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Int'l Tax News

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Canada Consults on New Pillar 2 Legislation, Revised DST Bill

  • By Stephanie Soong

The Canadian Department of Finance is seeking public input on new draft legislation that would implement OECD global minimum tax rules and on an amended bill providing for a controversial digital services tax.

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Canada Moves Forward With New Tech Tax

  • By Vjosa Isai

On August 4, Canada released an explanatory note about the Digital Services Tax Act, which goes into effect as soon as January. It is a 3 percent tax on the revenues of large technology companies, including those with online marketplaces, like Walmart and Amazon, and social media platforms, like Meta.

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Canada Issues Digital Tax Draft After Global Deal Hold-Out

  • By Lauren Vella and Michael Rapoport

Canada is seeking feedback on a revised version of its digital services tax after declining to sign on to an OECD-penned outcome statement that included an extension of the moratorium on new digital service taxes to the end of 2024.

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West African Tax Forum Cautions Members on OECD Global Tax Deal

  • By Stephanie Soong

It’s important to scrutinize the OECD’s two-pillar global tax reform plan and carefully weigh its economic implications before committing to implement it, the West African Tax Administration Forum told its members.

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Slovakia Seeks Feedback on Global Minimum Tax Draft Legislation

  • By Jan Stojaspal

Slovakia is seeking feedback on draft legislation that would implement a 15% minimum corporate tax rate. The proposal includes a domestic top-up tax and would take effect in December 2023.

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Germany to Raise Modest Tax Revenues Under OECD Global Tax Plan

  • By Stephanie Soong

Germany stands to benefit under both pillars of the OECD’s global tax reform plan, but its tax revenue gains might not be very high, according to research commissioned by the German Ministry of Finance.

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Luxembourg Government Approves Global Minimum Tax Bill

  • By Stephanie Soong

Luxembourg’s Council of Government has approved draft legislation to transpose into domestic law the EU’s directive implementing global minimum tax rules under pillar 2 of the OECD’s two-pillar corporate tax reform plan.

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Ways and Means GOP Demand 'Robust Consultations' on Pillars

  • By Doug Sword

Thirteen House Ways and Means Committee Republicans signed a July 31 letter accusing Treasury of failing to consult with Congress over global tax negotiations that they claim will cost taxpayers at least $56 billion.

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Luxembourg Global Minimum Tax Rules Sent for Parliament Approval

  • By Jan Stojaspal

Luxembourg approved a legislative proposal to implement the global minimum tax rules. The proposal introduces two new tax rules, a top-up tax and an undertaxed profits rule, to ensure that multinational companies are taxed at a rate of at least 15%.

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German Revenue Set for ‘Moderate’ Gains From Global Tax Reform

  • By Jan Stojaspal

Germany is expected to see a moderate increase in tax revenue from the OECD-led global tax reform, with additional revenue of between €2.75 billion and €3.9 billion per year between 2024 and 2026. However, the revenue increase could be lower if multinational groups escape the scope of the reform.

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GOP, Chamber Ramp Up Pressure on Treasury Over OECD Tax Deal

  • By Chris Cioffi and Samantha Handler

Republicans and the US Chamber of Commerce are urging the Treasury Department to reexamine its positions on key provisions of the global tax deal, including the global minimum tax. They argue that the deal could harm US businesses and want Treasury to seek more input from Congress.

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Treasury Pulls Back Tough Foreign Tax Credit Regulations

  • By Lee A. Sheppard

Lee A. Sheppard examines IRS Notice 2023-55, which provides relief from the foreign tax credit rules, addressing why taxpayers are happy about the notice.

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Chips, China, Taiwan, and Tax Preferences

  • By Mindy Herzfeld

Mindy Herzfeld examines how recent congressional efforts to bypass traditional tax treaty requirements for encouraging semiconductor chip trade with Taiwan could be models for innovative international tax agreements.

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Scoping-Criteria Dispute Overshadows Amount B Progress

  • By Ryan Finley

Ryan Finley explains that some countries' distrust of quantitative screens threatens to derail the OECD's simplified transfer pricing approach for baseline distributors under amount B.

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African Cross-Border Trade Growth Demands Tax Transparency

  • By Nana Ama Sarfo

Nana Ama Sarfo reviews the OECD's latest Tax Transparency in Africa report and notes how developments in trade and beneficial ownership transparency could help advance tax transparency on the continent.

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The South Centre Warns Against OECD Global Tax Reform Plan

  • By Stephanie Soong

Developing countries should think long and hard before signing on to an OECD-brokered two-pillar global corporate tax reform plan while also considering alternative measures, an intergovernmental policy research organization said.

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Developing Countries Cast Doubt on Benefits of Global Tax Treaty

  • By Lauren Vella

Some developing countries are reluctant to ratify the OECD-led global tax pact until other OECD countries, especially the US, choose to do so. They believe the pact will yield a small amount of revenue and that they risk losing their taxing rights if they ratify it before developed countries do.

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Vietnam May Ease Global Minimum Tax Burden for Firms

  • By Nguyen Xuan Quynh

Vietnam's investment ministry is considering ways to compensate foreign investors who will be affected by the global minimum tax. The measures include providing financial support, training and R&D assistance, and tax breaks.

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Ireland Consults Further on Global Minimum Tax Rule Adoption

  • By Stephanie Soong

Ireland’s Department of Finance is asking for more public input on new aspects of its plan to transpose the EU’s pillar 2 directive, incorporating features of the OECD’s second tranche of pillar 2 administrative guidance.

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Ireland Seeks More Feedback on Implementing Global Minimum Tax

  • By Jan Stojaspal

Ireland is seeking feedback on the six main areas of draft legislation implementing the OECD's 15% global minimum tax. The draft legislation includes safe harbor rules for transitional CbCR and UTPR reporting.

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Latam Nations Create Tax Cooperation Forum, in Challenge to OECD

  • By Michael Rapoport

Latin American countries have created a new forum to cooperate on tax issues in response to concerns that the OECD's global tax agreement does not benefit developing countries enough. The forum will be facilitated by the United Nations Economic Commission for Latin America and the Caribbean.

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Vietnam Proposes Global Minimum Tax Rules to Apply in 2024

  • By Stephanie Soong

The Vietnamese government will send a draft resolution to the National Assembly proposing the application of global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan starting January 1, 2024.

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Israel Approves New Tax Benefits for Technology Investors

  • By Marissa Newman

Israel's parliament approved tax breaks for investors in Israeli tech startups to boost investment in the sector. Tax credits are available to private investors in pre-seed and seed rounds, as well as tax relief for companies that acquire tech firms and foreign banks that offer loans to Israeli tech startups.

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Semiconductor Industry Presses IRS to Expand Tax Credit Rules

  • By Erin Slowey

The US semiconductor industry is urging the IRS and Treasury to broaden eligibility for the tax credit for research and manufacturing of semiconductors. The industry wants more of the supply chain to benefit.

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GOP Lawmakers Tell Accounting Board to Nix Tax Disclosure Plan

  • By Nicola M. White

Republican lawmakers want the Financial Accounting Standards Board to withdraw its proposal to force companies to report more details about how much they pay in income taxes and where. The lawmakers said the proposal would expose US multinational companies to enhanced review and tax audits by foreign governments and put them at a competitive disadvantage.

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OECD Business Advisory Group Seeks More Minimum Tax Consultations

  • By Danish Mehboob

Businesses want more opportunities to address complexities in the global minimum tax following new guidance from the OECD. They say the guidance is complex and challenging to implement and call for more simplification measures.

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Subsidy Wars Heat Up With US Allies Forced to Pay Up or Lose Out

  • By Brian Platt, Enda Curran, and Gabrielle Coppola

The US is waging a subsidy war with China in an attempt to maintain its technological lead. The European Union is responding with plans to invest billions of euros in clean energy and semiconductor manufacturing.

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Nations Could Lose Trillions Without UN Tax System, Group Says

  • By Michael Rapoport

Tax Justice Network says the UN needs to be involved in global tax administration to help stop $4.7 trillion in lost taxes to multinational companies and wealthy individuals over the next decade.

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Some Simple and Overlooked Economics of the OECD's Pillar 2

  • By Martin A. Sullivan

Martin A. Sullivan explores the concerns of legislators at a recent congressional hearing on the OECD’s minimum tax proposal.

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IRS Offers Temporary Relief From Foreign Tax Credit Rules

  • By Andrew Velarde

The IRS is providing temporary relief from expansive foreign tax credit rules, allowing taxpayers to use modified old rules, as the agency reexamines provisions that have swept far more broadly than many practitioners thought necessary.

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U.K. Adopts Accounting Standard Changes for Pillar 2 Tax Rules

  • By Stephanie Soong

In response to OECD global minimum tax rules, the U.K. Endorsement Board has accepted amendments to a key international accounting standard that provides temporary relief from deferred tax accounting and targeted disclosure requirements.

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Treasury Hits Pause on Imposing New Foreign Tax Credit Rules

  • By Isabel Gottlieb and Michael Rapoport

The IRS is temporarily allowing taxpayers to follow the old rules on the foreign tax credit while it considers whether to modify its newer, controversial standards for claiming the credit. This is a relief for companies that have complained that the new rules are too strict.

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Digital Taxes Won't Go Away Anytime Soon, U.N. Official Says

  • By Stephanie Soong

Despite multilateral attempts to avoid them, digital services taxes will persist, and it would be better for countries to focus on ensuring that those taxes are adopted and interpreted consistently, a U.N. official said.

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Digital Taxes Are ‘Here to Stay,’ UN Official Tells Symposium

  • By Lauren Vella

A UN official said DSTs are here to stay and countries should find a uniform way to administer them. He suggested using Article 12B of the United Nations model treaty as a starting point.

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OECD Deal's Treatment of U.S. Tax Credits Troubles House Taxwriters

  • By Cady Stanton

House taxwriters in both parties came to a rare agreement about the United States’ role in the OECD tax deal concerning the treatment of nonrefundable tax credits.

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GOP Seeks to Up Global Tax Deal Oversight With Treasury Official

  • By Chris Cioffi and Samantha Handler

Republicans are pushing back on the global minimum tax deal, arguing that it would put US companies at a disadvantage. Democrats say that if the US doesn't get on board, it will be left behind.

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G-20 Finance Ministers Welcome OECD Tax Reform Plan Progress

  • By Stephanie Soong

The G-20’s top finance officials continue to press ahead with the OECD-brokered two-pillar global tax reform plan, recognizing progress on some of the plan’s key features and calling for countries to settle outstanding issues.

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Canada Is Sticking With a Planned Tax on Big Tech the US Opposes

  • By Brian Platt

Canada will introduce a digital services tax in 2024 despite US opposition. The Canadian government made a concession by delaying its DST and believes it is necessary to defend the country’s interests.

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Taiwan Trade Bill Clears Senate, Heads to Biden’s Desk

  • By Chris Cioffi

The US Senate passed legislation approving a trade deal with Taiwan, which could lead to stronger tax ties between the two countries. The bill also includes transparency and cooperation guidelines for future agreements negotiated under the initiative.

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OECD Seeks Simpler Transfer Pricing With Amount B Consultation

  • By Stephanie Soong
  • By Alexander F. Peter

The OECD has opened an additional consultation on two amount B alternatives to simplify routine marketing and distribution transactions for transfer pricing. The options could include an examples-based determination of non-baseline distribution activities.

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OECD Issues Information Return for Global Minimum Tax Filing

  • By Michael Rapoport

The OECD finalized the information return that multinational companies will use to file their taxes under the new global minimum tax. The return is designed to strike a balance between providing tax administrations with the data they need to ensure compliance while limiting the cost of compliance for companies.

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Low-Income Countries Get Treaty-Based Minimum Tax Rule

  • By Lauren Vella

The OECD released a model treaty provision for the global tax deal's subject-to-tax rule, which is meant to help low-income countries collect more tax under treaties that set low withholding rates.

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Energy Credits’ Treatment in Global Tax Deal Detailed By OECD

  • By Lauren Vella

The OECD clarified that the global minimum tax will treat the Inflation Reduction Act’s transferable tax credits as additional income rather than a reduction in tax paid. This means that businesses will not be subject to the undertaxed profits rule if they use the credits to lower their tax expenses.

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U.S. Companies Score Partial Reprieve From Global Minimum Tax Deal

  • By Richard Rubin

Under the updated agreement negotiated by the Treasury Department, U.S.-based companies will have an extra year (until 2026) before foreign countries can start imposing new taxes on any U.S. companies deemed to pay too little tax in the United States. In addition, the clean-energy tax credits at the core of last year’s Inflation Reduction Act will be counted in a more favorable way than some companies had feared, offering certainty as a tax-credit trading market gets under way.

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Using Tax Transparency for Latin America's Economic Recovery

  • By Nana Ama Sarfo

Nana Ama Sarfo examines the OECD’s latest report on tax transparency in Latin America and questions whether the organization’s tax transparency standards could be a useful tool in improving the region’s slow economic growth.

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Pillar 2 Would Overlook Some Tax-Advantaged IP Transfers

  • By Martin A. Sullivan

Martin A. Sullivan argues that even if pillar 2 is adopted, multinationals’ income stemming from intellectual property transfers to low-tax jurisdictions is likely to remain as tax advantaged as it is now.

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Is There a Way to Fix Pillar 2?

  • By Mindy Herzfeld

Mindy Herzfeld examines what the United States stands to lose if it enacts or rejects pillar 2, and what can be done to lessen the impact.

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Profit-Based Contribution to EU Budget Receives Little Support

  • By Elodie Lamer

EU finance ministers did not sound impressed by the European Commission’s idea to allocate to the EU budget a new statistics-based levy on large companies’ profits.

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Luxembourg to Be Referred to CJEU for Anti-Tax-Avoidance Failures

  • By Amanda Athanasiou

Luxembourg will be referred to the Court of Justice of the European Union for its continued failure to correctly incorporate the anti-tax-avoidance directive into domestic law, according to the European Commission.

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Finance Ministers Oppose EU Budget Corporate Profits Levy Plan

  • By Stephen Gardner

EU finance ministers rejected the European Commission's proposal to levy a charge based on a calculation of surplus corporate profits. The ministers said the levy would be regressive and difficult to implement.

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