Int'l Tax News

President Joe Biden's proposed tax hikes are forecast to bring in $3.6 trillion over the next decade, the Treasury Department said Friday, a key funding source for the $4 trillion he hopes to spend remaking the American economy and social safety net. The figure, representing the sum of all tax increases if enacted by Congress, came as is part of the "Greenbook" report that accompanies thewhite House's $6 trillion 2022 budget request, also released on Friday. It effectively serves as the revenue side of the ledger, against Biden's spending priorities in the budget.

A Group of Seven meeting thisweek is unlikely to settle on a rate for a global minimum corporate tax, Japan's Finance Minister Taro Aso said, sounding a note of caution before he and his counterparts gather in London. Expectations of a preliminary deal between theworld's richest economies have risen after the Joe Biden administration made proposals on both a minimum rate and rules to reallocate tax revenues of the biggest multinational firms. France's Finance Minister Bruno Le Maire said lastweek that the June 4-5 meeting must give momentum to clinching a global accord in mid-July.

French Finance Minister says U.S. proposal for a global minimum tax on corporations of 15% is a "good compromise," but the key question is clearly to have a compromise and agreement about the two pillars: digital taxation and minimum taxation." Le Maire says there must be a political agreement on both elements of international tax negotiations by the G-20 meeting in July at the latest.

The Organization for Economic Cooperation and Development's two-part planwould see more corporate profits attributed to the countrieswhere companies make sales, known as "Pillar One," and establish a global minimum corporate tax rate, known as "Pillar Two." The U.S. in April pitched a proposal thatwould narrow the OECD plan and target 100 of the largest and most profitable companies. Crapo called for Treasury to report to Congress on how many U.S. companieswould be among the roughly 100 firms thatwould see their profits reallocated under the U.S. Pillar One proposal, and how the planwould affect U.S. tax revenue.

The EU's digital levywill be broadly based so as not to discriminate against U.S. tech firms, a top European Commission tax official said Tuesday. The governments of France, Spain, and Italy, among others, have unilaterally acted to create their own digital services taxes. That drew the ire of the Trump administration,which argued that they unfairly targeted U.S. tech firms because of their high thresholds for earnings. It opened trade investigations to determinewhether they justified the imposition of retaliatory tariffs. Angel said that the EU's taxwould show that concerns that the new digital levywould be similar to these taxes are misplaced.

Germany and France said discussions on a global agreement on corporate tax rateswere entering the home stretch and that a deal could be reachedwithinweeks. French Finance Minister Bruno Le Maire indicated support for a U.S. proposal to set the minimum rate at 15%, calling it an "interesting and solid basis" for discussion.

A global agreement that could reshape the tax landscape for the biggest corporations is approaching a crucial first stage as the Group of Seven nations hone in on an accord that might feature both a minimum rate and encompass digital giants. If finance ministers due to meet virtually on Friday and in person nextweek can find enough common ground, that could pave theway for awider consensus to formwithin the Group of 20, building a foundation for theworldwide agreement that is in negotiators' sights.

European governments are increasingly optimistic that the G-7 could mark a breakthrough after U.S. President Joe Biden's administration made proposals on the two pillars of the talks:where to tax firms in the digital era, and a minimum rate. Le Maire said thatwhile the U.S. proposal for a 15% floorwould feature in the London talks, the key issue for France remains new rules on how to divide up rights to tax multinationals -- the so-called pillar one of international negotiations. Onwednesday, he said that, subsequent to a recent U.S. proposal to limit rules to the 100 biggest firms, there is progress toward ensuring digital giants are covered.

A paper published by the IMF argues that the joint adoption of the European Commission's common consolidated corporate tax base proposal and a global minimum tax rate may help address distortions caused by tax competition.

President Biden on Friday unveiled $3.6 trillion in tax increases onwealthy Americans and big corporations to pay for his plans to combat climate change, reduce income inequality and significantly expand the nation's social safety net.

The Group of Seven top advanced economies are close to an accord on the corporate taxation of multinationals, paving theway for a global deal later in the year to create new rules for the imposition of levies on theworld's largest companies.

Representatives of the 27 EU member states agreed on May 26 to amend their position on public country-by-country reporting, according to three diplomatic sources.

If the G-7 members can reach agreement on a two-pillar global tax reform plan, then theywill send a powerful message to other countries ÔøΩ even resistant ones ÔøΩ to get on board, France's finance minister said.

The United States' proposed corporate minimum tax rate floor of 15 percent amid OECD global tax reform talks should not detract from Irish-U.S. relations, the Houseways and Means Committee chair said.

Lee Sheppard analyzes the General Court of the European Union (GCEU)'s recent decision inEngie,which she argues treated an affiliated group as a single taxpayer, and applied the step transaction doctrine on the basis of substance rather than form.

The Senate's top Republican taxwriter,Senate Finance Committee ranking member Mike Crapo, R-Idaho, has asked Treasury for further analysis about its position in OECD-led tax reform negotiations ÔøΩ and for a promise that any deal emerging from those talkswon't discriminate against American companies.

Green book provides more detail on Biden administration's minimum book tax proposal.

Green book provides more detail on Biden administration's GILTI and SHIELD proposals.

The African Tax Administrators Forum is urging an OECD-led effort to overhaul global tax rules to target companieswith revenue over 250 million euros ($302 million). The group released a plan thatwould simplify part of the OECD plan aimed at reallocating the profits of multinationals to countrieswhere they have users and customers but a limited physical presence.

The improving macroeconomic climatewill open opportunities for more global expansion and growth, aswell as for diversification of supply chains. In addition, governments looking to boost the economic recovery may roll out new tax incentives.Many countries, including the U.S. and the U.K., are reviewing their research and development (R&D) tax incentiveswith a goal to further encourage investment to invigorate the economy. China has recently renewed a slew of tax incentives available to businesses and has significantly enhanced the R&D "super deduction" available to manufacturing enterprises.

The Biden administration proposed a global tax on multinational corporations of at least 15 percent in the latest round of international tax negotiations, Treasury Department officials said on Thursday, as the U.S. looks to reach a dealwith countries that fear hiking their rateswill deter investment.

The Biden administration has signaled itwill accept a 15 per cent global minimum tax on large multinational companies, in international talks aimed at increasing revenues from corporations that operate across borders.US officials have been meeting negotiators from countries taking part in OECD talks thisweek to discusswhat that minimum tax rate should be. The Biden administration had previously proposed 21 per cent, according to the US Treasury.

Biden's Made in America Tax Plan seeks to promote nascent green technologies via targeted tax incentives; encourage adoption of electric vehicles; support further deployment of alternative energy sources, such as solar andwind power; and endwhat it characterizes as long-entrenched subsidies for fossil fuels.

Where does the IMF see things heading? Increasingly toward destination-based taxation, although it believes it's too early for a destination-based cash flow tax or formulary apportionmentwith a sales factor. In the meantime, the institution believes thatwewill continue to see greater adoption of consumption taxes at the expense of corporate and labor taxes, because they achieve similar effects and are alreadywell used.

Members of the European Parliament (MEPs) and tax observers cast doubt onwhether the European Commission's reworked common consolidated corporate tax base proposal, expected in 2023, can become lawwithout qualified majority voting on tax matters.

The rejection in the Amazon judgment of the European Commission's arguments regarding the proper application of the transactional net margin method (TNMM) raises doubts about the viability ofwhat has become a recurring argument in state aid cases.

The European Commission must explain how a digital levywould alignwith an agreement on the pillars of the OECD tax reform project, and priority should be given to the latter, French sources said.

The United States has proposed a 15 percent rate as a starting point for OECD-led negotiations on a global minimum corporate tax regime as part of a sweeping plan to modernize the international tax system. According to a May 20 Treasury readout, "discussions on the global corporate minimum tax rate began in earnest" during two days of meetingswith the steering group of the OECD inclusive framework on base erosion and profit shifting.

The European Union presented plans for a new corporate taxation framework for the bloc thatwould go further than a global deal under negotiation to change rules on how much andwhere multinational firms should pay levies. The EU's supplementary measure -- dubbed Business in Europe: Framework for Income Taxation, or BEFIT --would create a single corporate tax rulebook and reallocate profits between member states.

British officials aren't convinced by President Joe Biden's plan for a global minimum business tax rate of 21%. Sunak is concerned that the ratemay be too high over the long term, even though the U.K. intends to raise its corporation tax to 25% in 2023 to repair public finances after the pandemic.Britainwants the U.S. and other nations to focus on measures to make big multinational companies -- especially digital giants like Amazon.com Inc. -- pay more of their tax in countrieswhere they operate.

Since April 8, 2021, the OECD/G20 Inclusive Framework on BEPS has been focused on a new set of proposals advanced by the U.S. to move the negotiations forward. The author looks at the changed landscape and discusses possible outcomes.

The European Commission's plan for a unified tax system across the EU may not sitwell alongside international plans for a global tax overhaul. Key questions the Commission,which is the EU's executive arm, must grapplewith as it designs the new system include how to treat companies that fall under both sets of rules, and how to change treaties between EU and non-EU countries.

The U.S. called for a global minimum corporate tax of at least 15%, less than the 21% rate it has proposed for the overseas earnings of U.S. businesses -- a level that some nations had arguedwas excessive. The contrast between the new proposal, released by the Treasury Department Thursday, and the higher rate the Biden administration is seeking to be applied to American companies underscores the difficulty of international talks being led by the Organization for Economic Cooperation and Development. Countries including Ireland have used low business taxes as a key economic development strategy. Negotiators are aiming for a deal this summer.

The European Commissionwill propose later this year a rule requiring large multinational companies to publish the rate of corporate tax they actually pay, according to plans it announced Tuesday. Countries in the European Union have headline corporate tax rates ranging from 9% to 30%, but few multinationals really pay those rates, as they legally reduce their bills through tax breaks designed to boost investment, or, more controversially, through profit shifting to achieve far lower effective tax rates.

Previous efforts to create a common European tax base have foundered, lacking unanimous support from member states. The Commission's new plan, called BEFITÔøΩBusiness in Europe: Framework for Income TaxationÔøΩwould replace proposals for a common European tax base that have been pending for years, known as the Common Consolidated Corporate Tax Base.

The U.S.will accept a global minimum corporate tax rate as low as 15% in international negotiations, below the 21% level it has been seeking for U.S.-based companies' foreign income. The move could make it easier to reach the multilateral agreement that Treasury Secretary Janet Yellen has been seeking, but an agreement at 15%would raise less revenue for governments. And, depending onwhere the U.S. sets its policies, a 15% minimum tax on companies headquartered outside the U.S. could give those businesses an advantage over those based in the U.S.

This Article discusses the impact of the GILTI-related foreign tax credit rules and the coordination of other new international provisionswith the existing foreign tax credit system. The Article argues that the GILTI-related foreign tax credit is more generous than accuracy (exact reduction of double taxation)would demand. The TCJA's coordination of other new ruleswith the foreign tax credit system also tends to be more taxpayer favorable than mere fairnesswould require,with some notable exceptions. The interaction of the foreign tax creditwith the new international tax provisions also creates some surprising effects and incentives.

The G20/OECD Inclusive Framework is currently deliberating an effective international minimum tax as Pillar Two of itswork on the tax challenges arising from digitalization. Political agreement on the so-called Global Anti-Base Erosion Proposal (GloBE) is sought for summer 2021 and prospects currently look good, in particular due to its full endorsement by the Biden administration. This paper outlines the developments leading up to the October 2020 Blueprint on GloBE and provides an assessment of its policy rationale and of certain objections raised in public hearings and in literature. Moreover, the paper critically analyses some of GloBE's key design features; it also shortly addresses its compatibilitywith tax treaty law and simplification measures.

Media projections depict that robotics, process automation, and artificial intelligence threaten humanworkforce sustainability. Two oft cited studies forecast that technological innovation could jeopardize more than one third of the U.S.workforce. Nevertheless, the author concludesthat Congress should not impose a robot tax. This Article is the first to conduct a significant literature review of the current proposals to tax robots, ultimately taking a contrarian view. It examines mankind's historical connection to labor amid fears of automation substitution and proposes that implementing fear based tax policy based on job displacement projections is unsound

Amazon.com Inc. haswon the latest stage in a legal battlewith the EU overwhether itwas given 250 million euros ($303 million) of illegal subsidies by the Luxembourg authorities through a tax ruling.Wednesday's judgmentÔøΩissued by the European Union's second-highest courtÔøΩis another loss for the European Commission's years-long effort to clamp down on past transfer pricing practicesÔøΩhow companies value intercompany transfersÔøΩ multinational companies have used in Europe.

US president Joe Biden's plan to reform global corporate taxationwill do little to help the countries most in need of more tax revenues, say developing economieswhich are lobbying for greater power over multinationals.

EU judges have overturned a European Commission order to Amazon to pay back ÔøΩ250m in taxes to Luxembourg, in a further blow to Brussels' efforts to curb sweetheart national tax deals.

Rishi Sunak is holding back support for Joe Biden's plans for a 21 per cent minimum global business tax rate, as Britain pushes the US to ensure any agreement includes a fairer system for taxing digital technology giants.

The chancellor,who chairs the G7 finance ministers, said hewould consider a global minimum levy only as part of a broader package,with Treasury officials fearing Biden is intent on compelling tech firms to pay tax "in Californiawhen it ought to be paid in the UK".

After 10 years of on and off discussions, a much-debated U.N. Tax Committee proposal on treating software payments as royalties is still unresolved. But some of the U.N.'s recent treaty modifications, combinedwith a spate of global litigation, could give the issue a much-needed nudge toward resolution.

The United States should hold off on tariffs on Indian imports, including shrimp and jewelry, in response to India's digital tax, especially amid the economic devastation caused by the COVID-19 pandemic, stakeholders said. Manab Majumdar of the Federation of Indian Chambers of Commerce and Industry said May 10 that proposed U.S. tariffs on 40 products from India in retaliation against India's equalization levywould be "inimical to the vibrant trade relations" between both countries, citing "formidable challenges" arising from the coronavirus crisis.

The time may be right for countries to consider adopting or reforming inheritance tax policies to help shore up government revenues and better addresswealth inequalities in their post pandemic economies, a new OECD report says. The report, published May 11, examines and compares inheritance, estate, and gift taxes across the 37 OECD countries; considers their designs; evaluates the need for inheritance taxation; and outlines reform options that governments may consider adopting to improve their regimes.

African tax administratorswant further changes to part of the OECD's global tax reform plan, including the allocation of total ÔøΩ instead of residual ÔøΩ multinational profits to market jurisdictions to be taxed under proposed new rules. The African Tax Administration Forum (ATAF) announced in a May 12 statement that it had sent a proposal to the OECD inclusive framework on base erosion and profit shifting thatwould simplify pillar 1 of the two-pillar plan that its members are negotiating.

The EU General Court has annulled the European Commission's 2017 ruling that advance pricing agreements approved by Luxembourg granted Amazon ÔøΩ250 million in state aid, holding that the commission's transfer pricing analysiswas fundamentally flawed. In its May 12 judgment in Luxembourg v. Commission, Cases T-816/17 and T-318/18, the General Court held that the commission's 2017 ruling on an APA granted to Amazon group members in 2003 and renewed in 2011was based on a flawed transfer pricing analysis. According to the commission, the APAs' generous terms conferred ÔøΩ250 million in selective state aid that Luxembourgwas required to recover from Amazon.

Ireland should continue building on its nontax advantages to mitigate the effect of potential global corporate tax reforms on the Irish corporate tax base, according to a new IMF report. In its staff concluding statement of the 2021 Article IV mission to Ireland, published May 12, the IMF said that Irelandwas in a good position for an economic recovery in 2021, thanks to strong multinational enterprise growth during 2020.

The Biden administration's proposed reforms of the global intangible low-taxed income provisions retain the 20 percent foreign tax credit "haircut" that exists under current law, according to a top Treasury official. The administration's GILTI proposals build on the current structure, including that haircut, Kimberly Clausing, Treasury deputy assistant secretary for tax analysis, said May 13.