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BEPS Watchdog Warns Against Adopting OECD Tax Reforms
Developing countries are not likely to benefit from the two-pillar global tax reform plan negotiated through the OECD framework, so they should adopt alternative measures instead, the BEPS Monitoring Group said.
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Confrontational Approach Deters Valid R&D Claims, CIOT Says
HM Revenue & Customs’ approach to research and development tax relief inquiries is deterring genuine claims and risks undermining the U.K. government’s policy aim of encouraging R&D, the Chartered Institute of Taxation said.
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Ireland Announces €1.1 Billion in Tax Measures in Budget Preview
An over-€1 billion tax package will be among the measures in Ireland’s 2024 budget, according to the Finance Department, which also announced plans to increase capital spending with windfall corporate tax receipts.
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Windfall Corporate Revenue Poses Challenge to Ireland
Martin A. Sullivan examines the causes and possible effects of the post-COVID surge in Ireland’s corporate tax receipts, cautioning that although the increased revenue might be good for the country in the short term, the revenue stream is too volatile to rely on long-term.
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Time to Declutter the Corporate Tax System, OECD Official Says
With pillar 2 of the global tax plan materializing, it may be time to take another look at some of the base erosion and profit-shifting measures implemented over the years, an OECD official said.
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Countries Must Reduce MAP Inventories, OECD Official Says
Competent authorities and multinational enterprises should work together to reduce mutual agreement procedure case inventories by focusing on dispute prevention rather than resolution, an OECD official said.
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Galvanizing International Tax Case Accepted by Supreme Court
The US Supreme Court will hear a case on whether the government can tax foreign earnings that have not been distributed to US shareholders. The case could have implications for the limits of Congress' taxing powers.
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OECD Pillar One Must Consider African Digital Resources, Study Says
A report from South Centre says African countries need to improve data collection around digital transactions to benefit from the OECD's global tax reallocation plan.
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Companies Need Time to Absorb New Tax Rules, EU Lawmakers Say
European Parliament members suggest delaying creation of a common tax base for large companies until businesses have adjusted to the global minimum tax rules.
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Nascent China Competition Bill Seen as Potential Tax Vehicle
Lawmakers are looking to a new US-China competition bill as a potential vehicle for enacting tax policy, including reviving the research and development tax break and establishing a carbon border adjustment mechanism.
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Supreme Court May Opt for Narrow Ruling on Foreign Earnings Tax
The US Supreme Court will hear a case that could upend wide sections of US tax law, but experts say the justices may ultimately coalesce around a narrower ruling. If the court strikes down the foreign earnings tax, it could jeopardize other taxes tied to multinational arrangements.
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UK Treasury Agrees to Review Digital Tax Contingency Plans
The UK Treasury agreed to review and provide progress reports on the global tax agreement and its digital services tax and provide a contingency plan in case the UK DST needs to be extended past 2025.
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Global Tax Deal Can Help Declutter National Rules, OECD Says
An OECD official said countries should review and slim down national rules that may no longer be needed now that there is a global minimum tax approach.
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Siemens Global Tax Head Criticizes OECD Global Deal Rollout
The global head of tax at Siemens said that businesses have not had a proper chance to provide their opinions on the global tax deal, which he described as an anti-democratic process..
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Germany to Start Legislating for OECD Global Minimum Tax
After consulting on transporting an EU directive implementing global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan, Germany is ready to take the next step, a German official said.
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EU Wants SAFE Proposal to Focus on 'Bad Apples,' MEP Says
A European Commission proposal to penalize intermediaries that facilitate tax avoidance and aggressive tax planning aims to target “bad apples,” not law-abiding tax advisers, Dutch member of the European Parliament Paul Tang said.
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Pillar 2 Could Raise Taxes on Multinationals in U.S., CRS Says
The pillar 2 proposed global minimum tax could raise taxes on multinationals’ operations in the United States even if the country fails to act on the proposal, and it could reduce the benefit of credits or other domestic tax incentives, the Congressional Research Service said in a June 29 report.
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Pillar 2 Concerns Persist Amid Australia's Draft Intangibles Rule
Australia’s amended draft rule denying deductions for intangibles payments linked to low-tax jurisdictions reflects some stakeholder concerns, but its interaction with OECD global minimum tax rules remains to be seen, practitioners said.
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Minimum Tax May Spur Rethink of Incentives, OECD Official Says
A global minimum effective tax rate will likely encourage governments to stop offering tax incentives that reduce a multinational enterprise’s profit and design incentives to cost-effectively stimulate investment, according to an OECD official.
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Supreme Court to Hear Transition Tax Case With Vast Implications
In Moore v. United States, the Supreme Court has decided to take up a constitutional challenge to the validity of the transition tax in the face of 16th Amendment concerns, and the fallout from a taxpayer-favorable decision could be monumental.
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Spain Aims for EU Deal on Beneficial Ownership Criterion
The Spanish presidency of the EU Council, which begins in July, will try to get member states to agree on proposals to strengthen the EU list of noncooperative jurisdictions for tax purposes.
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Could Bilateral Investment Treaties Kill Pillar 2?
Mindy Herzfeld considers how commitments countries have made under bilateral investment treaties might hinder adoption of the pillar 2 global minimum tax.
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U.N. Revisits the International Tax Architecture
Nana Ama Sarfo discusses a recent U.N. policy brief outlining ways to improve the international tax system for the benefit of developing countries.
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Kenyan Parliament Approves Cryptoasset, Digital Creator Taxes
The Kenyan National Assembly has passed a controversial finance bill that will introduce a withholding tax on income of digital content creators and a tax on cryptoassets.
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OECD Removes Three Countries From Its Harmful Tax Practices List
The OECD removed San Marino, Aruba, and Jordan from its harmful tax practices list after they amended their incentive regimes to address concerns raised by the organization.
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France’s Macron Champions Global Taxation for Poverty, Climate
French President Emmanuel Macron called for global taxation to finance the fight against poverty and climate change. He proposed new taxes on airline tickets, financial transactions, and shipping.
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Chile-U.S. Tax Treaty Gets Senate Approval, Heads to White House
The Senate voted 95 to 2 to approve a tax treaty between the United States and Chile after more than a decade of delay.
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U.S. Tax Revenue Would Decrease Under OECD Pillar 2, JCT Says
Enacting the OECD’s pillar 2 global minimum tax is estimated to result in a decrease of federal tax receipts for the United States over the next ten years, according to a new analysis.
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European Commission Avoids Political Headaches With FASTER
The European Commission has published its withholding tax reform proposal, insisting that it is strictly procedural, as it tries to gain quick approval of the plan, unlike its previous pro-business proposals.
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U.K. Will Keep DST Until Pillar 1 Rules Are in Place
The United Kingdom will maintain its digital services tax until pillar 1 of the two-pillar plan to reform global corporate tax rules is implemented, according to Paul Tang, a Dutch member of the European Parliament.
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The UTPR and the Credits
Reuven S. Avi-Yonah examines the intersection between the UTPR and tax credits recently enacted by the Inflation Reduction Act and the CHIPS Act.
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National Horsemen's and the Constitutionality of the Corporate AMT
Mindy Herzfeld considers the implications of the Fifth Circuit’s holding in a recent nondelegation doctrine decision for the constitutional validity of the corporate alternative minimum tax.
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Countries Mull U.S. Call for Extending Digital Tax Moratorium
The United States has proposed extending a digital services tax moratorium under the OECD’s pillar 1 framework, and while some countries are open to the idea, others are keeping their cards close to their chests.
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United Kingdom Seeks Input on Pillar 2 Draft Guidance
The United Kingdom is seeking public input on draft guidance on the administration, chargeability, and scope of the taxes introduced by the country’s pillar 2 legislation.
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World's Biggest Offshore Center Backs Effort to Fight Corporate-Tax Avoidance
Swiss voters overwhelmingly supported a global move to establish a minimum tax on corporate profits, with the world’s largest offshore center feeling the pressure to help crack down on tax avoidance by the biggest international companies.
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New Jersey Lawmakers Launch Action on Corporate Tax Changes
New Jersey's SB 3737 would enlarge the state's GILTI exclusion from 50% to 95%, in line with neighboring states. The change could cost the state $122.8 million per year, but supporters maintain it would make New Jersey more competitive.
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GOP Plan Would Let Companies Opt Out of Foreign Tax Credit Rules
A new tax proposal from House Republicans would allow companies to temporarily disregard stricter standards for taking advantage of the foreign tax credit. GOP lawmakers argue the proposal would shorten US companies' supply chains, boost their competitiveness, and prevent double taxation.
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Developing Nations Need UN to Air Their Tax Issues, Official Says
Developing countries want a UN forum to discuss global tax cooperation because they feel the OECD hasn't addressed their concerns. The UN secretary general is working on a report that could lead to the creation of an intergovernmental tax-cooperation body.
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Taiwan Trade Bill Clears House Panel in United Vote
The House Ways and Means Committee unanimously approved a bill to approve a trade pact with Taiwan. The bill could lead to a tax agreement between the two countries to eliminate double taxation and promote investment.
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European Court of Justice Issues Advocate General Ruling on Luxembourgish State Aid to Amazon
The European Court of Justice's advocate general sided with the General Court in its decision to overturn the European Commission's ruling that Amazon received illegal state aid from Luxembourg. The advocate general found that the Commission incorrectly applied the arm's length principle and failed to identify the framework for normal taxation in Luxembourg.
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Boost Social Economy Through Tax Policy, European Commission Says
The European Commission recommends that EU countries review their tax systems to encourage social economy enterprises, which prioritize community or environmental causes. The Commission suggests offering tax breaks for donations and retained profits and reducing the tax compliance burden.
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More Than 250 Delegates Join First OECD Global Tax Deal Seminar
The OECD held an information sharing meeting to help developing countries implement the global minimum tax rules. The meeting brought together early movers on the deal to discuss change management and the necessary steps to implement a minimum tax.
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Multinationals Should Beware New European Tax Rules on Horizon
ATAD 3 is a pending EU tax rule intended to crack down on the misuse of EU holding companies. The rule will take effect as early as 2024, and companies that are out of compliance could face penalties.
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UK Tax Office Clarifies How Minimum Tax Regime Will Hit Business
The UK tax office released a draft proposal for how it will implement its version of the global minimum tax framework. The proposal includes details on which groups and entities will be subject to the minimum tax, as well as how the tax will be administered.
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Bill Overhauling Brazil’s Transfer Pricing Rules Signed Into Law
Brazil adopted new transfer pricing rules in line with global norms, which will make it more likely that US multinationals operating there will be able to receive foreign tax credits. The rules become mandatory in 2024, but companies can choose to apply them in 2023.
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Global Tax Mess Awaits U.S. Companies, and Congress Isn't Helping
U.S.-based multinational companies will start paying higher taxes in foreign countries next year under a global minimum-tax agreement. The following year, the deal will cause U.S. companies to lose domestic tax breaks. In 2026, U.S. taxes on companies’ foreign income will rise because of long-delayed provisions of the 2017 tax law. Despite U.S. officials negotiating in 2021 for a way to limit corporate tax avoidance, Congress is deadlocked over what to do and this will ignite consequences for American companies.
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Big Companies on Verge of New Market for Clean-Energy Tax Credits
The Biden administration is setting the stage for large companies to start buying clean-energy tax credits, kick-starting a new market at the core of last year’s climate law.
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'Cautious Optimism' on Pillar 1 Tax Deal, Nembhard Parker Says
The inclusive framework on base erosion and profit shifting is staying positive about finalizing a multilateral convention to implement part of the OECD’s two-pillar global tax plan, but challenging discussions remain, the group’s co-chair said.
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Mexico Offers Tax Free Investments to Boost Southeast
The Mexican government is offering tax breaks to companies that invest in 10 new development zones in the southeast of the country. The tax breaks include a three-year exemption from corporate income tax with a 50% reduction for an additional three years.
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Treasury Plans More Guidance on Intellectual Property Transfers
The Treasury Department plans to release additional guidance on transfers of intellectual property into and out of the United States. The guidance will address questions that were not addressed in proposed rules issued in May.