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Int'l Tax News

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PTEP Basis Notice, Pillar 2 Guidance, Treaty Update, Crypto Reporting Extended, and Worthlessness Regs

  • By Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler

Larissa Neumann, Julia Ushakova-Stein, and Mike Knobler review guidance and new regs on section 174, group membership implicit support, pillar 2, and catalog comments and recommendations for a pillar 1 implementation treaty.

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Hunt Weighs Ending Non-Dom Tax Status to Raise Budget Funds

  • By Joe Mayes

Chancellor of the Exchequer Jeremy Hunt has considered scrapping Britain’s non-domiciled tax, which allows about 70,000 people to avoid paying tax on their overseas earnings.

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OECD’s Risk Assessment Tool Is a Good Fit for Certain Taxpayers

  • By Lauren Ann Ross

Covington’s Lauren Ann Ross analyzes advantages of the OECD International Compliance Assurance Program compared with advance pricing agreements and audit adjustments.

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Global Tax Treaty To Meet Deadline, OECD Tells G20 Ministers

  • By Danish Mehboob

The OECD is on track to finish its multilateral tax treaty to reallocate taxing rights by March, and the global minimum tax will start in more than 35 countries this year. Estimates provide the treaty will reallocate $200 billion per year and increase revenues by at least $155 billion annually.

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EU Crackdown Shows Hurdles to Enacting Global Minimum Tax Deal

  • By Will Morris
  • By Steven Kohart
  • By Giorgia Maffini

European Commission enforcement of Pillar Two rules for EU nations creates implementation challenges for countries and multinationals, PwC’s Will Morris, Giorgia Maffini, and Steven Kohart say.

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US Tolerance of Digital Tax Justifies Canada Bill, Official Says

  • By James Munson

Canada defended plans to enact a digital services tax against a potential economic reckoning from the US on Thursday, pointing to Washington’s tolerance for similar measures elsewhere.

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Warren Tax Guru Makes G-20 Case to Soak Global Billionaires

  • By Andrew Rosati
  • By Maria Eloisa Capurro

Gabriel Zucman, who helped Elizabeth Warren develop a wealth tax plan for her 2020 US presidential campaign, is promoting a proposal for a global minimum wealth tax aimed at international coordination to tax the rich and fight poverty.

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Africa Group Says Hold Off on Adopting OECD Transfer Pricing Rules

  • By Lauren Vella

A group representing West African tax administrations is concerned the OECD’s recently published guidance on transfer pricing rules lack a definition for low-capacity jurisdictions and qualitative scoping criteria.

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OECD Mulls Multilateral Treaty for Global Minimum Tax Disputes

  • By Lauren Vella

The OECD is considering developing a multilateral convention to resolve disputes related to the application of the global minimum tax, a top official for the organization said.

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Global tax deal under threat from US politics and fraying consensus

  • By Emma Agyemang
  • By Paola Tamma

Implementation of the OECD’s global tax treaty is stalling due to political opposition in the US and tax negotiations by the UN influenced by developing nations.

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U.S. WHT on Tax-Free Dividends Not Creditable, Austrian Court Says

  • By Alexander F. Peter

No Austrian tax credit can be claimed for tax-free dividends burdened with Swiss or U.S. withholding tax, an Austrian court has ruled, saying that even EU withholding tax must be waived by the payer country.

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Pepsi, IBM Sell Bonds Through Singapore to Reap Tax Benefit

  • By Olivia Raimonde, Paul Cohen & Ameya Karve

 A tax deduction on interest in both the US and Singapore effectively lowers after-tax borrowing costs on bonds issued in Singapore.

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Pillar 2 Taxes Are Eligible for Foreign Tax Credits

  • By Lee A. Sheppard

Lee A. Sheppard argues that there’s no justification for the basic position of section 901 and she defines the accessibility problems that arise due to the entity that earns the income not being the one to pay taxes on it.

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How to Protect the U.S. Tax Base, Part 2: IP Ownership

  • By Mindy Herzfeld

Mindy Herzfeld examines how the United States can strengthen incentives for companies to keep their intellectual property stateside and protect the U.S. tax base.

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OECD’s Amount B Report Will Disappoint Taxpayers and Advisers

  • By Gerdes, Imke
  • By Richard Fletcher

The OECD’s latest report to simplify transfer pricing is complex and fails to confirm certain provisions, Imke Gerdes and Richard Fletcher of Baker McKenzie say.

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New Zealand Opts Out of OECD Transfer Pricing Approach

  • By Deborah Nesbitt

New Zealand will not adopt the Organization for Economic Development’s new transfer pricing rules for bringing goods into the country, and instead continue to rely on its own rules.

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Bahamas Introduces Corporate Tax Regime in Response to Pillar 2

  • By Kiarra M. Strocko

The Bahamian government has announced its plans to implement a 15 percent corporate income tax in response to the OECD’s two-pillar international tax reform plan, anticipating tax revenue to exceed $140 million annually.

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Don’t Blame the United States if Pillar 1 Fails, Estonia Says

  • By Elodie Lamer

Other factors should be considered before the United States is blamed for a potential failure of pillar 1 of the OECD’s two-pillar global tax reform plan, an Estonian Ministry of Finance official said.

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Pillar 2 Compatibility With Italian R&D Tax Credit

  • By Andrea Di Gialluca and Davide Cotroneo

Andrea Di Gialluca and Davide Cotroneo explain the interaction between Italy’s research and development credits set in place to promote innovation and competitiveness in Italy, and imposition of the OECD’s pillar 2.

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Isle of Man Proposes Tax Increase as Part of Pillar 2 Transition

  • By Stephanie Soong

The Manx government is planning to raise the corporate tax rate for large banks and retailers as it moves to implement pillar 2 of the OECD’s two-pillar global tax reform plan.

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High-Income Countries Want Consensus in U.N. Tax Discussions

  • By Sarah Paez

High-income OECD countries said the terms of reference for a U.N. framework convention on international tax cooperation should be based on consensus rather than simple majority voting — a view opposed by low-income countries.

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South Africa Consults on Draft Global Minimum Tax Bills

  • By Stephanie Soong

The South African government is publicly consulting on draft legislation implementing pillar 2 of the OECD’s global tax reform plan and on related tax administration measures as part of its 2024 budget.

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OECD Sets Out Amount B Transfer Pricing Simplification Framework

  • By Stephanie Soong and Alexander F. Peter

The OECD has published a report on an elective approach for simplifying transfer pricing for baseline marketing and distribution transactions starting in 2025, noting several reservations and concerns from India about the framework.

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EU Council Approves Removal of Four Nations From Tax Blacklist

  • By Sarah Paez

The EU Council approved the removal of four small, tropical nations from its blacklist for noncooperative jurisdictions in tax matters, two of which had been recently added to the list.

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EU Countries Reject Platform Workers Deal for Second Time

  • By Elodie Lamer

The EU Council was unable to get enough votes from member states to approve a watered-down second deal on the reclassification of digital platform workers.

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Singapore to Advance Global Minimum Tax Adoption Plans

  • By Stephanie Soong

The Singaporean government has announced it is moving forward with plans to partially adopt parts of the global minimum tax regime under pillar 2 of the OECD’s two-pillar global tax reform plan in 2025.

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Back to the Future? What to Do About the TCJA in 2025

  • By Reuven S. Avi-Yonah

Reuven S. Avi-Yonah considers which provisions of the 2017 Tax Cuts and Jobs Act should be retained and which should be allowed to expire at the end of 2025.

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EU Countries' Lawmakers List Issues With BEFIT

  • By Elodie Lamer

As EU countries’ parliamentary scrutiny period for the European Commission’s Business in Europe: Framework for Income Taxation (BEFIT) proposal came to an end, Ireland and Poland, among other member states, voiced serious concerns.

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EU Ambassadors Agree to Remove Four Jurisdictions From Blacklist

  • By Elodie Lamer

EU member states’ permanent representatives have agreed to remove the Bahamas, Belize, the Seychelles, and Turks and Caicos from the EU list of noncooperative jurisdictions for tax purposes.

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U.S. Deal to Avoid Trade War Over DSTs Extended to End of June

  • By Stephanie Soong

The United States has extended a “unilateral measures compromise” with five countries that will deal with their digital services taxes in the period before pillar 1 rules are enacted and sidestep retaliatory U.S. trade actions.

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MEPs Agree on Transfer Pricing Directive but Not Group Taxation

  • By Elodie Lamer

Under the European Parliament’s provisional opinion on a new transfer pricing directive, the U.N. could set guidelines in the future, but agreement on a proposal to harmonize aspects of the corporate tax rules remains elusive.

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EU BEFIT Proposal Could Decrease Tax Avoidance, Study Author Says

  • By Sarah Paez

The European Commission's proposal to harmonize aspects of corporate tax rules would make it harder for multinational enterprises to shift profits to tax havens, a researcher said.

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Trade Groups Say Pillar 2 Income Blending Should Not Alter DCLs

  • By Michael Smith

U.S. trade groups are urging Treasury not to apply dual consolidated loss rules to the jurisdictional tax blending rules under pillar 2 and the corresponding safe harbors of the OECD’s global minimum tax deal.

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It’s 2024 and Trump’s Tariffs Are (Still) a Bad Idea

  • By Robert Goulder

Robert Goulder critiques a proposal for renewed tariffs.

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How to Protect the U.S. Tax Base: Don’t Give It Away

  • By Mindy Herzfeld

Mindy Herzfeld explains how the U.S. trade representative’s withdrawal of U.S. opposition to global data localization may have negative revenue consequences for the United States.

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Multinational Pharmaceutical Companies Forecast Pillar 2 Effects

  • By Amanda Athanasiou

Executives at several multinational pharmaceutical companies are making projections about the effects of pillar 2 on their companies’ financial outlooks and discussing other tax developments as they report their 2023 financial results.

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BIAC Calls for More Refinements to OECD’s Pillar 2 Projections

  • By Stephanie Soong

The OECD’s assumptions underpinning its global minimum tax revenue projections are still uncertain, so it should keep refining those estimates to get a more accurate picture of pillar 2’s effects, Business at OECD said.

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Japan Proposes Pillar 2 Amendments in Tax Reform Bill

  • By Stephanie Soong

The Japanese government has published a tax reform bill containing draft changes to its pillar 2 regime, but the absence of a proposal to adopt the global minimum tax backstop rule was unexpected, a practitioner said.

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Brazil Politics: Government, Congress Aim for Deal on Tax Bill

  • By Fernando Travaglini

The government is facing dissatisfaction over its ongoing efforts to end a payroll tax exemption as it aims to boost revenues and achieve its zero-deficit target for 2024. The Finance Ministry and Congress are trying to reach a deal to give companies more time to adapt to full taxation.

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Business Groups Applaud Irish Plan to Exempt Foreign Dividends

  • By Sarah Paez

Business groups, accounting firms, and corporations lauded Ireland’s proposal to exempt foreign-source income from corporation tax, but some said that the move could complicate pillar 2 implementation.

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Estonia to Delay Full Global Minimum Tax Rollout Until 2030

  • By Jan Stojaspal

Estonia is allowed a six-year deferral of the obligation to implement the 15% tax OECD Global Minimum Tax because it has fewer than 12 companies that would be in scope.

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French Tax Authorities Boost Powers in Transfer Pricing Audits

  • By Thierry Viu

Thierry Viu of CMS France explains how the new finance bill strengthens the powers of the tax authorities in transfer pricing audits and what this means for international groups.

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India Will Seek End to WTO’s 1998 Tariff Freeze on Digital Trade

  • By Shruti Srivastava

India is seeking to end a freeze on countries taxing electronic trade, a move that would allow tariffs to be imposed on anything from software downloads to video games.

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Companies Want Broad Irish Dividend Exemption Amid Global Tax

  • By Danish Mehboob

Companies told Ireland’s finance ministry to broaden its proposal to exempt dividends from corporation tax to include the profits of foreign branches of Irish companies too, a move to draw more business operations to the country with a global minimum tax in place.

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European Commission to Establish Carbon Pricing Task Force

  • By Amanda Athanasiou

The European Commission will establish a task force to design a global carbon pricing approach and support jurisdictions seeking to introduce or bolster carbon pricing systems outside the EU, according to a newly released communication.

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The Case Against Expensing R&E

  • By Reuven S. Avi-Yonah

Reuven S. Avi-Yonah argues that research and experimentation expensing is the wrong way to subsidize research.

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The Ongoing Path to Tax Certainty for Cross-Border Intragroup Arrangements

  • By B. Anthony Billings and Kyungjin “KJ” Kim

B. Anthony Billings and Kyungjin “KJ” Kim examine recent guidelines on advance pricing agreements from the IRS and the OECD as well as the implications of Eaton for multinationals.

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OECD Forum Deems Hong Kong, UAE Tax Regimes ‘Not Harmful’

  • By Lauren Vella

Countries involved in the OECD’s project to reduce base erosion and profit shifting determined the tax regimes in Hong Kong and the United Arab Emirates aren’t harmful, according to an update from the organization released Tuesday.

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Chile Brings in $1 Billion From Digital Services Tax

  • By Sam Edwards

Under Chile’s 19% digital services tax, foreign companies providing digital services to clients in Chile voluntarily register with the tax authority and pay sales tax. Those that don’t are subject to a withholding tax for services provided to Chilean residents.

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And Still Not Boring: U.N. Pushes Tax Cooperation Framework Convention

  • By Sharon Katz-Pearlman

Sharon Katz-Pearlman explores the possible effects of the U.N. resolution passed November 2023 to create a framework convention for international tax cooperation.

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