2026

With the national debt above $40 trillion and the Social Security Trust Fund six years from insolvency, the author questions how far the United States should subsidize foreign governments through the foreign tax credit and argues that, absent a coherent bipartisan policy on the credit, the positions of both Democrats and Republicans leave the U.S. Treasury losing revenue to foreign governments. She points to a bill from Rep. Ron Estes, R-Kan., that would expand taxpayers’ ability to credit foreign taxes, and to the new section 901 regulations, which are not yet in effect.

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The OECD/G20 Inclusive Framework on BEPS held its 18th plenary meeting in Paris on October 28-30, 2026, with more than 410 delegates from 131 jurisdictions and observers from 12 international organizations, and welcomed Guatemala as its newest member; membership has grown from 82 to 148 over the past decade. Marking the Inclusive Framework’s 10th anniversary, members reflected on its achievements, shared implementation experience, and discussed the ongoing work program.

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The author rejects the argument of Raffaele Russo and his co-authors that digital services taxes are justified as a way to capture value created by users, contending that value creation is a vague concept that has never been a basis for taxation in any jurisdiction. He prefers the view of Peter A. Barnes and H. David Rosenbloom that, where consumers are a remote seller’s only connection to a jurisdiction, the seller’s sales there can properly bear a destination-based consumption tax.

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Treating pretax losses in the United States and pretax profits abroad as the apparent goal of U.S. pharmaceutical companies’ transfer pricing, the author examines whether seven of them (AbbVie, Amgen, Bristol-Myers Squibb, Eli Lilly, Gilead Sciences, Merck, and Pfizer) achieved that result, company by company and year by year, from 2007 to 2025. The conjectured mechanism is recording revenue and operating expenses in the United States and operating income abroad; under a weaker form of the hypothesis, U.S. pretax income need only be small relative to foreign pretax income.

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At its October 28-30 meeting in Paris, the OECD/G20 Inclusive Framework asked the OECD secretariat to prepare a plan by the end of 2026 to “swiftly advance the work” on taxing the digital economy, after members discussed “ambiguities and gaps” in how current rules apply to digital business models. Members agreed to continue discussions to reach a shared understanding of the challenges and to consider the merits and practicalities of coordinated solutions to prevent fragmentation of the international tax system. The Inclusive Framework shelved negotiations on Pillar One in 2025.

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The UK is forecasted to rake in £200 million ($267 million) more in taxes from multinationals than previously expected this year under the global minimum tax, new data shows.

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The UK confirmed it will implement the OECD’s agreement to carve out US-headquartered companies from key parts of the global minimum tax into law as part of its 2026 budget.

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The UK will introduce a new foreign tax credit mechanism to help mitigate double taxation of UK residents who are members of US limited liability companies and similar reverse hybrid entities.

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The European Court of Justice (ECJ) Oct. 22 issued an Advocate General opinion for Joined Case Nos. C‑287/25 and C‑289/25, on French tax rules for the deductibility of losses incurred by nonresident subsidiaries. The taxpayers, French parent companies, sought to deduct final losses incurred by nonresident subsidiaries that were no longer being utilized in their state of residence. The French tax authorities denied the deductions, claiming nonresident subsidiaries couldn’t participate in a French tax-integrated group. Upon request for a preliminary ruling, the Advocate General opined that Articles 49 and 54 of the Treaty on the Functioning of the European Union (TFEU): 1) don’t place parent companies with resident and nonresident subsidiaries in objectively comparable situations where France doesn’t tax the nonresident subsidiary’s profits under domestic law or double tax treaty; and 2) permit France to deny the offset of final losses of nonresident subsidiaries against the profits of a French tax group under its tax integration regime. [European Union, EU Legal Database, 10/22/26].

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