2023

European governments are increasingly turning to windfall taxes to raise revenue and tackle public anger over companies making high profits during the cost-of-living crisis. The taxes are being imposed on a variety of sectors, including energy and banks.

Australia is planning its consultation on the global minimum tax in three phases, the tax office announced on Friday.

Japan is steadily adopting the 15% global minimum tax proposed by the OECD. In March, the Japanese Diet legislated the 2023 tax reform package providing its basic framework, followed by governmental and ministerial regulations issued by the Cabinet and the Ministry of Finance in June.

Poland is challenging the legal basis for the EU’s carbon border tax at the Court of Justice of the EU.

The United Nations has identified three systems — two of which would include legally binding provisions — that it could host to promote inclusivity for developing countries in international tax cooperation, according to a draft report.

UN Secretary-General António Guterres has called for the UN to play a bigger role in shaping global tax policy. Guterres said that the OECD, which has traditionally led global tax discussions, is too exclusive and opaque.

Half of Switzerland’s cantons are expected to raise CHF 530 million (about $606 million) collectively in the first year of implementation of global minimum tax rules under pillar 2 of the OECD’s global tax reform plan.

Bermuda is consulting on implementing a new corporate income tax regime in response to global minimum tax rules that are part of the OECD’s plan to modernize the international tax system.

Russian President Vladimir Putin signed a decree that suspends double taxation treaty benefits with countries it calls “unfriendly” because of the sanctions they have imposed on Russia after it invaded Ukraine.

The United Nations should assume a bigger role in setting global tax rules, the UN’s secretary general said Tuesday in a draft version of a long-awaited report.

Russian President Vladimir Putin signed a decree suspending double taxation agreements with the US, UK, Japan, Australia, South Korea, Singapore, Canada, and most European countries.

Senate Finance Committee leaders are planning to mark up legislation this fall that would alleviate double taxation for US and Taiwan businesses via the tax code.

Switzerland is set to generate more than CHF 530 million ($600 million) in additional tax revenue in the first year under a 15% minimum tax rate, according to an update from the Swiss Federal Department of Finance.

Bermuda is proposing to establish its first-ever corporate income tax in 2025 in line with the global minimum tax rules agreed upon by more than 130 countries in 2021.

Republicans oppose the global minimum tax, arguing that it would hurt American businesses and workers and that it would violate the Constitution. Proponents dismiss these claims, arguing Republicans oppose the tax because they want to help corporations get to the lowest tax rate possible, even at the expense of the federal budget, other taxpayers, and the ability of governments worldwide to build fair and efficient tax systems.

Martin A. Sullivan explains how the pillar 2 global minimum tax could affect tax competition.

The Canadian Department of Finance is seeking public input on new draft legislation that would implement OECD global minimum tax rules and on an amended bill providing for a controversial digital services tax.

On August 4, Canada released an explanatory note about the Digital Services Tax Act, which goes into effect as soon as January. It is a 3 percent tax on the revenues of large technology companies, including those with online marketplaces, like Walmart and Amazon, and social media platforms, like Meta.

Canada is seeking feedback on a revised version of its digital services tax after declining to sign on to an OECD-penned outcome statement that included an extension of the moratorium on new digital service taxes to the end of 2024.

It’s important to scrutinize the OECD’s two-pillar global tax reform plan and carefully weigh its economic implications before committing to implement it, the West African Tax Administration Forum told its members.

Slovakia is seeking feedback on draft legislation that would implement a 15% minimum corporate tax rate. The proposal includes a domestic top-up tax and would take effect in December 2023.

Germany stands to benefit under both pillars of the OECD’s global tax reform plan, but its tax revenue gains might not be very high, according to research commissioned by the German Ministry of Finance.

Luxembourg’s Council of Government has approved draft legislation to transpose into domestic law the EU’s directive implementing global minimum tax rules under pillar 2 of the OECD’s two-pillar corporate tax reform plan.

Thirteen House Ways and Means Committee Republicans signed a July 31 letter accusing Treasury of failing to consult with Congress over global tax negotiations that they claim will cost taxpayers at least $56 billion.

Luxembourg approved a legislative proposal to implement the global minimum tax rules. The proposal introduces two new tax rules, a top-up tax and an undertaxed profits rule, to ensure that multinational companies are taxed at a rate of at least 15%.

Germany is expected to see a moderate increase in tax revenue from the OECD-led global tax reform, with additional revenue of between €2.75 billion and €3.9 billion per year between 2024 and 2026. However, the revenue increase could be lower if multinational groups escape the scope of the reform.

Republicans and the US Chamber of Commerce are urging the Treasury Department to reexamine its positions on key provisions of the global tax deal, including the global minimum tax. They argue that the deal could harm US businesses and want Treasury to seek more input from Congress.

Lee A. Sheppard examines IRS Notice 2023-55, which provides relief from the foreign tax credit rules, addressing why taxpayers are happy about the notice.

Mindy Herzfeld examines how recent congressional efforts to bypass traditional tax treaty requirements for encouraging semiconductor chip trade with Taiwan could be models for innovative international tax agreements.

Ryan Finley explains that some countries' distrust of quantitative screens threatens to derail the OECD's simplified transfer pricing approach for baseline distributors under amount B.

Nana Ama Sarfo reviews the OECD's latest Tax Transparency in Africa report and notes how developments in trade and beneficial ownership transparency could help advance tax transparency on the continent.

Developing countries should think long and hard before signing on to an OECD-brokered two-pillar global corporate tax reform plan while also considering alternative measures, an intergovernmental policy research organization said.

Some developing countries are reluctant to ratify the OECD-led global tax pact until other OECD countries, especially the US, choose to do so. They believe the pact will yield a small amount of revenue and that they risk losing their taxing rights if they ratify it before developed countries do.

Vietnam's investment ministry is considering ways to compensate foreign investors who will be affected by the global minimum tax. The measures include providing financial support, training and R&D assistance, and tax breaks.

Ireland’s Department of Finance is asking for more public input on new aspects of its plan to transpose the EU’s pillar 2 directive, incorporating features of the OECD’s second tranche of pillar 2 administrative guidance.

Ireland is seeking feedback on the six main areas of draft legislation implementing the OECD's 15% global minimum tax. The draft legislation includes safe harbor rules for transitional CbCR and UTPR reporting.

Latin American countries have created a new forum to cooperate on tax issues in response to concerns that the OECD's global tax agreement does not benefit developing countries enough. The forum will be facilitated by the United Nations Economic Commission for Latin America and the Caribbean.

The Vietnamese government will send a draft resolution to the National Assembly proposing the application of global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan starting January 1, 2024.

Israel's parliament approved tax breaks for investors in Israeli tech startups to boost investment in the sector. Tax credits are available to private investors in pre-seed and seed rounds, as well as tax relief for companies that acquire tech firms and foreign banks that offer loans to Israeli tech startups.

The US semiconductor industry is urging the IRS and Treasury to broaden eligibility for the tax credit for research and manufacturing of semiconductors. The industry wants more of the supply chain to benefit.

Republican lawmakers want the Financial Accounting Standards Board to withdraw its proposal to force companies to report more details about how much they pay in income taxes and where. The lawmakers said the proposal would expose US multinational companies to enhanced review and tax audits by foreign governments and put them at a competitive disadvantage.

Businesses want more opportunities to address complexities in the global minimum tax following new guidance from the OECD. They say the guidance is complex and challenging to implement and call for more simplification measures.

The US is waging a subsidy war with China in an attempt to maintain its technological lead. The European Union is responding with plans to invest billions of euros in clean energy and semiconductor manufacturing.

Tax Justice Network says the UN needs to be involved in global tax administration to help stop $4.7 trillion in lost taxes to multinational companies and wealthy individuals over the next decade.

Martin A. Sullivan explores the concerns of legislators at a recent congressional hearing on the OECD’s minimum tax proposal.

The IRS is providing temporary relief from expansive foreign tax credit rules, allowing taxpayers to use modified old rules, as the agency reexamines provisions that have swept far more broadly than many practitioners thought necessary.

In response to OECD global minimum tax rules, the U.K. Endorsement Board has accepted amendments to a key international accounting standard that provides temporary relief from deferred tax accounting and targeted disclosure requirements.

The IRS is temporarily allowing taxpayers to follow the old rules on the foreign tax credit while it considers whether to modify its newer, controversial standards for claiming the credit. This is a relief for companies that have complained that the new rules are too strict.

Despite multilateral attempts to avoid them, digital services taxes will persist, and it would be better for countries to focus on ensuring that those taxes are adopted and interpreted consistently, a U.N. official said.

A UN official said DSTs are here to stay and countries should find a uniform way to administer them. He suggested using Article 12B of the United Nations model treaty as a starting point.