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Int'l Tax News

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EU Should Delay BEFIT Amid Global Tax Reforms, Businesses Say

  • By Stephanie Soong

The adoption of a proposed common EU corporate tax system should be delayed until pillar 2 rules are comprehensively implemented and pillar 1 talks are finalized, business groups told the European Commission.

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Effects From Moore: Does the Corporate Tax Require Realization?

  • By Reuven S. Avi-Yonah

Reuven S. Avi-Yonah explores the history of the corporate tax as an excise versus income tax and explains potential effects from the Moore and Altria cases.

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Score One for the Treaty Makers and One for the Treaty Shoppers: Canada’s Husky Energy Case

  • By Allison Christians

Allison Christians examines a recent Tax Court of Canada decision that took an unusual approach to treaty shopping.

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The Proposed Expansion of Foreign Currency Rules

  • By Carrie Brandon Elliot

Carrie Brandon Elliot reviews prop. reg. section 1.987-1(b), which addresses foreign currency gains and losses of foreign branches using functional currencies that differ from that of their owners.

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OECD Official Notes Issues With Capital Gains Tax Regimes

  • By Elodie Lamer

An OECD official told the European Parliament’s subcommittee on tax matters that the way capital gains are taxed in OECD countries could lead to tax minimization strategies, inequities, and the loss of revenues.

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Interest Limitation Violates EU Treaty, Swedish Court Says

  • By Alexander F. Peter

Sweden’s interest limitation rule that denies an interest deduction for a cross-border intercompany loan to finance an intragroup reorganization violates the freedom of establishment guaranteed by the EU treaty, a Swedish court has held.

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Revisiting an Age-Old Issue: What Taxes Should Be Treated as Income Taxes?

  • By Paul W. Oosterhuis

Paul W. Oosterhuis offers proposals for determining which taxes the multinational tax community can agree are properly imposed as income taxes and proposals for determining what taxes other countries should defer to, either through foreign tax credits or income exemptions.

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EU Council’s Belgian Presidency Wants Bloc to Lead on Pillar 1

  • By Elodie Lamer

Belgian Finance Minister Vincent Van Peteghem told members of the European Parliament that the EU needs to take the lead in the discussion regarding pillar 1 of the OECD’s global corporate tax plan.

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Stakeholders Question OECD’s Proposed 30-Day PE for Extractives

  • By Amanda Athanasiou

Extractives industry groups and other stakeholders have voiced concerns over a recent OECD proposal to amend the model tax convention commentary by including a 30-day permanent establishment threshold for natural resource extraction.

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Academics Unite in Call for EU Agency on Tax Cooperation

  • By Elodie Lamer

More than 100 tax academics from 17 EU member states are calling for the creation of an EU agency for tax cooperation to facilitate the exchange of information, particularly regarding VAT and excise taxes.

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Foreign Tax Credit Recapture and Schedule UTP

  • By Lee A. Sheppard

Lee A. Sheppard examines the foreign tax credit recapture and Schedule UTP aspects of Liberty Global and details why the Tax Court rejected Liberty Global’s argument that its capital gain in excess of its overall foreign loss should be exempt from U.S. tax.

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Treasury Considering Issuing Proposed Regs on Cloud Sourcing

  • By Andrew Velarde

Treasury is considering issuing proposed regs on sourcing rules for cloud transactions as companion regulations to finalized rules regarding characterization.

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What’s Next for the Committee-Passed Carbon Tariff Bill?

  • By Emma Dumain

Four Republicans broke with others in their party to back legislation that would study the greenhouse gas footprint of certain industrial imports and exports — something that could lead to the creation of new tariffs.

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Pepsico Appeals Australia Ruling for Tough Tax on Multinationals

  • By Michael Rapoport

Pepsico appeals a November court ruling that authorized use of the diverted profits tax, taxing company profits at a 40% rate, for the first time in Australia.  

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Rishi Sunak vows ‘more to come’ on pre-election tax cuts

  • By Fleming, Sam
  • By Jim Pickard
  • By George Parker

UK’s prime minister says the government has clear priorities to control spending and welfare, in order to lower people’s taxes.  

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Companies Snap Up New Clean-Energy Tax Credits

  • By Richard Rubin and Amrith Ramkumar

A new government program is designed to funnel cash quickly to renewable-energy developers, potentially accelerating the transition from fossil fuels.

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European People's Party Wants to Revive EU Digital Tax

  • By Jean Comte

The European People's Party is likely to push for an EU digital tax during the 2024 European elections, according to its draft manifesto obtained by Tax Notes.

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Why Did the IRS Win? A Remarkable Year in Tax Litigation, Part 2

  • By Reuven S. Avi-Yonah

Reuven S. Avi-Yonah continues his examination of 2023 legal victories for the government with a look at an offshore hedge fund case and a Tax Cuts and Jobs Act tax planning case.

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U.S. Stakeholders Call for DST Enforcement, Clarity, and More

  • By Nana Ama Sarfo

Nana Ama Sarfo reviews some comments received from the U.S. Treasury Department's consultation on pillar 1.

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EU Council’s Belgian Presidency Notes Pitfalls Posed by IRA

  • By Elodie Lamer

As Belgium takes over the EU Council presidency, Prime Minister Alexander De Croo is warning that the EU risks being squeezed between the United States — with its Inflation Reduction Act — and China.

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Taiwan Tax Fix Tucked Into Congress’s Tax Package Framework

  • By Cady Stanton

Taxwriters included a long-negotiated double taxation fix between the United States and Taiwan in the framework for a bipartisan, bicameral tax package deal, raising the chances for passage of the tax agreement this Congress.

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South Korea’s Yoon Calls for Bold Tax Changes to Boost Stocks

  • By Youkyung Lee

South Korea’s president and top financial regulator seeks to avoid excessive taxation that undermines the stock market and causes South Korean stocks to trade at a lower value.  

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Software Royalty Withholding Tax Rules Clarified by Australia

  • By Danish Mehboob

The Australian government’s new draft ruling details scenarios when payments for software will count as royalties and copyright that are liable for tax, based on case law and new examples of modern software distribution arrangements. The ruling is expected to apply to situations both before and after it is finalized. 

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Collaboration Is Gateway to Success Under New Global Tax Rules

  • By Ann-Maree Wolff

Ann-Maree Wolff of Business at OECD explains challenges of the new global minimum tax rules and what multinational enterprises and governments can do to successfully implement the new reporting system. 

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US Lawmakers Near Taiwan Tax Deal, Risking Anger From China

  • By Mackenzie Hawkins

A proposal by US lawmakers would reduce withholding taxes on qualified Taiwanese residents doing business in the US from 30% to 10% on interest and royalties, and down to 15% on most dividends.

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CAMT and CFC Dividends, Part 2

  • By Lee A. Sheppard

Lee A. Sheppard looks at a recent Treasury notice on compliance with the new corporate alternative minimum tax and discusses how the guidance is both stingy and generous.

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OECD Rulemaking, the APA, and Chevron Deference

  • By Mindy Herzfeld

Mindy Herzfeld examines the legal status of pillar 2 administrative guidance around the world and considers how administrative due process requirements might apply to OECD rulemaking.

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Disentangling the OECD’s New Estimates of Pillar 2 Effects

  • By Martin A. Sullivan

Martin A. Sullivan provides context for unraveling the bountiful statistics in a recent OECD report on the economic effects of pillar 2.

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Global Battery Race Heats Up With Billions for Europe’s Northvolt

  • By Amrith Ramkumar

Concerns about the world’s reliance on Chinese batteries and the climate law known as the Inflation Reduction Act are driving a global competition for investments from companies such as Northvolt.

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Growing income inequality is driving public mistrust

  • By Sandrine Dixson-Decleve

Governments can address economic inequality by raising funds and redistributing income and wealth through increases in tax progressivity, implementing wealth taxation measures, and enacting windfall taxation on extreme profits generated by corporations. 

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UN Experts Renew Charge That OECD Tax Pact Violates Human Rights

  • By Michael Rapoport

The 2021 global tax agreement could have “a discriminatory impact” by hurting predominantly non-white nations’ ability to collect taxes and pay for vital services for their people, according to nine experts who have been appointed by the UN Human Rights Council to report and advise on human rights issues. 

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New Philippine Finance Chief to Push Tax Bills, More Revenue

  • By Andreo Calonzo, Ditas Lopez, Cliff Venzon

Philippine Finance Secretary, Ralph Recto, pledged to focus on boosting tax collection and sustaining current spending as he took over the job on Friday in the first revamp of President Ferdinand Marcos Jr.’s economic team since he assumed power in 2022. 

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Global minimum tax will put the squeeze on investors’ returns

  • By Financial Times

New international tax rules will force multinational companies to pay an extra 6.5% to 8.1% in tax, according to the OECD. The impact will be felt most acutely by companies that use tax havens, euphemistically known as investment hubs. 

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OECD to Start Work on More Pillar 2 Anti-Arbitrage Guidance

  • By Stephanie Soong

The OECD will soon begin working on broader guidance tackling hybrid arbitrage arrangements involving the pillar 2 global anti-base-erosion rules, and it could release that guidance this year, an OECD adviser said.

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US Rejects Renegotiating Major Parts of Global Tax Treaty

  • By Lauren Vella

After soliciting public feedback on the OECD’s multilateral tax treaty in case any important issues were missed, the US does not plan to reopen negotiations of the document, according to a Treasury Department official. However, some consideration as to the definition of terms in the treaty may be made.

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Treasury Eyes Extraterritorial Taxes in Foreign Tax Credit Regs

  • By Lauren Vella

The Treasury Department is focused on finding a “principled” way to deal with novel extraterritorial taxes like digital services taxes as it considers changes to its foreign tax credit rules. 

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Global minimum tax will boost revenues for tax havens, says OECD

  • By Emma Agyemang

Countries categorized as “investment hubs”, such as Ireland and the Netherlands, will have the largest expected gains from the reforms, with corporate income tax revenues rising from 14 per cent minimum to up to 34 per cent. 

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Platform Contributions: Cost Sharing’s New Definitional Fight

  • By Ryan Finley

Ryan Finley explains why it’s wrong to read special exclusions for items like goodwill into the cost-sharing regulations’ definition of a platform contribution.

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Global Minimum Tax May Raise Extra $192 Billion, OECD Paper Says

  • By Stephanie Soong

The global anti-base-erosion rules could raise as much as $192 billion annually in extra corporate tax revenue and reduce low-taxed profits worldwide by more than two-thirds, according to an OECD working paper.

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Yellen: New Beneficial Ownership Reporting Rules Already Working

  • By Alexander Rifaat

Treasury Secretary Janet Yellen says new requirements for beneficial ownership information reporting implemented by the department’s Financial Crimes Enforcement Network are leading to a noticeable improvement in tax transparency efforts.

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Colombia Looks to Lower Corporate Tax Rate to 30% in Years Ahead

  • By Sam Edwards

Following President Gustavo Petro’s calls for a lower corporate tax rate, Colombia’s finance minister said the government is revising a proposal to gradually reduce the corporate tax rate from 35% to 30% in the coming years.

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SBIE Significantly Cuts Pillar 2 Tax on U.S. Profit

  • By Martin A. Sullivan

Martin A. Sullivan uses several data sets to explore how the substance-based income exclusion affects pillar 2 tax on the profits of U.S. multinationals in various industries and jurisdictions.

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South Korea Sets Up Special Team for Global Tax Reform Rules

  • By Stephanie Soong

South Korea’s tax authority has created an international tax response team to administer new global minimum tax and digital taxation rules and participate in international talks under the OECD’s two-pillar global tax reform plan.

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Vietnam Investment Fund Is Key Amid Pillar 2 Rules, Minister Says

  • By Stephanie Soong

Vietnam’s proposed investment support fund created in response to its adoption of global minimum tax rules is necessary to ensure the country’s continued competitiveness and attractiveness to business, according to a top Vietnamese official.

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Constructive Ownership and the Meaning of Control for CFC Purposes

  • By Lucas De Lima Carvalho

Lucas de Lima Carvalho explains the importance of control in the taxation of controlled foreign corporations and reviews the ordinary meaning of the word and how it relates to its use in tax legislation.

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Hidden Research Incentives Face Progressive Attack

  • By Gary Clyde Hufbauer

Gary Clyde Hufbauer argues that low taxation of intellectual property sourced abroad provides a major, if hidden, tax incentive, and that taxing such income at a higher rate is a bad policy choice that will hinder future U.S. innovation.

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Businesses Warn of Disputes in Global Minimum Tax Peer Review

  • By Lauren Vella

The possibility that countries will interpret the highly complex global minimum tax rules differently and adopt inconsistent legislation raises concern amongst businesses. Disagreements between countries’ interpretation of the rules may lead to double-taxation problems for businesses. 

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New Year, New Expectations for Global Tax Transparency

  • By Nana Ama Sarfo

Nana Ama Sarfo discusses some expected tax transparency activity in 2024.

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A step forward in global corporate taxation

  • By The Editorial Board

The OECD’s global minimum tax of 15% goes into effect this week in several dozen countries. Although the US and China are not part of the economies employing the global minimum tax, enactment in some of the world’s largest economies will raise vital proceeds for governments and end a “race to the bottom” on corporate tax.  

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The Not-So-Obvious Effects of Pillar 2 on Tangible Capital Investment

  • By Martin A. Sullivan

Martin A. Sullivan examines how the pillar 2 anti-base-erosion rules may affect incentives and how some of those detrimental effects could be mitigated.

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