Int'l Tax News

A proposed change to a United Nations model tax treaty is being debated for its potential for double taxation and increased compliance burdens for companies, while it is intended to expand the use of gross taxation to more kinds of cross-border business services and eliminate physical presence tests.

EU heads of state are scheduled to discuss how to strengthen the bloc’s single market and competitiveness, and some member states are determined to debate even the most politically sensitive proposals, with potential tax implications.

G-24 countries are hoping to engage multilaterally on a range of tax issues, including corporate income tax and consumption tax, and shore up domestic revenue amid debt woes.

Canada will start applying a proposed 3% tax on the world’s biggest technology companies this year, despite threats from American lawmakers to carry out trade reprisals against a levy that will primarily hit US firms.

 Former Italian prime minister Enrico Letta said European Union countries should better harmonize their tax systems as part of a major effort to boost the bloc’s single market.

The European Union may have the opportunity to amend anti-tax avoidance rules and develop a new tax information exchange rule so that companies don’t have to report multiple times in different EU countries for minimum tax compliance purposes.

The “Future Made in Australia” plan, which will form part of Australia's upcoming budget and address the green energy transition, will contain strict tests for receiving tax credits and subsidies.

European Commission President Ursula von der Leyen is unleashing a barrage of trade restrictions against China as she seeks to follow through on a pledge to make the EU a more relevant political player on the global stage.

Canada’s federal budget includes a new 10% tax credit on the capital cost of buildings used for EV manufacturing — but only if companies make a significant bet on locating other portions of their supply chains within the country.

Large U.S. companies are pressing lawmakers to revive expired tax breaks for research and development spending, as a political stalemate keeps some finance executives wrestling with those investments.

The US is looking at consistent implementation of the global minimum tax rules across countries through a peer review process to ensure its foreign tax credit can be distributed appropriately to companies in regimes that qualify under the review.

Jurisdictions may have missed a key deadline to reach agreement on the text of the pillar 1 multilateral convention, but the OECD remains optimistic about prospects for a deal, a top OECD official said.

The two-pillar OECD tax reform plan doesn’t go far enough to help developing countries, so the G-24 is hopeful for more progress under a U.N. framework convention for international tax cooperation, the group’s director said.

Nana Ama Sarfo reviews some responses to Australia's most recent public country-by-country reporting consultation and notes how the measure raises larger questions about international standardization.

EU leaders plan to adopt a draft statement calling for the harmonization of corporate tax law to advance the Capital Markets Union, but the European Commission’s meetings with tax officials tell a different story.

Reuven S. Avi-Yonah suggests that the EU adopt the pillar 1 three-factor formula for BEFIT and apply it to large multinationals operating in the EU.

Martin A. Sullivan examines how companies are addressing the effects of pillar 2 in their financial reports, using the “Magnificent 7” to show various approaches.

Mindy Herzfeld cautions that the United States’ tax base could erode in the wake of a global push for broad-based withholding taxes on services.

U.S. progress on implementing OECD global minimum tax rules would put American negotiators in a better position to ask for U.S.-friendly pillar 2 administrative guidance, according to a top Treasury official.

An EU task force looking at taxing rights over remote teleworkers appears to be leaning toward bilateral arrangements, and the possibility of triggering permanent establishments is a recurring theme in the talks.

The Joint Committee on Taxation is monitoring the implementation of global minimum tax rules around the world as it considers how to update its analysis of pillar 2’s potential U.S. revenue effects.

The Irish Finance Department has published a draft proposal for a participation exemption for foreign dividends that draws on feedback from a government consultation.

Arlene S. Fitzpatrick provides context for various proposals to address the Taiwan-U.S. tax relationship and explains the merits of the options available to navigate this landscape.

Ireland wants to circumscribe its incoming corporate tax break for dividend income to tax treaty countries in the latest “strawman” version of the proposal with scope and administration details.

Nathan Boidman, Marc André Gaudreau Duval, and Michael N. Kandev give an overview of IP box regimes, discuss whether it would be advantageous for Canada to adopt one, and examine the Canadian government’s perspective on the issue.

A top Dutch tax official suggested tweaks to the country’s corporation tax to replace the higher bank tax and upcoming dividend tax on stock buybacks.

Acting Deputy Assistant Secretary for International Affairs at the Treasury, Scott Levine, said the US should adopt an income inclusion rule or reform its current global intangible low-taxed income rule, known as GILTI, so that it is compliant with the global minimum tax rules and provides more tax certainty to corporations.

Reuven S. Avi-Yonah examines the history of the arm’s-length standard and considers whether Treasury can deviate from it if it is necessary to clearly reflect related taxpayers’ income.

Ignacio Gepp, lawyer at Puente Sur, assess Latin America’s use of AI in tax administration and potential consequences to taxpayer rights.

House appropriators tried to punish the OECD for its tax policies by eliminating its federal funding for fiscal 2024, but the organization instead got a 4 percent budget boost, according to a State Department document.

The Liechtenstein government has approved an ordinance that clarifies the interpretation and implementation of the country’s new law implementing a global minimum tax on large corporate groups.

Melani Dewi Astuti provides a status check on Southeast Asian countries’ adoption of the global anti-base-erosion rules and examines the challenges these countries face in the wake of pillar 2, including limitations on offering tax incentives.

Pressure from EU and recent international tax developments have led Switzerland to align its national tax system with new international standards by focusing on transfer pricing provisions.

Norway may have breached state aid rules by granting carbon tax exemptions for some waste incineration and some industrial uses of natural gas and liquefied petroleum gas, the authority that oversees Norway’s compliance with European Union single market rules said.

The OECD continues negotiations over the global tax treaty, after missing a March 31 deadline to agree on the convention’s final text. Issues that remain unresolved include withholding taxes and the definition of digital service taxes.

UK start-ups and small businesses have accused HM Revenue & Customs of putting economic growth and innovation at risk by rejecting legitimate claims for research and development tax relief, delaying payments and clawing back credits. The result has left companies exploring options to move overseas or scrapping plans to create jobs or invest.

New Zealand finalized a law that will introduce the global minimum corporate income tax of 15%, via an income inclusion rule and an undertaxed profits rule. The income inclusion rule will apply to New Zealand-headquartered multinationals, and the undertaxed profits rule will apply a top-up tax on foreign companies that operate in New Zealand but are taxed below 15% in their home jurisdictions.

The OECD is considering using one of its existing tools to provide taxpayers the ability to gain more certainty about their positions if they are subject to the global minimum tax and other provisions under the global tax deal.

The first customs duties on digital products such as online films and software downloads will hit consumers and businesses in 2026, increasing prices in some countries, the head of the World Trade Organization has predicted. 

China filed a complaint to the World Trade Organization alleging the US’ Inflation Reduction Act and associated rules are “discriminatory” and have “seriously distorted” the global EV supply chain by blocking electric-vehicle manufacturers from sourcing materials from China and other foreign adversaries.

The OECD expects to publish in the coming weeks updated commentary for the pillar 2 global anti-base-erosion rules that will incorporate previous rounds of administrative guidance, an OECD official said.

The list of outstanding issues in the European Commission's Faster and Safer Relief of Excess Withholding Taxes proposal is narrowing, but EU member states are still divided over which transactions to exclude from the text.

The United States is trying to secure key conditions for Congress to support a pillar 1 tax agreement, but it is at odds with a few major jurisdictions, according to a Treasury official.

The EU will engage with the U.N. tax cooperation process to reach a broad consensus, an EU tax official said, stressing that the process should not undo important work on the OECD two-pillar plan.

The law aims to ease the burden of taxation and bureaucracy to strengthen the country’s competitiveness as a business location, with Europe’s biggest economy struggling to generate growth.

The Netherlands is recommending that work on the United Nations tax treaty meet sustainable development goals and be consistent with the Organization for Economic Cooperation and Development’s tax work without duplicating it.

The European Commission has raised the possibility of moving the EU Council from unanimity to qualified majority voting on tax and other matters as part of a strategy for integrating new member states.

Italy’s economy minister said his country might retain and modify its digital services tax if efforts to implement pillar 1 of the OECD’s two-pillar global tax reform plans come to naught.

Pillar 2 of the OECD’s global tax reform plan could have presented an opportunity to merge resources for the EU budget — for example, through the undertaxed profits rule — according to an international tax expert.

Italian Finance Minister Giancarlo Giorgetti told the country’s Chamber of Deputies on Wednesday that signing the Organization for Economic Cooperation and Development’s treaty looks problematic because of the political dynamics in some large countries, including the US, that are crucial to finalizing the deal.