Int'l Tax News

The Treasury Department is running into some complex disagreements over a global tax deal forged by the OECD as the end-of-June deadline to get a treaty ready for signature looms.

House Republicans hoping to extend the 2017 tax cuts are beginning to systematically examine tax provisions in the Democrats' landmark climate law.

The European Commission has informed stakeholders that it will soon begin an evaluation of the anti-tax-avoidance directive, especially how it would work alongside pillar 2 of the OECD’s global tax plan.

Malaysia’s 2024 budget tax incentives will benefit companies operating there, but if it wants to keep attracting investment after implementing global minimum tax rules in 2025, it must adopt further breaks, according to a new analysis.

Najeeb Memon breaks down the global issue of how royalty income from intangibles is taxed and provides suggestions on how to close the fairness gap.

While the deleterious consequences of failing to limit global warming are becoming more costly, doubt has been cast on the relevance of the presumed efficiency of carbon pricing relative to green tax breaks and subsidies.

House Republican appropriators kept their word on their intent to roll back funding to the OECD in fiscal 2025 appropriations as part of a larger protest against U.S. participation in the organization’s global tax deal negotiations.

The International Compliance Assurance Program allows companies to preemptively discuss their transfer pricing positions with tax administrations to obtain more certainty about their tax bills.

A UK Treasury official reported substantial progress in ironing out differences over the global tax treaty, saying it is at a point where countries can work toward adopting it.

Lee A. Sheppard examines the proposed share buyback excise tax regulations and related industry feedback, and she argues that the regulations overreach and should be withdrawn.

Mindy Herzfeld puzzles over the Biden administration’s opposition to a global minimum tax on the world’s richest people, touted as building on the success of the global corporate minimum tax.

Ahead of the U.K. general election, the Liberal Democrat Party has pledged to triple the digital services tax and freeze VAT, while the Green Party and Reform UK also outlined their tax plans.

The Bahamian government is set to introduce draft legislation for a qualified domestic minimum top-up tax that will likely apply retroactively to January 1, according to Prime Minister and Minister of Finance Philip Davis.

The European Union law ,meant to protect local industry from foreign undercutting in the transition to a greener economy, may do more harm than good by hindering the competitiveness of the EU industry and failing to reduce carbon dioxide emissions by the intended amount.

Business and trade groups that represent US-based multinationals with big Australian businesses are hearing concerns from members following the Australian Tax Office’s tough stance against multinationals they view as avoiding its taxes.  

Biden’s tariffs on $18 billion in Chinese electric vehicles, batteries and computer chips, announced last month, are likely too small to lift the economy’s overall price level, economists said. But Trump’s plan for 60 percent tariffs on all $427 billion in goods that China ships to the United States each year would almost certainly reshape trade in ways that consumers would notice.

Jurisdictions in the OECD inclusive framework on base erosion and profit shifting are close to finalizing pillar 1 of a sweeping two-pillar global tax reform plan, according to an update from the group’s co-chairs.

Exchanges of information between tax authorities in Latin America brought in an additional 2.1 billion euros ($2.3 billion) in revenue over the last five years, and other transparency measures have allowed Latin American countries to identify at least 27.8 billion euros in additional revenue since 2009.

The Australian Budget released earlier this month had measures for multinational enterprises that ranged from barely a surprise to some game-changers from a tax administration perspective on transactions.

Turkey is getting ready to introduce OECD-brokered global minimum tax rules to protect its right to tax in-scope multinational enterprises operating within its borders, according to Turkish Finance Minister Memhet Şimşek.

Jefferson VanderWolk cautions the international business community and developed countries not to ignore the international tax reform efforts underway at the United Nations and explains how these initiatives reveal important factors in global economic growth and what developing countries think about their taxing rights.

The 2024-2025 Australian federal budget released this month continues to balance inflationary pressures with cost-of-living concerns. In this environment, specific measures on royalty tax avoidance and foreign resident capital gains tax target multinationals and foreign investors in Australia.

A special committee of countries charged with creating draft terms for a global tax treaty on tax cooperation will start hashing out key details of the proposals’ shape and contents in the coming weeks, including how countries will eventually make decisions and what priority issues it will pursue.

Some jurisdictions are at loggerheads over transfer pricing simplification measures under pillar 1 of the OECD’s two-pillar global tax reform plan, dimming prospects of finalizing a deal in June, Italian Finance Minister Giancarlo Giorgetti said.

Martin A. Sullivan explores developments in Vietnam’s plans for implementing pillar 2 and creating an investment support fund and incentives to drive foreign direct investment.

Countries should keep working on approaches for resolving disputes related to global minimum tax rules and consider the legal basis for those mechanisms, such as a multilateral convention, the OECD told G7 ministers.

Unfavorable treatment of the highly lucrative US R&D credit under the global minimum tax is threatening to expose American companies to higher taxes and prompting some to rethink new investments in the US.

Treasury Secretary Janet Yellen said the US won’t sign an agreement to finalize a still-pending global tax deal until India and China agree to key unresolved issues. Yellen told reports, “India, in particular, has been a holdout and China has not really engaged very much in these negotiations at all.”

While more than 140 countries have signed on to the global minimum tax agreement known as Pillar Two, these efforts don’t always have the backing of domestic legislative bodies, some of which have done little to adopt laws that would make Pillar Two effective.

One of the biggest questions about the global minimum tax agreement known as Pillar Two has been how different countries would implement it locally. In the US, Congress must consider the future of the domestic minimum tax on which Pillar Two is based—the Global Intangible Low Taxed Income regime, commonly known as GILTI—before the transition period to adopt the 15% tax ends in 2026.

Agreement on a few key issues under Amount B of the global tax rules has been elusive so far—such as which countries’ choice to use Amount B would be respected under the rules, which transfer pricing transactions would fall in scope, and whether the simplified rules should be optional or mandatory.

Italy has amended its global minimum tax law to include temporary key safe harbor provisions to simplify the application of the tax rules, while Belgium companies can now register for the tax.

The European Commission referred Spain to the EU Court of Justice Thursday for breaching rules on taxation in company mergers. The commission also said Germany, Hungary, Poland and Romania were infringing EU law by not sharing with other EU tax administrations data on earnings from trading via online platforms.

The European Commission is threatening to refer six countries—Poland, Portugal, Spain, Cyprus, Latvia and Lithuania—to the top European court unless they provide details of their implementation of the global minimum tax within two months.

To preserve tax fairness that underlies voluntary tax compliance, the OECD should leave room for facts-and-circumstances exceptions to part of its global tax treaty.

The global minimum tax is turning out to be a huge compliance hurdle for many multinationals, especially those with subsidiaries spread out in hundreds of cities across the globe. In order to pay their global minimum tax bill in a timely manner, large companies need to build new systems to synthesize thousands of pieces of new data and track the differences between countries’ local laws applying the levy.

The design of the global minimum tax is making large multinational companies vulnerable to disputes with countries all over the world—and halfway into 2024, there’s no tool to resolve them due to the differences in adoption of the global tax rules across jurisdictions.

US multinational companies are engaging in what essentially amounts to a political game of chicken, dissolving their overseas holding companies and reshoring ownership of their subsidiaries to delay paying the new 15% global minimum tax—perhaps indefinitely.

What once seemed like an impossibility, a global billionaire’s tax is now being considered by G20 finance ministers.

New Zealand’s coalition government should scrap the previous government’s bill for a digital services tax because the DST could lead the country’s trading partners to respond with retaliatory tariffs, an activist group has warned.

A new study by the European Left estimates that a permanent tax on excessive profitability of near-monopolies would raise between €81 billion and €107 billion.

A bipartisan group of lawmakers in the House and Senate introduced a measure to overturn the Biden administration’s rules implementing the EV tax credit, which they argue are too lenient on China.

Kenya has proposed withdrawing its digital services tax and replacing it with a significant economic presence tax after President William Ruto said the government would review the DST and align it with OECD tax reforms.

The International Tax and Investment Center describes some potential GLOBE rule disputes and analyzes some proposals for a dispute resolution mechanism, focusing on how the tax treaty mutual agreement procedure in article 25 of the OECD model tax convention can best be used.

Reuven S. Avi-Yonah examines the use of tax incentives to encourage location-specific investment and offers a new approach that he says will be more successful.

Australia plans to introduce a new tax penalty for big companies that try to avoid taxes on royalties in its latest move to crack down on multinationals that it says aren’t paying their fair share.

European Union finance ministers agreed in principle to a law intended to speed up cross-border withholding tax refund procedures and that will require EU countries to replace current tax refund systems for cross-border dividend and interest payments with improved, simpler procedures.

The Biden administration will increase tariffs from 25 percent to 100 percent on Chinese EV imports to offset Chinese export practices, which they argued “favor Chinese automakers at the expense of U.S. and other foreign automakers and autoworkers and are leading to a massive surge of unfairly underpriced Chinese vehicles into foreign markets.”

Martin A. Sullivan scrutinizes the no-benefit requirement under pillar 2 of the OECD’s base erosion project, highlighting the tension between incentives and taxation in light of Singapore’s planned implementation of two components of pillar 2.

Tomás Bailey, Colm Brussels, and Rachel O’Sullivan explain how Irish taxpayers can use the EU tax dispute resolution directive to challenge the tax treaty compatibility of EU member states’ digital services taxes.