The ITPF News Blog is managed by the students at the University of Florida Levin College of Law International Tax LLM Program.
By Jean Comte
Prominent members of the European Parliament have asked the European Commission not to postpone its digital tax proposal. The commission said on July 12 that it had put on hold its work on a digital levy proposal in order not to impede the OECD-led negotiations on global tax reforms. The move was welcomed by the OECD but criticized by the EP, which had obtained in November 2020 a commitment from the commission to propose a digital levy by June 2021. The commitment, crystallized in an interinstitutional agreement, aimed to secure the reimbursement of the EU's €750 billion coronavirus recovery plan.
By Stephanie Soong Johnston
Amazon has notified advertisers that it will soon apply new fees to their invoices if their ads are served in six countries with digital services taxes, including the United Kingdom and France. The company confirmed the change in a July 16 email to Amazon Advertising clients, saying that new “regulatory advertising fees” would start applying September 1. According to a company help page, the new fees will be included on invoices “when an ad is served in and/or when ads are purchased by advertisers in certain countries.”
By Stephanie Soong Johnston
The U.S. government will decide what’s necessary to push new profit allocation rules through the Senate as part of a G-20-backed global tax reform deal once an implementation plan is finalized, perhaps in early 2022. U.S. Treasury Secretary Janet Yellen confirmed July 11 that Treasury is pushing to include measures to implement pillar 2, which calls for global minimum taxation, of the two-pillar plan in a forthcoming budget resolution and reconciliation package. She was speaking during a press conference the day after G-20 finance ministers and central bank governors concluded their July 9-10 meeting in Venice, Italy, under the Italian presidency, where ministers endorsed the plan.
By Sarah Paez
Developing countries must mobilize political power to ensure fair representation in the OECD inclusive framework on base erosion and profit shifting, according to Logan Wort, executive director of the African Tax Administration Forum. During a July 9 Tax Justice Network virtual conference, panelists representing the interests of developing countries said they felt that those countries were sidelined during OECD negotiations on a two-pillar solution to modernize global corporate tax rules because of a lack of political representation. At a June 30 meeting, 130 of the 139 countries in the OECD inclusive framework on BEPS released a statement agreeing to a two-pillar plan that would revise profit allocation rules and tentatively set a global minimum corporate tax rate of 15 percent.
By Andrew Velarde
A key part of a G-20-backed tax reform plan will be a test of whether a formulary approach can be used more widely when it comes to multinational profit allocation, a top OECD official said. Grace Perez-Navarro, the OECD’s deputy tax chief, highlighted elements of a two-pillar global tax overhaul plan that more than 130 countries had agreed on and G-20 finance ministers recently approved. “This major achievement has been a long time coming,” she said July 13 during a webcast organized by the Urban-Brookings Tax Policy Center.
By Stephanie Soong Johnston
The OECD aims to complete a multilateral convention and model legislation by the end of 2021 or early 2022 so countries can start implementing new rules under a two-pillar global tax reform deal in 2023. During a July 16 OECD podcast, Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration, discussed translating the political agreement that more than 130 countries struck in recent weeks into concrete implementation. “The next step is finalizing the political deal in October. There is not much to do, just a few numbers to firm up,” Saint-Amans said. “The following step will be the implementation to move from a political agreement to legislation.”
By Alan Rappeport
BRUSSELS - The United States secured a diplomatic victory in Europe when European Union officials agreed to postpone their proposal for a digital levy that threatened to derail a global effort to crack down on tax havens. The delay removes another potential obstacle to the broader tax agreement, which gained momentum over the weekend after finance ministers from the Group of 20 countries formally backed a new framework. That deal, which officials hope to make final by October, would usher in a global minimum tax of at least 15 percent and allow countries to tax large, profitable companies based on where their goods and services are sold. If enacted, the changes would entail the biggest overhaul of the international tax system in a century.
By Richard Rubin
A complex international corporate tax deal that took years to hammer out soon faces one of its toughest tests: the U.S. Congress. The Group of 20 major economies backed the plan in Venice, Italy, following the earlier endorsement from a broader 130-country group. The plan, aimed at limiting corporate tax avoidance, would revamp longstanding international rules and is crucial to President Biden’s plans to raise corporate taxes. “The world is ready to end the global race to the bottom on corporate taxation, and there’s broad consensus about how to do it,” Treasury Secretary Janet Yellen said.
By Birgit Jennen and Christopher Condon
Top officials from the U.S., Germany and France each expressed confidence that a proposed global tax deal can overcome political obstacles in Washington and within the European Union in time for it to be finalized in October. “There’s more work to be done, but I’m really hopeful that with the growing consensus we’re on a path to a tax regime that will be fair for all of our citizens,” U.S. Treasury Secretary Janet Yellen told reporters on the sidelines of a Group of 20 meeting of finance ministers and central bankers in Venice.
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