Int'l Tax News

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.

The UK government aims to introduce its carbon border tax on Jan. 1, 2027, and is seeking feedback on its design, implementation, and administration—including the scope of products and ways to calculate emissions.

The United States is working to protect the benefits of the research credit under pillar 2 global minimum tax, possibly through OECD administrative guidance, a top Treasury official said.

Jefferson VanderWolk takes exception to criticism of the use of refundable tax credits, explaining that in fact refundable tax credits are a legitimate policy response to the current GLOBE rules.

The EU commission says rules on voting procedures do not need to be changed, but EU countries could agree to activate a procedure allowed by the rules under which a unanimous decision could be taken to permit qualified majority decisions in some areas currently subject to unanimity, including tax.

The EU will soon put in motion a 2020 commitment to hold annual talks with the United Kingdom regarding measures to counter harmful tax practices, according to a draft European Commission/EU Council statement.

New Treasury Department data shows companies have registered 45,500 projects for possible sale on a new tax-credit marketplace.

The terms of reference for a proposed U.N. convention on international tax cooperation should provide for funding to ensure that the least developed countries can attend upcoming negotiations in New York, a Colombian official said.

Peter Mason reviews the latest report by the OECD on corporate tax statistics to assess the impact of the base erosion and profit-shifting project.

The United Arab Emirates is consulting on the global minimum tax framework, including policy options for the extraterritorial rules. The UAE wants feedback on how the framework interacts with the country’s new corporate tax system and implementation of rules which ensure the top-up tax is collected on foreign in-scope entities too.

Australia should exempt multinational companies from reporting tax information from each country where they have operations if they’re not required to report it at home, tax and accounting firms told the Treasury department.

If companies make transfer pricing adjustments after the end of the year, as many do, they could be disqualified from using a safe harbor that simplifies the global minimum tax’s calculations and reduces their tax liabilities.

France started offering its green industry tax credit to companies to offset costs up to €350 million ($381 million) per qualified investment in energy. The tax credit is expected to generate €23 billion in investments, create 40,000 jobs, and cut 35 million tons of CO2 emissions by 2030.

Developing countries laying out recommendations for a new framework convention at the United Nations are seeking protocols to address the taxation of digital services, environmental taxes, exchange of information for both services and wealth, and illicit financial flows.

Kimberly S. Blanchard examines the U.S. tax treatment of a sale of a partnership interest by a foreign person and explains why the Tax Court’s decision in Rawat was incorrect.

The Biden administration is proposing an expansion of a levy that targets companies with high profits and low taxes.

A recent agreement to extend the length of the “unilateral measures compromise” between the United States and five other countries over their digital services taxes will apply to Turkey as well.

Reuven S. Avi-Yonah argues that because digital services taxes are used to offset the taxation impediment that “digital giants” cannot be taxed under permanent establishment rules, they should qualify as an in-lieu-of tax and therefore be creditable.

European finance ministers said they are committed to acting in the collective interest to boost the EU Capital Markets Union, but they insist that any related tax initiatives be left to the member states.

New Zealand’s pillar 2 global minimum tax rules should start taking effect in 2025 and be incorporated into law by reference to OECD model rules and guidance, a parliamentary committee has recommended.

The EU Council’s Belgian presidency has persuaded some reluctant member states to accept a previously rejected deal with the European Parliament on the reclassification of digital platform workers.

In the wake of a significant and surprising district court decision holding the Corporate Transparency Act unconstitutional, practitioners expect the case to influence other challenges to the beneficial ownership reporting regime.

Tax authorities in Africa and Ukraine said technical assistance from the OECD in transfer pricing has resulted in higher revenue and improved compliance.

Pierce O’Reilly, head of business and international taxes at the Organization for Economic Cooperation and Development, noted that the minimum tax’s substance-based income exclusion rule will continue to support investment into low-capacity countries that tend to offer significant corporate investments.

Mindy Herzfeld examines how the United States can increase research and development and keep the resulting intellectual property stateside.

Martin A. Sullivan examines Form 10-K data from multinational pharmaceutical companies indicating that recent tax policy changes haven’t induced them to shift profits back to the United States, and he explores why that is a different story for tech companies.

Richard S. Collier and Ian F. Dykes explain the new rules released by HM Revenue & Customs on the transfer pricing risk framework and detail the relationship with the OECD Transfer Pricing Guidelines and the base erosion and profit-shifting project.

House taxwriters coalesced over their worries about the impact of the OECD global tax deal’s approach to digital services taxes but found little common ground across the aisle on whether the U.S. response should be to scrap participation or stick with the talks.

Low-capacity jurisdictions may not benefit from the OECD’s optional framework to simplify transfer pricing for some business transactions, because of a lack of data and administrative resources available to determine the revenue companies owe from such transfer pricing.