2006 May Meeting

ABA SECTION OF TAXATION  • DATE: May 4 - 6, 2006 • LOCATION: Washington, DC
SPONSORS: Section of Taxation

Committee Programs

US Activities of Foreigners and Tax Treaties

Date:  05/05/06

 

Start Time:  8:45AM

 

End Time:  10:45AM

 

Chair:  Stanley C. Ruchelman, The Ruchelman Law Firm, New York, NY

 

8:45am                   Residence of Corporations – Legislative Proposals Would Obfuscate Bright Line Test.  Spurred on by the anti-inversion provisions of recent legislation, the staff of the Joint Committee on Taxation proposes to treat foreign subsidiaries of US based multinational groups as domestic corporations if effectively managed in the US. Similar proposals appear in the report of the President’s Commission on Tax Reform. The panel will discuss the proposals, exploring potential problems for the corporate group and other stakeholders, including foreign governments and joint venture partners. Experience of other countries will be explored.  Moderator: Alan W. Granwell, Ivins Phillips & Barker Chartered, Washington, DC.  Panelists: Chris Javens, Majority Tax Counsel, Senate Finance Committee, Washington, DC; Professor Michael S. Kirsch, Notre Dame Law School, Notre Dame, IN; D. Ian Shane, Salans, New York, NY; Alexander Spitzer, Nestle USA, Norwalk, CT.


9:45am                   Accessing Income Tax Treaties Through Competent Authority – A Ray of Hope When All Else Fails.  A mainstay of US treaty policy, the Limitation on Benefits Article of an Income Tax Treaty limits residents in third countries from “borrowing” treaty benefits when an investment is channeled through a subsidiary.  In most instances, objective tests are applied in determining whether a foreign corporation qualifies for benefits. However, an alternative subjective test exists if the US competent authority believes that benefits should be extended when the objective tests have not been met. The panel will discuss when and how this alternative is available. Moderator: Stephen A. Nauheim, PricewaterhouseCoopers LLP, Washington, DC. Panelists: Barbara M. Angus, Angus & Nickerson LLC, Washington, DC; Peter M. Daub, Baker & McKenzie LLP, Washington, DC;Michael J. Miller, Roberts & Holland LLP, New York, NY.

BUSINESS MEETING

 

Date:  5/5/06

 

Start Time:  5:30PM

 

End Time:  6:30PM

 

SECTION PROGRAM

 

Date:  5/6/06

 

Start Time:  2:00PM

 

End Time:  5:00PM

 

Use of Hybrid Entities in Cross Border Tax Planning – A Primer Addressing Tax and Ethical Considerations

“Hybrid entities” is a term that describes business organizations treated as partnerships in one jurisdiction and corporations in a second jurisdiction. That dichotomy of characterization offers tax planners unique opportunities to mix and match various tax rules in order to reduce the overall tax burden. This two-panel mini-program provides an overview of opportunity and risk available to the sophisticated investor. It is intended for practitioners who are not specialists in international taxation and is expected to be the first of a series of programs that will explore various opportunities and issues encountered in the life of a hybrid entity.

 

2:00pm             Use of Hybrid Entities in Inbound Investment Transactions.  This panel will discuss the basic uses of hybrid entities for inbound investment into the US. The panel will discuss the use of so-called "domestic reverse hybrids" as well as problems that exist when a foreign hybrid entity claims a tax treaty benefit for dividends, interest, and royalties. Also discussed are new section 1446 withholding regulations for partnerships, corporate issues in the home country of the investor at the time profits are distributed, and ethical considerations inherent in this type of “tax arbitrage” transaction.

 

Moderator:         Sam Kaywood, Alston & Bird LLP, Atlanta, GA

 

Panelists:          Alan I. Appel, Bryan Cave LLP, New York, NY

 

Joan C. Arnold, Pepper Hamilton LLP, Philadelphia, PA

 

Jordi Dominguez, Perez Garrigues, New York, NY

 

3:30pm             Use of Hybrid Entities in Outbound Investment Transactions.   This panel will discuss uses of hybrid entities for US investment in other countries. Topics include the classification of foreign entities, tax treatment of asset transfers from the US, and structures designed to reduce foreign tax without any offset for immediate US tax under subpart F.  Issues identified in foreign countries such as know your client rules and limitation on access to treaties will be addressed as well as emerging European entities and new tax rules that foster use of European hybrid entities. 

Moderator:         Professor Lawrence A. Lokken, Levin College of Law, University of Florida, Gainesville, FL

 Panelists:        Werner Heyvaert, Stibbe, Brussels, Belgium

Kathleen Penny, Blake Cassels & Graydon LLP, Toronto, ON

Marco Q. Rossi, Marco Q. Rossi & Associati, New York, NY

Sponsored by:      US Activities of Foreigners & Tax Treaties Committee, Foreign Activities of US Taxpayers Committee, Foreign Lawyers Forum

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