2023

The Inflation Reduction Act, signed into law in August 2022, provided tax credits and other support for clean-energy projects. Concerned that these subsidies will draw investment away from Europe, the European Union (EU) wants to provide tax breaks and other aid to clean-tech companies. The EU's proposed response said that state-aid rules could be loosened to make it easier for governments to back new investment in clean-tech production facilities, including through tax breaks.

This Editorial considers the current approach of keeping the unanimity rule for the making of tax legislation in Europe, while at the same time consistently exploring alternative pathways to circumvent it. It argues that this approach is a reflection of the trade-off between (perceived) national tax sovereignty on one hand, and tax efficiency and fairness on the other hand.

The article analyzes strategies that low-income countries and high-income countries might undertake in response to the GloBE rules on the assumption that are indeed implemented by a critical mass of countries.

Baistrocchi explores Global tax hubs which he describes as the black boxes of the international tax regime. The paper offers the theory of global tax hubs as an intermediation market. It argues that tax hubs are the matchmakers of the international tax regime.

Heinemann and Stiller analyze the impact of the widely introduced e-invoicing in Italy on cross-border value-added tax fraud. They calculate trade gaps based on product flows on the most detailed level between Italy and the remaining countries of the European Union with results suggesting a significant decline in cross-border fraud in response to the introduction of mandatory e-invoicing, providing an important rationale for the application of this measure by other countries.

This paper provides a high-level overview of Pillar Two Global Minimum Tax in terms of its policy objectives, technical design and implications for Canada. After teasing out some significant known and unknown challenges, it offers some thoughts on whether, and if so, how and when Canada can proceed with implementation.

Navarro’s paper is aimed at depicting the rather asymmetrical state of affairs on the access to dispute resolution remedies in instances of tax abuse. It also purports to demonstrate that there are compelling policy reasons to support granting access to both mutual agreement and arbitration procedures in these cases and to criticize the incoherencies that originate from the existing restrictions.