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Trump Proposal to Cut Tax Rate for U.S. Manufacturers Spurs Flurry of Questions
Reactions to the proposal are mixed: some predict a 15% tax cut will boost American jobs and wages, but others worry about administrative burdens and gamesmanship.
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EU Recommends New Global Levies for Green Transition
Countries should consider international tax solutions like a global financial transaction tax and levies on aircraft and shipping to finance the green transition, according to a new EU brief.
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EU-U.S. Clash Over Tax Policy Appears Likely, Saint-Amans Says
Former OECD tax chief Pascal Saint-Amans has forewarned the EU’s future tax commissioner of the likely failure of pillar 1 negotiations and possible tensions when the bloc starts collecting the minimum corporate tax.
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The History and Prospects of the U.N. Fast-Track Instrument
Hafiz Choudhury explains efforts at the U.N. to create a fast track instrument to help countries implement changes to the U.N. model tax convention without requiring an onerous renegotiation of the treaty.
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Italian Treasury Official Calls for Temporary European DST
A European digital services tax could be used as a stopgap until a deal on pillar 1 of the two-pillar global tax reform plan is reached and could provide resources for the EU budget.
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Switzerland to Implement Income Inclusion Rule in 2025
Switzerland will implement the income inclusion rule for the 15 percent corporate minimum tax under pillar 2 of the OECD’s inclusive framework on January 1, 2025, but will not enact the undertaxed profits rule.
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Singapore Rebuffs Calls to Curb Domestic Top-Up Tax Application
Singapore’s Ministry of Finance has rejected stakeholder suggestions to limit the application of its proposed domestic top-up tax to the wholly owned constituent entities of Singapore-based multinational enterprise groups.
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Commission Pushes for U.N. Subject-to-Tax Rule Over OECD’s Rule
Developing countries should adopt the U.N.’s subject-to-tax rule because it is administratively simpler and broader in scope than the OECD’s version, according to the Independent Commission for the Reform of International Corporate Taxation.
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Puerto Rico and Pillar 2: Challenges Ahead
Manuel “Nolin” López-Zambrana examines how Puerto Rico — known for relying on tax incentives to attract investment and encourage economic growth — will respond to pillar 2’s minimum tax requirements and how multinational enterprises operating in the territory will be affected by the new framework.
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Tax Lawyers, Researchers Call for Revised EU Tax Avoidance Rules
A German tax group has urged the EU to abolish its controlled foreign company (CFC) rules for companies that fall under the scope of the global minimum tax. The group argues that the CFC rules overlap with the global minimum tax and can lead to double taxation.
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Belgium Starts Allowing Pillar 2 Advance Tax Payments
Multinational enterprises registered for Belgium’s global minimum tax regime can start making advance payments under the income inclusion rule and qualified domestic minimum top-up tax, according to the country’s tax authority.
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Brazil Might Propose Tech Tax Hike to Offset Revenue Shortfall
Brazil’s government may propose taxes on major technology companies and introduce legislation to implement the OECD’s 15 percent minimum tax if projected 2025 revenues are insufficient to eliminate the country’s primary budget deficit.
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Argentina’s Tax Reforms Aim to Change the Game for Investors
The Argentine government has launched a new incentive program, the RIGI, designed to attract foreign direct investment and boost economic growth. The program offers significant benefits to investors in various sectors, including tax breaks, regulatory relief, and long-term stability..
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Corporate Tax Growth Spurs 17% Rise in Singaporean Tax Revenue
The Inland Revenue Authority of Singapore (IRAS) reported a 17% increase in tax revenue for the financial year 2023-2024, reaching S$80.3 billion. Corporate tax collections saw the most significant growth, up 25.6% to S$29 billion, accounting for 36.1% of the total revenue.
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Tech Groups Warn That Higher UK Taxes Will Deter Risk-Takers
UK venture capitalists and entrepreneurs have warned that the Labour government’s signal that it will raise taxes risks stifling the country’s technology industry.
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Evaluating Three Minimum Taxes on the Foreign Profits of Multinationals
Kyle Pomerleau and Carol Wang compare and analyze three minimum taxes on the foreign profits of multinational corporations — the global intangible low-taxed income regime, the corporate alternative minimum tax, and pillar 2’s income inclusion rule — evaluating each for impact on economic efficiency, robustness to avoidance, and administrability.
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The Need for Income Sourcing Changes
Jeffery M. Kadet responds to a recent article on the potential reform of income sourcing rules and emphasizes that simplicity, objectivity, and results that are fair to both taxpayers and tax authorities are key, including the need for sourcing rules to be applied on a unitary basis when appropriate and for the activities of independent contractors (especially when related) to be attributed to the taxpayer.
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Behavioral Incentives Under Amount A — Law of Unintended Consequences Redux
Kartikeya Singh uses a hypothetical example to explain how behavioral incentives created by pillar 1 amount A rules could influence in-scope companies to relocate personnel and physical capital away from headquarter jurisdictions to low-tax investment hubs.
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$1 Trillion in Unpaid Corporate Taxes Sparks UN Tussle
Fed up with a stalled international effort at the Organization for Economic Cooperation and Development (OECD) to rein in the use of tax havens and put a global corporate minimum tax into force, African countries at the United Nations are now leading a charge for greater transparency and fairness in international tax.
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Taiwan to Bring Corporate AMT in Line With Pillar 2
The Taiwanese government has announced plans to adjust the corporate alternative minimum tax for large multinational enterprises to align with the 15 percent effective tax rate under the OECD’s pillar 2 global minimum tax rules.
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Ireland Seeks More Input on Foreign Dividend Exemption Proposal
Ireland has opened a second round of consultation on a draft proposal for a participation exemption for foreign dividends that would significantly change the country’s corporate tax system.
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A Pillar 2 Tale of Two Investment Fund Regimes: Singapore and Italy
Annalise Foong and Davide Cotroneo examine the tax treatment of investment funds in Italy and Singapore and how the global anti-base-erosion rules could affect those regimes.
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IRS Told to Review Exam Strategy for Multinational Tax Avoidance
The IRS said it plans to review its procedures for examining potential tax avoidance by large multinational corporations, including how it applies the economic substance doctrine.
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Croatian Investment Tax Breaks Under Review by OECD Group
An OECD group dedicated to eradicating harmful tax regimes is reviewing Croatia’s Investment Promotion Act, which grants tax deductions for investments in manufacturing and other high-value industries.
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Once More: Digital Services Taxes Should Be Creditable
Reuven S. Avi-Yonah follows up an earlier installment by further explaining why digital services taxes should be creditable.
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Researchers Try to Quantify Firms’ Use of Tax Havens After TCJA
The Tax Cuts and Jobs Act might have caused a “small shift” toward the use of domestic tax havens for U.S. multinational firms in the three years after its passage.
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Businesses Call for Central Platform for Global Minimum Tax Data
The OECD should create a centralized global platform to facilitate and streamline the exchange of data that large companies must report to tax administrations under the global anti-base-erosion rules, business trade groups said.
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The Usefulness of Pillar 1
Reuven S. Avi-Yonah responds to recent discussions regarding implementation of pillar 1 and evaluates the merits of potential alternatives.
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America the Tax Haven and Its Trade Deficits
Kenneth Austin and Hillel Nadler examine how U.S. tax policies have made the United States a tax haven, and they propose unwinding tax preferences for foreign holders of U.S. financial assets to reduce the United States’ external borrowing and trade deficit.
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France Flirts With Citizenship-Based Taxation
Robert Goulder comments on a French proposal to adopt citizenship-based taxation.
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Countries Adopt First Steps to U.N. Tax Convention
U.N. countries have adopted a document that could allow governments to tackle the international taxation of cross-border digital services income, centering fairness for developing countries.
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Jersey Publishes Draft Global Minimum Tax Legislation
Jersey has proposed two pieces of legislation that would implement an income inclusion rule and a stand-alone multinational corporate income tax in response to OECD pillar 2 global minimum tax rules.
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The History and Effect of Residence-Based Taxation
Sohum Dua talks about the reasons for existence of the current international tax model, which is heavily biased toward residence-based taxation, and its effects on cross-border financial flows.
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Limitation on Benefits or Principal Purpose Test? Part 2
In the second part of a two-part series, Reuven S. Avi-Yonah examines whether the United States should adopt a principal purpose test over the limitation on benefits rule.
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A Misconceived Change: U.N. Includes Software in the Scope of Royalty
Najeeb Memon discusses the legal nature of software and argues that the U.N.’s recent addition of software to article 12 of its model treaty was misguided.
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Canada Publishes Draft Undertaxed Profits Rule Legislation
Canada’s Department of Finance is asking for stakeholder feedback on proposed legislation that would implement the undertaxed profits rule, a global minimum tax backup enforcement mechanism, as part of a broader budget consultation process.
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Countries May Push U.N. Tax Convention Agreement to 2027
A U.N. framework convention governing international tax cooperation will likely be agreed on by 2027, instead of 2026 as some countries had hoped.
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Bermuda Consults on Administration of New Corporate Tax Regime
The Bermudian government is seeking stakeholder input on a draft taxpayer compliance framework for the administration of the island’s new corporate tax regime, adopted in response to OECD-brokered pillar 2 global minimum tax rules.
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Higher U.K. Digital Tax Rate May Cost U.S. Firms $4.4 Billion
If the United Kingdom's digital services tax were tripled and passed through to U.K. consumers, American companies could lose over $4 billion annually, according to a report from the Computer & Communications Industry Association.
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Rich Countries Push to Delay Early Protocols in U.N. Tax Process
Many high-income countries continue their push to delay discussion of early protocols to a U.N. international tax framework convention, citing a tight timeline and the complexity of issues to discuss.
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NGO Pushes for Domestic Minimum Top-Up Tax in Puerto Rico
A Puerto Rican nongovernmental organization claims that Puerto Rico could miss out on collecting up to $3.8 billion in tax revenue from predominantly U.S. corporations if it does not implement a qualified domestic minimum top-up tax.
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The UTPR: A Symptom of Malleable Sovereignty?
Lucas de Lima Carvalho comments on the incompatibility between the UTPR and tax treaties and examines the threat to national sovereignty over taxation.
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Limitation on Benefits or Principal Purpose Test? Part 1
In the first part of a two-part series, Reuven S. Avi-Yonah examines the relationship between the principal purpose test and the limitation on benefits provision.
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There’s a Flip Side to Fight Against Tax Barriers to EU Freedom
While the European Commission continues to wage a brisk fight against tax discrimination and tax barriers, it should be aware of “tension between cooperation and competition” among member states, according to a German research center.
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Controlled Foreign Corporations as Collateral After the TCJA
Kevin M. Cunningham explores situations in which U.S. multinational borrowers might incur a section 956 inclusion as a result of using controlled foreign corporation stock or assets as collateral, and he describes the factors that must be evaluated when providing such collateral as well as the strategies that can be undertaken to avoid the inclusion.
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Taxes vs. Tariffs, Harris vs. Trump
Mindy Herzfeld evaluates the choices of income taxes vs. tariffs in the platforms of the 2024 presidential election candidates.
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EU Evaluating Whether Anti-Tax-Avoidance Rules Need Changes
A European Commission evaluation of the anti-tax-avoidance directive will examine the directive’s implementation, its effectiveness, and whether it requires amendments in the future, given the overlap with the pillar 2 directive.
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Has Cost Sharing Outlived Its Usefulness?
Reuven S. Avi-Yonah explains why he thinks cost-sharing arrangements could be eliminated.
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Trump’s Big Idea: The Problem With Swapping Tariffs for Income Tax
Robert Goulder comments on former President Trump’s proposal to use tariff revenues to pay for income tax cuts.
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Tariffs Could Pay for Extending the TCJA
Martin A. Sullivan explains the economics of tariffs and why they have more potential to reduce the deficit than other tools.