The United States uses the U.S. Model Income Tax Convention as a starting point for treaty negotiations, and European countries and trading partners employ the Organization for Economic Co-operation and Development (OECD) Model Tax Convention. The United Nations tax committee has also produced a UN Model Tax Convention.
• Compare the U.S. model, OECD model, and the UN model treaties and give your opinion as to which model reduces barriers to international trade and investment by decreasing tax barriers to the international flow of goods and services.
• Defend the use of the U.S. model as opposed to the OECD or UN models by the United States. Provide an example to support your defense.
The United States has employed a worldwide system of taxation for the past 100 years. The Tax Cuts and Jobs Act (TCJA) upended this system. Imagine you are an international tax consultant advising a client on the impact of P.L. 115-97, the law known as the Tax Cuts and Jobs Act, on the taxation of a controlled foreign corporation (CFC).
• Analyze two changes to CFCs and advise your client on the actions necessary to reduce current and future tax liability as a result of these charges.
• Create a scenario reflecting the taxation under the prior tax and current law to support your recommendations.
