The New Realities of Tax Risk Management: Navigating Risk in a Complex World
13th Annual Tax Policy & Practice Symposium
February 15 - 16, 2012
The Ritz-Carlton, Washington, DC
Program Managers: KPMG LLP
|7:15AM - 8:15AM||
|8:15AM - 8:30AM||
Welcome Remarks and Recognition of Symposium Mission
|8:15AM - 9:00AM||
Competitive Advantage: The Importance of Intangible Assets to U.S. Economic Growth in the Global Economy
Intangible assets, also known as knowledge assets or intellectual capital, are critical to U.S. job growth in an increasingly competitive global economy. This session provides an overview of different types of intangibles, which can include intellectual property, computerized information, brand equity, firm-specific human capital, networks, and organizational know-how. In some countries, investment in intangible assets equals or exceeds investment in property, plant and equipment. New research highlights the importance of these assets to increasing capital investment and labor productivity. The panelists will discuss the importance of intangible assets to U.S. companies and jobs.
- Patrick Roxworthy, Senior Vice President, Tax, Hyatt Hotels Corporation (moderator)
- Robert Atkinson, President, Information Technology and Innovation Foundation (ITIF)
- Robin Beran, Chief Tax Officer; Director, Global Tax & Trade, Caterpillar Inc.
- Bart van Ark, Executive Vice President and Chief Economist, The Conference Board Keynote Address: Kelly Romano, Vice President, Business Development, United Technologies Corporation
|9:30AM - 10:00AM||
|10:00AM - 10:30AM||
|10:00AM - 11:00AM||
A Brief History: Evolution of the U.S. Tax Rules Governing Intangible Property
Intangible property activities and investments present challenges for both domestic and international tax policy. The U.S. tax system reflects decades of efforts to adapt traditional tax concepts to intangible-intensive business models. How does the current U.S. tax system pursue the sometimes-conflicting goals of encouraging investment in intangible property while limiting perceived abuses relating to transactions involving intangible property? To the extent that different rules are needed for tangible and intangible property transactions, how do these rules apply to products that may involve components of both? How do these rules deal with increasingly common scenarios in which a business engages in intangible property transactions directly with its customers? In addressing these questions, the panel will explore the definitions of intangible property for U.S. tax purposes, the deductibility or creditability of costs to develop or acquire intangible property, and the rules governing when the tax system will respect the earning of an intangible property return in a particular location.
- David Noren, Partner, McDermott Will & Emery LLP (moderator)
- William Curry, Chief Tax Officer & Assistant Secretary, The Dow Chemical Company
- Rocco Femia, Member, Miller & Chevalier
- Joshua Odintz, Partner, Baker & McKenzieWhile other countries have moved aggressively to provide incentives for innovation, and to attract commercial activity from intangibles to their jurisdictions, has the US fallen behind? An R&E credit that expires every few years, and a patchwork of targeted incentives is not a long term innovation policy. In recognition that intangibles are mobile and innovation can occur anywhere, other countries have taken steps to attract intangibles to their shores. How does this impact corporate decision making, and ultimately U.S. competitiveness.
- Madeleine Barber, Senior Vice President & Chief Tax Officer, Tyco International (moderator)
- Tracee Fultz, Global Leader of Life Sciences Transfer Pricing, Ernst & Young LLP
- Michael Goldbas, Principal R&D Tax Services, Deloitte Tax LLP
- Mike Williams, Director, Business and International Tax, HM Revenue & Customs
|1:30PM - 2:30PM||
U.S. Tax Administration: Issues Raised by Intangible Transfers
This session, which will include government and private-sector panelists, will discuss the recent establishment of the IRS Transfer Pricing Office and its role in the examination of intangible transfers. The panel will then build upon earlier discussions to explore the definition of “intangible” for U.S. federal income tax purposes, with a focus on outbound asset transfers and difficulties in obtaining certainty on valuation issues in connection with such transactions.
- Paul Oosterhuis, Partner, International & Corporate Tax Law, Skadden, Arps, Slate, Meagher & Flom LLP (moderator)
- Anthony Barbera, Vice President, Charles River Associates
- James M. O’Brien, Partner, Baker & McKenzie
- Samuel Maruca, Director of Transfer Pricing Operations, Internal Revenue Service (IRS)Emerging conflicts in the taxation of intangible property income by developed and developing countries complicate an already challenging landscape for global companies. The OECD has begun a number of projects to reconcile competing views on appropriate cross-border allocation of profits from intangible assets to prevent double taxation of income. But the growing importance of non-OECD countries, their diverging views on tax policy and administration and the rise of other forums for discussing global tax policy issues have affected the OECD’s influence. The growth in cross-border activity has led to a rise in APA applications and greater use of mutual agreement processes, along with more resources dedicated to international examinations. This panel will discuss the OECD’s work in this area, challenges faced by taxing authorities, and the effects on globally-engaged companies.
- Garry Stone, Global Transfer Pricing Leader, PwC (moderator)
- Joseph Andrus, Head of Transfer Pricing Unit, OECD’s CTPA
- Michael Danilack, Deputy Commissioner for Large Business and International, Internal Revenue Service (IRS)
- Michael Lennard, Chief International Tax Cooperation Section Financing for Development, U.N. Department of Economic and Social AffairsThe growth of cloud computing and e-commerce has added a new wrinkle to the taxation of intangibles. While these business models are by nature borderless, tax regulations and compliance requirements are not. As use of the cloud evolves, it is creating challenges for businesses that are encountering tax regimes that vary from state to state and from country to country and for taxing authorities trying to capture tax revenue. Determining where and whether a cloud service provider has a taxable presence is one of many challenges that will be discussed during this overview of cloud-related U.S. and global tax policy.
- Channing Flynn, Global Technology Industry Tax Services Leader, Ernst & Young LLP (moderator)
- Joe Crosby, Senior Vice President & Principal, MultiState Associates Incorporated
- Nancy Perks, Senior Director, International Tax, Microsoft
- Gary Sprague, Partner, Baker & McKenzieThis session will discuss potential reform of the U.S. taxation of U.S. intangible income. The Treasury Department estimated low effective marginal tax rates on intangible investments in The President’s Framework for Business Tax Reform, released by President Obama in February 2012. This panel will explain those estimates, as well as the differences between financial and tax accounting for intangible investments. Panelists will discuss research and development incentives and the U.S. tax treatment of acquired and self-constructed intangible investments in the context of federal tax reform.
- Eric Solomon, Co-Director of National Tax, Ernst & Young LLP (moderator)
- Michelle Hanlon, Howard W. Johnson Professor and Professor of Accounting, MIT’s Sloan School of Management
- David P. Lewis, Vice President – Global Taxes; Chief Tax Executive; Assistant Treasurer, Eli Lilly and Company
- James Mackie, Director - Office of Tax Analysis, U.S. Department of TreasuryProceeding from the premise that the goal of the U.S. tax system is to enhance the domestic standard of living, this panel will examine the treatment of foreign-source intangible income in a wide variety of proposals from both the public and private sectors. Panelists will discuss the President’s FY13 Budget and Framework for Business Tax Reform and separate pieces of legislation introduced by House Ways and Means Committee Chairman Dave Camp (R-MI) and Senator Mike Enzi (R-WY) during the 112th Congress.
- Hank Gutman, Director, Tax Governance Institute, KPMG LLP (moderator)
- Ray Beeman, Tax Counsel and Special Advisor for Tax Reform, House Ways & Means Committee
- Ronald Dickel, Vice President, Global Tax and Trade, Intel Corporation
- Tim McDonald, Vice President, Global Taxes, Procter & Gamble
- Michael Mundaca, Co-Director, National Tax, Ernst & Young LLP
- Michael R. Reilly, Vice President, Taxation, Johnson & Johnson