WASHINGTON (Reuters) - The Obama administration, in its latest bid to prevent American companies from minimizing U.S. taxes by rebasing abroad, issued final rules on Thursday to combat a key tax-reduction technique known as earnings stripping.

United States Secretary of the Treasury Jack Lew speaks at the Centre for American Progress in Washington, U.S., October 13, 2016. REUTERS/Gary Cameron

Six months after proposing the regulations, the U.S. Treasury made good on its pledge to move swiftly against corporate tax inversions by rolling out the new final rule, despite opposition from business groups and from Republicans in Congress who demanded a delay only last week.

“For years, this administration consistently has called for comprehensive business tax reform to fix our broken tax system,” Treasury Secretary Jack Lew told reporters. “In the absence of congressional action, however, it is Treasury’s responsibility to use our authority to protect the tax base.”

Business lobbyists said the rules would likely be challenged in court.

Tax inversions occur when a U.S. company is acquired by a smaller foreign business from a low-tax country and adopts its domicile to reduce the combined firm’s overall U.S. tax burden.

Inversions have occurred since the 1980s, but a new wave in recent years prompted the Treasury to take a series of actions including Thursday’s final regulations, which were unveiled in April as part of a package that led to the collapse of a $160 billion merger deal between U.S. drugmaker Pfizer Inc (PFE.N) and Ireland’s Allergan Plc (AGN.N).

Treasury also imposed a temporary rule in April to prevent foreign companies from engaging in serial inversions. That is expected to be finalized later this year.

Earnings stripping occurs when the U.S. subsidiary of a newly inverted company avoids taxes on domestic operations by sending them overseas as tax-deductable interest payments.

The newly finalized regulations would reclassify some forms of debt as equity, changing tax-exempt interest payments into dividends that are taxed.

Business groups including the U.S. Chamber of Commerce have warned that the regulations could harm the cash management operations of U.S.-based multinationals and pose damaging unintended consequences for a range of businesses by creating mountains of red tape.

But Treasury officials said the final rules addressed those concerns by granting exemptions for regulated financial and insurance firms, cash pooling, short-term debt, transactions between the foreign units of U.S. companies, stock acquisitions for employee compensation plans and other operations.

The regulation also relaxed requirements for companies to document intercompany loans and delayed the documentation deadline for a year to Jan. 1, 2018. </s> The US government has issued new regulations aimed at clamping down on so-called tax inversions, a practice whereby multinationals shift their tax base to lower tax jurisdictions in order to reduce their bills.

The EU has been in the crosshairs of US politicians for years, as multinationals have sought to avoid the US corporate tax rate of 35 per cent. The Republic has long been a destination of choice for big corporations because of its 12.5 per cent rate.

On Thursday, the US Department of Treasury and the Internal Revenue Service issued “final regulations” that will further reduce the benefits of corporate tax inversions and “level the playing field between US and non-US businesses”.

The move will likely have serious repercussions for the Republic’s ability to attract big business from the United States.

The US government said the move would limit the ability of companies to lower their tax bills through transactions involving debt that do not support new investment in the US. The rules will also reduce the incentive for companies to engage in inversions.

The regulations also require large corporations claiming interest deductions to document loans to and from their affiliates, just as businesses of all sizes do when they borrow from unrelated lenders.

“We have taken a series of actions to make it harder for large foreign multinational companies to avoid paying US taxes and reduce the incentives for US companies to shift income and operations overseas,” said Treasury Secretary Jacob J. Lew. “Such tax avoidance practices are wrong and should be stopped,” he added.

Specifically, the regulations will narrowly target problematic “earnings stripping” transactions that generate deductions for interest payments on related-party debt that does not finance new investment in the US.

The US government said the rules would seek to minimise “unintended consequences” for regular business activities. </s> WASHINGTON, March 28 (Reuters) - U.S. President Donald Trump signed an executive order on Tuesday to undo a slew of Obama-era climate change regulations that his administration says is hobbling oil drillers and coal miners, a move environmental groups have vowed to take to court.

The decree's main target is former President Barack Obama's Clean Power Plan that required states to slash carbon emissions from power plants - a critical element in helping the United States meet its commitments to a global climate change accord reached by nearly 200 countries in Paris in 2015.

The so-called "Energy Independence" order also reverses a ban on coal leasing on federal lands, undoes rules to curb methane emissions from oil and gas production, and reduces the weight of climate change and carbon emissions in policy and infrastructure permitting decisions.

"I am taking historic steps to lift restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations," Trump said at the Environmental Protection Agency headquarters, speaking on a stage lined with coal miners.

The wide-ranging order is the boldest yet in Trump´s broader push to cut environmental regulation to revive the drilling and mining industries, a promise he made repeatedly during the presidential campaign. But energy analysts and executives have questioned whether the moves will have a big effect on their industries, and environmentalists have called them reckless.

"I cannot tell you how many jobs the executive order is going to create but I can tell you that it provides confidence in this administration´s commitment to the coal industry," Kentucky Coal Association president Tyler White told Reuters.

Trump signed the order with EPA Administrator Scott Pruitt, Interior Secretary Ryan Zinke, Energy Secretary Rick Perry and Vice President Mike Pence by his side.

U.S. presidents have aimed to reduce U.S. dependence on foreign oil since the Arab oil embargo of the 1970s, which triggered soaring prices. But the United States still imports about 7.9 million barrels of crude oil a day, almost enough meet total oil demand in Japan and India combined.

While Trump's administration has said reducing environmental regulation will create jobs, some green groups have countered that rules supporting clean energy have done the same.

The number of jobs in the U.S. wind power industry rose 32 percent last year while solar power jobs rose by 25 percent, according to a Department of Energy study.

Environmental groups hurled scorn on Trump's order, arguing it is dangerous and goes against the broader global trend toward cleaner energy technologies.

"These actions are an assault on American values and they endanger the health, safety and prosperity of every American," said billionaire environmental activist Tom Steyer, the head of activist group NextGen Climate.

Green group Earthjustice was one of many organizations that said it will fight the order both in and out of court. "This order ignores the law and scientific reality," said its president, Trip Van Noppen.

An overwhelming majority of scientists believe that human use of oil and coal for energy is a main driver of climate change, causing a damaging rise in sea levels, droughts, and more frequent violent storms.

But Trump and several members of his administration have doubts about climate change, and Trump promised during his campaign to pull the United States out of the Paris climate accord, arguing it would hurt U.S. business.

Since being elected Trump has been mum on the Paris deal and the executive order does not address it.

Christiana Figueres, former executive secretary of the United Nations Framework Convention on Climate Change who helped broker the Paris accord, lamented Trump's order.

"Trying to make fossil fuels remain competitive in the face of a booming clean renewable power sector, with the clean air and plentiful jobs it continues to generate, is going against the flow of economics," she said.

The order will direct the EPA to start a formal "review" process to undo the Clean Power Plan, which was introduced by Obama in 2014 but was never implemented in part because of legal challenges brought by Republican-controlled states.

The Clean Power Plan required states to collectively cut carbon emissions from power plants by 32 percent below 2005 levels by 2030.

Some 85 percent of U.S. states are on track to meet the targets despite the fact the rule has not been implemented, according to Bill Becker, director of the National Association of Clean Air Agencies, a group of state and local air pollution control agencies.

Trump´s order also lifts the Interior Department's Bureau of Land Management's temporary ban on coal leasing on federal property put in place by Obama in 2016 as part of a review to study the program's impact on climate change and ensure royalty revenues were fair to taxpayers.

It also asks federal agencies to discount the cost of carbon in policy decisions and the weight of climate change considerations in infrastructure permitting, and reverses rules limiting methane leakage from oil and gas facilities. (Additional reporting by Timothy Gardner; writing by Richard Valdmanis; Editing by Mary Milliken and Jeffrey Benkoe) </s> The House of Representatives on Thursday passed sweeping legislation to strip and replace much of the financial regulations passed under former President Barack Obama Barack Hussein ObamaBiden makes supporters nervous; his gaffes could derail him Difference between primaries and caucuses matters in this election Harris apologizes and says she didn't hear questioner call Trump policies 'mentally retarded' MORE after the 2008 financial crisis.

The House passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, 233-186, along party lines. The bill is not expected to pass the Senate.

Sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), the CHOICE Act is the most ambitious Republican effort to roll back the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010. Republicans have long targeted Dodd-Frank, saying it has created a crushing regulatory burden that suffocates small businesses and banks while empowering unaccountable bureaucrats.

“Dodd-Frank represents the greatest imposition on our business enterprises than all Obama-era regulations combined,” Hensarling said Thursday morning in a briefing with reporters. “In many respects, it was not a response to the financial crisis, but a grab bag of leftist ideas that were waiting on the shelf for quite some time.”

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Democrats have fiercely defended Dodd-Frank. They say the bill has held Wall Street accountable for the risky investment practices that caused the crisis and protected Americans from predatory lending and abusive financial firms.

"It's shameful that Republicans have voted to do the bidding of Wall Street at the expense of Main Street and our economy,” said Rep. Maxine Waters (Calif.), the ranking Democrat on the Financial Services Committee. “They are setting the stage for Wall Street to run amok and cause another financial crisis. I urge my colleagues in the Senate not to move on this deeply harmful bill."

The CHOICE Act would roll back much of the Dodd-Frank regulations long targeted by Republicans. It would allow banks that reach certain cash thresholds an off-ramp from Dodd-Frank, reduce the frequency of federal stress tests and restrain oversight powers of several federal agencies that the 2010 law expanded.



Hensarling’s bill would also eliminate orderly liquidation authority — the process through which the federal government takes over and dismantles a major bank before it collapses — and place strict limits on the Consumer Financial Protection Bureau (CFPB).



The CHOICE Act would turn the CFPB, which Republicans consider abusive and unaccountable, into the Consumer Law Enforcement Agency. It would no longer control its own budget, its director would be appointed by the president, and it would lose its authority to crack down on “unfair, abusive and deceptive practices.”

Speaker Paul Ryan Paul Davis RyanScott Walker's son considers congressional run Bloomberg revises story on Trump Labor pick who was reinstated Labor reinstates official accused of anti-Semitic posts by Bloomberg story: report MORE (R-Wis.) and GOP leaders touted the bill in the weeks before Thursday’s vote. Ryan, a longtime Hensarling ally who served with him on the House Budget Committee, on Wednesday called the CHOICE Act “the crown jewel” of the GOP deregulation agenda.

“This legislation comes to the rescue of Main Street America,” Ryan said Wednesday. “The Financial CHOICE Act makes it possible for small businesses across this country to stop struggling and to start hiring.”



Democrats have universally opposed the CHOICE Act, claiming it's a boon for Wall Street that puts American consumers at risk. House Minority Leader Nancy Pelosi (D-Calif.) called it “a dangerous Wall Street-first bill that would drag us back to the days of the Great Recession.”

The CHOICE Act is unlikely to pass the Senate, where the Republican majority is too slim to overcome a Democratic filibuster. Lawmakers on the Senate Banking Committee have floated a bipartisan measure to relieve regulations on smaller banks, which has received measured interest from House members.

Trump administration officials have called on the House to pass the CHOICE Act, while urging the Senate to work on changes that could clear the chamber.

Hensarling said he’s also looking to pass some aspects of the bill through budget reconciliation, the budgetary maneuver Democrats used to pass ObamaCare and Republicans are using to repeal it.

While Hensarling said he’s discussed the bill with his Senate counterpart, Banking Committee Chairman Mike Crapo Michael (Mike) Dean CrapoA US-UK free trade agreement can hold the Kremlin to account Oversight Republicans demand answers on Capital One data breach On The Money: Fed cuts rates for first time since financial crisis | Trump rips Fed after chief casts doubt on future cuts | Stocks slide | Senate kicks budget vote amid scramble for GOP support MORE (R-Idaho), he declined to say what the upper chamber should do.

“I’m certainly not going to advise Chairman Crapo on how to proceed from here,” Hensarling said. “The Senate is a very different animal than the House.” </s> A House of Representatives panel filed suit on Tuesday against the US Treasury and the Internal Revenue Service, as it wrangled to obtain President Donald Trump's tax returns.

The Democratic-led House Ways and Means Committee filed the lawsuit in US District Court for the District of Columbia after the Treasury Department refused a request for tax information about the Republican president.

"In refusing to comply with the statute, Defendants have mounted an extraordinary attack on the authority of Congress to obtain information needed to conduct oversight of Treasury, the IRS, and the tax laws on behalf of the American people," the lawsuit said.

The lawsuit said the committee believes it was the first time an administration has denied such a request.

The committee is one of half a dozen that are conducting investigations involving Trump and his administration, from his campaign's contacts with Russians during the 2016 presidential race to the sprawling business interests he has not divested since taking office.

The White House is refusing to cooperate with must of them, setting up potential legal battles like this one.

Democrats have pressed Trump to release tax records from 2013 to 2018, which legal experts said could shed light on the president's business dealings. Such a legal process, experts said, could unfold slowly and become an issue in the 2020 election.

The lawsuit, which also names Treasury Secretary Steven Mnuchin, said the administrations continued refusal to produce the materials "is depriving the Committee of information necessary to complete its time-limited investigation, thereby impeding its most basic constitutional functions."

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Budget 2019: Find the latest news on ndtv.com/budget. Use the income tax calculator to learn about your tax liability </s> WASHINGTON – President-elect Donald Trump is expected to name fast-food executive Andrew Puzder, a vocal critic of substantially increasing the minimum wage and an opponent of rules that would make more workers eligible for overtime pay, as head of the Labor Department, according to a Republican briefed on the decision.

Puzder, who runs CKE Restaurants, the parent company of Hardee’s and Carl’s Jr., has been a harsh critic of raising the federal minimum wage to $15 an hour, arguing that it would increase costs for consumers and lead to fewer jobs. He also opposes the recently-delayed Labor Department rule that aimed to make millions more workers eligible for overtime pay.
• December 8, 2016 Editorial: Scott Pruitt is too extreme for EPA post
• December 7, 2016 Trump names Scott Pruitt, Oklahoma attorney general suing EPA on climate change, to head the EPA As the head of a fast-food company, Puzder is a supporter of the approach touted by Trump on the campaign trail that lowering taxes for corporations and the wealthy and loosening regulations for businesses can boost job creation. He is a strong opponent of the Affordable Care Act, which he claims has hurt the restaurant industry because higher health premiums have left consumers with less money to spend.

By bringing in Puzder, Trump is signaling that he may scale back some of regulations introduced by current Labor Secretary Tom Perez. He will have the potential to reverse some of the Obama administration’s most notable efforts to bolster protections for workers, families and retirement savers.

His appointment puts the future of the Labor Department’s overtime rule into question. The rule was halted by a federal judge last month, roughly a week before it was supposed to go into effect. to allow the court more time to come to a final decision. In a Forbes op-ed that ran after the Labor Department finalized the overtime rule in May, Puzder wrote that the rule would “add to the extensive regulatory maze the Obama Administration has imposed on employers,” and that the rule would lead to fewer hours and reduced opportunities for workers.

With the nomination of the fast-food executive, Trump brings another top fundraiser into his cabinet. Puzder supported Trump’s race to the White House financially and served as an economic adviser to his campaign. He and his wife, Deanna, contributed a total of $332,000 to helping Trump get elected, including money given to Trump’s campaign, to joint fundraising committees and to the Republican National Committee, according to the Federal Election Commission.

The Washington Post Philip Rucker contributed to this report. </s> The House’s tax-writing committee filed a lawsuit on Tuesday against the U.S. Treasury Department and the Internal Revenue Service for access to President Donald Trump’s tax returns, reported. The lawsuit, filed by the the House Ways and Means Committee in U.S. District Court in Washington, D.C., seeks to enforce a statute that gives Congress access to anyone’s tax returns. The lawsuit comes two months after the Democrat-led panel subpoenaed Treasury Secretary Steven Mnuchin and IRS chief Charles Rettig to submit Trump’s personal and business returns for the last six years. The officials defied those May subpoenas, however, arguing the request to disclose Trump’s financial documents had no legitimate legislative purpose.

“In refusing to comply with the statute, Defendants have mounted an extraordinary attack on the authority of Congress to obtain information needed to conduct oversight of Treasury, the IRS, and the tax laws on behalf of the American people who participate in the Nation’s voluntary tax system,” the complaint states. The lawsuit also notes the committee is investigating whether the IRS has been enforcing its “self-imposed policy of annually auditing the returns of sitting presidents.” “Indeed, President Trump himself has repeatedly questioned the integrity of the process by which the IRS audits his tax returns, complaining that his returns are under ‘continuous audit’ and that the IRS’s policy of annually auditing Presidential returns is ‘extremely unfair,’” the complaint states. </s> Bertie Ahern didn’t know about Apple. “The Revenue Commissioners act within hard walls”, says Bertie.

Successive Irish governments were unaware of Apple’s special tax arrangements, according to Mr Ahern, a former Minister for Finance who was taoiseach in 2007 when Apple got its second generous ruling from Revenue.

Why not believe him? Governments didn’t know what was going on in the banks either, or in the banking “regulator” or in Nama or in the gardaí or in children’s homes run for the State by the Catholic Church.

And no doubt they knew nothing until recently about voracious vulture funds that used charity law to avoid tax. Sometimes you have to wonder if they know what is going on in government.

And then there’s the rest of us, who vote for politicians and who maybe do not want to know too much.

Irish ministers should get out more – in Chicago for example. The dogs on American streets have long known that we were giving it away. It’s what brings their firms here.

One morning two years ago I found myself downtown in the Windy City looking for breakfast. I asked a man in a suit if he knew a good place. He was heading to a great pancake house and he suggested I join him.

The tone changed as we walked. He worked for a big Chicago accountancy firm, and had just got back overnight from an audit in San Diego. Maybe he was tired. But when he confirmed that I was Irish he started in on me contemptuously about the “double Irish” tax avoidance scheme, laughing.

I pulled on the green jersey, the one they keep wanting you to wear to cover Ireland’s political and corporate embarrassments.

Humiliated as a citizen of Ireland abroad, I rolled out the usual lines about everybody being at it, and Ireland being a small, open economy on the edge of Europe that has to fight more powerful states for jobs. In the end I told him I was running late, and bailed out of breakfast with the guy.

In February of this year The Irish Times reported that Google had used the strategy known as the “double Irish/ Dutch sandwich” to move €10.7 billion through the Netherlands to Bermuda in 2014, allowing it to earn most of its foreign income tax free You can bet that’s the tip of a corporate iceberg.

So what should we do? The Government is scrambling to close some of the more obscene loopholes, such as vulture funds using a Revenue concession for charities that was intended to help the poor and weak. These funds buy up property to rent and make it harder for young couples to own homes.

For a century, Irish leaders have been going to America to attract investment to Ireland. Eventually, a combination of incentives and a low corporate tax rate began to pay off. Job numbers rose dramatically and, from 1961, the population began to grow again for the first time since before the Great Famine.

That was the deal, and it was worth it. Who relished a return to the depressed economic and social conditions of the 1950s or earlier? If other countries did not like it, then too bad.

Our membership of the EEC from 1973 helped us lure US companies. Closest to the United States by air, we spoke the same language and had a pretty decent standard of education. The weather wasn’t great, but the craic made up for it.

Yet what made the big difference was profit margins. Then, as capital became more global and mobile, and competition more cut-throat, multinationals could play one country off against another. A race to the tax bottom began.

We pushed things too far. Revenue appears to have had a free hand to do deals subject to no effective scrutiny. It is hard to believe that no minister for finance or taoiseach knew, at least in broad outline, what was going on.

We elect governments that have failed to monitor swathes of Irish life. It is no intrusion into the privacy of tax returns to demand that the Revenue Commissioners keep us clearly informed about the number and kind of deals they do.

Then the public may at least make an informed judgment on whether or not it really pays Ireland to keep chasing foreign direct investment, and can decide if we have any real choice in the matter.

Hopefully, given where Brexit may also lead us, it will not boil down to a hard choice between being in the EU or out of it. </s> WASHINGTON — President Donald Trump will sign a sweeping executive order Tuesday at the Environmental Protection Agency, which looks to curb the federal government’s enforcement of climate regulations by putting American jobs above addressing climate change.

The order represents a clear difference between how Trump and former President Barack Obama view the role the United States plays in combating climate change, and dramatically alters the government’s approach to rising sea levels and temperatures — two impacts of climate change.

A White House official briefed on the plan said Monday the administration believes the government can both “serve the environment and increase energy independence at the same time” by urging the EPA for focus on what the administration believes is its core mission: Clean air and clean water.

More important than regulating climate change, the official said, is protecting American jobs.

“It is an issue that deserves attention,” the official said of climate change. “But I think the President has been very clear that he is not going to pursue climate change policies that put the US economy at risk. It is very simple.”

Tuesday’s order will initiate a review of the Clean Power Plant initiative, rescind the moratorium on coal mining on US federal lands and urge federal agencies to “identify all regulations, all rules, all policies … that serve as obstacles and impediments to American energy independence,” the official said.

Specifically, the order will rescind at least six Obama-era executive orders aimed at curbing climate change and regulating carbon emissions, including Obama’s November 2013 executive order instructing the federal government to prepare for the impact of climate change and the September 2016 presidential memorandum that outlined the “growing threat to national security” that climate change poses.

“The previous administration devalued workers by their policies,” the official said. “We are saying we can do both. We can protect the environment and provide people with work.”

The White House official went on to argue that the best way to protect the environment is to have a strong economy, noting that countries like India and China do less to protect the environment.

“To the extent that the economy is strong and growing and you have prosperity, that is the best way to protect the environment,” the official said.

The executive order also represents the greatest fears climate change advocates had when Trump was elected in November 2016.

“These actions are an assault on American values and they endanger the health, safety and prosperity of every American,” Tom Steyer, the president of NexGen Climate, said in a statement. “Trump is deliberately destroying programs that create jobs and safeguards that protect our air and water, all for the sake of allowing corporate polluters to profit at our expense.”

Andrew Steer, CEO of the World Resources Institute, said that the executive order shows Trump is “failing a test of leadership to protect Americans’ health, the environment and economy.”

But as much as Democrats and climate advocates will decry it, Trump’s executive order follows the President’s past comments about climate change. Though Trump told The New York Times during the election that he has an “open mind” about confronting climate change, he also once called it a hoax.

“The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive,” Trump tweeted in November 2012.

“I will also cancel all wasteful climate change spending from Obama/Clinton,” Trump said in October 2016.

The changes, the official said, do not mean the Trump administration will not look to protect the environment any longer, the official said, but when pressed about the human impact on climate change and Trump’s beliefs, the official was reluctant to say whether all government officials in the Trump White House believe humans cause climate change.

“I think there are plenty of rules on the books already. We will continue to enforce that provide for clean air and clean water. And that is what we are going to do,” the official said. “The President has been very clear that he wants the EPA to stick to that basic core mission that Congress set out for it.”

The changes also reflect the view of EPA Administrator Scott Pruitt, who routinely sued the organization he now leads during his time as the Attorney General of Oklahoma. In an interview with CNBC earlier this month, Pruitt argued incorrectly that carbon dioxide isn’t the “primary contributor” to climate change, a comment that goes against most scientific research.

This executive order is also an attempt by the Trump administration to make good on its promise to bring more coal jobs back. The official said that Obama’s regulations “were not helpful” to the coal industry and these reversals are the President honoring “a pledge he made to the coal industry.”

“We are going to put our coal miners back to work,” Trump said at a March 2017 event in Kentucky. “They have not been treated well, but they’re going to be treated well now.”
The Obama administration's Treasury Department, in a move against corporate tax inversions, enacts regulations to combat a key tax-reduction technique known as earnings stripping.