My daughter is putting the finishing touches to our virtual day in Buenos Aires. The menu is still a secret, but I hope our additional activities include a cyber tour of the city and learning to tango.
A male Colombian tourist poses with an Argentine professional tango dancer on Florida Street, Buenos Aires.
Photographer: JUAN MABROMATA / AFP via Getty Images
Recreation days abroad have become a tradition for my family since the beginning of the pandemic. Since we couldn’t travel to cities around the world, the cities came to us. We started with some of our favorites: Paris, Rome, Munich and Barcelona before trying out some places we’ve never been to like Tokyo. It was a great learning experience – and a lot cheaper than jumping on a flight.
We look forward to the return of the trip, of course. Lufthansa announced this week that it has resumed direct flights from Philadelphia to Frankfurt, the same week that Delta resumed flights from JFK to Dublin.
Welcome @lufthansa! Lufthansa is back at #PHLAirport for the first time since March 2020 and offers direct connections between Philadelphia and Frankfurt three times a week. Further information on traveling with Lufthansa can be found at https://t.co/GJtcAhlJzS. pic.twitter.com/YwJJuMgexv
– PHLAirport (@PHLAirport) August 3, 2021
Travel makes the world smaller and that’s a good thing. We are reminded that we are not that different from one another. When we see how other people live and hear their stories, we learn who they are and what is important to them. This context is important. And that’s the great thing about our Tax Insights. Tax professionals from all over the world share their passion for taxes and their expertise in various subject areas. And when we travel, when we read these perspectives, we know a little more than before.
As always, we want to achieve this this week with the latest federal, state and international tax analyzes.
—Kelly Phillips Erb
Quick Numbers Trivia
As part of the CARES Act, between March 28, 2020 and December 31, 2020, were the aviation taxes for the transport of persons (Section 4261) and property (Section 4271) enacted excise tax rates on domestic and international air travel for passengers in 2021?
(Answer below.)
Our summary
This week our experts touched on a wide range of topics from charitable foundations to transfer pricing methods. To bring you up to date, here is our summary:
Transfer pricing is a global issue this year too – but it’s not always about multinational companies. In Cannabis Tax and Transfer Pricing – Part 1 – Introduction, David Merrick of Riverbank Consulting and James Mann of the James B. Mann Law Firm demonstrate how Section 482 applies to cannabis companies operating in multiple states. And in Part 2, the authors go through transfer pricing methodologies, explaining what works and what doesn’t for the cannabis industry.
However, companies doing business worldwide need to be aware of changes that could affect the transfer pricing methodology. In the Dutch Ministry of Finance’s report on tax rulings, Eduard Sporken of KPMG Global Transfer Pricing Services looks at the latest report from the Dutch Ministry of Finance on tax rulings 2020 with international features and discusses the progress of the rulings during the Covid-19 pandemic.
As countries make big changes, taxpayers and tax advisors need to be aware of this. In the Turkish MLI strategy – and its impact on Turkish investments in the Netherlands, Abdulkadir Kahraman and Mahmut Aydemir from EY discuss the draft law to ratify the multilateral instrument that was presented to the Grand National Assembly of the Turkish Parliament for the Planning and Budget Committee and the Impact of the Turkish approach on the tax treaty between Turkey and the Netherlands.
Dutch historic sailing ships gather in Muiden outside Amsterdam on June 9, 2020.
Photographer: KOEN VAN WEEL / ANP / AFP via Getty Images
Tax treaties are designed to consolidate the tax positions of taxpayers who live or do business in two countries, but questions often remain. In India: Two judgments on double taxation treaties, Shailendra Sharma declares two tax rulings in India on the applicability of the provisions of double taxation treaties – a recent decision by the Mumbai Income-Tax Appellate Tribunal and a decision by the Delhi High Court.
In the US, the tax world is focused on tax changes that could disrupt existing planning strategies. The potential for higher capital gains tax rates could make the goal of deferring Charitable Rest Unitrusts (CRUTs) undesirable. Jeff Gonya, Chris Moran, and Allison Church of Venable explain how to convert a CRUT into a “spigot” Net Income Trust that gives the donor flexibility and control to defer income.
For now, US tax rates could stay the same even if inflation rises. Therefore, investors are looking for protection. In times of rising inflation, which cryptocurrencies can offer the best protection? Bitwave’s Pat White examines the inclusion of cryptocurrencies in your portfolio and the tax implications.
And while global markets rebound with the resumption of travel and business, not every deal is a money maker. But that’s not necessarily a bad thing. In Tax Loss Harvesting: Be tax conscious all year round, not just at the end of the year, Frank Pape of Russell Investments explains how you can make the most of your investment losses to minimize taxes.
Listen in
Investors interested in how companies meet environmental, social and governance (ESG) standards are also increasingly interested in where and whether a company pays taxes. Witold Henisz, a professor at the University of Pennsylvania’s Wharton School and founder of the ESG Analytics Lab, spoke to Bloomberg reporter David Hood on the Bloomberg podcast Talking Tax about how investors are using local disclosures to gather “tailored data” that the Showing a company’s tax charges and payments, and why companies are likely to face increasing pressures to disclose this type of information.
And how can the corporate culture be transferred to the hiring of employees? On a recent episode of the Taxgirl podcast, Kelly is joined by Derrick Coleman, Los Angeles Managing Director, Creative Financial Staffing, to talk about how a diverse workforce is good for both a company’s culture and bottom line. Coleman previously authored an article for Insights on How to Grow and Maintaining Various Recruitment Practices After the Pandemic.
Write for us
Bloomberg Tax Insights articles are written by tax professionals and provide expert analysis of the latest tax practice and policy, tax trends and issues, and the practice and management of tax and accounting firms. If you have an interesting, unpublished article to publish, we’d love to hear about it. You can contact our Insights team by emailing TaxInsights@bloombergindustry.com.
Headlights
This week’s focus is CPA Brad Garland. Garland jokes that in a year when Covid-19 meant not attending the Auburn soccer games, not seeing new Marvel movies in theaters, and not personally helping individuals and businesses, the people on the other side of video call control was colleagues, employees and customers through pandemic aid at the federal and state level.
Beyond taxes
From working at home to working abroad, it is clear that our vision of the “normal” has changed. Recent EY surveys suggest that reopening legal departments will find their employees have new expectations of work. Paula Hogéus and Nicholas Bruch from EY argue in In-House Lawyers Want More Flexible Work Arrangements that the transition back to work offers the heads of the legal department an opportunity to rethink their operating models before the pandemic and to accelerate the transformation. Putting employee empowerment at the center is said to be the key.
Quick number answer
Domestic air travel is taxed at 7.5% of the ticket price per person in accordance with Section 4261. An additional tax of $ 4.30 will be levied for each flight segment or take-off and landing in 2021.
An American Airlines aircraft lands at Miami International Airport in Miami, Florida on June 16, 2021.
Photographer: Joe Raedle via Getty Images
Section 4261 excise tax on any amount paid for international air travel when transportation begins or ends in the United States is $ 19.10 in 2021. A lower tax rate – $ 9.60 – applies to a domestic segment that starts or ends in Alaska or Hawaii, and the tax only applies to departures.
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More great tax content
This is a weekend round-up from Bloomberg Tax Insights, written by practitioners, that includes expert analysis on current issues of tax practice and policy. For a full archive of articles, see Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and Financial Accounting.
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