Int'l Tax News

Regs on cloud and digital transactions have undergone significant changes from earlier rules, answering practitioners' calls to adopt a predominant character rule surrounding transactions and modify sourcing and cloud classification rules.

Final regulations on applying disregarded payment losses provide widespread relief by delaying the implementation date and creating carveouts for royalty payments and fractional ownership.

The EU has published the final Faster and Safer Relief of Excess Withholding Taxes directive, which was approved by the EU Council in December 2024 and allows member jurisdictions to provide relief of excess withholding taxes on cross-border investments as part of its initiative to tackle tax fraud.

According to a U.S. official, challenges in global anti-base-erosion (GLOBE) rules negotiations under the OECD's pillar 2 taxation framework have made a permanent safe harbor provision seem unlikely.

The EU Tax Observatory published a working paper January 8 explaining how the OECD's pillar 2 global minimum tax rules could affect government revenue and the potential impact on profit shifting using data reports from active multinational enterprises in Slovakia, finding that the 15 percent global minimum tax could help increase the country's corporate tax revenue by 4 percent.

Ryan Finley explains why Treasury and the IRS shouldn’t indefinitely postpone a Tax Cuts and Jobs Act-conforming update to the transfer pricing regulations’ definition of intangible.

President-elect Trump has said newspaper reports that his aides are working on tailored tariff plans that would only target critical imports are incorrect.

In this article, Sol Picciotto argues that the negotiations at the U.N. offer an opportunity to overcome the increasing dissensus in international tax rooted in the polarization between residence and source taxation, and that while a new consensus may be difficult to reach, it could be more sustainable.

Mindy Herzfeld reviews existing controversial regulations and discusses whether they are likely to be eliminated under the incoming presidential administration.

As the pillar 1 agreement hangs in the balance and questions arise about pillar 2 global minimum tax implementation, the outlook for the OECD-brokered tax reforms is anything but crystal clear.

With a fresh European Commission ready to make its mark and Poland steering the EU Council presidency, 2025 is poised to shape the role of taxation in the bloc’s policies for the next five years.

Global South countries are prepared to dive into substantial tax matters for the U.N. tax convention this year, but they could be waylaid by Global North countries demanding more specifics about the decision-making process.

Enrique González, José Carbajal, Ana María Romero, and Kent P. Stackhouse explain the unique challenges that must be considered if pillar 1’s amount B is implemented in Mexico and Latin America.

Luis de la Cruz explains the taxation of offshore indirect transfers.

Anirudh Raghavan questions the U.N.’s role in the international tax community and suggests ways of moving further toward international tax cooperation and equality.

Jefferson VanderWolk offers a sobering assessment of the two-pillar project and the brewing conflict between the OECD and the U.N.

A Fifth Circuit panel has reinstated an injunction halting the enforcement of the Corporate Transparency Act in Texas Top Cop Shop Inc. v. Garland and scheduled oral arguments for March 2025.

The U.N. General Assembly has adopted a resolution approving the terms of reference for a framework convention on international tax cooperation, but EU countries and the United States have raised concerns about two specific paragraphs.

A make-or-break year is coming for Pillar One, the first half of a two-part global tax overhaul that aims to reallocate corporate profits to address digitalization of the economy and reform rules for transfer pricing, which dictate how multinational corporations value their intercompany transactions.

Lee A. Sheppard explains important 2024 tax developments in the European Union, including key tax decisions in the EU’s Court of Justice.

Mindy Herzfeld examines how pillar 1’s amount B — which generally streamlines transfer pricing rules by adopting set margins — could be consistent with an America First agenda.

The IRS is articulating its reasoning for the proposed regs on previously taxed earnings and profits (PTEP) requiring a dual system of accounting at both the corporate level and shareholder level.

The OECD has released an automated tool for pricing a return on sales for baseline distributors that are in scope of the amount B transfer pricing simplified and streamlined approach.

Reuven S. Avi-Yonah explains how reducing the corporate tax rate for domestic manufacturing could encourage multinationals to expand activities in the United States.

The IRS is asking for stakeholder feedback with the intention of proposing regs in line with the OECD’s report on the amount B simplified and streamlined approach for pricing baseline marketing and distribution transactions.

Patrick Driessen argues that the revenue and general nonrevenue policy effects of pillar 2 look more favorable after consideration of the U.S. government’s obligation to regulate foreign tax credits to discourage quid pro quo subsidy schemes of foreign governments.

More than 58,000 exchanges of information on tax rulings took place between 2016 and 2023 under action 5 of the base erosion and profit-shifting project, according to the OECD’s latest peer review report.

Thomas Horst examines differences between the undertaxed payments rule and the UTPR, or undertaxed profits rule, and whether adoption of the former could resolve incongruities between the laws of the United States and the many countries that have enacted the UTPR and provide a legally acceptable alternative to the UTPR.

The continuation of work on the ninth directive on administrative cooperation is the only direct taxation priority listed in the six-month program of the next EU Council presidency.

The United States must continue engaging at the OECD on tax issues like the two-pillar global tax reforms to protect its interests and promote its global leadership, Treasury’s top OECD negotiator said.

Brandon Pizzola and Hilary Gelfond-Gross analyze the economic effects of the foreign-derived intangible income deduction, the economic activity supported by the deduction, and the macroeconomic impacts of repealing it.

The OECD’s transitional peer review process for determining which jurisdictions have enacted measures qualified as in line with the pillar 2 rules is winding down, and a list of those jurisdictions may be published soon.

U.S. guidance on transfer pricing penalties, featured prominently in recent litigation, will be even more critical under the amount B transfer pricing approach under pillar 1 of the OECD’s global tax reform plan, practitioners warn.

Reuven S. Avi-Yonah describes the looming international conflicts regarding the U.S. foreign-derived intangible income provision.

Prita Subramanian and Thomas Zollo examine the evolution of the commensurate with income standard, its current and prospective application, and its practical implications for taxpayers.

Robert Goulder comments on President-elect Trump’s recent tariff threats.

Democrats are planning to move quickly on a bill providing a double taxation fix between the United States and Taiwan, with hopes to get the legislation to President Biden’s desk before the end of the year.

Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler explain how political changes may affect tax legislation and discuss the Tax Court’s ruling on penalties in Microsemi, the interest deduction ruling in Exxon, and comments on section 988 proposed regulations, among other developments.

Mindy Herzfeld examines U.S. tariff history and considers options for the next administration to achieve tariff advocates’ revenue goals and policy objectives.

Daniel Olika proposes a framework to measure success in international tax cooperation, arguing that effectiveness should be measured by both the process and the outcome.

Robert Goulder considers what it will take for Congress to reclaim its tariff authority from the executive branch.

After years of anticipation, the IRS and Treasury have released rules on previously taxed earnings and profits, which are exceptionally detailed and complex.

The European Commission has determined that Luxembourg and the Netherlands did not grant selective state advantages to Amazon, Fiat Chrysler, and Starbucks through advance pricing agreements.

President-elect Donald Trump made tariffs on China a defining feature of his first term. Now Trump is poised to ratchet up the pressure on China and other trading partners again, recently proposing an additional 10% tariff on all products from China and a 25% tariff on all Mexican and Canadian imports.

Mindy Herzfeld examines the differences between tariffs and the VAT in light of upcoming debates over U.S tax rate changes, as well as how the destination-based cash flow tax might fit into the picture.

The U.N. Economic and Social Committee approved the bones of a framework convention on international tax cooperation, despite continued opposition from Global North countries.

Antonio Lanotte explains the European Commission’s VAT in the Digital Age reform for updating VAT regulations and modernizing VAT rules in light of rapid digitalization and increasing cross-border commerce.

The decision ends three of the EU competition regulator’s attempts to crack down on international companies’ tax deals.

The European Commission has singled out Luxembourg as the only EU country that refuses to adequately address aggressive tax planning, while Malta got the benefit of the doubt for promising to take steps to comply.

President-elect Trump announced that he will introduce an additional 25 percent tariff on imports from Canada and Mexico until the countries stop migrants and drugs from crossing at the borders.