New IRS Service Fee Regulations: The US Will Go First, Other Countries Will Be Forced to Follow
15 November 2005
By Dr. Stuart Harshbarger
In 2003, the US Internal Revenue Service (IRS) introduced long-awaited proposed regulations on controlled services and intangibles that are to be finalized before the end of the second quarter of 2006. In this article, NERA Vice President Dr. Stuart Harshbarger discusses the proposed changes to existing guidance and the steady stream of criticism from practitioners, attorneys, and pundits regarding numerous perceived deficiencies and potential perverse outcomes of the proposed regulations should they be implemented in their current form. Dr. Harshbarger argues that though much of the criticism does raise valid concerns, the IRS is adapting appropriately to the changing composition of US international trade flows and that many other industrialized countries will be forced to follow the IRS' lead.
Copyright 2005, with permission of the publisher, WorldTrade Executive, Inc. For more information on Practical US/International Tax Strategies or other WorldTrade Executive publications, please visit www.wtexecutive.com.
