The genuine economic business purpose test and international tax planning in Belgium

Article Abstract:

Belgium has adopted a genuine economic business purpose test to combat over- aggressive tax planning. The country's strict adherence to a constitutional requirement that anything not explicitly mentioned in law cannot be taxed has led to what the country considers abuse of the system. The new law, however, is too broad in abandoning this strict legalism of tax law. The law's scope suggests that existing antiabuse legislative activity would have been as effective. The law's potential impact on international businesses is discussed.

Analysis, Belgium, Business purpose doctrine

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DASTM: the Mexican peso devaluation rules

Article Abstract:

The return of Mexican hyperinflation, a possibility following the devaluation of the peso, triggers the Dollar Approximate Separate Transactions Method (DASTM) for reporting by US-owned qualified business units (QBUs). QBUs will be required to use the dollar as their functional currency and DASTM to calculate earnings and profits, in order to minimize income distortions, until the IRS permits a return to the local currency. Retroactive election could result in refunds for multinationals with Mexican QBUs.

Economic aspects, Laws, regulations and rules, Accounting and auditing, Mexico, Currency devaluation, Devaluation (Currency), Inflation accounting, Peso (Mexico)

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U.K. forex rules: what do the changes mean for U.S. multinationals?

Article Abstract:

The UK revisions to the system for taxing foreign exchange differences affects US multinationals with UK holdings, beginning in 1995. US companies may find economic advantages in electing loan structures known as "fluctuating nothings" and "floating nothings," leveraging their UK holding companies, and by using local currency in UK branch transactions. Local currency election rules, hedging rules and deferral mechanisms are discussed.

United Kingdom, International aspects, Tax accounting, Foreign exchange

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