2023

The OECD will soon begin working on broader guidance tackling hybrid arbitrage arrangements involving the pillar 2 global anti-base-erosion rules, and it could release that guidance this year, an OECD adviser said.

Ryan Finley explains why it’s wrong to read special exclusions for items like goodwill into the cost-sharing regulations’ definition of a platform contribution.

The global anti-base-erosion rules could raise as much as $192 billion annually in extra corporate tax revenue and reduce low-taxed profits worldwide by more than two-thirds, according to an OECD working paper.

Treasury Secretary Janet Yellen says new requirements for beneficial ownership information reporting implemented by the department’s Financial Crimes Enforcement Network are leading to a noticeable improvement in tax transparency efforts.

Martin A. Sullivan uses several data sets to explore how the substance-based income exclusion affects pillar 2 tax on the profits of U.S. multinationals in various industries and jurisdictions.

South Korea’s tax authority has created an international tax response team to administer new global minimum tax and digital taxation rules and participate in international talks under the OECD’s two-pillar global tax reform plan.

Vietnam’s proposed investment support fund created in response to its adoption of global minimum tax rules is necessary to ensure the country’s continued competitiveness and attractiveness to business, according to a top Vietnamese official.

Lucas de Lima Carvalho explains the importance of control in the taxation of controlled foreign corporations and reviews the ordinary meaning of the word and how it relates to its use in tax legislation.

Gary Clyde Hufbauer argues that low taxation of intellectual property sourced abroad provides a major, if hidden, tax incentive, and that taxing such income at a higher rate is a bad policy choice that will hinder future U.S. innovation.

Nana Ama Sarfo discusses some expected tax transparency activity in 2024.

Martin A. Sullivan examines how the pillar 2 anti-base-erosion rules may affect incentives and how some of those detrimental effects could be mitigated.

Belgium is inheriting a heavy tax agenda as it takes over the EU Council presidency from Spain in the new year.

Colombian President Gustavo Petro calls for a tax reform proposal to lower the country’s high corporate tax rate, remove the VAT on tourism-related activities and create tax exemptions for clean energy. 

The missions given to EU Tax Commissioner Paolo Gentiloni when he took office have been fulfilled, but the European Commission still has some tax initiatives in the drawer for the closing months of its mandate.

Bulgaria, Croatia, and the Netherlands recently published laws implementing an EU directive providing for global minimum tax rules in line with an OECD-brokered, two-pillar plan to revamp the international corporate tax system.

 European Commissioner for the Economy, Paolo Gentiloni, discusses the application of the OECD’s minimum tax rules in jurisdiction around the world. According to Gentiloni, the global minimum tax will put an end to the downward spiral of corporate tax rates over the last four decades. 

Belgium's Chamber of Representatives has adopted a draft law transposing the EU directive on public country-by-country reporting, with some changes aimed at making it stronger.

The U.N. General Assembly has adopted a resolution that aims to move negotiations on international tax matters from the OECD to the U.N.

A Swiss qualified domestic minimum top-up tax will go into effect January 1, 2024, as part of an OECD/G-20-led two-pillar plan to modernize global corporate tax rules.

The European Commission has posted a lengthy FAQ in response to a wide range of technical questions from member states and other stakeholders about the application of the EU’s global minimum tax directive.

Corporate tax advisers are gearing up clients for 2024 tax code changes to research and development expenses, an election year that could determine the fate of some high-profile laws, and corporate minimum taxes, among other regulatory actions from the IRS and Treasury Department. 

The IRS updated its clean vehicle tax credits FAQs sheet, emphasizing that vehicles and dealers must follow the rules to be eligible for credits. Vehicles with battery components manufactured or assembled by a foreign entity of concern aren’t eligible for any amount of new clean vehicle credit, even if the vehicle meets the critical mineral applicable percentage requirements for 2024. In addition, qualified manufacturers are required to make an attestation demonstrating compliance with the foreign entity of concern requirements. 

Jeffrey Tebbs and Caroline Reaves of Miller & Chevalier Chartered analyze recent guidance addressing the interaction of the US foreign tax credit system with Pillar Two top-up taxes coming into effect in 2024. According to Tebbs and Reaves, it isn’t clear that Pillar Two taxes can (or should) be excluded from the US exceptions for high-taxed income. Nor is it clear how a Pillar Two tax could be ineligible for the US foreign tax credit but nevertheless result in a deemed dividend inclusion. 

Hong Kong started consulting on its implementation of global minimum tax rules for 2025 on the same day the U.K. government announced it is seeking input on more draft guidance for its pillar 2 regime.

Gibraltar plans to introduce legislation in 2024 to implement a qualified domestic minimum top-up tax on local subsidiaries and permanent establishments of large multinational enterprises.

Proposed criteria that would determine who gets generous tax credits for producing hydrogen are too strict and could stifle the industry, energy companies say.

Osler’s Patrick Marley and Kaitlin Gray say Canada’s latest move to implement a digital services tax is likely to encounter political and practical challenges related to the tax itself and the OECD’s Pillar One. 

Baker McKenzie’s Juan David Velasco and Juan Diego Fernandez analyze fiscal challenges arising from economic digitization and Colombia’s recent tax reform. New regulations taking effect on Jan. 1, 2024, consider nonresidents ‘significant economic presence’ as an alternative to the OECD’s proposed guidelines for its two-pillar approach.  

Discussions on a plan for international tax cooperation under U.N. auspices is feasible, but rethinking the OECD’s two-pillar global tax reform plan would be “a giant waste of time,” a top European Commission official said.

Brazil signed into law an overhaul to simplify a patchwork of tax codes from its states and thousands of municipalities.

Robert Goulder considers Canada’s refusal to extend the global DST moratorium beyond 2023.

Kevin Brogan, Alistair Pepper, and Daren J. Gottlieb consider the implementation of the pillar 2 global anti-base-erosion rules and ways in which revisions to them may create more consistency with policy objectives.

Mindy Herzfeld looks back at key tax litigation from 2023, including Christensen v. United States.

The United States expects an extension of the pillar 1 negotiation deadline into 2024 and is working to extend the digital services tax moratorium as well, Treasury’s outgoing OECD negotiator said.

The IRS and Treasury issued further interim guidance for the corporate alternative minimum tax, addressing potential double counting of income from controlled foreign corporations and modifying prior guidance for tax consolidated groups.

The U.K. will impose a tax on imports with a big overseas carbon footprint, the government announced, in a major new commitment that aligns the country with the EU in efforts to use the global trade system to tackle climate change.

Africa could lose as much as $25 billion annually due to the European Union’s new carbon border tax, hurting the continent’s trade by penalizing valued-added exports such as iron and fertilizers, African Development Bank Group President Akinwumi Adesina said.

The 15% global minimum tax, part of the 2021 global tax pact agreed to by more than 140 countries, seeks to end the “race to the bottom” that has nations competing to offer the lowest corporate tax rates to draw big business investment to their shores.

Australia started consultations with digital service providers to inform them on global minimum tax implementation plans, data requirements, and potential solutions for future compliance.

The United Nations’ framework for international tax cooperation is likely to initially include tackling illicit financial flows and cross-border services, two key areas of concern for developing countries, a UN official said.