2023

Reactions to the proposal are mixed: some predict a 15% tax cut will boost American jobs and wages, but others worry about administrative burdens and gamesmanship.

Countries should consider international tax solutions like a global financial transaction tax and levies on aircraft and shipping to finance the green transition, according to a new EU brief.

Former OECD tax chief Pascal Saint-Amans has forewarned the EU’s future tax commissioner of the likely failure of pillar 1 negotiations and possible tensions when the bloc starts collecting the minimum corporate tax.

Hafiz Choudhury explains efforts at the U.N. to create a fast track instrument to help countries implement changes to the U.N. model tax convention without requiring an onerous renegotiation of the treaty.

A European digital services tax could be used as a stopgap until a deal on pillar 1 of the two-pillar global tax reform plan is reached and could provide resources for the EU budget.

Switzerland will implement the income inclusion rule for the 15 percent corporate minimum tax under pillar 2 of the OECD’s inclusive framework on January 1, 2025, but will not enact the undertaxed profits rule.

Singapore’s Ministry of Finance has rejected stakeholder suggestions to limit the application of its proposed domestic top-up tax to the wholly owned constituent entities of Singapore-based multinational enterprise groups.

Developing countries should adopt the U.N.’s subject-to-tax rule because it is administratively simpler and broader in scope than the OECD’s version, according to the Independent Commission for the Reform of International Corporate Taxation.

Manuel “Nolin” López-Zambrana examines how Puerto Rico — known for relying on tax incentives to attract investment and encourage economic growth — will respond to pillar 2’s minimum tax requirements and how multinational enterprises operating in the territory will be affected by the new framework.

Multinational enterprises registered for Belgium’s global minimum tax regime can start making advance payments under the income inclusion rule and qualified domestic minimum top-up tax, according to the country’s tax authority.

Brazil’s government may propose taxes on major technology companies and introduce legislation to implement the OECD’s 15 percent minimum tax if projected 2025 revenues are insufficient to eliminate the country’s primary budget deficit.

Kyle Pomerleau and Carol Wang compare and analyze three minimum taxes on the foreign profits of multinational corporations — the global intangible low-taxed income regime, the corporate alternative minimum tax, and pillar 2’s income inclusion rule — evaluating each for impact on economic efficiency, robustness to avoidance, and administrability.

Jeffery M. Kadet responds to a recent article on the potential reform of income sourcing rules and emphasizes that simplicity, objectivity, and results that are fair to both taxpayers and tax authorities are key, including the need for sourcing rules to be applied on a unitary basis when appropriate and for the activities of independent contractors (especially when related) to be attributed to the taxpayer.

Kartikeya Singh uses a hypothetical example to explain how behavioral incentives created by pillar 1 amount A rules could influence in-scope companies to relocate personnel and physical capital away from headquarter jurisdictions to low-tax investment hubs.

The Taiwanese government has announced plans to adjust the corporate alternative minimum tax for large multinational enterprises to align with the 15 percent effective tax rate under the OECD’s pillar 2 global minimum tax rules.

Ireland has opened a second round of consultation on a draft proposal for a participation exemption for foreign dividends that would significantly change the country’s corporate tax system.

Annalise Foong and Davide Cotroneo examine the tax treatment of investment funds in Italy and Singapore and how the global anti-base-erosion rules could affect those regimes.

The IRS said it plans to review its procedures for examining potential tax avoidance by large multinational corporations, including how it applies the economic substance doctrine.

An OECD group dedicated to eradicating harmful tax regimes is reviewing Croatia’s Investment Promotion Act, which grants tax deductions for investments in manufacturing and other high-value industries.

Reuven S. Avi-Yonah follows up an earlier installment by further explaining why digital services taxes should be creditable.

The Tax Cuts and Jobs Act might have caused a “small shift” toward the use of domestic tax havens for U.S. multinational firms in the three years after its passage.

The OECD should create a centralized global platform to facilitate and streamline the exchange of data that large companies must report to tax administrations under the global anti-base-erosion rules, business trade groups said.

Reuven S. Avi-Yonah responds to recent discussions regarding implementation of pillar 1 and evaluates the merits of potential alternatives.

Kenneth Austin and Hillel Nadler examine how U.S. tax policies have made the United States a tax haven, and they propose unwinding tax preferences for foreign holders of U.S. financial assets to reduce the United States’ external borrowing and trade deficit.

Robert Goulder comments on a French proposal to adopt citizenship-based taxation.

U.N. countries have adopted a document that could allow governments to tackle the international taxation of cross-border digital services income, centering fairness for developing countries.

Jersey has proposed two pieces of legislation that would implement an income inclusion rule and a stand-alone multinational corporate income tax in response to OECD pillar 2 global minimum tax rules.

Sohum Dua talks about the reasons for existence of the current international tax model, which is heavily biased toward residence-based taxation, and its effects on cross-border financial flows.

In the second part of a two-part series, Reuven S. Avi-Yonah examines whether the United States should adopt a principal purpose test over the limitation on benefits rule.

Najeeb Memon discusses the legal nature of software and argues that the U.N.’s recent addition of software to article 12 of its model treaty was misguided.

Canada’s Department of Finance is asking for stakeholder feedback on proposed legislation that would implement the undertaxed profits rule, a global minimum tax backup enforcement mechanism, as part of a broader budget consultation process.

A U.N. framework convention governing international tax cooperation will likely be agreed on by 2027, instead of 2026 as some countries had hoped.

The Bermudian government is seeking stakeholder input on a draft taxpayer compliance framework for the administration of the island’s new corporate tax regime, adopted in response to OECD-brokered pillar 2 global minimum tax rules.

If the United Kingdom's digital services tax were tripled and passed through to U.K. consumers, American companies could lose over $4 billion annually, according to a report from the Computer & Communications Industry Association.

Many high-income countries continue their push to delay discussion of early protocols to a U.N. international tax framework convention, citing a tight timeline and the complexity of issues to discuss.

A Puerto Rican nongovernmental organization claims that Puerto Rico could miss out on collecting up to $3.8 billion in tax revenue from predominantly U.S. corporations if it does not implement a qualified domestic minimum top-up tax.

Lucas de Lima Carvalho comments on the incompatibility between the UTPR and tax treaties and examines the threat to national sovereignty over taxation.

In the first part of a two-part series, Reuven S. Avi-Yonah examines the relationship between the principal purpose test and the limitation on benefits provision.

While the European Commission continues to wage a brisk fight against tax discrimination and tax barriers, it should be aware of “tension between cooperation and competition” among member states, according to a German research center.

Kevin M. Cunningham explores situations in which U.S. multinational borrowers might incur a section 956 inclusion as a result of using controlled foreign corporation stock or assets as collateral, and he describes the factors that must be evaluated when providing such collateral as well as the strategies that can be undertaken to avoid the inclusion.

Mindy Herzfeld evaluates the choices of income taxes vs. tariffs in the platforms of the 2024 presidential election candidates.

A European Commission evaluation of the anti-tax-avoidance directive will examine the directive’s implementation, its effectiveness, and whether it requires amendments in the future, given the overlap with the pillar 2 directive.

Reuven S. Avi-Yonah explains why he thinks cost-sharing arrangements could be eliminated.

Robert Goulder comments on former President Trump’s proposal to use tariff revenues to pay for income tax cuts.

Martin A. Sullivan explains the economics of tariffs and why they have more potential to reduce the deficit than other tools.

Senate appropriators approved a bill that would fully fund U.S. contributions to the OECD while Republican taxwriters in the chamber formally voiced their opposition to the organization’s two-pillar global tax deal.

Vincent Ooi and Kerrie Sadiq examine the Australian Taxation Office’s reasoning for adopting a broad interpretation of royalties amidst various criticisms suggesting it has gone too far and is out of step with internationally accepted principles.

The Indian government hopes for agreement on the OECD’s pillar 1 tax reform plan, but it can’t give its support unless its interests are taken into account, a top finance ministry official reportedly said.

Xiaoli Ortega examines research and analyses conducted by the Chinese government, professionals, and scholars regarding how China may respond to pillar 2.

User data, from which tech companies derive superprofits, could be akin to a new natural resource and could be taxed globally as such, according to Norwegian Finance Minister Trygve Slagsvold Vedum.