Hot Assets, Source, and Hypothetical Sales: How the Rawat Court Made Hash Out of Simple Rules
Kimberly S. Blanchard examines the U.S. tax treatment of a sale of a partnership interest by a foreign person and explains why the Tax Court’s decision in Rawat was incorrect.
Should Digital Services Taxes Be Creditable?
Reuven S. Avi-Yonah argues that because digital services taxes are used to offset the taxation impediment that “digital giants” cannot be taxed under permanent establishment rules, they should qualify as an in-lieu-of tax and therefore be creditable.
EU Sends Mixed Signals on Tax and Capital Markets Union
European finance ministers said they are committed to acting in the collective interest to boost the EU Capital Markets Union, but they insist that any related tax initiatives be left to the member states.
Committee Recommends New Zealand's Pillar 2 Rules Start in 2025
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.
Practitioners Expect NSBA Case to Influence More CTA Challenges
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.
What Will It Take to Get Big Pharma Profits Into the United States?
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.
U.K. Tax Authorities Release New Guidance on the Risk Framework
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.
W&M Members Debate Whether U.S. Should Walk Away From Pillar 1
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.
Company Challenges Reg for Ignoring Downward Attribution Change
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.
'Phantom FDI' in Sharp Decline, European Commission Says
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.
U.S. Could Lose Billions Under OECD Pillar 1 Tax Rules, JCT Says
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.
Stakeholders: Australian Draft Software Rules Depart From Tax Norms
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.
A Tale of Two Subject-to-Tax Rules
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.
Canadian Official Defends DST Against U.S. Backlash
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.
PTEP Basis Notice, Pillar 2 Guidance, Treaty Update, Crypto Reporting Extended, and Worthlessness Regs
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.
U.S. WHT on Tax-Free Dividends Not Creditable, Austrian Court Says
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.
Pillar 2 Taxes Are Eligible for Foreign Tax Credits
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.
Bahamas Introduces Corporate Tax Regime in Response to Pillar 2
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.
Don’t Blame the United States if Pillar 1 Fails, Estonia Says
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.
Pillar 2 Compatibility With Italian R&D Tax Credit
Andrea Di Gialluca and Davide Cotroneo explain the interaction between Italy’s research and development credits set in place to promote innovation and competitiveness in Italy, and imposition of the OECD’s pillar 2.
High-Income Countries Want Consensus in U.N. Tax Discussions
High-income OECD countries said the terms of reference for a U.N. framework convention on international tax cooperation should be based on consensus rather than simple majority voting — a view opposed by low-income countries.
South Africa Consults on Draft Global Minimum Tax Bills
The South African government is publicly consulting on draft legislation implementing pillar 2 of the OECD’s global tax reform plan and on related tax administration measures as part of its 2024 budget.
OECD Sets Out Amount B Transfer Pricing Simplification Framework
The OECD has published a report on an elective approach for simplifying transfer pricing for baseline marketing and distribution transactions starting in 2025, noting several reservations and concerns from India about the framework.
Singapore to Advance Global Minimum Tax Adoption Plans
The Singaporean government has announced it is moving forward with plans to partially adopt parts of the global minimum tax regime under pillar 2 of the OECD’s two-pillar global tax reform plan in 2025.
EU Countries' Lawmakers List Issues With BEFIT
As EU countries’ parliamentary scrutiny period for the European Commission’s Business in Europe: Framework for Income Taxation (BEFIT) proposal came to an end, Ireland and Poland, among other member states, voiced serious concerns.
U.S. Deal to Avoid Trade War Over DSTs Extended to End of June
The United States has extended a “unilateral measures compromise” with five countries that will deal with their digital services taxes in the period before pillar 1 rules are enacted and sidestep retaliatory U.S. trade actions.
MEPs Agree on Transfer Pricing Directive but Not Group Taxation
Under the European Parliament’s provisional opinion on a new transfer pricing directive, the U.N. could set guidelines in the future, but agreement on a proposal to harmonize aspects of the corporate tax rules remains elusive.
Trade Groups Say Pillar 2 Income Blending Should Not Alter DCLs
U.S. trade groups are urging Treasury not to apply dual consolidated loss rules to the jurisdictional tax blending rules under pillar 2 and the corresponding safe harbors of the OECD’s global minimum tax deal.
Multinational Pharmaceutical Companies Forecast Pillar 2 Effects
Executives at several multinational pharmaceutical companies are making projections about the effects of pillar 2 on their companies’ financial outlooks and discussing other tax developments as they report their 2023 financial results.
BIAC Calls for More Refinements to OECD’s Pillar 2 Projections
The OECD’s assumptions underpinning its global minimum tax revenue projections are still uncertain, so it should keep refining those estimates to get a more accurate picture of pillar 2’s effects, Business at OECD said.