read: Trading Cross-Border Using Outdated VAT Simplification Rules

Roderik Bouwman and Mehdi el Manouzi of DLA Piper discuss the main direct and indirect tax measures recently announced in the Netherlands Tax Plan 2021, with a focus on what they will mean for multinationals doing business there. Read: Netherlands Tax Plan 2021

The Indian government has introduced a taxation provision with a nexus to citizenship. This is a departure from tradition since Indian taxation provisions typically derive their nexus based on residence. Shabnam Shaikh and Ipshita Bhuwania, of Khaitan & Co, discuss the consequences of this significant amendment to the Finance Act 2020. Read: India’s Move Towards Citizenship-Based Taxation

Corporate Tax Chat With John Lee of Zoom Video Communications

Bloomberg Tax recently spoke with John Lee, head of tax at Zoom Video Communications Inc., about how tax departments anticipate further changes in the federal and global landscape with the upcoming elections and with the OECD’s work to overhaul the international tax system. Lee also shared what it is like to work remotely during a pandemic. Read: Corporate Tax Chat With John Lee of Zoom Video Communications

From the Archive

Bloomberg Tax contributors have been engaging in civil discourse on the Trump tax returns since the issue arose.

Seth Hanlon of the Center for American Progress and Kyle Pomerleau of the American Enterprise Institute express different takes on what President Trump’s tax returns say and don’t say about the U.S. income tax system.

In 2019 President Trump’s lawyers asked the U.S. Supreme Court to quash two subpoenas for his tax returns. Alan Morrison of George Washington University Law School explained why both requests should be denied.

George K. Yin of the University of Virginia School of Law said Congressional tax committees should act responsibly but not shy away from using their authority to disclose the president’s tax returns if the public’s interest demands it.

There is a reason that the privacy and confidentiality of everyone’s tax return—including the president’s—is protected. Lawrence Gibbs, a former IRS commissioner, recounted the events and concerns that led to the current language in the tax code providing that protection. Gibbs, of Miller & Chevalier Chartered, helped draft that language and explains that it is as important now as when it was enacted.

Beyond Tax

What’s happening outside the world of tax?

Whether in a trial or appellate court, attorneys need to prep diligently for arguments with effective moot court sessions. Washington, D.C., appellate attorneys Andrew Nichols, shareholder at Charis Lex, and Steffen Johnson, partner at Wilson Sonsini, say keys include staying in role and holding multiple sessions. Read: Ten Keys to Getting the Most Out of Your Moot Court

Kirkland & Ellis LLP’s Erica Williams shares lessons on essential skills for legal team leaders from her experience serving in the Obama White House, the Securities and Exchange Commission, and now as a BigLaw partner. General counsel must remain mission-focused, implement effective communication strategies, and have the confidence to make tough decisions that minimize risks, especially during the pandemic. Read: GCs Need Three Mission Critical Skills for Navigating Legal Challenges

Law firms must improve transparency and overhaul biased compensation systems to overcome the persistent pay disparity between male and female partners, according to Debra Pickett, founder of Page 2 Communications. She says industry groups must urge firms to make compensation systems public—and hold them accountable for what they reveal. Read: True Equity Requires Transparent, Accountable Compensation Systems

Exclusive Content for Bloomberg Tax Subscribers

(*Note: Your Bloomberg Tax login will be required to read the following content.)

James W. Standard Jr. of Taylor, English & Duma LLP discusses the basic considerations that must be addressed in forming and operating a Section 501(c)(3) organization, primarily from a federal income tax perspective. Section 501 and accompanying Treasury Regulations provide for the creation and operation of charitable organizations, sometimes referred to as non-profits.

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 emcmanus@bloombergtax.com.