2026

A U.N. draft protocol published July 20 would bring automated digital services—including online advertising, social media, search engines, and online gaming—into scope of source-based taxation, allowing states to levy gross-basis taxes on income paid to residents of other signatory states. The draft, alongside a companion protocol on dispute resolution, will be discussed at the next U.N. negotiating session in New York August 3-14, as delegates work toward finalizing a framework convention and early protocols by late 2027; it would also explicitly cover existing DSTs and equalization taxes with similar economic effect.

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The IMF on July 17 published a working paper on the taxation of cross-border services and the various tax instruments that international governments utilize, finding that governments that rely on destination-based taxation better approach issues that come from digital services trade.

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The U.N. has released its latest draft of the framework convention on international tax cooperation, including new measures that establish a fair allocation of taxing rights across participating jurisdictions to reduce double taxation risks; prevent tax avoidance and evasion activities from high-net-worth individuals; focus on tax-related illicit financial flows; promote mutual administrative assistance; support the effective prevention and resolution of taxpayer disputes; and establish information exchange procedures.

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Karan Bhatia, Google's global head of government affairs and a former deputy USTR, argued in a July WSJ op-ed that the Trump administration's digital trade agreements with countries like Indonesia, Cambodia, and Malaysia are building the foundation of a modernized global trading system for the AI era, addressing 146 digital barriers across 43 jurisdictions identified by the USTR, including discriminatory digital taxes and data localization rules. Bhatia urged the administration to enforce existing commitments and expand the roughly 20 countries that have accepted core digital trade principles into a unified framework rather than a fragmented patchwork of bilateral deals.

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Hoor explores the European Commission’s proposed tax omnibus directive, arguing that it will undermine tax sovereignty within the EU and that member states should reject it.

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On a frigid Thursday last December, 50 finance and technology experts shuffled into the International Monetary Fund’s Washington, DC, headquarters with a dire mission: to war-game how artificial intelligence might upend the global economy.

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The United Kingdom HM Revenue and Customs July 13 issued a policy paper on proposed finance bill measures to implement the OECD side-by-side package and updated administrative guidance to the Pillar 2 Global Anti-Base Erosion (GloBE) Model Rules, for purposes of the multinational top-up tax (MTT) and domestic top-up tax (DTT) for multinational enterprise (MNE) and large domestic groups with annual global revenues exceeding 750 million euros (US$858.8 million). The proposal includes measures to: 1) introduce side-by-side, ultimate parent entity (UPE), substance-based tax incentive, and simplified effective tax rate (ETR) safe harbors; 2) extend the transitional safe harbor election to accounting periods beginning on or before Dec. 31, 2027, and ending on or before June 30, 2029, effective for accounting periods beginning on or after Dec. 31, 2023; and 3) amend rules for discontinued operations, companies in distress, the election to treat certain top-up amounts as zero, and DTT determinations for group members. [United Kingdom, Government Portal, 07/13/26] .

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This OECD announcement presents updated analysis of the economic impact of the Global Minimum Tax, combining new estimates with preliminary evidence from its first year of implementation. It highlights expected increases in multinational effective tax rates, reductions in tax rate differentials and profit shifting, and higher global corporate income tax revenues, while preliminary 2024 data show no statistically significant negative effects on investment or employment. The announcement also places the findings in the context of BEPS reduction and broader international tax cooperation.

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This official USTR announcement imposes a 25 percent tariff on certain Brazilian imports following a Section 301 investigation into Brazilian trade practices. The investigation addressed measures involving digital trade and electronic payment services, preferential tariffs, intellectual property, ethanol market access, and other cross-border trade issues. The action reflects the use of tariffs and trade enforcement measures in response to disputed foreign economic policies.

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As global competition for mobile capital intensifies, tax administration is increasingly viewed as a core component of a jurisdiction’s investment offering. The UK’s Advance Tax Certainty Service, or ATCS, reflects this shift, positioning tax certainty as a strategic lever to enhance the attractiveness of the UK for major long-term investments.

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