Moves to Adopt Pillar 2 Will Help U.S. in OECD Guidance Talks
U.S. progress on implementing OECD global minimum tax rules would put American negotiators in a better position to ask for U.S.-friendly pillar 2 administrative guidance, according to a top Treasury official.
EU Talks on Remote Workers Show Progress Is Possible on PEs
An EU task force looking at taxing rights over remote teleworkers appears to be leaning toward bilateral arrangements, and the possibility of triggering permanent establishments is a recurring theme in the talks.
JCT Mulling Ways to Refine U.S. Pillar 2 Revenue Estimates
The Joint Committee on Taxation is monitoring the implementation of global minimum tax rules around the world as it considers how to update its analysis of pillar 2’s potential U.S. revenue effects.
Canada Studies IP Box Initiative
Nathan Boidman, Marc André Gaudreau Duval, and Michael N. Kandev give an overview of IP box regimes, discuss whether it would be advantageous for Canada to adopt one, and examine the Canadian government’s perspective on the issue.
Senate Wins Fight With House Over OECD Budget
House appropriators tried to punish the OECD for its tax policies by eliminating its federal funding for fiscal 2024, but the organization instead got a 4 percent budget boost, according to a State Department document.
Liechtenstein Approves Ordinance Clarifying Pillar 2 Legislation
The Liechtenstein government has approved an ordinance that clarifies the interpretation and implementation of the country’s new law implementing a global minimum tax on large corporate groups.
The Implementation of Global Minimum Tax in ASEAN Countries
Melani Dewi Astuti provides a status check on Southeast Asian countries’ adoption of the global anti-base-erosion rules and examines the challenges these countries face in the wake of pillar 2, including limitations on offering tax incentives.
OECD to Soon Release Updated Pillar 2 Commentary, Official Says
The OECD expects to publish in the coming weeks updated commentary for the pillar 2 global anti-base-erosion rules that will incorporate previous rounds of administrative guidance, an OECD official said.
EU Council Presidency Closing In on FASTER Directive
The list of outstanding issues in the European Commission's Faster and Safer Relief of Excess Withholding Taxes proposal is narrowing, but EU member states are still divided over which transactions to exclude from the text.
EU Likely Won’t Ratify U.N. Tax Convention if It Undoes OECD Work
The EU will engage with the U.N. tax cooperation process to reach a broad consensus, an EU tax official said, stressing that the process should not undo important work on the OECD two-pillar plan.
European Commission Proposes Path to End Unanimity in Tax Votes
The European Commission has raised the possibility of moving the EU Council from unanimity to qualified majority voting on tax and other matters as part of a strategy for integrating new member states.
Saint-Amans Suggests External Tax Borders to Fund EU Budget
Pillar 2 of the OECD’s global tax reform plan could have presented an opportunity to merge resources for the EU budget — for example, through the undertaxed profits rule — according to an international tax expert.
Offering Refundable Tax Credits Is Not ‘Gaming’ the GLOBE Rules
Jefferson VanderWolk takes exception to criticism of the use of refundable tax credits, explaining that in fact refundable tax credits are a legitimate policy response to the current GLOBE rules.
EU Prepares for Future Talks With U.K. on Harmful Tax Practices
The EU will soon put in motion a 2020 commitment to hold annual talks with the United Kingdom regarding measures to counter harmful tax practices, according to a draft European Commission/EU Council statement.
Funding Needed to Make U.N. Tax Talks Inclusive, Colombia Says
The terms of reference for a proposed U.N. convention on international tax cooperation should provide for funding to ensure that the least developed countries can attend upcoming negotiations in New York, a Colombian official said.
Hot Assets, Source, and Hypothetical Sales: How the Rawat Court Made Hash Out of Simple Rules
Kimberly S. Blanchard examines the U.S. tax treatment of a sale of a partnership interest by a foreign person and explains why the Tax Court’s decision in Rawat was incorrect.
Should Digital Services Taxes Be Creditable?
Reuven S. Avi-Yonah argues that because digital services taxes are used to offset the taxation impediment that “digital giants” cannot be taxed under permanent establishment rules, they should qualify as an in-lieu-of tax and therefore be creditable.
EU Sends Mixed Signals on Tax and Capital Markets Union
European finance ministers said they are committed to acting in the collective interest to boost the EU Capital Markets Union, but they insist that any related tax initiatives be left to the member states.
Committee Recommends New Zealand's Pillar 2 Rules Start in 2025
New Zealand’s pillar 2 global minimum tax rules should start taking effect in 2025 and be incorporated into law by reference to OECD model rules and guidance, a parliamentary committee has recommended.
Practitioners Expect NSBA Case to Influence More CTA Challenges
In the wake of a significant and surprising district court decision holding the Corporate Transparency Act unconstitutional, practitioners expect the case to influence other challenges to the beneficial ownership reporting regime.
What Will It Take to Get Big Pharma Profits Into the United States?
Martin A. Sullivan examines Form 10-K data from multinational pharmaceutical companies indicating that recent tax policy changes haven’t induced them to shift profits back to the United States, and he explores why that is a different story for tech companies.
U.K. Tax Authorities Release New Guidance on the Risk Framework
Richard S. Collier and Ian F. Dykes explain the new rules released by HM Revenue & Customs on the transfer pricing risk framework and detail the relationship with the OECD Transfer Pricing Guidelines and the base erosion and profit-shifting project.
W&M Members Debate Whether U.S. Should Walk Away From Pillar 1
House taxwriters coalesced over their worries about the impact of the OECD global tax deal’s approach to digital services taxes but found little common ground across the aisle on whether the U.S. response should be to scrap participation or stick with the talks.
Company Challenges Reg for Ignoring Downward Attribution Change
In Solar New US Holding Corp. v. Commissioner, a Tax Court challenge that could have implications for other rules, a company argues that the statutory repeal of the downward attribution exception makes the definition of a controlled foreign corporation under anti-inversion regulations invalid.
'Phantom FDI' in Sharp Decline, European Commission Says
So-called phantom foreign direct investment, often undertaken through shell special purpose vehicles, has declined sharply since 2021, the European Commission said, noting the U.S. Tax Cuts and Jobs Act’s major effects on cross-border financial flows.
U.S. Could Lose Billions Under OECD Pillar 1 Tax Rules, JCT Says
Revised profit allocation rules under pillar 1 of the OECD’s two-pillar global tax reform plan could have cost the United States as much as $4.4 billion in 2021, according to caveated estimates from the Joint Committee on Taxation.
Stakeholders: Australian Draft Software Rules Depart From Tax Norms
Trade groups have warned the Australian Taxation Office that its draft software royalty rules do not properly distinguish between payments on copyright articles and contravene preexisting international norms regarding the taxation of software.
A Tale of Two Subject-to-Tax Rules
Sol Picciotto, Jeffery M. Kadet, and Bob Michel analyze and compare the two proposals for a subject-to-tax rule to be included in tax treaties, one from the U.N. Tax Committee and the other from the G20/OECD inclusive framework on base erosion and profit shifting.
Canadian Official Defends DST Against U.S. Backlash
An official with Canada’s Department of Finance has confirmed the government’s plan to proceed with its unilateral digital services tax despite U.S. opposition, underscoring that several other large economies have already implemented similar measures.
PTEP Basis Notice, Pillar 2 Guidance, Treaty Update, Crypto Reporting Extended, and Worthlessness Regs
Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler review guidance and new regs on section 174, group membership implicit support, pillar 2, and catalog comments and recommendations for a pillar 1 implementation treaty.