Int'l Tax News

The OECD pushed back Thursday against criticism by tax advocacy groups that the 15% global minimum tax rules are too hard to administer and could be detrimental to developing countries.

The federal government is escalating efforts to make cryptocurrency investors comply with tax law, nearly 15 years after people started trading bitcoin. The Treasury Department proposed new rules Friday to make it harder for crypto investors to dodge income taxes when they sell digital assets and to simplify complicated tax messes for people who are trying to follow the law.

Switzerland expects to net CHF 1.6 billion (about $1.8 billion) from the first year of operation of its pillar 2 legislation, according to the 2024 budget.

Portugal has published a decree law transposing EU Directive 2021/2101, which requires member states to make country-by-country reporting mandatory for large multinational entities.

Two intergovernmental groups are advising developing countries to undertake a careful cost-benefit analysis of the OECD-led global tax deal.

Analyzing the OECD’s Pillar Two proposal that all countries impose a 15% minimum tax on corporate income is like playing a multidimensional chess game. Each element of the proposal, and each country that adopts it, creates waves that affect all other players, both governments and corporate taxpayers.

A new 1% tax on stock buybacks is starting to increase companies’ anticipated tax burdens, to the tune of over $3.5 billion in the first half of the year among the largest U.S. public companies.

Members of the Association of Southeast Asian Nations must review global minimum tax rules because they will only benefit developed countries and will adversely affect incentives offered by developing countries, investment ministers said.

The US Treasury Department recently won hard-fought victories in the global minimum tax multilateral negotiations, which US lawmakers and stakeholders should applaud. Instead, some of them are now attempting to use that win against Treasury negotiators.

The US accounting standard setter said it would press on with a project that would force companies to detail the amount of income tax paid to state, federal, and foreign tax authorities. Companies would also be required to disclose the states, countries, and amounts paid if payments equal 5% or more of total tax payments.

Martin A. Sullivan argues that the IRS’s detailed data on five years of country-by-country reports don’t help provide a clear picture of multinationals’ profit shifting.

Nana Ama Sarfo looks at the evolution of China’s Belt and Road Initiative Tax Administration Cooperation Mechanism and questions whether it can meet its broad goals.

Domestic minimum top-up taxes in line with the OECD’s pillar 2 plan won’t protect developing countries’ tax bases, but other options, like alternative minimum taxes, will, according to a South Centre policy brief.

The 15% global minimum tax rules included as part of the OECD-led international tax deal favor developed nations, are burdensome to administer and do not guarantee the collection of more revenue, an advocacy group for developing nations said.

Germany has finalized its proposed bill for transposing into domestic law the EU’s directive implementing global minimum tax rules under pillar 2 of an OECD-brokered international corporate tax reform revamp.

The European Commission has adopted rules governing reporting requirements during the phase-in of the carbon border adjustment mechanism. Several non-EU countries expressed concerns during the consultation on those rules.

The Czech Republic has approved draft legislation to transpose into its domestic law an EU directive implementing a global minimum top-up taxation framework under the OECD’s two-pillar corporate tax system overhaul.

Vietnam’s finance ministry estimates the implementation of the global minimum tax may add about $629m to state revenue by 2024, news website Nhip Song reports, citing information from the Ministry of Finance.

For the moment, the government’s big rollback of foreign tax credit rules is a clear win for multinational drug makers, manufacturers, and companies doing business in Brazil. What happens next isn’t so clear.

A government plan to let companies cut their taxes by financing clean-energy projects kicked off with a deal to help fund a $1.5 billion wind-energy transaction that officials hope will spur tens of billions of dollars in climate financing.

The Finnish government is seeking feedback on proposed legislation that would transpose into domestic law the EU’s directive for implementing global anti-base-erosion rules under pillar 2 of the OECD’s two-pillar global tax reform plan.

Italy's deputy prime minister, Antonio Tajani, said the government's bank windfall tax should not apply to smaller lenders and that it should be tax-deductible. The tax was announced last week and sent shockwaves through financial markets.

Australia is moving forward with its plan to implement a carbon border tax in order to reach net zero emissions by 2050.

Technical concerns about a global tax treaty detailing how multinational companies’ residual profits will be reallocated are expected to be resolved by the fall, a top OECD official said Tuesday.

The OECD has a “proven record of enabling significant change,” Manal Corwin, the organization’s top tax official said in response to a United Nations draft report that argued it doesn’t adequately address the needs of developing countries.

The UK Law Commission released its final report on digital assets on June 28, commissioned by the government in March 2020 and followed by an extensive consultation with industry, legal firms, and others.

Mindy Herzfeld explains the current rift between the United States and the OECD and outlines potential steps to close the gap and encourage a better working relationship.

Nana Ama Sarfo takes a look at the OECD’s latest report on developing countries and the inclusive framework.

The Australian government is consulting with multinational enterprises over the next few months on its plan to implement global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax system revamp.

A U.N. report that proposes options to move multilateral tax negotiations from the OECD to the United Nations ignores the positive impact of OECD work on developing countries, according to a top OECD official.

A Nordic battery manufacturer incorporated in Luxembourg has announced plans to move its holding company to the United States, reporting that Inflation Reduction Act incentives will enable it to generate billions in additional cash flow.

European governments are increasingly turning to windfall taxes to raise revenue and tackle public anger over companies making high profits during the cost-of-living crisis. The taxes are being imposed on a variety of sectors, including energy and banks.

Australia is planning its consultation on the global minimum tax in three phases, the tax office announced on Friday.

Japan is steadily adopting the 15% global minimum tax proposed by the OECD. In March, the Japanese Diet legislated the 2023 tax reform package providing its basic framework, followed by governmental and ministerial regulations issued by the Cabinet and the Ministry of Finance in June.

Poland is challenging the legal basis for the EU’s carbon border tax at the Court of Justice of the EU.

The United Nations has identified three systems — two of which would include legally binding provisions — that it could host to promote inclusivity for developing countries in international tax cooperation, according to a draft report.

UN Secretary-General António Guterres has called for the UN to play a bigger role in shaping global tax policy. Guterres said that the OECD, which has traditionally led global tax discussions, is too exclusive and opaque.

Half of Switzerland’s cantons are expected to raise CHF 530 million (about $606 million) collectively in the first year of implementation of global minimum tax rules under pillar 2 of the OECD’s global tax reform plan.

Bermuda is consulting on implementing a new corporate income tax regime in response to global minimum tax rules that are part of the OECD’s plan to modernize the international tax system.

Russian President Vladimir Putin signed a decree that suspends double taxation treaty benefits with countries it calls “unfriendly” because of the sanctions they have imposed on Russia after it invaded Ukraine.

The United Nations should assume a bigger role in setting global tax rules, the UN’s secretary general said Tuesday in a draft version of a long-awaited report.

Russian President Vladimir Putin signed a decree suspending double taxation agreements with the US, UK, Japan, Australia, South Korea, Singapore, Canada, and most European countries.

Senate Finance Committee leaders are planning to mark up legislation this fall that would alleviate double taxation for US and Taiwan businesses via the tax code.

Switzerland is set to generate more than CHF 530 million ($600 million) in additional tax revenue in the first year under a 15% minimum tax rate, according to an update from the Swiss Federal Department of Finance.

Bermuda is proposing to establish its first-ever corporate income tax in 2025 in line with the global minimum tax rules agreed upon by more than 130 countries in 2021.

Republicans oppose the global minimum tax, arguing that it would hurt American businesses and workers and that it would violate the Constitution. Proponents dismiss these claims, arguing Republicans oppose the tax because they want to help corporations get to the lowest tax rate possible, even at the expense of the federal budget, other taxpayers, and the ability of governments worldwide to build fair and efficient tax systems.

Martin A. Sullivan explains how the pillar 2 global minimum tax could affect tax competition.

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.

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.

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.