May 24 Edition

GLOBAL TAX WEEKLY ISSUE 289 | MAY 24, 2018 a closer look SUBJECTS TRANSFER PRICING INTELLECTUAL PROPERTY VAT, GST AND SALES TAX CORPORATE TAXATION INDIVIDUAL TAXATION REAL ESTATE AND PROPERTY TAXES INTERNATIONAL FISCAL GOVERNANCE BUDGETS COMPLIANCE OFFSHORE SECTORS MANUFACTURING RETAIL/WHOLESALE INSURANCE BANKS/FINANCIAL INSTITUTIONS RESTAURANTS/FOOD SERVICE CONSTRUCTION AEROSPACE ENERGY AUTOMOTIVE MINING AND MINERALS ENTERTAINMENT AND MEDIA OIL AND GAS COUNTRIES AND REGIONS EUROPE AUSTRIA BELGIUM BULGARIA CYPRUS CZECH REPUBLIC DENMARK ESTONIA FINLAND FRANCE GERMANY GREECE HUNGARY IRELAND ITALY LATVIA LITHUANIA LUXEMBOURG MALTA NETHERLANDS POLAND PORTUGAL ROMANIA SLOVAKIA SLOVENIA SPAIN SWEDEN SWITZERLAND UNITED KINGDOM EMERGING MARKETS ARGENTINA BRAZIL CHILE CHINA INDIA ISRAEL MEXICO RUSSIA SOUTH AFRICA SOUTH KOREA TAIWAN VIETNAM CENTRAL AND EASTERN EUROPE ARMENIA AZERBAIJAN BOSNIA CROATIA FAROE ISLANDS GEORGIA KAZAKHSTAN MONTENEGRO NORWAY SERBIA TURKEY UKRAINE UZBEKISTAN ASIA-PAC AUSTRALIA BANGLADESH BRUNEI HONG KONG INDONESIA JAPAN MALAYSIA NEW ZEALAND PAKISTAN PHILIPPINES SINGAPORE THAILAND AMERICAS BOLIVIA CANADA COLOMBIA COSTA RICA ECUADOR EL SALVADOR GUATEMALA PANAMA PERU PUERTO RICO URUGUAY UNITED STATES VENEZUELA MIDDLE EAST ALGERIA BAHRAIN BOTSWANA DUBAI EGYPT ETHIOPIA EQUATORIAL GUINEA IRAQ KUWAIT MOROCCO NIGERIA OMAN QATAR SAUDI ARABIA TUNISIA LOW-TAX JURISDICTIONS ANDORRA ARUBA BAHAMAS BARBADOS BELIZE BERMUDA BRITISH VIRGIN ISLANDS CAYMAN ISLANDS COOK ISLANDS CURACAO GIBRALTAR GUERNSEY ISLE OF MAN JERSEY LABUAN LIECHTENSTEIN MAURITIUS MONACO TURKS AND CAICOS ISLANDS VANUATU GLOBAL TAX WEEKLY a closer look Global Tax Weekly – A Closer Look Combining expert industry thought leadership and team of editors outputting 100 tax news stories a the unrivalled worldwide multi-lingual research week. GTW highlights 20 of these stories each week capabilities of leading law and tax publisher Wolters under a series of useful headings, including industry Kluwer, CCH publishes Global Tax Weekly –– A Closer sectors (e.g. manufacturing), subjects (e.g. transfer Look (GTW) as an indispensable up-to-the minute pricing) and regions (e.g. asia-pacific). guide to today's shifting tax landscape for all tax Alongside the news analyses are a wealth of feature practitioners and international finance executives. articles each week covering key current topics in Unique contributions from the Big4 and other leading depth, written by a team of senior international tax firms provide unparalleled insight into the issues that and legal experts and supplemented by commentative matter, from today’s thought leaders. topical news analyses. Supporting features include a round-up of tax treaty developments, a report on Topicality, thoroughness and relevance are our important new judgments, a calendar of upcoming tax watchwords: CCH's network of expert local researchers conferences, and “The Jester's Column,” a lighthearted covers 130 countries and provides input to a US/UK but merciless commentary on the week's tax events. © 2018 CCH Incorporated and/or its affiliates. All rights reserved. GLOBAL TAX WEEKLY ISSUE 289 | MAY 24, 2018 a closer look CONTENTS FEATURED ARTICLES The IRS Whistleblower Program And Topical News Briefing: Aussie Tax Rules Cryptocurrency – The Feds Eye Bitcoin And The Global Tax Weekly Editorial Team 22 Cryptocurrency Recent Tax Developments In Mexico Michael DeBlis III, Esq., LLM, DeBlis Law 5 Turanzas, Bravo & Ambrosi 24 International Developments In Beneficial Ownership Transparency Digital Economy: A Good Tax Is Hard To Find Stuart Gray, Senior Editor, Global Tax Weekly 9 Stéphane Gelin and Rosemary Billard-Moalic, attorneys-at-law, CMS Francis Lefebvre Avocats, Paris 27 Common Corporation Purchase Structures To Obtain Step-Up In Tax Basis When Equity Is Topical News Briefing: The VAT-scape Is Changing Purchased 32 Christopher Klug, Business Tax Attorney, The Global Tax Weekly Editorial Team Klug Law Office PLLC, Washington, DC 18 NEWS ROUND-UP Country Focus: Australia 34 VAT, GST, Sales Tax 38 Australia Announces Foreign Investor Tax Reforms Malaysia Answers FAQs On GST Repeal Ombudsman Reviews ATO's Use Of Asset Seizure Powers UAE Issues VAT Refund Guidance For New House Builds Support Wavers For Australian Corporate Tax Cuts Kuwait To Delay VAT Until 2021 ATO Guides On July 1 Real Property GST Change Gabriel Resources Provides Update On 'Retaliatory' Romanian VAT Bill Country Focus: United Kingdom 42 Digital Taxation 54 Despite Brexit, UK Tax Regime Still Seen Ireland Issues Tax Guidance On Peer-To-Peer Lending As Competitive: Survey Japan Holding Talks On Virtual Currency Taxation, UK Criticized For Overzealous Offshore Regulation Tax Enforcement Plans Airbnb Agrees Landmark Tax Deal With Denmark UK Mulling Extending Recent IR35 Reforms To Private Sector TAX TREATY ROUND-UP 56 47 BEPS CONFERENCE CALENDAR 58 Bahrain Signs Up To BEPS Minimum Standards IN THE COURTS 70 New Zealand's BEPS Bill Back Before Parliament THE JESTER'S COLUMN: 79 OECD Provides Update On Action 5 Harmful Tax The unacceptable face of tax journalism Practices Work Tax Reform 51 Norway Announces Tax Breaks In Revised Budget World Bank Urges Uganda To Shore Up Tax Base Belgian Finance Minister Says Corporate Tax Reform A Success For article guidelines and submissions, contact [email protected] © 2018 CCH Incorporated and its affiliates. All rights reserved. FEATURED ARTICLES ISSUE 289 | MAY 24, 2018 The IRS Whistleblower Program And Cryptocurrency – The Feds Eye Bitcoin And Cryptocurrency by Michael DeBlis III, Esq., LLM, DeBlis Law Introduction Did you know that the IRS will pay you to turn in tax evaders? While the IRS Whistleblower Pro- gram1 has been around for 150 years, the Tax Relief and Health Care Act of 2006 made whistle- blowing a much more lucrative pursuit. In fact, you may receive up to 30 percent of the amount the IRS collects from the culprit. History Of The IRS Whistleblower Program In March of 1867, the Secretary of the Treasury was granted the right to award payments to those who assisted in "detecting and bringing to trial and punishment persons guilty of violating the internal revenue laws". However, these payments were left up to IRS discretion, so whistleblowers sometimes didn't get any reward for their assistance. For the next hundred years or so, the IRS Whistleblower Program remained essentially unchanged. Finally, in 1996, Congress made two small but significant changes to the program: it added a clause allowing whistleblower payments for "detecting underpayments of tax," and also ruled that payments to whistleblowers would come from the tax money collected based on the whistleblower's tip. In June 2006, the Treasury Inspector General audited the Whistleblower Program and found that during the fiscal years 2001 through 2005, the program had collected more than USD340m in taxes and related penalties and paid out rewards of more than USD27m to whistleblowers. These results were particularly impressive considering that the IRS had done little to no publicity in re- lation to the Program; at that point, it was virtually unknown to the public at large. The Treasury Inspector General recommended expanding the program and revising its procedures to reduce inconsistencies in the rules and speed up processing times. 5 The New And Improved Whistleblower Program The Tax Relief and Health Care Act of 20062 used the Treasury Inspector General's findings to set new rules and limits for the IRS Whistleblower Program. The new rules apply only in cases where total tax, interest and penalties are greater than USD2m and (if an individual rather than a business) the transgressor's annual gross income is greater than USD200,000. Thanks to the new rules, whistleblower rewards are no longer discretionary. If a whistleblower meets the basic requirements, he or she is guaranteed a percentage of however much the IRS collects from the transgressor. This reward can be anywhere from 15 percent to 30 percent of the amount collected. Thus, if a whistleblower tip led the IRS to collect USD3m in back taxes and penalties, the whistleblower in question would get anywhere from USD450,000 to USD900,000 as a reward. The law also established the IRS Whistleblower Office. This office reports to the IRS Commis- sioner and is responsible for managing the entire program. Prior to the 2006 changes, the whistleblower program was managed at a regional level and did not keep any centralized records. Lastly, the new rules granted whistleblowers the right to appeal the result of their claims to the Tax Court. The new Whistleblower Office divided the Program into two different branches based on whether or not a claim qualifies for the new rules. Claims that do not meet the USD2m claim/USD200,000 income limits are classed under the Informant Claims Program, which uses the pre-2006 whistleblower rules. Rewards for these claims continue to be discretionary and are capped at 15 percent of the amount collected, up to a maximum reward of USD10m. The IRS Finds A New Target Even as the IRS got to work implementing the new whistleblower rules, a brand-new innovation called Bitcoin was emerging that would one day shake up the financial world. Bitcoin software be- came available to the public in 2009, allowing the first transactions to occur shortly thereafter. The new cryptocurrency went through some rocky times at first; during the earliest years of its existence, only a handful of early adopters jumped onto the Bitcoin bandwagon. Worse, certain shady indi- viduals

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