The European Union Cracks Down on Member State Corporate Tax Agreements

Corina McIntyre, Vol. 37 Associate Editor

On October 21, 2015, the European Commission ruled that Luxembourg and the Netherlands granted illegal tax agreements to Fiat Finance and Trade and Starbucks.  In essence, the European Commission determined that these tax agreements created anticompetitive effects by granting these multinational corporations unfair tax advantages.  Continue reading

FATCA, GATCA and the Controversial Withholding Provision

Abigail Zeitlin, Vol. 36 Associate Editor

For many years, there have been large discrepancies between different countries’ tax reporting standards.  This has allowed for certain countries, like the United Kingdom or Switzerland,[i] to become tax shelters and for other governments to lose out on millions of dollars in tax revenue. [ii] In the United States alone, it was estimated that the government lost out on $100 billion of tax revenue a year due to tax havens.[iii] This phenomenon led to the enactment of the Foreign Account Tax Compliance Act, or FATCA, in 2010.[iv]  One major provision of FATCA requires foreign financial institutions to disclose the names of U.S. citizen account holders and their various transactions, with limited exceptions.[v]   If the institution does not report under FATCA, the U.S. will impose a 30% withholding tax on all transactions involving U.S. money and securities.[vi]   Although FATCA was enacted in 2010, because of the immense amount of bureaucratic muscle necessary to enforce FATCA, it is set to begin being enforced in 2016.[vii] Continue reading