Int'l Tax News

New Zealand’s coalition government should scrap the previous government’s bill for a digital services tax because the DST could lead the country’s trading partners to respond with retaliatory tariffs, an activist group has warned.

A new study by the European Left estimates that a permanent tax on excessive profitability of near-monopolies would raise between €81 billion and €107 billion.

A bipartisan group of lawmakers in the House and Senate introduced a measure to overturn the Biden administration’s rules implementing the EV tax credit, which they argue are too lenient on China.

Kenya has proposed withdrawing its digital services tax and replacing it with a significant economic presence tax after President William Ruto said the government would review the DST and align it with OECD tax reforms.

The International Tax and Investment Center describes some potential GLOBE rule disputes and analyzes some proposals for a dispute resolution mechanism, focusing on how the tax treaty mutual agreement procedure in article 25 of the OECD model tax convention can best be used.

Reuven S. Avi-Yonah examines the use of tax incentives to encourage location-specific investment and offers a new approach that he says will be more successful.

Australia plans to introduce a new tax penalty for big companies that try to avoid taxes on royalties in its latest move to crack down on multinationals that it says aren’t paying their fair share.

European Union finance ministers agreed in principle to a law intended to speed up cross-border withholding tax refund procedures and that will require EU countries to replace current tax refund systems for cross-border dividend and interest payments with improved, simpler procedures.

The Biden administration will increase tariffs from 25 percent to 100 percent on Chinese EV imports to offset Chinese export practices, which they argued “favor Chinese automakers at the expense of U.S. and other foreign automakers and autoworkers and are leading to a massive surge of unfairly underpriced Chinese vehicles into foreign markets.”

Martin A. Sullivan scrutinizes the no-benefit requirement under pillar 2 of the OECD’s base erosion project, highlighting the tension between incentives and taxation in light of Singapore’s planned implementation of two components of pillar 2.

Tomás Bailey, Colm Brussels, and Rachel O’Sullivan explain how Irish taxpayers can use the EU tax dispute resolution directive to challenge the tax treaty compatibility of EU member states’ digital services taxes.

Northern Ireland should slash its corporate tax rate from 25% in line with the Republic of Ireland’s 12.5% rate for small firms and 15% for large companies, to drive growth in the cash-strapped region.

Reuven S. Avi-Yonah casts doubt on whether bilateral investment treaties offer investors a viable shield from pillar 2’s qualified domestic minimum top-up tax, in response to a recent Tax Notes article.

Regulators including the China Securities Regulatory Commission and the State Taxation Administration are reviewing a plan submitted by Hong Kong to waive the 20% tax on dividends from Hong Kong stocks bought via Stock Connect.

The Norwegian government in March announced its latest step to close tax loopholes for wealthy expatriates by setting a deadline for the payment of an exit tax on unrealized changes in the value of their assets, or their transfer. That plan follows increases in wealth and dividend taxes since 2022 that have prompted dozens of the country’s richest to relocate, mainly to Switzerland.

The European Commission is evaluating the effectiveness of reporting rules that govern collection of information relevant for cross-border taxation and the exchange of that information between EU tax authorities.

Financial services industry groups are calling on the Australian government to be more discerning with the tax information from funds that is made public following it’s country-by-country proposal released in February.

Global policymakers, including the UK, New Zealand, Israel and US states, are imposing new taxes on electric vehicles as the shift away from combustion engines threatens to leave a $110bn hole in government revenues owing to a drop in receipts from fuel duties. 

Mindy Herzfeld explains the uneven effect of the Tax Cuts and Jobs Act’s carrot-and-stick approach to encouraging U.S. multinationals to bring valuable intellectual property back to the United States.

Companies in scope of digital services taxes will probably have more permanent establishments in jurisdictions with DSTs if OECD pillar 1 rules are enacted, according to a Joint Committee on Taxation economist.

EU member states are at odds over how to coordinate the application of double taxation agreements to accommodate the tax complexities of cross-border telework.

Manufacturers have two years to move their critical mineral supply chains away from foreign entities of concern if they want to qualify for the new clean vehicle tax credits, Treasury announced in final regulations.

Błażej Kuźniacki and Edwin Visser explain the difficulties for non-advanced economies trying to attract foreign direct investment while also adhering to new pillar 2 rules, and offer suggestions for new international approaches that could help create a more level playing field for all economies.

US multinational companies may lose the ability to deduct up to hundreds of millions of dollars’ worth of losses incurred from their income starting this year under the new global minimum tax.

Canada’s digital services tax might cause U.S. companies to lose up to $2.3 billion annually, and if the United States doesn’t push back, the “global contagion” of DSTs will spread, a tech industry group said.

Roy Clemons argues that the United States should replace its quasi-territorial tax system and proposes a framework that taxes domestic and multinational corporations at the same statutory tax rate on a country-by-country basis.

Ryan Finley explains why withdrawing the cost-sharing regulations wouldn’t further the policy goals of cost-sharing critics.

Robert Goulder comments on a recent Congressional Research Service report on pillar 1 and digital services taxes.

Martin A. Sullivan examines newly released IRS data that reveal surprising shifts in where U.S. multinationals book profits and losses, with some of the usual suspects absent and Gibraltar topping the tax haven list.

Honda is the latest automaker to announce a multibillion-dollar investment in Canada, bolstered by new investment tax credits introduced by the federal government to support the green transition.

Vladimir Starkov and Alexis Jin explain their study on the effect of amount A on U.S. corporate income tax revenue.

A future United Nations Framework Convention on International Tax Cooperation should help countries reform their domestic tax systems and avoid duplicating work on international tax reform, the European Union said ahead of UN tax discussions in New York.

The committee is considering topics such as how the UN framework will approach taxing multinational companies and wealthy individuals, digital taxation, taxation of cross-border transactions, combating tax-related illicit financial flows, and using tax to address environmental challenges.

EY authors discuss the implications of EU’s new carbon tax that may significantly impact developing economies.

EU member states have presented a common approach to discussions about a U.N. framework convention on international tax cooperation, but several countries are still not ready to discuss proposals.

The US Treasury Department and business groups are at odds with Australia over its taxation of software — and that could prompt higher taxes, higher prices, and maybe even a rethink by US companies over how they’ll do business there.

Business groups are critical of Vietnam’s financial support plan to soften the impact of the global minimum tax on multinationals, saying it’s too vague and narrow in scope, with only large projects able to meet its eligibility conditions.

Nana Ama Sarfo outlines some of the discussions at a recent Senate Budget Committee hearing on offshore tax avoidance.

Ireland has forecast a budget surplus of €8.6 billion ($9.2 billion) this year, citing anticipated record corporation tax receipts in a boost for the country that is in the process of setting up its sovereign wealth fund.

Martin A. Sullivan examines the generous provisions of Bermuda’s new corporate income tax and how they interact with the OECD’s pillar 2 rules.

The European Commission is still open to the possibility of proposing mandatory publication of the effective tax rates of large corporations operating in the EU, according to a top EU tax official.

Peter Hongler and Simon Habich explain that upcoming U.N. negotiations should look to establish the institutional groundwork for a more credible evolution of the international tax system, recognizing that a global consensus may not be imperative across all tax-related domains, and instead should strive for global inclusivity.

Sweden’s finance ministry is aiming to pass a suite of tax breaks to enhance the country’s competitiveness and to support business and individuals who continue to struggle economically.

Building consensus takes time, so the quick pace of the U.N.’s work on the terms of reference for a new framework convention on international tax cooperation is worrisome, a top EU tax official said.

While implementing a minimum effective tax rate of 15% under the OECD’s Pillar Two initiative, Singapore looks to stay competitive to businesses by granting credits to offset corporate income tax payable by companies with qualifying expenditures for approved projects.

A report commissioned by EU leaders on the future of the single market calls for a harmonized tax framework and says allowing exceptions to the unanimity rule could take a bite out of tax avoidance.

EU leaders have broadly backed a roadmap for improving the bloc’s competitiveness, a blueprint that includes using tax incentives to meet its objectives.

Ratification of an international treaty that would reallocate taxing rights over the profits of the world’s largest companies is “not the most likely scenario” despite its possibly being ready for signing in June, a former OECD tax chief said.

As president of this year’s Group of 20 nations, Brazil is prioritizing implementation of a global minimum wealth tax on billionaires as a means to fund efforts to combat rising temperatures and poverty in low and middle-income countries.

An EU value-added tax exemption for companies’ foreign operations that aren’t considered “fixed establishments” may need to be redefined in the context of increased automation.