Many companies oppose Treasury’s proposed rules to curb earnings stripping. Treasury would limit how companies deduct interest on debt in the US and move profits to lower-taxed jurisdictions. The Wall Street Journal reports (paywall) that firms are complaining that Treasury underestimates how hard it will be to track and document these internal loans. They also insist that the transactions aren’t always about dodging taxes—sometimes they’re just about business structuring. Treasury says it appreciates the feedback.
A court ruling could mean billions in more corporate refunds… Wells Fargo won a partial victory in a $350 million federal tax-refund lawsuit. The bank didn’t get everything it wanted, but a federal appeals court may have opened the door to billions of dollars in similar claims by other firms. In a nutshell, the ruling allows companies that have grown through repeated mergers to use tax benefits held by acquired companies.
Is the IRS really stifling churches’ free speech? The TaxVox Tax Hound considers the question, as well as GOP presidential contender Donald Trump’s promise to get the IRS out of churches’ way.
Mexico’s junk food tax may have reduced junk food purchases—a bit. According to a new study, the 8 percent tax on high-calorie snacks has reduced purchases—but only by about 5 percent, or 0.88 ounces per person, per month. Most of the decline came from the nation’s poor and middle-income families. High income households did not reduce their purchases at all. The study didn’t say whether Mexicans were eating healthier or substituting cheaper—but even less healthy—alternatives for taxed junk food.
For British banks, vive la France? Reuters reports that the French government plans to make its tax regime the most favorable in Europe for London’s post-Brexit banking industry. Paris is already the biggest center for many euro zone markets, with €3.6 trillion in assets under management there.
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