2023

Fed up with a stalled international effort at the Organization for Economic Cooperation and Development (OECD) to rein in the use of tax havens and put a global corporate minimum tax into force, African countries at the United Nations are now leading a charge for greater transparency and fairness in international tax.

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.

Reuven S. Avi-Yonah reflects on the relationship between investment incentives and the possible neutralization of pillar 2 effects.

The Indian government has proposed abolishing its controversial 2 percent equalization levy to help advance the OECD-brokered two-pillar global tax reform plan, Indian Finance Minister Nirmala Sitharaman said.

The Indian government plans to eliminate a highly controversial so-called angel tax on startup investments for all investors and to reduce the corporate tax rate for foreign companies by 5 percentage points.

The latest draft setting out terms of reference for a U.N. framework convention on international tax cooperation does not account for EU concerns that early protocols should be negotiated separately from the convention.

Robert Goulder comments on the Labour Party’s victory and the rise of Chancellor of the Exchequer Rachel Reeves.

In news analysis, Lee A. Sheppard examines inversions from the perspective of closely held business owners attempting to restructure their corporate entities to escape the effects of political instability.

The OECD has released a package of pre-application templates to assist multinational groups with their international compliance assurance program applications, which must contain specific information and overviews of transactions.

The OECD is already eyeing other pressing profit attribution issues, including those related to global mobility, now that only minor items for a mandatory amount B still need to be negotiated, an OECD official has said.

A corporate proposal for a permanent country-by-country reporting safe harbor under the pillar 2 global anti-base-erosion rules could help make the EU more business friendly, according to a European Commission official.

The OECD is working on identifying jurisdictions that are planning on adopting the optional amount B transfer pricing simplification framework and will likely release a list in October, an OECD official said.

The European Commission’s tax decluttering and pro-competitiveness agenda will probably enhance its business-friendly image and build a bridge between pillar 2 and the anti-tax-avoidance directive, an EU official said.

Multinational enterprises may have reduced their base erosion and profit-shifting activity in the past few years, but the practice is still ongoing, according to the most recent country-by-country reporting data.

Three multinational music streaming companies have mounted a challenge to a Canadian streaming services tax in federal court, according to a digital music advocacy group that claims the levy is bad policy.