- Discourage the use of corporate inversions to avoid tax by implementing full withholding on payments by "expatriated entities" such as dividends, interest, and royalties.
- Target abuse stemming from "special tax regimes" that provide low tax rate for movable income such as royalties. The provisions would deny benefits if the "special tax regimes" are used in conjunction with particular provisions of a tax treaty to move such deductible income around.
- Avoid allowing nonresidents (who reside outside of the two nations who have entered into a bilateral tax treaty) from improperly obtaining benefits from the treaty.
- Adds a "derivative benefits" rule to the provisions, that would widen the term "ownership" to include third country ownership.
This week at the court
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