Covington & Burling advises and represents multinational corporations, financial institutions, and sovereign wealth funds on their most important and sensitive international tax matters. These matters include the tax-efficient structuring of inbound and outbound investments, the development, documentation, and defense of transfer pricing policies, and the successful resolution of international tax controversies.
Our international tax advisory work includes global tax minimization, intellectual property migration, nonfunctional currency transactions, complex financial instruments, cross-border tax arbitrage, cost-sharing arrangements, and foreign tax credit planning. Our tax attorneys support the firm’s corporate attorneys in Beijing, London, New York, San Francisco, and Washington (or the client’s own attorneys) in planning and implementing cross-border mergers, acquisitions, dispositions, and joint ventures.
We enjoy a long record of successfully settling major international tax controversies for clients of the firm, whether the matter is under examination, at appeals, before the National Office, or in Competent Authority proceedings. We are almost always able to achieve a favorable settlement for our clients without resort to litigation, but we are prepared to prevail in that venue as well, if needed to protect our clients’ best interests.
Our extensive experience in managing tax controversies informs our judgment on the ultimate viability of tax-motivated transactions, and we are often called upon by senior management of firm clients to opine upon the prudence of proceeding with tax strategies proposed by other advisors and also upon the appropriate tax accrual.
Our firm has one of the oldest and best regarded tax practices in Washington, and our tax partners regularly interact with senior Treasury and IRS officials, both on behalf of clients and in the public interest. We have secured a number of innovative letter rulings for our US and foreign clients and have been equally successful in obtaining legislative or regulatory relief on behalf of individual clients or industry groups.
To address tax issues involving multiple jurisdictions, we rely on our London office and our global network of correspondent firms (ordinarily one of the top tax advisory firms in each country), but we are also accustomed to collaborating with our clients’ own foreign advisors, including foreign offices of the global audit firms.
Representative Matters
- We secured within a single year a landmark “outbound” letter ruling that gain from the sale of active subsidiaries did not convert a foreign corporation into a "PFIC" and a landmark “inbound” letter ruling that the US branch of a foreign bank could use the net operating losses of the bank’s liquidated US subsidiary.
- We pioneered the development of “virtual contract manufacturing” (the use of modern risk-management technology to achieve the tax savings of traditional “contract manufacturing” strategies with less tax risk and business disruption).
- We designed a complex foreign currency hedging strategy for a foreign multinational that reduced volatility in its global effective tax rate.
- Through careful study of underlying financial records and the application of tax treaty expertise, we converted what appeared to be a multi-million dollar tax deficiency into an even larger refund claim.
- We developed a program for reducing the valuation allowance on the net operating loss carryovers of multiple US enterprises owned by a major overseas bank.
- We managed a multinational service company’s global review of its intercompany headquarters services charges under attorney work product protection.
- We successfully defended a US multinational against multi-year transfer pricing adjustments and a corresponding disallowance of foreign tax credits.
- We provided strategic advice concerning the potential outcome of cross-border tax controversies to support the FIN 48 analysis of several major clients.
Accolades
- In 2006 Covington & Burling was ranked among the top 30 international law firms by The Lawyer.
- Reeves Westbrook was listed in the 2007 and 2008 editions of Best Lawyers in America and was named a leading tax lawyer in 2008 by Chambers USA. Reeves chairs the Transfer Pricing and Litigation Subcommittee of the International Bar Association’s Tax Committee.
- Bill Chip was named in 2007 and 2008 one of America's leading international tax lawyers by Chambers USA. Bill chairs the Transfer Pricing Subcommittee of the U.S. Council for International Business, chairs the OECD Subcommittee of the ABA Tax Section’s Committee on Foreign Activities of U.S. Taxpayers, and serves on the Tax Committee of the OECD’s Business and Industry Advisory Committee.
- Dirk Suringa chairs the Young IFA Network Committee of the International Fiscal Association and is an honorary member of the Association’s Executive Committee. He is also vice-chair of the Foreign Tax Credit Subcommittee of the ABA Tax Section’s Committee on Foreign Activities of U.S. Taxpayers. Prior to joining the firm, Dirk served as Attorney-Advisor in the U.S. Treasury Department’s Office of International Tax Counsel.
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