On Wednesday, April 5 from 12:45 PM – 1:45 PM in Furman Hall Room 334, please join us for a presentation by Mindy Herzfeld, Professor of Tax Practice and Director of the LL.M. in International Tax program at the University of Florida, Frederic G. Levin College of Law. The title of Professor Herzfeld’s presentation is “The Case Against Tax Coordination – Lessons from BEPS.” Following Professor Herzfeld’s presentation, Professors Shaviro and Kane (NYU Law) will offer brief comments.
The following is a summary of the article:
In 2013 the OECD, at the behest of the G20, embarked upon an ambitious project of coordinating and harmonizing countries’ international tax rules under the guise of curtailing multinational companies’ cross-border tax planning, generally referred to as base erosion and profit shifting, or BEPS. The project was finalized with great fanfare in November 2015. But the proclamations of success masked real underlying differences between participant countries. I argue that countries’ self-interest largely precluded effective coordination, as a result of which the project’s recommendations merely paper over differences while doing nothing to solve the systemic problems it was seeking to address. For example, while a key stated goal of the project was to align the taxation of profits with value creation, there was no attempt made to define the location of value creation, nor to address the fact that this principle is fundamentally at odds with the arm’s length principle that serves as the backbone of transfer pricing rules.
In characterizing its efforts as a success, the BEPS project may have done more harm than good. New broadly worded anti-abuse rules lend themselves to multiple interpretations, and open the door to unprincipled and aggressive tax agents. But the coordination effort also suffers from more fundamental flaws. Because it seeks to reinforce the existing rules, it never questions whether those rules need updating to lead to a fairer allocation of taxing rights globally. Because coordination efforts necessarily impinge on countries’ sovereignty, they risk benefiting more powerful countries at the expense of smaller and weaker ones. To really address the issues that created the BEPS problem, what is needed is a more comprehensive approach to trying to solve the problems that cause multinational taxpayers to move income and profits to lower taxed jurisdictions, and research into the principles that should form the basis for a system of international taxation.
About Our Speaker: Mindy Herzfeld is Of Counsel with Ivins, Phillips & Barker’s Corporate and International Tax practice areas, and has recently been appointed Professor of Tax Practice and Director of the LL.M. in International Tax program at the University of Florida, Frederic G. Levin College of Law. Since 2014, Mindy has been a Contributing Editor to Tax Notes International, a weekly magazine on tax developments published by Tax Analysts. In that capacity, she has written over 150 articles on international tax policy developments and cross-border transactions, and has also written extensively on U.S. tax reform efforts. Prior to joining Tax Analysts, Mindy worked at the national tax office and the New York office of a Big 4 accounting firm, where she provided transactional advice to U.S. and foreign multinational corporations, private equity funds, venture capital funds and individuals on a broad range of U.S. and cross-border tax issues. She has advised on the structuring of acquisitions, joint ventures, and dispositions, including spin-offs and has led complex cross-border restructuring projects. Ms. Herzfeld began her career at the New York office of a global law firm and has also worked as in-house tax counsel at a large automotive manufacturing company.
If you would like to attend this presentation, please RSVP here: https://nyu.qualtrics.com/jfe/form/SV_4MgYtyx52iZlHAV . Light refreshments will be served.