Int'l Tax News

Sol Picciotto, Jeffery M. Kadet, and Bob Michel analyze and compare the two proposals for a subject-to-tax rule to be included in tax treaties, one from the U.N. Tax Committee and the other from the G20/OECD inclusive framework on base erosion and profit shifting.

Jeremy Hunt wants UK retail investors to help revive the fortune of the country’s ailing stock market by creating an ISA, a tax-free savings account, for investing in UK equities.

The World Trade Organization agreed to extend a moratorium on e-commerce tariffs for two years after marathon negotiations in Abu Dhabi, while failing to secure deals on other contentious trade issues including a crackdown on agriculture and fisheries subsidies.

According to the National Foreign Trade Counsel and other industry groups, Australia’s draft ruling to tax payments for software and intellectual property is “overly broad”. The ruling targets goods and services that are often made up of many components, and applying a withholding tax to the entire payment is overreaching.

The EU’s carbon border adjustment mechanism taxes carbon-intensive imports to prevent a flood of cheap imports from countries with highly polluting industries, but only a fraction of EU companies expected to report emissions did so by an early deadline.

Chancellor of the Exchequer Jeremy Hunt has considered scrapping Britain’s non-domiciled tax, which allows about 70,000 people to avoid paying tax on their overseas earnings.

Covington’s Lauren Ann Ross analyzes advantages of the OECD International Compliance Assurance Program compared with advance pricing agreements and audit adjustments.

The OECD is on track to finish its multilateral tax treaty to reallocate taxing rights by March, and the global minimum tax will start in more than 35 countries this year. Estimates provide the treaty will reallocate $200 billion per year and increase revenues by at least $155 billion annually.

European Commission enforcement of Pillar Two rules for EU nations creates implementation challenges for countries and multinationals, PwC’s Will Morris, Giorgia Maffini, and Steven Kohart say.

Canada defended plans to enact a digital services tax against a potential economic reckoning from the US on Thursday, pointing to Washington’s tolerance for similar measures elsewhere.

Gabriel Zucman, who helped Elizabeth Warren develop a wealth tax plan for her 2020 US presidential campaign, is promoting a proposal for a global minimum wealth tax aimed at international coordination to tax the rich and fight poverty.

A group representing West African tax administrations is concerned the OECD’s recently published guidance on transfer pricing rules lack a definition for low-capacity jurisdictions and qualitative scoping criteria.

The OECD is considering developing a multilateral convention to resolve disputes related to the application of the global minimum tax, a top official for the organization said.

Implementation of the OECD’s global tax treaty is stalling due to political opposition in the US and tax negotiations by the UN influenced by developing nations.

 A tax deduction on interest in both the US and Singapore effectively lowers after-tax borrowing costs on bonds issued in Singapore.

The OECD’s latest report to simplify transfer pricing is complex and fails to confirm certain provisions, Imke Gerdes and Richard Fletcher of Baker McKenzie say.

New Zealand will not adopt the Organization for Economic Development’s new transfer pricing rules for bringing goods into the country, and instead continue to rely on its own rules.

The Bahamian government has announced its plans to implement a 15 percent corporate income tax in response to the OECD’s two-pillar international tax reform plan, anticipating tax revenue to exceed $140 million annually.

Other factors should be considered before the United States is blamed for a potential failure of pillar 1 of the OECD’s two-pillar global tax reform plan, an Estonian Ministry of Finance official said.

Andrea Di Gialluca and Davide Cotroneo explain the interaction between Italy’s research and development credits set in place to promote innovation and competitiveness in Italy, and imposition of the OECD’s pillar 2.

The Manx government is planning to raise the corporate tax rate for large banks and retailers as it moves to implement pillar 2 of the OECD’s two-pillar global tax reform plan.

High-income OECD countries said the terms of reference for a U.N. framework convention on international tax cooperation should be based on consensus rather than simple majority voting — a view opposed by low-income countries.

The South African government is publicly consulting on draft legislation implementing pillar 2 of the OECD’s global tax reform plan and on related tax administration measures as part of its 2024 budget.

The OECD has published a report on an elective approach for simplifying transfer pricing for baseline marketing and distribution transactions starting in 2025, noting several reservations and concerns from India about the framework.

The EU Council approved the removal of four small, tropical nations from its blacklist for noncooperative jurisdictions in tax matters, two of which had been recently added to the list.

The EU Council was unable to get enough votes from member states to approve a watered-down second deal on the reclassification of digital platform workers.

The Singaporean government has announced it is moving forward with plans to partially adopt parts of the global minimum tax regime under pillar 2 of the OECD’s two-pillar global tax reform plan in 2025.

Reuven S. Avi-Yonah considers which provisions of the 2017 Tax Cuts and Jobs Act should be retained and which should be allowed to expire at the end of 2025.

As EU countries’ parliamentary scrutiny period for the European Commission’s Business in Europe: Framework for Income Taxation (BEFIT) proposal came to an end, Ireland and Poland, among other member states, voiced serious concerns.

EU member states’ permanent representatives have agreed to remove the Bahamas, Belize, the Seychelles, and Turks and Caicos from the EU list of noncooperative jurisdictions for tax purposes.

The United States has extended a “unilateral measures compromise” with five countries that will deal with their digital services taxes in the period before pillar 1 rules are enacted and sidestep retaliatory U.S. trade actions.

Under the European Parliament’s provisional opinion on a new transfer pricing directive, the U.N. could set guidelines in the future, but agreement on a proposal to harmonize aspects of the corporate tax rules remains elusive.

The European Commission's proposal to harmonize aspects of corporate tax rules would make it harder for multinational enterprises to shift profits to tax havens, a researcher said.

U.S. trade groups are urging Treasury not to apply dual consolidated loss rules to the jurisdictional tax blending rules under pillar 2 and the corresponding safe harbors of the OECD’s global minimum tax deal.

Robert Goulder critiques a proposal for renewed tariffs.

Mindy Herzfeld explains how the U.S. trade representative’s withdrawal of U.S. opposition to global data localization may have negative revenue consequences for the United States.

Executives at several multinational pharmaceutical companies are making projections about the effects of pillar 2 on their companies’ financial outlooks and discussing other tax developments as they report their 2023 financial results.

The OECD’s assumptions underpinning its global minimum tax revenue projections are still uncertain, so it should keep refining those estimates to get a more accurate picture of pillar 2’s effects, Business at OECD said.

The Japanese government has published a tax reform bill containing draft changes to its pillar 2 regime, but the absence of a proposal to adopt the global minimum tax backstop rule was unexpected, a practitioner said.

The government is facing dissatisfaction over its ongoing efforts to end a payroll tax exemption as it aims to boost revenues and achieve its zero-deficit target for 2024. The Finance Ministry and Congress are trying to reach a deal to give companies more time to adapt to full taxation.

Business groups, accounting firms, and corporations lauded Ireland’s proposal to exempt foreign-source income from corporation tax, but some said that the move could complicate pillar 2 implementation.

Estonia is allowed a six-year deferral of the obligation to implement the 15% tax OECD Global Minimum Tax because it has fewer than 12 companies that would be in scope.

Thierry Viu of CMS France explains how the new finance bill strengthens the powers of the tax authorities in transfer pricing audits and what this means for international groups.

India is seeking to end a freeze on countries taxing electronic trade, a move that would allow tariffs to be imposed on anything from software downloads to video games.

Companies told Ireland’s finance ministry to broaden its proposal to exempt dividends from corporation tax to include the profits of foreign branches of Irish companies too, a move to draw more business operations to the country with a global minimum tax in place.