Int'l Tax News

Media projections depict that robotics, process automation, and artificial intelligence threaten humanworkforce sustainability. Two oft cited studies forecast that technological innovation could jeopardize more than one third of the U.S.workforce. Nevertheless, the author concludesthat Congress should not impose a robot tax. This Article is the first to conduct a significant literature review of the current proposals to tax robots, ultimately taking a contrarian view. It examines mankind's historical connection to labor amid fears of automation substitution and proposes that implementing fear based tax policy based on job displacement projections is unsound

Amazon.com Inc. haswon the latest stage in a legal battlewith the EU overwhether itwas given 250 million euros ($303 million) of illegal subsidies by the Luxembourg authorities through a tax ruling.Wednesday's judgmentÔøΩissued by the European Union's second-highest courtÔøΩis another loss for the European Commission's years-long effort to clamp down on past transfer pricing practicesÔøΩhow companies value intercompany transfersÔøΩ multinational companies have used in Europe.

US president Joe Biden's plan to reform global corporate taxationwill do little to help the countries most in need of more tax revenues, say developing economieswhich are lobbying for greater power over multinationals.

EU judges have overturned a European Commission order to Amazon to pay back ÔøΩ250m in taxes to Luxembourg, in a further blow to Brussels' efforts to curb sweetheart national tax deals.

Rishi Sunak is holding back support for Joe Biden's plans for a 21 per cent minimum global business tax rate, as Britain pushes the US to ensure any agreement includes a fairer system for taxing digital technology giants.

The chancellor,who chairs the G7 finance ministers, said hewould consider a global minimum levy only as part of a broader package,with Treasury officials fearing Biden is intent on compelling tech firms to pay tax "in Californiawhen it ought to be paid in the UK".

After 10 years of on and off discussions, a much-debated U.N. Tax Committee proposal on treating software payments as royalties is still unresolved. But some of the U.N.'s recent treaty modifications, combinedwith a spate of global litigation, could give the issue a much-needed nudge toward resolution.

The United States should hold off on tariffs on Indian imports, including shrimp and jewelry, in response to India's digital tax, especially amid the economic devastation caused by the COVID-19 pandemic, stakeholders said. Manab Majumdar of the Federation of Indian Chambers of Commerce and Industry said May 10 that proposed U.S. tariffs on 40 products from India in retaliation against India's equalization levywould be "inimical to the vibrant trade relations" between both countries, citing "formidable challenges" arising from the coronavirus crisis.

The time may be right for countries to consider adopting or reforming inheritance tax policies to help shore up government revenues and better addresswealth inequalities in their post pandemic economies, a new OECD report says. The report, published May 11, examines and compares inheritance, estate, and gift taxes across the 37 OECD countries; considers their designs; evaluates the need for inheritance taxation; and outlines reform options that governments may consider adopting to improve their regimes.

African tax administratorswant further changes to part of the OECD's global tax reform plan, including the allocation of total ÔøΩ instead of residual ÔøΩ multinational profits to market jurisdictions to be taxed under proposed new rules. The African Tax Administration Forum (ATAF) announced in a May 12 statement that it had sent a proposal to the OECD inclusive framework on base erosion and profit shifting thatwould simplify pillar 1 of the two-pillar plan that its members are negotiating.

The EU General Court has annulled the European Commission's 2017 ruling that advance pricing agreements approved by Luxembourg granted Amazon ÔøΩ250 million in state aid, holding that the commission's transfer pricing analysiswas fundamentally flawed. In its May 12 judgment in Luxembourg v. Commission, Cases T-816/17 and T-318/18, the General Court held that the commission's 2017 ruling on an APA granted to Amazon group members in 2003 and renewed in 2011was based on a flawed transfer pricing analysis. According to the commission, the APAs' generous terms conferred ÔøΩ250 million in selective state aid that Luxembourgwas required to recover from Amazon.

Ireland should continue building on its nontax advantages to mitigate the effect of potential global corporate tax reforms on the Irish corporate tax base, according to a new IMF report. In its staff concluding statement of the 2021 Article IV mission to Ireland, published May 12, the IMF said that Irelandwas in a good position for an economic recovery in 2021, thanks to strong multinational enterprise growth during 2020.

The Biden administration's proposed reforms of the global intangible low-taxed income provisions retain the 20 percent foreign tax credit "haircut" that exists under current law, according to a top Treasury official. The administration's GILTI proposals build on the current structure, including that haircut, Kimberly Clausing, Treasury deputy assistant secretary for tax analysis, said May 13.

After 23 years of existence, the European Union body chargedwith calling out harmful tax competition is planning a more transparent policy approach. The EU's Code of Conduct Group, formed in December 1997,wants to alignwith the ever-increasing transparency compliance rules for multinational taxpayers. The code represents a political commitment by EU member countries to review and amend tax measures representing harmful tax competition, and to refrain from adopting such measures. It also promotes a similar commitment by non-EU jurisdictions.

Indian business groups called for the U.S. not to move forwardwith tariffs on imported products like gold jewelry and frozen shrimp in response to India's digital tax. "Such a tax on 40 items imported into the U.S. from India have negative consequences and impact on both economies," Manab Majumdar, from the Federation of Indian Chambers of Commerce and Industry, said during a U.S. Trade Representative hearing on Monday. The U.S. is considering a retaliatory tariff of up to 25% on India, over the country's 2% tax on digital services provided by non-residents.

Hungary plans to slash the tax on cryptocurrency earnings by 50% from next year in an effort to encourage investors to declare income from trading digital tokens such as Bitcoin. The government said itwill lower the rate on such earnings to 15% from 30.5% starting in 2022,whichwould bring it in linewith capital gains levies on stocks. The impetus appears to be fears among officials that investors are shielding crypto gains from authorities because of the higher tax rate.

Amazon struck a new blow to European Union efforts towring more tax from big tech companieswhen the bloc's second-highest court sidedwith the company over a $300 million tax bill. The EU court onwednesday annulled a 2017 decision from the European Commission, the EU's top antitrust authority, that had ordered Amazon to pay 250 million euros in taxes to Luxembourg, the latest of several big EU tax decisions to be overturned.

Joe Biden intends to increase taxes on corporate profits andwill probably succeed. He may not get the rate all theway from 21 per to a planned 28 per cent, but some increase is likely.whowill bear the heavier tax burden: companies, employees or shareholders? Robert Armstrong provides an analysis of the response to this question.

President Biden is seeking about $2 trillion in higher taxes on companies over 15 years to pay for his infrastructure plan. But corporations are just entities composed of people, so if corporate taxes go up,who ultimately pays?

The Biden administration says it's trying to spur investment in AmericaÔøΩwhile proposing to remove a four-year-old tax break thatwas intended to do exactly that.

The U.K. could accept a higher global minimum tax, but only if U.S. lawmakers pass a Biden proposal to double the country's minimum tax, a top U.K. Treasury official said.

An EU-wide digital tax plan to be published in Junewill be carefully calibrated so itwon't disrupt global talks on corporate taxation, the EU's top economy official said.Hewas referring to negotiations in the Organization for Economic Cooperation and Development on proposals to tax companieswhere they earn revenue rather thanwhere they declare their profit.

A rule to equalize the tax treatment of debt and equitywill be proposed this year in the EU, the bloc's executive arm said Friday. The rule,whichwill be outlined in a broader business taxation plan to be published May 18,will be "designed to mitigate the debt-equity bias in corporate taxation," the European Commission said in an emailed statement.

Lobbying groups representing the biggest U.S. Internet-based companies called on the U.S. to negotiate for the removal of digital-service taxes charged by nations ranging from the U.K. to India,with at least one endorsing retaliatory tariffs.

The European Parliament April 29 passed Legislative Resolution, endorsing a draft proposal to introduce a digital tax. The draft proposal includes 6 main measures.

U.S. President Joe Biden's proposal to set a minimum global corporation tax at 21% is gaining momentum,with the official running international talks on the matter saying that an agreement could settle near that rate. The Biden administration's plan has turbocharged negotiations at the Organization for Economic Cooperation and Development on how to overhaul rules on how much tax companies pay, andwhere. The U.S. suggestion,while subject to negotiations in Congress,would be significantly higher than the 12.5% previously discussed in the talks.

Mindy Herzfeld examines Treasury's recent proposal for simplifying the OECD's complex pillar 1 blueprint, arguing that Treasury fails to mention that Congress is unlikely to enact the suggested changes.

Marty Sullivan argues that the Biden administration should consider disallowing expenses allocable to the exempt portion of foreign income as part of its legislative proposal to overhaul the GILTI rules.

After several days of violent protests over Colombian tax reform proposals, President Iván Duque said the planwill be revised to avoid broadening VAT rules and subjecting anyonewho is currently exempt to income tax.

A potential agreement on a public country-by-country reporting proposalwould obligate multinationals to disclose details of their economic activity in each EU country, plus countries belonging on the so-called EU gray list.

Representatives of the European Parliament and EU member states are aiming for an agreement by early June, according to several sources involved in the talks.

A potential agreement on a public country-by-country reporting proposalwould obligate multinationals to disclose details of their economic activity in each EU country, plus countries belonging on the so-called EU gray list.

Representatives of the European Parliament and EU member states are aiming for an agreement by early June, according to several sources involved in the talks.

The Justice Department is countering plaintiffs' motion that a court reconsider their Regulatory Flexibility Act (RFA) challenge to the transition tax regs in no uncertain terms, arguing it "lacks merit" and merely restates rejected arguments. The government filed its response to plaintiffs' motion for reconsideration and for leave to amend complaint in the U.S. District Court for the District of Columbia in Silver v. Internal Revenue Service on May 4.

The Biden administration's ideas to simplify pillar 1 of a two-pillar global tax reform plan bring a new dynamic to negotiations, raising the prospects for a multilateral agreement by October, the OECD's tax chief said.

Faler summarizes Biden's tax proposals and explainswhy theywill be difficult to enact andwill only be the starting point in negotiations.

Canada's finance minister has called the US proposal for a global minimum corporate levy a "breakthrough moment" in deadlocked international tax talks, in the latest sign of the growing momentum behind a deal on taxation of large tech groups.

Richard Murphy, longstanding member of NGO Tax Justice, argues that Biden's corporate tax proposals open up the possibility of significant new international tax reform..

When developing their climate policies, countries should avoid strong unilateral approaches and consider awide range of different measures instead of focusing only on carbon border adjustments, an OECD tax official said.

The finance ministers of France and Germany have signaled that theywould not oppose a U.S.-backed global minimum corporate tax rate of 21 percent if multilateral tax reform negotiations land on that rate.

The U.N. has published an updated edition of its transfer pricing manual for developing countries,which includes a significantly revised section on profit splits and new guidance on financial transactions and procurement hubs. The third edition of the U.N. transfer pricing manual, released April 27, generally retains the structure of the second edition and preserves most of the same text. However, it also includes new or revised guidance on profit splits, financial transactions, and centralized procurement structures and a new country-specific section on Kenya.

The U.N. Tax Committee has decided against including software payments in the U.N. model treaty's definition of royalties butwill note in the updated treaty commentary that some of its members support doing so. The committee on April 28 approved changes to the commentary on article 12 of the U.N. model tax convention, including a new paragraph reflecting final text for a new article 12B,which allows for the taxation of automated digital services. The text says that article 12B may cover downloads of software and some other types of digital content.

Although more negotiations are needed because of the reluctancy of some member states, the Biden administration has put global tax reform discussions on the right track, the EU's tax commissioner said.

Part of the funding for President Biden's $1.8 trillion American Families Plan hinges on a beefed-up reporting requirement for banks designed to identify unreported income. The proposalwould require banks to report annual account inflows and outflows to the Internal Revenue Service. The requirementwould also extend to peer-to-peer payment services such as Venmo butwouldn't require individuals and businesses to report any additional information to the government, according to people familiarwith the plan. Financial institutions already must report interest, dividend and investment income, and the IRS can get bank information during audits.

Canadawould make C$7.9 billion ($6.4 billion) more in revenues if it imposed a 15% tax on excess profits made by large corporations during the coronavirus pandemic, a Parliamentary office said in a report Tuesday. The Office of the Parliamentary Budget Officer analysis comes on the heels of new government proposals to raise taxes on firms.

France and Germany have given their backing to the U.S. proposal for a 21% minimum tax on multinational companies, adding momentum to efforts to overhaul global rules despite reluctance from some smaller European countries. The plan by President Joe Biden's administration earlier this month transformed global negotiations after years of being bogged down. It also carries a significantly higher levy on companies than the 12.5% minimum tax previously discussed.

France and Germany have given their backing to the U.S. proposal for a 21% minimum tax on multinational companies, adding momentum to efforts to overhaul global rules despite reluctance from some smaller European countries. The plan by President Joe Biden's administration earlier this month transformed global negotiations after years of being bogged down. It also carries a significantly higher levy on companies than the 12.5% minimum tax previously discussed.

Japan is prepared to back President Joe Biden's plan for overhauling the taxation of multinational companies as long as there is agreement on a global corporate minimum tax. Thewhite House has proposed reshaping a global plan so that about 100 of theworld's biggest companies pay more taxes in the countrieswhere they sell their goods and services. Japanese tax experts say the minimum corporate taxwould boost government revenue at a timewhen Tokyo is concerned about its national debt. And Biden's backing provides political cover for Prime Minister Yoshihide SugaÔøΩas does the fact that analysts expect few Japanese companies to number among that top 100.

The European Union should have a bloc-wide digital tax ready to go by the end of 2021, European Parliament lawmakers said in a resolution adopted Thursday. The EU tax should move forward regardless ofwhat happens in the OECD's global negotiations on taxing revenues from digital business, the resolution said. The parliament voted 549 to 70,with 75 abstentions, for the resolution.

Opposition in the EU to a high corporate minimum tax rate could be a deciding factor in the OECD-led negotiations on a global tax overhaul. After the Biden administration proposed that the U.S. apply a 21% global minimum rateÔøΩsparking speculation that itwould push for a high rate in the multilateral talks, tooÔøΩseveral European Union countries said theywouldn't agree to such a high number. Ireland, the Czech Republic, and Hungary have voiced concerns about a higher minimum effective tax rate. Any one of these countries could use its veto power and derail the minimum tax plan in the EU.

Countries need more details before they can decidewhether to back a U.S. proposal to shape international talks on digital taxation, a European Union official said Thursday. The Biden administration has proposed away around a major roadblock in the OECD-led negotiationsÔøΩan inability to agree onwhich companies should be subject to the rules. The U.S. plan calls for usingwhat thewhite House says are simple, objective criteria to determinewhich corporations are affected. It comes at a critical moment as 139 countriesÔøΩincluding the majority of EU membersÔøΩtry to reach agreement on a deal this summer.

GILTI may need a new name if Democrats get theirway. Democrats are aiming to expand GILTI so that it hits all of multinational corporations' foreign profits ÔøΩ intangible and otherwise.

Theywant to transform the Global Intangible Low-Taxed Income tax into something broader than just a levy on so-called intangible income. That's the money companies earn from things like patents and other types of intellectual property they often stash in overseas tax havens.

The EU is planning a measure to increase tax transparency in its further delayed communication on business taxation for the 21st century, according to a top EU tax official.