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Int'l Tax News

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Committee Recommends New Zealand's Pillar 2 Rules Start in 2025

  • By Stephanie Soong

New Zealand’s pillar 2 global minimum tax rules should start taking effect in 2025 and be incorporated into law by reference to OECD model rules and guidance, a parliamentary committee has recommended.

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EU Labor Ministers Agree to Platform Workers Deal

  • By Elodie Lamer

The EU Council’s Belgian presidency has persuaded some reluctant member states to accept a previously rejected deal with the European Parliament on the reclassification of digital platform workers.

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Practitioners Expect NSBA Case to Influence More CTA Challenges

  • By Andrew Velarde

In the wake of a significant and surprising district court decision holding the Corporate Transparency Act unconstitutional, practitioners expect the case to influence other challenges to the beneficial ownership reporting regime.

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OECD Transfer Pricing Help Boosted Africa, Ukraine Revenue

  • By Danish Mehboob

Tax authorities in Africa and Ukraine said technical assistance from the OECD in transfer pricing has resulted in higher revenue and improved compliance.

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Global Minimum Tax Won’t Limit Developing Country Investment

  • By Danish Mehboob

Pierce O’Reilly, head of business and international taxes at the Organization for Economic Cooperation and Development, noted that the minimum tax’s substance-based income exclusion rule will continue to support investment into low-capacity countries that tend to offer significant corporate investments.

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How to Protect the U.S. Tax Base, Part 3: Subsidizing R&D

  • By Mindy Herzfeld

Mindy Herzfeld examines how the United States can increase research and development and keep the resulting intellectual property stateside.

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What Will It Take to Get Big Pharma Profits Into the United States?

  • By Martin A. Sullivan

Martin A. Sullivan examines Form 10-K data from multinational pharmaceutical companies indicating that recent tax policy changes haven’t induced them to shift profits back to the United States, and he explores why that is a different story for tech companies.

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U.K. Tax Authorities Release New Guidance on the Risk Framework

  • By Richard S. Collier and Ian F. Dykes

Richard S. Collier and Ian F. Dykes explain the new rules released by HM Revenue & Customs on the transfer pricing risk framework and detail the relationship with the OECD Transfer Pricing Guidelines and the base erosion and profit-shifting project.

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W&M Members Debate Whether U.S. Should Walk Away From Pillar 1

  • By Cady Stanton

House taxwriters coalesced over their worries about the impact of the OECD global tax deal’s approach to digital services taxes but found little common ground across the aisle on whether the U.S. response should be to scrap participation or stick with the talks.

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OECD Transfer Pricing Rules Undercut Developing Country Benefits

  • By Lauren Vella

Low-capacity jurisdictions may not benefit from the OECD’s optional framework to simplify transfer pricing for some business transactions, because of a lack of data and administrative resources available to determine the revenue companies owe from such transfer pricing.

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Subcommittee Chair's Departure Leaves Void in EU Tax Negotiations

  • By Elodie Lamer

After 10 years in the European Parliament, Paul Tang, chair of the EP's subcommittee on tax matters, won't be running for a third term, leaving the future direction of the FISC unclear.

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Company Challenges Reg for Ignoring Downward Attribution Change

  • By Andrew Velarde

In Solar New US Holding Corp. v. Commissioner, a Tax Court challenge that could have implications for other rules, a company argues that the statutory repeal of the downward attribution exception makes the definition of a controlled foreign corporation under anti-inversion regulations invalid.

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The Origins of ‘Best Practices’ in International Tax Policy

  • By Lucas De Lima Carvalho

Lucas de Lima Carvalho examines how the “best practices” of international tax law developed and highlights the need for healthy skepticism toward this term.

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Spotify to Raise Prices in France to Offset Costs From A New Tax

  • By Simon Lee

Spotify Premium subscribers in France will soon get a price increase due to additional costs on music streaming services imposed by the government, as part of the CNM Tax, the company says in a statement.

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Dubai To Tax Income of Foreign Banks Not in Financial Center

  • By Dana Khraiche

Dubai, the Middle East’s financial hub, issued a decision to impose a 20% annual levy on the taxable income of foreign banks not based in the emirate’s international financial center.

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House GOP Lawmakers Say Global Tax Treaty Bad for US, Business

  • By Lauren Vella

US Republican lawmakers say the OECD’s multilateral tax treaty produces a loss of revenue to other countries, including China, and express concern the treaty is not effective to curb the proliferation of digital services taxes.

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'Phantom FDI' in Sharp Decline, European Commission Says

  • By Elodie Lamer

So-called phantom foreign direct investment, often undertaken through shell special purpose vehicles, has declined sharply since 2021, the European Commission said, noting the U.S. Tax Cuts and Jobs Act’s major effects on cross-border financial flows.

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Amount B Might Have a Phase 2, Bello Says

  • By Alexander F. Peter

U.S. negotiators on pillar 1 are working on a more robust outcome that would provide more tax certainty and a mandatory amount B, sometimes referred to as phase 2, according to a Treasury official.

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U.S. Could Lose Billions Under OECD Pillar 1 Tax Rules, JCT Says

  • By Stephanie Soong

Revised profit allocation rules under pillar 1 of the OECD’s two-pillar global tax reform plan could have cost the United States as much as $4.4 billion in 2021, according to caveated estimates from the Joint Committee on Taxation.

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UK to Replace ‘Non-Dom’ Regime With Residency Based System

  • By Louise Moon

The UK government will abolish the non-dom tax status and replace it with a "modern, simpler and fairer residency-based system," Chancellor of the Exchequer Jeremy Hunt says in an effort to raise tax revenues.

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UK Aims for New Tax Credits, Tax Avoidance Rules in 2024 Budget

  • By Danish Mehboob

The UK proposed a variety of tax breaks for small businesses in its Spring 2024 budget released Wednesday, along with plans to curb tax avoidance, implement reporting rules for crypto assets and new measures to regulate tax advisors.

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UN Tax Cooperation Efforts Should Focus on Simplicity, Investment

  • By Alan Cole

Senior Economist for The Tax Foundation says the UN should prioritize harmonization, reducing complexity, and cross-border investment to increase international tax cooperation.

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Liberty Global: Do Litigants Believe Their Own Tax Planning?

  • By Robert Goulder

Robert Goulder comments on one of Liberty Global’s multiple disputes with the IRS.

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Pillar One Would Have Cost $1.4b in 2021, JCT Says

  • By Brian Faler

Had the OECD’s Pillar One proposal been in place during 2021, it would have cost the Treasury $1.4 billion, according to a new government analysis.

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Stakeholders: Australian Draft Software Rules Depart From Tax Norms

  • By Michael Smith

Trade groups have warned the Australian Taxation Office that its draft software royalty rules do not properly distinguish between payments on copyright articles and contravene preexisting international norms regarding the taxation of software.

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Why the United States Needs a GAAR

  • By Reuven S. Avi-Yonah

Reuven S. Avi-Yonah advocates for Congress to adopt a general antiabuse rule to combat loopholes formed by the voluminous tax code.

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A Tale of Two Subject-to-Tax Rules

  • By Sol Picciotto, Jeffery M. Kadet, and Bob Michel

Sol Picciotto, Jeffery M. Kadet, and Bob Michel analyze and compare the two proposals for a subject-to-tax rule to be included in tax treaties, one from the U.N. Tax Committee and the other from the G20/OECD inclusive framework on base erosion and profit shifting.

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Canadian Official Defends DST Against U.S. Backlash

  • By Amanda Athanasiou

An official with Canada’s Department of Finance has confirmed the government’s plan to proceed with its unilateral digital services tax despite U.S. opposition, underscoring that several other large economies have already implemented similar measures.

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Jeremy Hunt Turns to Retail Investors to Save the UK Market

  • By Lisa Pham
  • By Sabah Meddings
  • By Joe Easton

Jeremy Hunt wants UK retail investors to help revive the fortune of the country’s ailing stock market by creating an ISA, a tax-free savings account, for investing in UK equities.

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WTO Extends Moratorium on E-Commerce Tariffs for Two Years

  • By Shruti Srivastava
  • By Jorge Valero

The World Trade Organization agreed to extend a moratorium on e-commerce tariffs for two years after marathon negotiations in Abu Dhabi, while failing to secure deals on other contentious trade issues including a crackdown on agriculture and fisheries subsidies.

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Australia Urged to Align Software Tax Rule With Global Standards

  • By Danish Mehboob

According to the National Foreign Trade Counsel and other industry groups, Australia’s draft ruling to tax payments for software and intellectual property is “overly broad”. The ruling targets goods and services that are often made up of many components, and applying a withholding tax to the entire payment is overreaching.

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World-first carbon border tax shows teething problems

  • By Alice Hancock

The EU’s carbon border adjustment mechanism taxes carbon-intensive imports to prevent a flood of cheap imports from countries with highly polluting industries, but only a fraction of EU companies expected to report emissions did so by an early deadline.

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PTEP Basis Notice, Pillar 2 Guidance, Treaty Update, Crypto Reporting Extended, and Worthlessness Regs

  • By Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler

Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler review guidance and new regs on section 174, group membership implicit support, pillar 2, and catalog comments and recommendations for a pillar 1 implementation treaty.

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Hunt Weighs Ending Non-Dom Tax Status to Raise Budget Funds

  • By Joe Mayes

Chancellor of the Exchequer Jeremy Hunt has considered scrapping Britain’s non-domiciled tax, which allows about 70,000 people to avoid paying tax on their overseas earnings.

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OECD’s Risk Assessment Tool Is a Good Fit for Certain Taxpayers

  • By Lauren Ann Ross

Covington’s Lauren Ann Ross analyzes advantages of the OECD International Compliance Assurance Program compared with advance pricing agreements and audit adjustments.

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Global Tax Treaty To Meet Deadline, OECD Tells G20 Ministers

  • By Danish Mehboob

The OECD is on track to finish its multilateral tax treaty to reallocate taxing rights by March, and the global minimum tax will start in more than 35 countries this year. Estimates provide the treaty will reallocate $200 billion per year and increase revenues by at least $155 billion annually.

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EU Crackdown Shows Hurdles to Enacting Global Minimum Tax Deal

  • By Will Morris
  • By Steven Kohart
  • By Giorgia Maffini

European Commission enforcement of Pillar Two rules for EU nations creates implementation challenges for countries and multinationals, PwC’s Will Morris, Giorgia Maffini, and Steven Kohart say.

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US Tolerance of Digital Tax Justifies Canada Bill, Official Says

  • By James Munson

Canada defended plans to enact a digital services tax against a potential economic reckoning from the US on Thursday, pointing to Washington’s tolerance for similar measures elsewhere.

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Warren Tax Guru Makes G-20 Case to Soak Global Billionaires

  • By Andrew Rosati
  • By Maria Eloisa Capurro

Gabriel Zucman, who helped Elizabeth Warren develop a wealth tax plan for her 2020 US presidential campaign, is promoting a proposal for a global minimum wealth tax aimed at international coordination to tax the rich and fight poverty.

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Africa Group Says Hold Off on Adopting OECD Transfer Pricing Rules

  • By Lauren Vella

A group representing West African tax administrations is concerned the OECD’s recently published guidance on transfer pricing rules lack a definition for low-capacity jurisdictions and qualitative scoping criteria.

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OECD Mulls Multilateral Treaty for Global Minimum Tax Disputes

  • By Lauren Vella

The OECD is considering developing a multilateral convention to resolve disputes related to the application of the global minimum tax, a top official for the organization said.

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Global tax deal under threat from US politics and fraying consensus

  • By Emma Agyemang
  • By Paola Tamma

Implementation of the OECD’s global tax treaty is stalling due to political opposition in the US and tax negotiations by the UN influenced by developing nations.

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U.S. WHT on Tax-Free Dividends Not Creditable, Austrian Court Says

  • By Alexander F. Peter

No Austrian tax credit can be claimed for tax-free dividends burdened with Swiss or U.S. withholding tax, an Austrian court has ruled, saying that even EU withholding tax must be waived by the payer country.

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Pepsi, IBM Sell Bonds Through Singapore to Reap Tax Benefit

  • By Olivia Raimonde, Paul Cohen & Ameya Karve

 A tax deduction on interest in both the US and Singapore effectively lowers after-tax borrowing costs on bonds issued in Singapore.

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Pillar 2 Taxes Are Eligible for Foreign Tax Credits

  • By Lee A. Sheppard

Lee A. Sheppard argues that there’s no justification for the basic position of section 901 and she defines the accessibility problems that arise due to the entity that earns the income not being the one to pay taxes on it.

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How to Protect the U.S. Tax Base, Part 2: IP Ownership

  • By Mindy Herzfeld

Mindy Herzfeld examines how the United States can strengthen incentives for companies to keep their intellectual property stateside and protect the U.S. tax base.

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OECD’s Amount B Report Will Disappoint Taxpayers and Advisers

  • By Gerdes, Imke
  • By Richard Fletcher

The OECD’s latest report to simplify transfer pricing is complex and fails to confirm certain provisions, Imke Gerdes and Richard Fletcher of Baker McKenzie say.

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New Zealand Opts Out of OECD Transfer Pricing Approach

  • By Deborah Nesbitt

New Zealand will not adopt the Organization for Economic Development’s new transfer pricing rules for bringing goods into the country, and instead continue to rely on its own rules.

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Bahamas Introduces Corporate Tax Regime in Response to Pillar 2

  • By Kiarra M. Strocko

The Bahamian government has announced its plans to implement a 15 percent corporate income tax in response to the OECD’s two-pillar international tax reform plan, anticipating tax revenue to exceed $140 million annually.

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Don’t Blame the United States if Pillar 1 Fails, Estonia Says

  • By Elodie Lamer

Other factors should be considered before the United States is blamed for a potential failure of pillar 1 of the OECD’s two-pillar global tax reform plan, an Estonian Ministry of Finance official said.

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