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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Tuesday, May 30, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This webinar will review the economic substance doctrine from the perspective of the U.S., EU, and offshore jurisdictions. Our panel of global tax attorneys will explain how to comply with the U.S. economic substance rules, European directives, and similar requirements of other offshore locations, including the British Virgin Islands, Cayman Islands and Nevis.

Faculty

Stanley C. Ruchelman
Chairman
Ruchelman, PLLC

Mr. Ruchelman concentrates his practice in the area of tax planning for transactional business operations, with emphasis on intercompany transactions. He represents companies in matters involving the I.R.S. and counsels corporate clients on transfer pricing issues and worldwide reorganizations. He advises foreign private clients on structuring investments in the United States. He authors and speaks on international taxation. Previously, he was an international tax partner at a major international accounting firm and was a senior attorney in the Legislation & Regulations Division of the Office of Chief Counsel, Internal Revenue Service, where he participated in the negotiation of income tax treaties and the development of legislative and regulatory policy affecting international business.

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Werner Heyvaert
Partner, Tax
AKD

Mr. Heyvaert is a partner at AKD and has 35 years of experience in Belgian and international tax law and specialises in advisory and litigation work in the field of direct taxes for businesses, such as institutional and transactional corporate tax, taxation of various forms of employee compensation and European and international tax law.

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David Payne
Global Head of Governance
Bolder Group

Mr. Payne has been working in the corporate, fiduciary, legal, trust, financial and alternative financial services industry since 2004, specializing in alternative investment vehicles and asset managers. As Global Head of Governance, one of his main tasks is to implement and supervise client facing economic substance solutions and procedures in the different jurisdictions in which Bolder operates amongst other regulatory requirements/services. Mr. Payne’s prior roles/responsibilities include group legal counsel and top executive positions for different Bolder offices in Europe, the Caribbean, and US, including acting as Managing Director for the BVI, Cayman, Nevis and US offices supervising all Corporate, Trust, Fiduciary, Captive Insurance, Compliance and Fund matters. He is also the Managing Partner of BGA Law, a law firm with offices in the British Virgin Islands, Cayman Islands and Hong Kong.

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Description

Codified in 2010, IRC Section 7701(o), the economic substance doctrine continues to be a critical element of international tax planning. What constitutes economic substance, however, remains primarily defined by case law which purports, "Whether we respect a taxpayer's characterization of a transaction depends upon whether the characterization represents and is supported by a bona fide transaction with economic substance, … and not shaped solely or primarily by tax avoidance features… .” Frank Lyon Co. v. U.S.

Transactions not having economic substance and not disclosed could be subjected to a 40 percent penalty in the U.S. if reasonable cause and good faith do not exist. The penalty can be reduced if the transaction is disclosed on Form 8275, Disclosure Statement, and the position has at least a reasonable basis. A reasonable cause exception is not a viable defense from these penalties.

In addition to the U.S., other countries have their own directives concerning the substance of transactions. In 2016, members of the EU adopted the Anti-Tax Avoidance Directive to coordinate and harmonize taxation and to meet OECD recommendations. The directive includes rules concerning CFCs, hybrid mismatches, exit taxes, and more. Tax advisers working with multinational taxpayers must consider the potential impact of the economic substance doctrine abroad and in the U.S.

Listen as our panel of international tax lawyers from the U.S. and abroad discusses complying with the economic substance doctrine for businesses operating in the U.S. and overseas.

Outline

  1. Economic substance: introduction
    1. U.S. rules on economic substance
    2. Evolution and codification
    3. Case law
  2. European directives
    1. Danish cases
    2. Noncooperative jurisdictions
    3. Anti-Tax Avoidance Directive (ATAD)
    4. DAC 6
    5. The Unshell Directive
  3. Offshore economic substance
    1. Cayman Islands
    2. Nevis
    3. British Virgin Islands

Benefits

The panel will cover these and other critical issues:

  • Pertinent U.S. case law relative to the economic substance doctrine
  • The two prong compliance test for economic substance
  • European directives including The Unshell Directive and ATAD
  • Complying with economic substance guidelines in the Cayman Islands and BVI
  • Best practices to meet economic substance guidelines in the U.S. and abroad

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify the components of the two prong test for economic substance
  • Determine how case law impacts the economic substance rules in the U.S.
  • Decide how Nevis approaches economic substance
  • Ascertain best practices to comply with international economic substance directives
  • Recognize the components of the EU's Anti-Tax Avoidance Directive

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).