Int'l Tax News

The OECD is working on identifying related-party transactions entered into by taxpayers that may pose integrity concerns under the pillar 2 global minimum tax rules, an OECD tax adviser said.

A statement joined by the majority of Canada’s first ministers says that the government could pursue retaliatory measures if U.S. President-elect Trump follows through with threats to introduce tariffs on Canadian imports.

The OECD has published more administrative guidance for the global minimum tax rules, including a list of legislation temporarily qualified as pillar 2-compliant and advice on deferred tax assets aimed at preserving the rules’ integrity.

Technical work is underway on a possible permanent safe harbor for multinational enterprises in scope of the pillar 2 global minimum tax rules, according to Treasury’s top OECD negotiator.

The OECD inclusive framework on base erosion and profit shifting has published a variety of tools and guidance regarding the administrative implementation of the global minimum tax under pillar 2 of the OECD's two-pillar tax reform plan, along with a central record of legislation that clarifies the member jurisdictions that have secured transitional qualified status for minimum tax purposes.

The OECD on January 15 published administrative guidance regarding the application of article 9.1 of the global anti-base-erosion model rules to deferred tax assets from benefits arranged by the government or new corporate income tax rates introduced after November 30, 2021.

The OECD on January 15 published a central record of legislation with transitional qualified status, providing information on the member jurisdictions whose implementation of the global anti-base-erosion model rules has been deemed consistent with the OECD's standard during a transition period.

The OECD on January 15 published a guide on how to complete the global anti-base-erosion information return, including a template that can be used to alert member jurisdictions that they will receive the returns through the exchange of information procedures.

Scott Besent, President-elect Donald J. Trump’s choice to be Treasury secretary, will be in charge of steering the president’s economic agenda if confirmed by the Senate.

Ryan Finley explains why Treasury and the IRS likely have the statutory authority to make a simplified approach to baseline distribution mandatory.

The second Trump administration and Republican-controlled Congress are poised to oppose the OECD’s global minimum tax rules, and countries shouldn’t ignore the policy shift, according to House Ways and Means Committee member Ron Estes, R-Kan.

Doron Narotzki and Vered Narotzki argue that the Tax Cuts and Jobs Act’s short-term economic stimulus has been overshadowed by mounting fiscal challenges and unfulfilled promises. They highlight concerns about the sustainability of extending the expiring provisions without addressing revenue shortfalls and call for a targeted restructuring of the TCJA provisions to prioritize long-term fiscal stability over short-term political gain.

EU member states are discussing legal ways to ensure that any future changes to the OECD’s standard global anti-base-erosion information return that are implemented through the EU administrative cooperation directive can be introduced quickly.

Concerns from some jurisdictions about a key part of the amount B transfer pricing simplification framework remain a hurdle in finalizing an agreement on pillar 1 of the OECD’s two-pillar global tax reform plan.

 Pillar 2’s global minimum tax “will secure a broad level of protection against harmful tax competition and aggressive tax planning” and some EU antiabuse rules should be simplified or abolished, Germany and the Netherlands said.

Hilary B. Miller explains the basis on which a foreign tax is creditable for U.S. taxpayers and applies the reasoning to France’s social charge called the cotisation subsidiaire maladie.

The OECD on January 13 published a working paper on the relationship between multinational enterprise business functions and effective corporate taxation using country-by-country reporting data from 2017-2021, finding that business functions are effectively influenced by tax incentives and antiavoidance rules and that tax has less influence on corporate decisions regarding routine functions such as manufacturing and sales.

The OECD inclusive framework on base erosion and profit shifting's co-chairs issued a statement January 13 about the current state of pillar 1 negotiations, reiterating its commitment to ironing out the concerns that member jurisdictions have regarding amount B provisions and reaching a finalized agreement.

Lee A. Sheppard considers what happens to basis in dividend equivalent redemptions involving controlled foreign corporations with earnings and profits representing previously taxed earnings and profits, a problem Treasury plans to address in future rulemaking.

Regs on cloud and digital transactions have undergone significant changes from earlier rules, answering practitioners' calls to adopt a predominant character rule surrounding transactions and modify sourcing and cloud classification rules.

Final regulations on applying disregarded payment losses provide widespread relief by delaying the implementation date and creating carveouts for royalty payments and fractional ownership.

The EU has published the final Faster and Safer Relief of Excess Withholding Taxes directive, which was approved by the EU Council in December 2024 and allows member jurisdictions to provide relief of excess withholding taxes on cross-border investments as part of its initiative to tackle tax fraud.

The EU Tax Observatory published a working paper January 8 explaining how the OECD's pillar 2 global minimum tax rules could affect government revenue and the potential impact on profit shifting using data reports from active multinational enterprises in Slovakia, finding that the 15 percent global minimum tax could help increase the country's corporate tax revenue by 4 percent.

Ryan Finley explains why Treasury and the IRS shouldn’t indefinitely postpone a Tax Cuts and Jobs Act-conforming update to the transfer pricing regulations’ definition of intangible.

President-elect Trump has said newspaper reports that his aides are working on tailored tariff plans that would only target critical imports are incorrect.

In this article, Sol Picciotto argues that the negotiations at the U.N. offer an opportunity to overcome the increasing dissensus in international tax rooted in the polarization between residence and source taxation, and that while a new consensus may be difficult to reach, it could be more sustainable.

Mindy Herzfeld reviews existing controversial regulations and discusses whether they are likely to be eliminated under the incoming presidential administration.

As the pillar 1 agreement hangs in the balance and questions arise about pillar 2 global minimum tax implementation, the outlook for the OECD-brokered tax reforms is anything but crystal clear.

With a fresh European Commission ready to make its mark and Poland steering the EU Council presidency, 2025 is poised to shape the role of taxation in the bloc’s policies for the next five years.

Global South countries are prepared to dive into substantial tax matters for the U.N. tax convention this year, but they could be waylaid by Global North countries demanding more specifics about the decision-making process.

Enrique González, José Carbajal, Ana María Romero, and Kent P. Stackhouse explain the unique challenges that must be considered if pillar 1’s amount B is implemented in Mexico and Latin America.

Luis de la Cruz explains the taxation of offshore indirect transfers.

Anirudh Raghavan questions the U.N.’s role in the international tax community and suggests ways of moving further toward international tax cooperation and equality.

Jefferson VanderWolk offers a sobering assessment of the two-pillar project and the brewing conflict between the OECD and the U.N.

A Fifth Circuit panel has reinstated an injunction halting the enforcement of the Corporate Transparency Act in Texas Top Cop Shop Inc. v. Garland and scheduled oral arguments for March 2025.

The U.N. General Assembly has adopted a resolution approving the terms of reference for a framework convention on international tax cooperation, but EU countries and the United States have raised concerns about two specific paragraphs.

A make-or-break year is coming for Pillar One, the first half of a two-part global tax overhaul that aims to reallocate corporate profits to address digitalization of the economy and reform rules for transfer pricing, which dictate how multinational corporations value their intercompany transactions.

Lee A. Sheppard explains important 2024 tax developments in the European Union, including key tax decisions in the EU’s Court of Justice.

Mindy Herzfeld examines how pillar 1’s amount B — which generally streamlines transfer pricing rules by adopting set margins — could be consistent with an America First agenda.

The IRS is articulating its reasoning for the proposed regs on previously taxed earnings and profits (PTEP) requiring a dual system of accounting at both the corporate level and shareholder level.

The OECD has released an automated tool for pricing a return on sales for baseline distributors that are in scope of the amount B transfer pricing simplified and streamlined approach.

Reuven S. Avi-Yonah explains how reducing the corporate tax rate for domestic manufacturing could encourage multinationals to expand activities in the United States.

The IRS is asking for stakeholder feedback with the intention of proposing regs in line with the OECD’s report on the amount B simplified and streamlined approach for pricing baseline marketing and distribution transactions.

Patrick Driessen argues that the revenue and general nonrevenue policy effects of pillar 2 look more favorable after consideration of the U.S. government’s obligation to regulate foreign tax credits to discourage quid pro quo subsidy schemes of foreign governments.

More than 58,000 exchanges of information on tax rulings took place between 2016 and 2023 under action 5 of the base erosion and profit-shifting project, according to the OECD’s latest peer review report.

Thomas Horst examines differences between the undertaxed payments rule and the UTPR, or undertaxed profits rule, and whether adoption of the former could resolve incongruities between the laws of the United States and the many countries that have enacted the UTPR and provide a legally acceptable alternative to the UTPR.

The continuation of work on the ninth directive on administrative cooperation is the only direct taxation priority listed in the six-month program of the next EU Council presidency.

The United States must continue engaging at the OECD on tax issues like the two-pillar global tax reforms to protect its interests and promote its global leadership, Treasury’s top OECD negotiator said.

Brandon Pizzola and Hilary Gelfond-Gross analyze the economic effects of the foreign-derived intangible income deduction, the economic activity supported by the deduction, and the macroeconomic impacts of repealing it.

The OECD’s transitional peer review process for determining which jurisdictions have enacted measures qualified as in line with the pillar 2 rules is winding down, and a list of those jurisdictions may be published soon.