The ITPF News Blog is managed by the students at the University of Florida Levin College of Law International Tax LLM Program.
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By Keith Brockman
Transparency continues to be at the forefront of international tax discussions. It’s the topic of articles, the focus of speeches, and the goal of legislation. But those discussions are tense and very divided, even among tax administrators. Advocates for more transparency are looking to identify and minimize a perceived tax gap, including profit shifting, paying nil taxes in low tax jurisdictions, and operating in what some call tax havens.
By Hamza Ali and Isabel Gottlieb
Developing countries could get a new avenue for taxing digital activities in their jurisdictions under a United Nations treaty amendment set for a vote next week. The proposal is meant to be an alternative to an OECD digital tax plan also under negotiation, said Rajat Bansal, a member of the U.N. Tax Committee and co-chair of the drafting subcommittee.
By Isabel Gottlieb and Hamza Ali
New lines are being drawn in the OECD digital tax talks over which business activities will be covered by a measure meant to make multinationals’ tax calculations simpler and reduce disputes. Some countries want to broaden the scope of business activities covered by part of the Organization for Economic Cooperation and Development’s planned global tax overhaul, known as Amount B. For companies, Amount B holds the promise of greater tax certainty but broadening the range of activities could mean some may end up paying more than they do now.
By Dhammika Dharmapala
The use of tax havens by multinational corporations (MNCs) has attracted increasing attention and scrutiny in recent years. This paper provides an exposition of the academic literature on this topic. It begins with an overview of the basic facts regarding MNCs’ use of havens, which are consistent with the location of holding companies, intellectual property, and financial activities in havens. However, there is also evidence of significant frictions that limit MNCs’ use of havens. These limits can be attributed to non-tax frictions (such as the legal and business environment in different jurisdictions), to tax law provisions limiting profit shifting, and to the costs of tax planning.To read more go here
By Richard Rubin
WASHINGTON—On paper, the 21% U.S. corporate tax rate was a permanent cornerstone of the 2017 tax law, a boon to business without the expiration date attached to other provisions. In reality, that low rate is only as solid as Republicans’ ability to wield power in Washington.
By Rochelle Toplensky
Taxes aren’t quite the certainty they once seemed to Benjamin Franklin. On Monday, the Organization for Economic Cooperation and Development said the new global rules it is developing could add $100 billion a year to multinational companies’ tax bills. That might sound like an unappealing prospect for investors, but the OECD painted a bleaker alternative: a chaos of digital taxes and tariffs that could cut global output by 1%. This outcome would itself hit corporate earnings, even if the new levies didn’t.
By Richard Rubin
WASHINGTON—There is an enormous gulf between the presidential candidates on tax policy—with trillions of dollars at stake over the next decade. President Trump is campaigning to continue his administration’s biggest legislative achievement, the 2017 tax law, which lowered taxes on businesses and individuals while increasing budget deficits. He credits the law with helping spur economic growth in 2018 and 2019, a period when the unemployment rate fell to 3.5% from 4.1%, and is pushing for even more tax cuts in a second term.
By: Stephanie Soong Johnston
Countries could not agree on a renovation of the international tax system in 2020 as planned, but they now have the blueprints that the OECD hopes will provide the foundation for an accord in 2021.
By: Stephanie Soong Johnston
The EU will hold off on unilateral plans to tax digital activity even though the OECD missed its 2020 deadline to reach agreement on a multilateral approach to modernize global tax rules.
By: Ryan Finley
Members of the United Nations’ subcommittee on taxing the digital economy have proposed a new treaty article allowing source-country taxation of digital services revenue, parting ways with the proposal currently under consideration at the OECD.
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