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Treasury Hits Pause on Imposing New Foreign Tax Credit Rules
The IRS is temporarily allowing taxpayers to follow the old rules on the foreign tax credit while it considers whether to modify its newer, controversial standards for claiming the credit. This is a relief for companies that have complained that the new rules are too strict.
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Digital Taxes Won't Go Away Anytime Soon, U.N. Official Says
Despite multilateral attempts to avoid them, digital services taxes will persist, and it would be better for countries to focus on ensuring that those taxes are adopted and interpreted consistently, a U.N. official said.
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Digital Taxes Are ‘Here to Stay,’ UN Official Tells Symposium
A UN official said DSTs are here to stay and countries should find a uniform way to administer them. He suggested using Article 12B of the United Nations model treaty as a starting point.
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OECD Deal's Treatment of U.S. Tax Credits Troubles House Taxwriters
House taxwriters in both parties came to a rare agreement about the United States’ role in the OECD tax deal concerning the treatment of nonrefundable tax credits.
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GOP Seeks to Up Global Tax Deal Oversight With Treasury Official
Republicans are pushing back on the global minimum tax deal, arguing that it would put US companies at a disadvantage. Democrats say that if the US doesn't get on board, it will be left behind.
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G-20 Finance Ministers Welcome OECD Tax Reform Plan Progress
The G-20’s top finance officials continue to press ahead with the OECD-brokered two-pillar global tax reform plan, recognizing progress on some of the plan’s key features and calling for countries to settle outstanding issues.
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Canada Is Sticking With a Planned Tax on Big Tech the US Opposes
Canada will introduce a digital services tax in 2024 despite US opposition. The Canadian government made a concession by delaying its DST and believes it is necessary to defend the country’s interests.
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Taiwan Trade Bill Clears Senate, Heads to Biden’s Desk
The US Senate passed legislation approving a trade deal with Taiwan, which could lead to stronger tax ties between the two countries. The bill also includes transparency and cooperation guidelines for future agreements negotiated under the initiative.
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OECD Seeks Simpler Transfer Pricing With Amount B Consultation
The OECD has opened an additional consultation on two amount B alternatives to simplify routine marketing and distribution transactions for transfer pricing. The options could include an examples-based determination of non-baseline distribution activities.
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OECD Issues Information Return for Global Minimum Tax Filing
The OECD finalized the information return that multinational companies will use to file their taxes under the new global minimum tax. The return is designed to strike a balance between providing tax administrations with the data they need to ensure compliance while limiting the cost of compliance for companies.
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Low-Income Countries Get Treaty-Based Minimum Tax Rule
The OECD released a model treaty provision for the global tax deal's subject-to-tax rule, which is meant to help low-income countries collect more tax under treaties that set low withholding rates.
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Energy Credits’ Treatment in Global Tax Deal Detailed By OECD
The OECD clarified that the global minimum tax will treat the Inflation Reduction Act’s transferable tax credits as additional income rather than a reduction in tax paid. This means that businesses will not be subject to the undertaxed profits rule if they use the credits to lower their tax expenses.
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U.S. Companies Score Partial Reprieve From Global Minimum Tax Deal
Under the updated agreement negotiated by the Treasury Department, U.S.-based companies will have an extra year (until 2026) before foreign countries can start imposing new taxes on any U.S. companies deemed to pay too little tax in the United States. In addition, the clean-energy tax credits at the core of last year’s Inflation Reduction Act will be counted in a more favorable way than some companies had feared, offering certainty as a tax-credit trading market gets under way.
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Using Tax Transparency for Latin America's Economic Recovery
Nana Ama Sarfo examines the OECD’s latest report on tax transparency in Latin America and questions whether the organization’s tax transparency standards could be a useful tool in improving the region’s slow economic growth.
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Pillar 2 Would Overlook Some Tax-Advantaged IP Transfers
Martin A. Sullivan argues that even if pillar 2 is adopted, multinationals’ income stemming from intellectual property transfers to low-tax jurisdictions is likely to remain as tax advantaged as it is now.
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Is There a Way to Fix Pillar 2?
Mindy Herzfeld examines what the United States stands to lose if it enacts or rejects pillar 2, and what can be done to lessen the impact.
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Profit-Based Contribution to EU Budget Receives Little Support
EU finance ministers did not sound impressed by the European Commission’s idea to allocate to the EU budget a new statistics-based levy on large companies’ profits.
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Luxembourg to Be Referred to CJEU for Anti-Tax-Avoidance Failures
Luxembourg will be referred to the Court of Justice of the European Union for its continued failure to correctly incorporate the anti-tax-avoidance directive into domestic law, according to the European Commission.
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Finance Ministers Oppose EU Budget Corporate Profits Levy Plan
EU finance ministers rejected the European Commission's proposal to levy a charge based on a calculation of surplus corporate profits. The ministers said the levy would be regressive and difficult to implement.
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Pillar 1 Tax Treaty Needs U.S. Ratification, EU Researchers Say
If the United States isn’t among the critical mass of jurisdictions needed to sign and ratify the OECD’s pillar 1 multilateral convention, then the reforms won’t be able to proceed globally, EU researchers said.
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German MOF Proposal Calls for €6 Billion in Corporate Tax Breaks
Germany’s Ministry of Finance has circulated plans for the largest corporate tax reform since 2008, calling for an extended research allowance, a revised interest barrier rule, and notification for national tax arrangements, among other issues.
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No Pillar One Agreement Without US, Warns EU Tax Think Tank
The global tax deal on Pillar One requires ratification by 30 signatory jurisdictions representing 60% of multinational groups covered by the deal. The US represents 46% of these groups, so the deal cannot go ahead without US ratification.
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OECD Tax Deal Report a Letdown for African Countries, Business
Businesses want to see more progress on Pillar One, and African countries are concerned about the extended moratorium on new digital services taxes.
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Extended OECD Digital Tax Ban Will Hurt Canada, Freeland Says
Canadian Finance Minister Chrystia Freeland has doubled down on the government’s plans to introduce a digital services tax after refusing to agree on a one-year extension of an OECD moratorium on new digital taxes.
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House, Senate Taxwriters Release Draft for Taiwan Tax Agreement
The top congressional taxwriters released a discussion draft of legislation for a tax agreement with Taiwan, hoping to clarify committee jurisdictions on the issue of ending the burden of double taxation for those in the region.
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House Appropriators Vote to Defund OECD
House GOP appropriators voted to zero out U.S. funding of the OECD in a spending bill that advanced July 12, complaining that the organization promotes higher tax rates and “digital tax schemes that target the American tax base.”
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US Wins Conditional Digital-Tax Truce as Global Deal Advances
The OECD extended the global freeze on new digital taxes for one year. However, Canada refused to endorse the deal, raising the possibility of trade tensions between the US and its close ally.
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OECD Outlines Progress On Global Tax Pact While Hurdles Remain
The OECD announced progress on the global tax deal, but acknowledged that differences remain between countries. The organization said governments are nearing an agreement on Amount A, and it will release a consultation document next week on Amount B.
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Big Tech's Love Affair With Low-Tax Nations Is Under Threat
Tax officials from 143 jurisdictions had hoped to seal an agreement on a new way to divide the taxes levied on the profits of about 100 of the world’s biggest companies. Such a deal would reallocate the taxation of some $200 billion in corporate profits across the world. Failure could lead some nations to impose their own levies.
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Countries Advance Pillar 1 Adoption, Extend Digital Tax Freeze
Nearly 140 countries have backed a statement on the OECD’s two-pillar tax reform plan that confirms agreement on the text of a pillar 1 tax convention and on extending a digital services tax moratorium.
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OECD Says Reports of Influence on Australian CbC Rules Are False
The OECD has struck back at accusations that it had a hand in weakening Australian country-by-country reporting legislation, but critics have said that Secretary-General Mathias Cormann’s explanation sounds more like an admission.
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Treasury Ramps Up U.S.-EU Energy Agreement Efforts
A Treasury official met with EU officials and business leaders to continue negotiations on a deal to allow more European firms to at least partially qualify for the clean vehicle tax credit enacted as part of the Inflation Reduction Act.
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Brazil Releases Consultation on New Transfer Pricing Law
Brazil released draft guidance on its new transfer pricing law, which adopts the arm's length standard. The rules become mandatory in 2024, but companies may choose to apply them in 2023.
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EU Not Certain on Plans for Pillar One Directive, Official Says
The EU is considering whether to move forward with a directive on Pillar One separately from the OECD-led tax deal. While not legally necessary, it could inject political momentum into the negotiations.
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Stellantis Gets $11 Billion From Canada, Surpassing VW’s Subsidy
Canada agreed to provide $11 billion in public support for an electric-vehicle battery plant to remain competitive with the generous US green incentives in the Inflation Reduction Act.
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Accounting for GLOBE
Lee A. Sheppard discusses how the OECD’s GLOBE taxes will work and how multinationals will be required to report the tax on their financial statements.
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Limiting the Fallout From Moore
Mindy Herzfeld examines how the U.S. Supreme Court’s decision in Moore v. United States could affect the U.S. international tax system and explores ways to limit the decision’s scope.
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Is Pillar 2 Right for Caribbean Nations? Depends Who You Ask
Nana Ama Sarfo reviews how various Caribbean countries are considering pillar 2’s global minimum tax.
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Australia Mulls More Pillar 2 Deferred Tax Break Disclosure Rules
An Australian regulator is consulting on draft amendments to its disclosure requirements for Tier 2 nonprofit and for-profit entities that have used the temporary accounting exception for deferred taxes under the OECD’s global minimum tax rules.
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SAFE Proposal Will Pin Down Meaning of Aggressive Tax Planning
The pending Securing the Activity Framework of Enablers proposal will clearly define aggressive tax planning so that companies and advisers will know “where the red line is,” according to an EU tax official.
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BEPS Watchdog Warns Against Adopting OECD Tax Reforms
Developing countries are not likely to benefit from the two-pillar global tax reform plan negotiated through the OECD framework, so they should adopt alternative measures instead, the BEPS Monitoring Group said.
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Confrontational Approach Deters Valid R&D Claims, CIOT Says
HM Revenue & Customs’ approach to research and development tax relief inquiries is deterring genuine claims and risks undermining the U.K. government’s policy aim of encouraging R&D, the Chartered Institute of Taxation said.
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Ireland Announces €1.1 Billion in Tax Measures in Budget Preview
An over-€1 billion tax package will be among the measures in Ireland’s 2024 budget, according to the Finance Department, which also announced plans to increase capital spending with windfall corporate tax receipts.
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Windfall Corporate Revenue Poses Challenge to Ireland
Martin A. Sullivan examines the causes and possible effects of the post-COVID surge in Ireland’s corporate tax receipts, cautioning that although the increased revenue might be good for the country in the short term, the revenue stream is too volatile to rely on long-term.
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Time to Declutter the Corporate Tax System, OECD Official Says
With pillar 2 of the global tax plan materializing, it may be time to take another look at some of the base erosion and profit-shifting measures implemented over the years, an OECD official said.
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Countries Must Reduce MAP Inventories, OECD Official Says
Competent authorities and multinational enterprises should work together to reduce mutual agreement procedure case inventories by focusing on dispute prevention rather than resolution, an OECD official said.
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Galvanizing International Tax Case Accepted by Supreme Court
The US Supreme Court will hear a case on whether the government can tax foreign earnings that have not been distributed to US shareholders. The case could have implications for the limits of Congress' taxing powers.
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OECD Pillar One Must Consider African Digital Resources, Study Says
A report from South Centre says African countries need to improve data collection around digital transactions to benefit from the OECD's global tax reallocation plan.
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Companies Need Time to Absorb New Tax Rules, EU Lawmakers Say
European Parliament members suggest delaying creation of a common tax base for large companies until businesses have adjusted to the global minimum tax rules.
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Nascent China Competition Bill Seen as Potential Tax Vehicle
Lawmakers are looking to a new US-China competition bill as a potential vehicle for enacting tax policy, including reviving the research and development tax break and establishing a carbon border adjustment mechanism.