Taiwan Trade Bill Clears House Panel in United Vote
The House Ways and Means Committee unanimously approved a bill to approve a trade pact with Taiwan. The bill could lead to a tax agreement between the two countries to eliminate double taxation and promote investment.
European Court of Justice Issues Advocate General Ruling on Luxembourgish State Aid to Amazon
The European Court of Justice's advocate general sided with the General Court in its decision to overturn the European Commission's ruling that Amazon received illegal state aid from Luxembourg. The advocate general found that the Commission incorrectly applied the arm's length principle and failed to identify the framework for normal taxation in Luxembourg.
Boost Social Economy Through Tax Policy, European Commission Says
The European Commission recommends that EU countries review their tax systems to encourage social economy enterprises, which prioritize community or environmental causes. The Commission suggests offering tax breaks for donations and retained profits and reducing the tax compliance burden.
More Than 250 Delegates Join First OECD Global Tax Deal Seminar
The OECD held an information sharing meeting to help developing countries implement the global minimum tax rules. The meeting brought together early movers on the deal to discuss change management and the necessary steps to implement a minimum tax.
Multinationals Should Beware New European Tax Rules on Horizon
ATAD 3 is a pending EU tax rule intended to crack down on the misuse of EU holding companies. The rule will take effect as early as 2024, and companies that are out of compliance could face penalties.
UK Tax Office Clarifies How Minimum Tax Regime Will Hit Business
The UK tax office released a draft proposal for how it will implement its version of the global minimum tax framework. The proposal includes details on which groups and entities will be subject to the minimum tax, as well as how the tax will be administered.
Bill Overhauling Brazil’s Transfer Pricing Rules Signed Into Law
Brazil adopted new transfer pricing rules in line with global norms, which will make it more likely that US multinationals operating there will be able to receive foreign tax credits. The rules become mandatory in 2024, but companies can choose to apply them in 2023.
Global Tax Mess Awaits U.S. Companies, and Congress Isn't Helping
U.S.-based multinational companies will start paying higher taxes in foreign countries next year under a global minimum-tax agreement. The following year, the deal will cause U.S. companies to lose domestic tax breaks. In 2026, U.S. taxes on companies’ foreign income will rise because of long-delayed provisions of the 2017 tax law. Despite U.S. officials negotiating in 2021 for a way to limit corporate tax avoidance, Congress is deadlocked over what to do and this will ignite consequences for American companies.
'Cautious Optimism' on Pillar 1 Tax Deal, Nembhard Parker Says
The inclusive framework on base erosion and profit shifting is staying positive about finalizing a multilateral convention to implement part of the OECD’s two-pillar global tax plan, but challenging discussions remain, the group’s co-chair said.
Mexico Offers Tax Free Investments to Boost Southeast
The Mexican government is offering tax breaks to companies that invest in 10 new development zones in the southeast of the country. The tax breaks include a three-year exemption from corporate income tax with a 50% reduction for an additional three years.
Treasury Plans More Guidance on Intellectual Property Transfers
The Treasury Department plans to release additional guidance on transfers of intellectual property into and out of the United States. The guidance will address questions that were not addressed in proposed rules issued in May.
EU Wealth Tax Debate Heats Up As Governments Search for Revenue
Some EU policymakers believe wealth taxes could provide new sources of revenue, while others argue they would be difficult to implement and enforce. Supporters claim skepticism about wealth taxes is due to shortcomings of the few currently in place and have proposed fixes.
Taiwan Trade Bill Unveiled, Could Pave Way to Tax Pact
Approval of a trade pact with Taiwan has laid the foundation for a tax deal between the two countries, according to House and Senate tax writers. Taiwan is not recognized by the US as a sovereign nation, so it can’t sign treaties, but lawmakers believe significant treaty-like benefits could be provided through the tax code.
Carried Interest Tax Advantage Faces Legal Challenge in United Kingdom
A nonprofit law firm and a UK businessman have filed a legal challenge against the UK tax authority, arguing that private equity managers should be taxed at a higher rate. The challenge seeks to end the practice of taxing carried interest as a capital gain at 28% instead of income at above a 40% rate.
Time to Declutter Tax Systems Amid Pillar 2 Adoption, Pross Says
As countries implement global minimum tax rules, it might be time to consider changing or eliminating potentially duplicative anti-tax-avoidance measures, like controlled foreign corporation rules, an OECD deputy tax chief said.
U.S., U.K. to Seek Energy Subsidy Agreement
President Biden and British Prime Minister Rishi Sunak announced plans to reach a deal on critical minerals that will allow U.K. auto manufacturers to at least partially qualify for the clean vehicle tax credit included in the Inflation Reduction Act.
Comments Requested on Services FTC Licensing Exception
Speaking on June 7 at a Texas Federal Tax Institute conference, Tracy Villecco of the IRS Office of Associate Chief Counsel (International) said the government is open to hearing comments on a fact pattern “where the withholding payment on a service payment is in respect to services performed within that source jurisdiction, similar to the single-country exception for royalties.”
OECD Countries Want to Aid Wider Adoption of CbC Reporting
Leaders from OECD member countries pledged to help developing countries implement the two-pillar plan to modernize corporate tax rules while calling on the OECD to aid those countries in introducing country-by-country reporting rules.
EU, U.S. Observers Say Green Goals Require Both Carrot and Stick
European Commissioner for Competition Margrethe Vestager said that taxing bad behavior is more efficient than rewarding good behavior for achieving clean energy goals, but sometimes subsidies are necessary to support innovation.
African Countries Talk Pillar 2 Top-Up Taxes, U.N. Tax Position
The African Union is seeking ways to protect its member countries’ tax bases, including adopting domestic minimum top-up taxes and formulating a common position to help shape the U.N. debate on international tax cooperation.
IASB Proposes Pillar 2 Tax Changes to SME Accounting Standard
The International Accounting Standards Board is seeking input on proposed temporary accounting relief for deferred taxes for small and medium-size enterprises in response to OECD-brokered pillar 2 global minimum tax rules.
Japan to Take Budgetary Steps to Help Its Chip Industry
Japan plans to use tax incentives to stimulate investment in its semiconductor industry, as well as biotechnology, storage batteries, and data centers. The move is part of Prime Minister Fumio Kishida's "new capitalism" agenda.
US-Chile Tax Treaty Passes Test at Key Senate Panel
A U.S.-Chile tax agreement was approved by the Senate Foreign Relations Committee, advancing it to a full Senate vote. The treaty with one of the world’s largest lithium producers, which was negotiated in 2010, is considered important for the U.S. manufacture of semiconductor chips.
NYSBA Tax Section Comments on Pillar 2 FTC Considerations
The New York State Bar Association Tax Section has submitted a report to the U.S. Treasury Department and the IRS regarding foreign tax credit considerations related to the OECD’s pillar 2 model rules, discussing considerations raised by pillar 2 taxes under the current IRS section 901, section 904, and section 960 rules; raising policy considerations for granting a credit for those taxes; and recommending related guidance.
Angel Assures That EU's SAFE Proposal Is Still in the Works
Benjamin Angel, director of direct taxation at the European Commission’s Directorate-General for Taxation and Customs Union, said that the removal of a proposal to address tax avoidance enablers from the European Commission’s agenda should not be overinterpreted.
Stellantis Plant Likely to Top $10 Billion in Canada Subsidies
Stellantis could receive C$19 billion in subsidies from the Canadian government for a new electric vehicle battery plant. Canada is competing with the US to attract production of battery cells after President Biden signed the IRA.
International Tax Stability? Latin America Dents OECD Armor
Mindy Herzfeld examines how actions taken by countries in South America and the Caribbean, and the treaties that bind them, could undermine the OECD two-pillar deal’s promise of international tax stability.
European Parliament Lawmaker Laments Stuck EU Shell Companies Rule
A law aimed at shell companies is stalled due to disagreements between EU member states. Some want it to require sanctions against tax-avoiding shell structures while others want it to be downgraded to an "exchange of information" system.
EU Push Crucial to International Tax Deal Finalization, Official Says
The EU is planning a directive for Pillar One similar to what was adopted for Pillar Two, and the framework is expected to be in place by July. An EU official said the move will catalyze a “political mass” for adoption of Pillar One at the international level.
Switzerland to Set Up One-Stop Shop in Pillar 2 Adoption Plan
Switzerland is seeking input on a proposal to minimize the administrative burden for multinational enterprises with business units across multiple Swiss cantons under a new supplementary tax regime aligned with OECD global minimum tax rules.
Commission Calls Out Luxembourg, Malta Over Tax Planning
The European Commission said in its country-by-country economic recommendations that aggressive tax planning in Luxembourg and Malta is still of concern, particularly regarding withholding taxes on outbound dividend, interest, and royalty payments.
G-7 Leaders Vow to Finish Pillar 1 Tax Convention Talks
The leaders of the G-7 countries are still aiming to quickly conclude talks on a multilateral convention that would implement pillar 1 of a two-pillar global corporate tax reform plan, according to their latest communique.
Australia Issues Draft Guidance on Intangible Arrangement
The Australian Taxation Office is soliciting comments on draft guidelines for its compliance and risk assessment framework on intangible arrangements between international related parties, revising a version from 2021.
Crown Dependencies to Adopt OECD Pillar 2 Tax Rules for 2025
Guernsey, the Isle of Man, and Jersey have confirmed that they will implement OECD-backed income inclusion rules and domestic minimum taxes, beginning in 2025, to ensure that large multinationals pay a 15 percent effective tax rate.
Bahamas Sets Out Potential Corporate Tax Responses to Pillar 2
The Bahamas is seeking stakeholder input on possible options for a new corporate income tax regime to support its implementation of global minimum tax rules under the OECD’s two-pillar international tax reform plan.
International Tax Stability? The China Factor
Mindy Herzfeld examines whether a multilateral economic arrangement that fails to fully consider how and whether the world's second largest economy will participate can truly bring stability to the international tax architecture, and how China's role in the deal might affect other countries' tax revenue and their economic competitiveness.
African Nations Warned Tax Incentives at Risk in Global Deal
An official from the African Tax Administration Forum said African countries must adopt minimum tax legislation to avoid losing corporate revenues under the global tax deal. They can use a domestic minimum top-up tax to get first rights to tax companies in their jurisdictions at the 15% minimum rate.
New Zealand Proposes Global Minimum Tax Rules to Start in 2024
The Kiwi government has presented draft legislation to implement global anti-base-erosion (GLOBE) rules under pillar 2 of the OECD’s two-pillar tax reform plan beginning next year, but the new rules will not raise much revenue.