Big Tech's Love Affair With Low-Tax Nations Is Under Threat
Tax officials from 143 jurisdictions had hoped to seal an agreement on a new way to divide the taxes levied on the profits of about 100 of the world’s biggest companies. Such a deal would reallocate the taxation of some $200 billion in corporate profits across the world. Failure could lead some nations to impose their own levies.
Countries Advance Pillar 1 Adoption, Extend Digital Tax Freeze
Nearly 140 countries have backed a statement on the OECD’s two-pillar tax reform plan that confirms agreement on the text of a pillar 1 tax convention and on extending a digital services tax moratorium.
OECD Says Reports of Influence on Australian CbC Rules Are False
The OECD has struck back at accusations that it had a hand in weakening Australian country-by-country reporting legislation, but critics have said that Secretary-General Mathias Cormann’s explanation sounds more like an admission.
Treasury Ramps Up U.S.-EU Energy Agreement Efforts
A Treasury official met with EU officials and business leaders to continue negotiations on a deal to allow more European firms to at least partially qualify for the clean vehicle tax credit enacted as part of the Inflation Reduction Act.
EU Not Certain on Plans for Pillar One Directive, Official Says
The EU is considering whether to move forward with a directive on Pillar One separately from the OECD-led tax deal. While not legally necessary, it could inject political momentum into the negotiations.
Australia Mulls More Pillar 2 Deferred Tax Break Disclosure Rules
An Australian regulator is consulting on draft amendments to its disclosure requirements for Tier 2 nonprofit and for-profit entities that have used the temporary accounting exception for deferred taxes under the OECD’s global minimum tax rules.
SAFE Proposal Will Pin Down Meaning of Aggressive Tax Planning
The pending Securing the Activity Framework of Enablers proposal will clearly define aggressive tax planning so that companies and advisers will know “where the red line is,” according to an EU tax official.
BEPS Watchdog Warns Against Adopting OECD Tax Reforms
Developing countries are not likely to benefit from the two-pillar global tax reform plan negotiated through the OECD framework, so they should adopt alternative measures instead, the BEPS Monitoring Group said.
Confrontational Approach Deters Valid R&D Claims, CIOT Says
HM Revenue & Customs’ approach to research and development tax relief inquiries is deterring genuine claims and risks undermining the U.K. government’s policy aim of encouraging R&D, the Chartered Institute of Taxation said.
Ireland Announces €1.1 Billion in Tax Measures in Budget Preview
An over-€1 billion tax package will be among the measures in Ireland’s 2024 budget, according to the Finance Department, which also announced plans to increase capital spending with windfall corporate tax receipts.
Windfall Corporate Revenue Poses Challenge to Ireland
Martin A. Sullivan examines the causes and possible effects of the post-COVID surge in Ireland’s corporate tax receipts, cautioning that although the increased revenue might be good for the country in the short term, the revenue stream is too volatile to rely on long-term.
Time to Declutter the Corporate Tax System, OECD Official Says
With pillar 2 of the global tax plan materializing, it may be time to take another look at some of the base erosion and profit-shifting measures implemented over the years, an OECD official said.
Countries Must Reduce MAP Inventories, OECD Official Says
Competent authorities and multinational enterprises should work together to reduce mutual agreement procedure case inventories by focusing on dispute prevention rather than resolution, an OECD official said.
Galvanizing International Tax Case Accepted by Supreme Court
The US Supreme Court will hear a case on whether the government can tax foreign earnings that have not been distributed to US shareholders. The case could have implications for the limits of Congress' taxing powers.
Nascent China Competition Bill Seen as Potential Tax Vehicle
Lawmakers are looking to a new US-China competition bill as a potential vehicle for enacting tax policy, including reviving the research and development tax break and establishing a carbon border adjustment mechanism.
Supreme Court May Opt for Narrow Ruling on Foreign Earnings Tax
The US Supreme Court will hear a case that could upend wide sections of US tax law, but experts say the justices may ultimately coalesce around a narrower ruling. If the court strikes down the foreign earnings tax, it could jeopardize other taxes tied to multinational arrangements.
UK Treasury Agrees to Review Digital Tax Contingency Plans
The UK Treasury agreed to review and provide progress reports on the global tax agreement and its digital services tax and provide a contingency plan in case the UK DST needs to be extended past 2025.
Germany to Start Legislating for OECD Global Minimum Tax
After consulting on transporting an EU directive implementing global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan, Germany is ready to take the next step, a German official said.
EU Wants SAFE Proposal to Focus on 'Bad Apples,' MEP Says
A European Commission proposal to penalize intermediaries that facilitate tax avoidance and aggressive tax planning aims to target “bad apples,” not law-abiding tax advisers, Dutch member of the European Parliament Paul Tang said.
Pillar 2 Could Raise Taxes on Multinationals in U.S., CRS Says
The pillar 2 proposed global minimum tax could raise taxes on multinationals’ operations in the United States even if the country fails to act on the proposal, and it could reduce the benefit of credits or other domestic tax incentives, the Congressional Research Service said in a June 29 report.
Pillar 2 Concerns Persist Amid Australia's Draft Intangibles Rule
Australia’s amended draft rule denying deductions for intangibles payments linked to low-tax jurisdictions reflects some stakeholder concerns, but its interaction with OECD global minimum tax rules remains to be seen, practitioners said.
Minimum Tax May Spur Rethink of Incentives, OECD Official Says
A global minimum effective tax rate will likely encourage governments to stop offering tax incentives that reduce a multinational enterprise’s profit and design incentives to cost-effectively stimulate investment, according to an OECD official.
Supreme Court to Hear Transition Tax Case With Vast Implications
In Moore v. United States, the Supreme Court has decided to take up a constitutional challenge to the validity of the transition tax in the face of 16th Amendment concerns, and the fallout from a taxpayer-favorable decision could be monumental.
France’s Macron Champions Global Taxation for Poverty, Climate
French President Emmanuel Macron called for global taxation to finance the fight against poverty and climate change. He proposed new taxes on airline tickets, financial transactions, and shipping.
European Commission Avoids Political Headaches With FASTER
The European Commission has published its withholding tax reform proposal, insisting that it is strictly procedural, as it tries to gain quick approval of the plan, unlike its previous pro-business proposals.
U.K. Will Keep DST Until Pillar 1 Rules Are in Place
The United Kingdom will maintain its digital services tax until pillar 1 of the two-pillar plan to reform global corporate tax rules is implemented, according to Paul Tang, a Dutch member of the European Parliament.
National Horsemen's and the Constitutionality of the Corporate AMT
Mindy Herzfeld considers the implications of the Fifth Circuit’s holding in a recent nondelegation doctrine decision for the constitutional validity of the corporate alternative minimum tax.
Countries Mull U.S. Call for Extending Digital Tax Moratorium
The United States has proposed extending a digital services tax moratorium under the OECD’s pillar 1 framework, and while some countries are open to the idea, others are keeping their cards close to their chests.
World's Biggest Offshore Center Backs Effort to Fight Corporate-Tax Avoidance
Swiss voters overwhelmingly supported a global move to establish a minimum tax on corporate profits, with the world’s largest offshore center feeling the pressure to help crack down on tax avoidance by the biggest international companies.
New Jersey Lawmakers Launch Action on Corporate Tax Changes
New Jersey's SB 3737 would enlarge the state's GILTI exclusion from 50% to 95%, in line with neighboring states. The change could cost the state $122.8 million per year, but supporters maintain it would make New Jersey more competitive.
GOP Plan Would Let Companies Opt Out of Foreign Tax Credit Rules
A new tax proposal from House Republicans would allow companies to temporarily disregard stricter standards for taking advantage of the foreign tax credit. GOP lawmakers argue the proposal would shorten US companies' supply chains, boost their competitiveness, and prevent double taxation.
Developing Nations Need UN to Air Their Tax Issues, Official Says
Developing countries want a UN forum to discuss global tax cooperation because they feel the OECD hasn't addressed their concerns. The UN secretary general is working on a report that could lead to the creation of an intergovernmental tax-cooperation body.