Int'l Tax News

African nations face a continued risk of losing revenue to developed countries that apply the global minimum tax despite redesigned rules that feature a carve-out for US multinational companies, a group of the continent’s countries argued.

A large swath of countries pushed back against a proposal that the United Nations play a role in encouraging the exchange of tax information between nations over concerns the move would impose obligations on governments.

The article explains the debate over new U.N. Model article 12AA, which would let countries impose gross withholding tax on cross border services even without a permanent establishment. It cites an ICC commissioned Oxford Economics report warning the rule could reduce services trade and investment and ultimately lower developing country revenues, while supporters say it is a simpler way to expand source country taxing rights in a digital economy. For practitioners, the key issues will be how countries define covered services, set rate caps, coordinate credits, and handle disputes if 12AA is adopted.

To read the document, it be can be read here.

The IRS’s final regulations for foreign tax credits for digital taxes cast a broader net than just addressing treatment—they may prevent taxpayers from obtaining foreign tax credits because of artificial intelligence, which enables intellectual property to migrate seamlessly across borders.

A growing number of foreign multinationals are exploring whether to relocate their parent companies to the US, with interest spurred in recent weeks by a deal struck at the OECD exempting American businesses from key parts of the 15% global minimum tax.

Three large banks, Banco Citibank SA, Itaú Unibanco, and Banco Santander Brasil, reportedly paid about BRL 2.4 billion, around $457 million, to settle Brazilian tax disputes, with average discounts of about 21 percent on interest and penalties. The settlements reportedly covered disputes involving Brazil’s former financial transactions tax for Santander and Citibank, and PIS and COFINS-style social contributions plus income tax and the social contribution on net profit for Itaú. The piece shows how Brazil uses settlement programs to close contentious assessments by discounting add-ons such as interest and penalties, and it underscores the real cash costs and compliance risks multinationals face in Brazil’s financial sector.

To read the document, it be can be read here.

Semer argues that the Treasury’s December 15, 2025, final and proposed section 892 regulations would significantly restrict how foreign sovereign investors can invest in the United States while keeping the section 892 exemption. He says the rules could treat routine lending and credit activity, and even standard minority protection governance rights, as disqualifying commercial activity or effective control. The result, he argues, is a policy contradiction where rules meant to police abuse could make sovereign capital harder and more expensive to attract, forcing funds and deal parties to rethink loan terms, veto rights, and compliance planning under section 892.

To read the document, it be can be read here.

An EU Commission official says member states are divided on cross-border remote work, and businesses warn that unclear tax rules are changing hiring and investment decisions across the single market. Companies cite permanent establishment and broader corporate tax exposure as the main problem, with some limiting remote work or hiring to avoid creating nexus through employee presence. The piece frames this as a live administration challenge at the intersection of PE standards, corporate residence, and withholding and payroll compliance, with implications for the EU’s simplification and competitiveness agenda. 

To read the document, it be can be read here.

A global business group said that developing countries would lose hundreds of millions of dollars a year if they adopt a new method of taxing cross-border services endorsed by the United Nations. The International Chamber of Commerce said a report (read the report here) it commissioned found the UN Model Tax Convention’s Article 12AA would lower annual revenue in developing countries by $241 million.

Two Dutch tax practitioners say the Netherlands should apply for the OECD Pillar Two side by side safe harbor, arguing its system is already closed because of the 25.8 percent corporate rate, a domestic top up tax, and strong antiavoidance rules. They frame it as a competitiveness and compliance burden move, warning the Netherlands could face maximum hassle and minimum revenue if it implements Pillar Two without safe harbor protection, especially after the Inclusive Framework’s January 5 deal shielding U.S. groups from IIR and UTPR. They also stress timing, noting the OECD will review regimes on request by the end of the first half of 2026, while Dutch politics have not clearly committed to applying despite parliamentary pressure and potential state aid concerns.

To read the document, it be can be read here.

The OECD’s new “side-by-side” deal exempts US-headquartered multinationals from much of its global minimum tax rules. The UK government has announced that it will implement this deal through new domestic legislation (retroactive to Jan. 1). The EU plans to implement it as well, likely through treating the new safe harbor as consistent with existing exemptions rather than trying to amend the Pillar Two directive that created the minimum tax regime.

More than a half-dozen countries said negotiations over a future United Nations tax treaty need to quickly clarify how the agreement will affect exiting tax treaties as delegates began a new round of talks.

Sheppard argues the OECD’s “side-by-side” safe harbor is an imperfect near-term fix for U.S. multinationals because it does not eliminate QDMTT exposure and may not meaningfully reduce ongoing Pillar 2 compliance. Until countries actually enact and implement the law, U.S. groups may still need to book and compute current IIR/UTPR exposure for financial reporting purposes. The piece also flags structural frictions, including the lack of a QDMTT “push-down” and continued reliance on complex book-income adjustments and elections, suggesting the safe harbors are a band-aid on a flawed framework. 

To read the document, it be can be read here.

Herzfeld argues that even as governments negotiate formal fixes like the Pillar 2 side-by-side safe harbor, many multinationals face opaque foreign audit practices that operate more like “pay-to-play” pressure than predictable rule-of-law enforcement. Herzfeld critiques OECD peer reviews for failing to identify real barriers to MAP and highlights the need for tougher enforcement and penalty tools in jurisdictions such as France, Italy, Mexico, and Australia. Herzfeld suggests responses including enhanced U.S. disclosure of foreign audit activity and a more reality-based peer review that incorporates taxpayer experience. 

To read the document, it be can be read here.

The European Commission opened infringement proceedings against 14 EU member states for failing to fully transpose DAC8 (cryptoasset tax transparency) and/or DAC9 (pillar 2 reporting) by the December 31, 2025 deadline. The action underscores the EU’s growing emphasis on enforcement of tax transparency and global minimum tax reporting as core elements of its anti–tax avoidance agenda. The article focuses on uneven national implementation of pillar 2–related obligations, with potential escalation to the Court of Justice if member states do not respond satisfactorily.

To read the document, it be can be read here.

Busefi writes that Libya largely ignores the usual permanent establishment (PE) concept and instead taxes foreign businesses based on a simple source link. For cross-border service providers and investors, PE planning won’t protect you, and the real risk shifts to withholding, counterparty compliance, and messy treaty conflicts with OECD-style PE rules. Busefi notes Libya has strengthened enforcement by removing limitation periods for unpaid tax recovery, creating an effectively open-ended audit window and signaling a broader drift toward source-based taxation for remote/digital services.

To read the document, it be can be read here.

Examines Turkey’s reduction of its digital services tax rate and considers broader implications for digital tax policy and international coordination.

To read the full article, click here (subscription required).

Reviews international parliamentary efforts to address multinational tax avoidance and the growing use of protectionist tax measures, examining the Inter-Parliamentary Union’s proposed resolution and its potential role alongside existing global tax coordination initiatives led by the OECD/G20 and the U.N. Tax Committee.

To read the full article, click here (subscription required).

Discusses how AI-driven tax modeling and new legislation are reshaping tax administration and compliance globally.

To read the full article, click here (subscription required).

An Amsterdam appeals court ruled that Uber drivers can qualify as entrepreneurs rather than employees, overturning a lower court decision that would have imposed retroactive employment obligations on Uber. The ruling emphasizes individual drivers’ degree of entrepreneurship and leaves enforcement of misclassification rules largely to tax authorities.

TTo read the full article, click here (subscription required).

This article explores how technological change, regulatory uncertainty, and enforcement pressures are reshaping global transfer pricing risk heading into 2026.

To read the full article, click here (subscription required).

Poland says it will draft legislation for a digital services tax of up to 3% aimed at large groups, framing the measure as a competitiveness and “digital sovereignty” response to cross border platform activity that is monetized in Poland but taxed elsewhere. The proposal targets revenues from targeted advertising, multilateral platform intermediation, and monetization of user derived data, while carving out streaming content, communications and payments, and direct online sellers that are not intermediaries. The tax would apply only above both a global size threshold and a Poland revenue threshold, and would be reduced by Polish corporate income tax, which is a design choice meant to blunt double taxation and treaty friction but also raises base definition and crediting questions.  

To read the full article, click here (subscription required).

Despite the growing complexity of border crossings and regulatory requirements, the need for workforce mobility—and its benefits—remains as vital as ever. Organizations continue to rely on international collaboration and flexible talent exchange as key drivers of growth, innovation, and competitive advantage.

A draft protocol on dispute prevention and resolution under the U.N. tax cooperation framework would focus on resolving cross-border tax disputes between states arising under existing bilateral or multilateral tax treaties, while also exploring optional mechanisms for no-treaty situations, expanded MAP tools, coordinated APAs, and a possible U.N.-led transfer pricing task force. 

To read the full article, click here (subscription required).

The OECD’s long-awaited side-by-side package is a pragmatic attempt to preserve the global minimum tax architecture while accommodating the unique position of US multinationals. That pragmatism, however, comes with limits.

There is “still willingness from all jurisdictions” at the OECD to restart stalled negotiations for a global tax on digital services, but the talks will likely deviate from the framework’s current construction, according to a senior EU official.

United Nations negotiators working on a new global tax treaty plan to establish a task force to explore and identify practical options for improving countries’ access to transfer pricing information.

A global agreement to exempt US multinationals from key parts of the 15% global minimum tax is raising concerns that its rules may tie the hands of Congress to make corporate-friendly changes to the US tax code in the future.

The OECD’s new “side-by-side” agreement for Pillar Two marks a decisive shift in the global minimum tax project—and not in Canada’s favor.

The OECD’s landmark global minimum tax deal isn’t guaranteed to succeed, according to the UN official leading negotiations on a new international tax convention.

The Japanese government approved changes to its global minimum tax system to implement the OECD’s recently revised agreement.

United Nations negotiators working on new global tax rules issued a draft paper suggesting options for how and when countries can tax cross-border services that result from remote work and digitalization.

See attached the draft for the cross-border “protocol”.

The U.N. released an updated draft framework convention on international tax cooperation that would set principles for sustainable development, fair allocation of taxing rights, measures targeting high-net-worth individual avoidance/evasion, harmful tax practices, and expanded mutual administrative assistance and exchange of information, with protocols contemplated to implement specific rules.

To read the full document, click here 

Simplification measures in the OECD’s new global minimum tax rules are unlikely to reduce the compliance burden for companies as they determine their tax liabilities under the new system, tax professionals said.

Multinationals asked the OECD for more clarity on complex questions around how corporations should be taxed in relation to remote work and a safe harbor for short-term cross-border working.

Here is the OECD consultation document on remote work, along with comments on it.

Trade frictions across the European Union are more onerous than the highest tariff US President Donald Trump threatened to slap on the bloc last year, according to research by the European Central Bank.

Companies need additional guidance on the impacts of remote work on corporate taxes and the creation of taxable permanent establishments, practitioners told the OECD in comments as part of the group’s global workforce mobility project.

Developing countries will want to adopt the global minimum tax because they will collect revenue, and further work is being done to make the levy more administrable, a top OECD official said.

Supporters of the OECD’s new Pillar Two “side-by-side” agreement—which carves the US out of the global minimum tax—claim the deal protects US tax sovereignty and preserves Congress’ authority over domestic tax law.

The European Commission published changes to the bloc’s minimum tax law in its official journal, putting into legal effect the revised the agreement reached by countries at the OECD last week.

Singapore should use an upcoming budget to issue new guidance on the global minimum tax and expand an investment credit launched in the tax’s wake, Deloitte said.

Examines a new OECD initiative aimed at ensuring mutual agreement procedures remain available for adjustments that are substantively transfer pricing–related but not formally characterized as such.

To read the full article, click here (subscription required).