Int'l Tax News

Computations to reallocate taxing rights to markets under a global treaty might be simplified over time, according to one senior official from the OECD.

Treasury Secretary Janet Yellen indicated the US will be unable to sign a treaty on global tax rules in time to uphold a deal that prevents other countries from imposing new levies on some of the largest American tech companies.

Mindy Herzfeld explains that the OECD will likely find itself policing a wider range of state subsidies as countries look for creative ways to shore up investment while staying on the right side of pillar 2.

Representatives of more than 40 members of the Forum on Tax Administration have pledged to facilitate the administration of global minimum tax rules by cooperating on compliance issues like risk assessment.

Fadi Shaheen floats the proposition that from a U.S. tax perspective, the UTPR is the mathematical, conceptual, and legal equivalent of a 100 percent withholding tax on a deemed distribution by the UTPR entity, and he addresses questions that would follow regarding the desirability of such a confiscatory tax and its interaction with tax treaties.

A variety of knotty issues remain over a multilateral treaty aimed at implementing a key part of the OECD’s global tax agreement—including disagreements among countries over withholding taxes and digital services taxes, and getting the US to sign on.

The OECD has published the text of a treaty providing for the reallocation of taxing rights to market jurisdictions and a digital tax repeal, but some details need resolution before countries can start signing it.

Among the many perplexing questions raised by the OECD’s two-pillar project on global tax policy, one mystery is why the government of Canada has broken ranks with other major players in the Inclusive Framework on Base Erosion and Profit Shifting—by announcing its intention to proceed unilaterally with a digital services tax.

U.S. Trade Representative Katherine Tai is facing increasing pressure from lawmakers to take decisive action against the impending enactment of Canada’s digital services tax as Senate Finance Committee members urge new warnings.

Ireland’s latest budget proposes to increase the research and development credit for companies from 25% to 30% to maintain the value of investment amid a global rollout of a minimum tax framework.

Senate Finance Committee Chair Ron Wyden and Republican Mike Crapo ask US Trade Representative Katherine Tai to tell Canada that America will forcefully defend US companies against its digital services tax.

On October 10, Ireland created a sovereign-wealth fund thanks to outsize profits from U.S. technology and pharmaceutical giants seeking to lower their tax bills. Ireland’s government said a new Future Ireland Fund could amass €100 billion by the middle of the next decade.

Martin A. Sullivan shows how pillar 2 could result in a windfall for tax havens.

Bermuda is holding another consultation on its response to global minimum tax implementation, this time proposing a 15 percent corporate tax rate and qualified refundable tax credits to take effect in 2025.

A trade group is urging the OECD to improve its pillar 2 administrative guidance — including amending and adding safe harbors — to give affected businesses more certainty about how the global minimum tax rules will work.

In this article, Eden critiques the latest public consultation document for pillar 1 amount B and proposes options for increasing the likelihood of its adoption and success.

The Treasury Department and the IRS proposed regulations aimed at reining in “Killer B” triangular reorganizations involving foreign corporations, which the government says companies have used in the past to avoid taxes.

Irish corporate tax receipts have dropped two months in a row, with third-quarter revenues falling €700 million short of projections as researchers predict a slowing corporate tax take in line with modest economic growth.

The OECD announced Tuesday that countries involved in the global tax deal negotiations have agreed on a multilateral convention to implement a rule aimed at helping developing countries collect more tax under treaties that set low withholding rates.

Germany and China have pledged to help developing nations administer the global minimum tax rules just months before they’re poised to go into effect.

A top Dutch tax official said the Netherlands is preparing for the global minimum tax rollout and will support developing countries in international tax policymaking at the United Nations following talks with US tax officials.

The EU said the negotiations “do not reflect our key points of concern,” and priorities like “consensus-based decision-making” and the inclusion of “taxpayers’ rights and safeguards” were not being addressed, according to this statement dated September 27 and made public on Oct 10.

Singapore aims to roll out a safe harbor as part of its adoption of the global minimum tax rules, according to a top government official.

Singapore will strive to implement a qualified domestic minimum top-up tax safe harbor to make tax compliance as easy as possible for companies affected by pillar 2 rules, according to a top government finance official.

The United States-Taiwan Expedited Double-Tax Relief Act, which is advancing to the full Senate, would provide an array of tax benefits on certain income earned by qualified residents of Taiwan from US investments or activities.

The International Accounting Standards Board changed small company accounting rules Friday in order to simplify issues created by OECD global minimum tax rules.

The United Kingdom has published more draft measures revising its pillar 2 legislation to reflect safe harbors and other features of the OECD’s latest administrative guidance for the global anti-base-erosion rules.

The French government is moving to adopt the EU’s pillar 2 directive, implementing global anti-base-erosion rules and a domestic minimum top-up tax, according to its 2024 draft finance bill.

Hungary’s finance minister has started talks with large Hungarian companies about ensuring the country remains competitive as it prepares draft legislation in the fall for transposing the EU’s global minimum tax directive into domestic law.

The Italian government modified a controversial windfall tax on banks, giving lenders an option to avoid paying if they set aside additional capital reserves.

The Office of the U.S. Trade Representative has again pushed back against Canada’s plans to introduce a digital services tax, days after American lawmakers warned that the tax, if imposed, might damage Canada-U.S. trade relations.

Government officials from Norway and Denmark announced that their countries are joining the Canadian-led global carbon pricing challenge and emphasized the importance of international cooperation on carbon taxes to effectively reduce emissions.

The Biden administration on September 22 issued final rules that would prohibit chip companies vying for a new infusion of federal cash from carrying out certain business expansions, partnerships and research in China, in what it described as an effort to protect United States national security.

A senior Treasury official has cautioned against efforts by the U.N. to pursue a separate multinational tax agreement, arguing that it would fundamentally undermine the progress made by the OECD’s inclusive framework.

The IRS is considering extending the period in which taxpayers can rely on old foreign tax credit rules, while the agency mulls changes to newer rules.

Several world leaders at a United Nations high-level panel said that the OECD is not the preferred organization to lead the international tax cooperation agenda, but existing work should not be duplicated.

EU Tax Commissioner Paolo Gentiloni told members of the European Parliament that the EU will have to work hard to avoid a situation in which private actors or jurisdictions find loopholes in pillar 2 of the OECD's global tax plan.

House Republican taxwriters are hoping other countries will delay implementation of pillar 2 of the OECD global tax deal while they separately encourage leaders to implement versions of the United States’ global intangible low-taxed income regime.

A bipartisan group of House Ways and Means Committee members called on the Treasury, the US Trade Representative, and the Organization for Economic Cooperation and Development to push back on Canada’s decision to impose a digital services tax.

The Dutch tax plan presented to Parliament on Tuesday highlighted ways to make up for uncertain tax revenues from the global minimum tax to start in 2024.

Although some EU member states have started transposing the EU’s global minimum tax directive into their domestic law, others aren’t acting as quickly, and time is running out, according to a European Commission official.

Stephen A. Bonovich considers the inexplicable and unexplained decision to design pillar 2 to attack various forms of tax rate competition but ignore state subsidies, even though tax academicians, officials, and practitioners have long concluded that such a design is highly irrational and gives rise to market distortions — the exact opposite of what pillar 2 seeks to achieve. He also looks at the practical implications of ignoring those views for the United States, the EU, and China.

Introduction of the 15% global minimum tax will lead jurisdictions to seek new ways of offering tax breaks to attract companies, according to a report on launch of the tax in the European Union.

Martin A. Sullivan uses data from Form 10-K reports to illustrate some policy shortcomings of recent tax reform efforts, focusing on intellectual property transfers and Switzerland’s status as a tax haven.

Ireland is considering a plan to offer corporate tax breaks for dividend income and foreign branches.

Bruce Zagaris breaks down the effect changes in global tax trends have had on Caribbean nations and examines measures to encourage growth in the region.

The Senate Finance Committee on September 14 passed a bill that would deepen economic ties between the United States and Taiwan and effectively create a tax treaty that is expected to pave the way for more Taiwanese investment in the American semiconductor industry.

Ryan Finley asserts that the apparent failure of the United States’ global crusade against digital services taxes should prompt a reassessment of U.S. policy.

Nana Ama Sarfo outlines some open questions generated by the U.N. secretary-general's recent report on international tax cooperation.

The US reiterated its preference Tuesday for what it says is an easier method for determining which transactions will be affected by new streamlined global transfer pricing rules.