U.S. taxation of foreign income / Gary Clyde Hufbauer & Ariel Assa.

Format:

Book

Author/Creator:

Hufbauer, Gary Clyde.

Contributor:

Assa, Ariel.

Language:

English

Subjects (All):

Income tax--United States--Foreign income.

Income tax.

Income tax--Law and legislation--United States.

Noncitizens--Taxation--Law and legislation--United States.

Noncitizens.

Corporations, Foreign--Taxation--Law and legislation--United States.

Corporations, Foreign.

Physical Description:

1 online resource (338 p.)

Edition:

1st ed.

Place of Publication:

Washington, DC : Peterson Institute for International Economics, 2007.

Language Note:

English

Summary:

Since 1992, new issues have arisen in international taxation for example, taxation of electronic commerce, novel means of shielding passive income, the World Trade Organization (WTO) debate over the foreign sales corporation and subsequent passage of the American Jobs Creation Act of 2004, the problem of corporate inversions, and alleged "earnings stripping" by foreign-based multinational enterprises (MNEs) operating in the United States. In the meantime, US-based MNEs operating abroad have used a variety of methods to cut the effective US tax on repatriated foreign source income to around 2 percent. This revised study analyzes the impact of taxes on industry location and profit shifting using new panel econometric studies. It also discusses and evaluates new paradigms that have been suggested for the international tax system."

Contents:

Cover

Contents

Acknowledgments

Preface

Chapter 1 Introduction

The US Role in the World Economy: Five Decades of Change

Foreign-Owned Assets in the United States

Internationalization of the US Economy

The Rise of High Technology

Headquarters for MNEs

Chapter 2 Corporate Taxation

Historical Background

Incidence of the Corporate Income Tax

Relevance to International Tax Issues

Chapter 3 Traditional Tax Doctrine for Foreign Income

Capital Export Neutrality

National Neutrality

Capital Import Neutrality

Capital Export Neutrality and Capital Import Neutrality Theories in Tax Reality

Capital Ownership Neutrality

Revenue Considerations

The Future Debate

Chapter 4 Residence Taxation for Portfolio Investment Income

The Rise of Portfolio Capital

Applying Capital Export Neutrality Logic to Portfolio Income

Residence-Only Taxation of Portfolio Income

Cooperation Against Tax Avoidance

OECD Project on Harmful Tax Competition

The USA Patriot Act and Anti-Money Laundering Initiatives

Recommendations

Chapter 5 Multinational Firms in the World Economy

Strategic Arguments

A Model of Operating Profits and Headquarters Costs

Restrictive Policies and National Prosperity

Tax Policy Implications

Chapter 6 Agenda for Modest Reform: A Territorial System

The Territorial System

Antiabuse Measures

Tax Treaty Policy

Revenue Implications

Appendices

Appendix A1 History of US Taxation of Foreign Income of US Corporation (Excluding Merchandise Export Income)

Revenue Act of 1894

Revenue Act of 1909

Income Tax Act of 1913

Revenue Act of 1918

Revenue Act of 1921

Revenue Act of 1932

Revenue Act of 1939

Revenue Act of 1942

Internal Revenue Code of 1954

Revenue Act of 1958

HR 10087 (1960)

Revenue Act of 1962.

Tax Reform Act of 1969

Revenue Act of 1971

HR 62 and S 2592 (Burke-Hartke)

Tax Reduction Act of 1975

Tax Reform Act of 1976

Treasury Regulations under Section 861

IRS Revenue Rulings 78-61, 78-62, and 78-63

Economic Recovery Tax Act of 1981

Tax Equity and Fiscal Responsibility Act of 1982

Tax Reform Act of 1984

Deficit Reduction Act of 1984

Tax Reform for Fairness, Simplicity, and Economic Growth (Treasury I, 1984)

The President's Tax Proposals to the Congress for Fairness, Growth, and Simplicity (Treasury II, 1985)

Tax Reform Act of 1986

Omnibus Budget Reconciliation Act (OBRA) of 1986

OBRA 1993

Small Business Job Protection Act of 1996

Taxpayer Relief Act of 1997

Treasury Proposed Regulations 1999 (Hybrid Entities)

FSC Repeal and Extraterritorial Income Exclusion Act of 2000

AJCA of 2004

Tax Increase Prevention and Reconciliation Act of 2005

Appendix A2 History of US Foreign Tax Credit Limitations

Appendix A3 History of US Deferral of Current Taxation of Controlled Foreign Corporations

Appendix A4 History of US Taxation of Merchandise Export Income

Revenue Act of 1921 and 1922 Regulations

Internal Revenue Code of 1954 and 1957 Regulations

Revenue Act of 1962

Treasury Tax Reform Proposals (1984)

Internal Revenue Service Revenue Ruling 88-73 and Notices 89-10 and 89-11 (1988/89)

1997: First Round of World Trade Organization (WTO) Litigation of the FSC Regime

2000: Second Round of WTO Litigation of ETI Act

2004: American Jobs Creation Act of 2004

Appendix A5 History of US Taxation of Foreign Corporations Doing Business in the United States.

Taxation Before Passage of the Foreign Investors Tax Act of 1966

Foreign Investors Tax Act of 1966

Foreign Investment in Real Property Tax (FIRPTA) Act of 1980

Tax Equity and Fiscal Responsibility Act (TEFRA)

Omibus Budget Reconciliation Act of 1989

Revenue Reconciliation Act of 1990

Treasury Regulations under Section 6038A (1991)

Revenue Reconciliation Act of 1993

Treasury Regulations 1995 (TD 8611) ("Anti Conduit" Regulations)

Treasury Regulations 1997 (TD 8734)

US Treasury Department's Preliminary Report on Corporate Inversion Transactions (May 2002)

Treasury Regulations 2002 (TD 8999)

American Jobs Creation Act of 2004 (AJCA)

Appendix A6 History of Source-of-Income Rules Prior to the Tax Reform Act of 1986

Revenue Act of 1916

Appendix A7 Comparison of Source-of-Income Rules Before and After the Tax Reform Act of 1986

Appendix A8 Allocation-of-Expense Rules

I. RD&amp

E Expenses

II. Interest Expense Allocation

Table A8.1 Summary of expense apportionment before and after the Tax Reform Act of 1986

Appendix A9 History of Rules for Intercompany Pricing Between US and Affiliated Foreign Corporations

War Revenue Act of 1917

Revenue Act of 1928

Treasury Regulation of 1935

Revenue Act of 1954

Treasury Regulations of 1968

Tax Equity and Fiscal Responsibility Act (TEFRA, 1982)

IRS Revenue Procedures 91-22, 91-23, and 91-24 (1991)

Temporary Treasury Regulations of 1994 (TD 8519)

Treasury Regulations of 1994 (TD 8552)

Treasury Regulations of 1996 (TD 8656).

1996: Cost Sharing Treasury Regulations (TD 8632)

2004: Revenue Procedure 2004-29

2005: Proposed Cost-Sharing Treasury Regulations

2006: Treasury Regulations (TD 9278)

Appendix B Methods for Reducing Corporate Income Taxes

Outright Tax Reductions

Do-It-Yourself" Tax Reduction

Integration of Corporate and Shareholder Taxes

Table B.1 Dividend tax relief in the OECD countries

Appendix C1 A Simple Model of World Portfolio Capital Flows

Appendix C2 Temporary Taxes on Portfolio Capital

Appendix C3 Conditions for Reimbursement of the Backup Withholding Tax

Appendix D The Simple Economics of Imperfect Competition

Appendix E Economic Commerce

Table E.1 Total worldwide e-commerce revenues, 2004

Table E.2 US online retail sales, 2000-2006

E-Commerce Challenges

Table E.3 E-commerce as share of total turnover, 2003

Coping with the Challenges

Table E.4 Proposals to implement withholding taxes on cross-border e-commerce transactions

Collecting VAT on E-Commerce Transactions

Appendix F Revenue on Foreign Investment in the United States

Table F.1 US tax revenue on US-source income accruing to foreign persons, 2005

References

Index.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references and index.

ISBN:

1-281-06102-6

9786611061029

0-88132-481-7

1-4356-0923-9

OCLC:

647682087