2026
Expenditure-Based Investment Tax Breaks Have Merit, OECD Says
Expenditure-based investment tax incentives can provide more value for money than income-based incentives and should be considered by policymakers as the basis for new incentive design, the OECD said. See OECD Guide to Investment Tax Incentives
EU Signals Limits to Pillar 2 Simplification Push
Teaser: The article discusses the European Commission’s warning that OECD pillar 2 simplification efforts must remain compatible with the EU pillar 2 directive because there is no short-term plan to amend the directive. Additional simplification may be possible through safe harbors, but only if those safe harbors fit within EU law, including Article 32 and the framework used for the U.S. side-by-side package.
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Circular AI Deals Threaten to Trip Transfer Pricing Rules
The growing web of circular deals among billion-dollar companies funding AI’s explosive growth is feeding investor worry about a massive bubble. For corporate tax departments there’s another concern, maybe unrecognized: the risk of transfer pricing regulation.
Tariffs Raised Consumers’ Prices, but the Refunds Go Only to Businesses
This article examines the aftermath of invalidated U.S. tariffs and the government’s refund process, highlighting how repayments are directed to businesses rather than consumers who bore much of the economic burden. It raises important questions about the incidence of tariffs and the distributional consequences of trade policy.
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An Updated Look at the Policy Justifications for the U.K. Digital Services Tax
The article argues that the original policy justifications for the U.K. digital services tax have weakened because BEPS reforms, U.S. international tax changes, and the implementation of pillar 2 have substantially changed how large digital multinationals report and pay tax. It criticizes the DST as an extraterritorial gross-receipts tax that functions more like a tariff or back-door VAT, creating trade friction with the United States while sitting uneasily with treaty-based income tax principles.
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Relevance of the Permanent Establishment Definition in the U.N. Model
Teaser: The article examines whether the U.N. model tax convention should update its definition of permanent establishment to address digitalized, globalized business models, especially through nonphysical nexus concepts such as significant economic presence. Articles 12B and 12AA already give source countries substantial taxing rights over automated digital services and cross-border services, often on a gross or simplified net-hybrid basis, while expanding the PE definition could force source countries into more complex net-basis taxation and transfer pricing disputes.
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Digital Tax Failure Risks Unilateral Measures, EU Official Says
Failure to find a multilateral solution on the taxation of the digital economy would make fresh regional or unilateral measures “almost unavoidable,” a senior European Commission official said.
War in Iran Gives New Fuel to a Tax Debate in Australia
This article explores how geopolitical conflict is influencing tax policy debates in Australia, particularly regarding the taxation of natural resource exports. It focuses on whether current tax regimes adequately capture revenue from multinational energy companies.
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