Tax Break

Essential reading: Medical device tax repeal gains ground, and more

May 31, 2012

Welcome to the top tax and accounting headlines from Reuters and other sources.

* Medical device tax repeal gains some ground. N.C. Aizenman – The Washington Post. Makers of medical devices are gaining some momentum in a vigorous campaign to persuade Congress to scrap a tax imposed on their industry by the 2010 healthcare law. A bill to void the tax sponsored by Rep. Erik Paulsen will be marked up in the House Ways and Means Committee on Thursday. Republican House leaders say a floor vote could be scheduled as soon as next week. Link

* Swiss parliament oks German, UK, Austria tax deals. Andrew Thompson and Catherine Bosley – Reuters. Switzerland’s parliament gave the green light for tax pacts with Germany, Britain and Austria aimed at preventing tax cheats from stashing money in secret accounts, a decision that could pour billions of extra euros into strained state coffers. Lawmakers in parliament’s lower house on Wednesday voted 108 to 81 in favor of the agreement with Germany, which will levy a retroactive tax of up to 41 percent. The deal, set to take effect in early 2013, has already been approved by the upper house. Link

* At core of Greek chaos, a reviled tax. Charles Forelle – The Wall Street Journal. When the Greek government surprised homeowners in September by imposing a new national property tax, the mayor of this down-at-the-heels suburb on the western fringe of Athens sprung into action and mobilized against it. For many in the euro zone, Greece’s sluggish tax receipts are a perennial frustration. For many in Greece, however, the new taxes — which fall particularly hard on those lower on the income scale — are only compounding the country’s woes and stifling its economy. Link

* India to seek $7 billion in taxes for past deals. Prasanta Sahu and Dhanya Ann Thoppil – The Wall Street Journal. India is likely to demand up to 400 billion rupees, or about $7 billion, in taxes related to 18 or 19 mergers in which foreign companies transferred Indian assets, a senior government official said. Enactment of legislation that would allow authorities retroactively to tax such deals is expected with a few days, the official told reporters on Wednesday. The proposed legislation follows months of criticism from the business community saying that the retroactive-tax proposal would tarnish India’s allure as an investment destination. Link

* Amazon’s tale of incentives with two California cities. John Letzing – The Wall Street Journal. Amazon.com Inc. is now bringing jobs to a growing number of states. But two California cities are pondering whether they might wind up handing some of the resulting tax windfall right back to the Internet retail giant. The pressures facing San Bernardino and Patterson – which each expect to gain around 1,000 jobs by hosting new Amazon shipping centers – could be shared by other local governments angling to court big companies to help bolster their economies. Amazon representatives asked a number of months ago whether San Bernardino would be open to discussions about sharing sales tax revenue with the company. Link to The Wall Street Journal, http://r.reuters.com/wuj58s

* Tips on preventing tax-refund identity theft. Ann Carns – The New York Times. One key to the ID fraud is that the thieves hurry to file early, so that the fake return is the first one received by the IRS. That argues for filing your return earlier, rather than later, if you don’t have a good reason to wait, to reduce the chances of a successful fake filing. Link

* Stern Advice: Tax apocalypse in your retirement account. Linda Stern – Reuters opinion. Amid all the gloom and doom about forced retirement, skyrocketing healthcare costs and nest egg-cracking financial markets, there’s another threat facing baby boomers: future tax liabilities. The generation that has depended solely on 401(k)s and tax-deferred individual retirement accounts may not realize how much of a tax hit it will take when it starts withdrawing the money and living on it. Link

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