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US DEPARTMENT OF TREASURY ISSUES
FINAL COST SHARING REGULATIONS
By Paul Flignor
The US Department of Treasury has issued final cost sharing regulations under Treas. Reg. §1.482-7.
These Final Regulations, issued in December, update the Temporary Regulations issued in 2008 and contain no major departures from the earlier regulations. Rather, the Final Regulations sharpen and clarify the Internal Revenue Service positions in light of recent court cases, taxpayer comments and IRS experience with this often discussed tax planning structure.
Learn more.
COST SHARING AGREEMENTS: THE SENSITIVITY OF
THE INCOME METHOD TO DISCOUNT RATES
By Joy Dasgupta and
Paul Flignor
The US Department of Treasury has issued final cost sharing regulations under Treas. Reg. §1.482-7 demonstrating its continued focus on the income method. Both the final regulations and the accompanying temporary and proposed regulations, which were issued on December 19, 2011, come at a time of continued IRS scrutiny of cost sharing arrangements and platform contributions.
The discount rate is among the most important determinants of the value of an asset under the income method. Small changes to the discount rate may produce large swings in the present value of cash flows.
However, the Final Regulations provide very limited guidance when it comes to developing discount rates for valuing the cost sharing and licensing alternatives.
Learn more.
THE FUTURE OF VAT
By Richard Woolich
The European Union Commission has published a Communication setting out its proposals for both the short term and long term reform of VAT.
The Communication follows the Green Paper on the Future of VAT published by the Commission in December 2010. That paper requested interested parties to provide their views. More than 1,700 comments were received.
In reviewing the Communication, it appears that, although much more thought, analysis and consultation needs to be carried out, it demonstrates a real determination to effect change.
Click here to read our summary, and comments, on the most significant proposals in the Communication.
PLEASE JOIN US
DLA PIPER INTERNATIONAL TAX CONFERENCE 2012
DLA Piper invites you to join our Global Tax Group for our fifth annual International Tax Conference.
Topics will include a legislative and regulatory update on European exit tax and related valuation issues, challenges and considerations in pan-Asian supply chains and more.
Silicon Valley Session
Four Seasons Silicon Valley
Friday, March 9, 2012
8:00 AM: Registration and Continental Breakfast
8:30 AM – Noon: Program
New York Session
DLA Piper New York
Monday, March 12, 2012
12:30 PM – 1:00 PM: Registration and Light Lunch
1:00 PM – 4:30 PM: Program
4:30 PM – 6:30 PM: Reception
Please contact Danielle Hood for more information.
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JANUARY 2012
In this issue:
CONTACTS
Editor, International Tax News
Linda E.S. Pfatteicher
For information about DLA Piper’s tax work worldwide, please contact:
David Colker
Global Chair and US Chair
Tax Practice
For more information about the final cost sharing regulations, please contact:
Paul Flignor
For more information about the income method and cost sharing arrangements, please contact:
Joy Dasgupta
Paul Flignor
For more information about VAT issues in the UK and EU, please contact:
Richard Woolich
LEARN MORE
A taxpayer-friendly ruling from the IRS provides a means to obtain material tax benefits for a year which is otherwise closed to adjustment. Learn more in this US Tax Alert by Paul B. Myers, “IRS permits increase to NOL for closed taxable years.”
ABOUT US
DLA Piper’s International Tax group provides sophisticated and creative tax and business planning advice, delivering prompt, innovative and effective service to our clients wherever they do business.
With 4,200 lawyers in 30 countries and 76 offices throughout Asia Pacific, Europe, the Middle East and the US, DLA Piper is positioned to help companies with their legal needs anywhere in the world. Learn more at www.dlapiper.com.
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