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Archives: March 2021Subscribe
By Hamza Ali
U.S. Treasury Secretary Janet Yellen and French Finance Minister Bruno Le Maire have reiterated their support for international efforts to rewrite how the digital economy is taxed. The Organization for Economic Cooperation and Development is currently working with nearly 140 countries to rewrite international tax rules that govern how tech companies are taxed.
By Hamza Ali
The U.K. will consider all options to defend its interests should the U.S. decide to impose tariffs on its businesses, the government said Monday. The U.S. announced Friday that it would push ahead with the its Section 301 probes into six digital services taxes from around the world including the U.K. The U.S Trade Representative has argued in the past that these taxes unfairly discriminate against U.S. tech giants.
By Ana Monteiro
Given that Brazil, EU, Czech Republic and Indonesia haven’t instituted digital taxes, the U.S. Trade Representative has ended its investigations on these countries and the bloc.
By Michael Rapoport
President Joe Biden and congressional Democrats are warning they may get tough on taxing U.S. companies abroad to raise more revenue and walk back some policies they see as being too corporate-friendly. Their plans include raising the corporate tax rate and increasing taxes on U.S. companies’ foreign income. They might also revise or reverse still-pending regulations to implement foreign-tax provisions of the 2017 tax law—with the aim of getting multinationals to pay more in U.S. taxes.
By Isabel Gottlieb
The U.S. is considering up to 25% tariffs on goods from Austria, India, Italy, Spain, Turkey, and the U.K. over digital taxes in each of those countries. The U.S. Trade Representative’s office on Friday said it is seeking feedback this spring on potential trade responses to the six countries’ measures “to preserve procedural options” while negotiations continue for a global digital tax solution.
By Isabel Gottlieb and Hamza Ali
Negotiators working on a global rewrite of corporate tax rules are debating how to force a rollback of domestic measures aimed at tech giants’ revenue. Countries are deciding how to define which unilateral measures will be replaced by the OECD-led effort, officials said Thursday at the American Bar Association European conference.
By Greg Ip
There is no more effective way for President Biden to meet his aggressive climategoals than a carbon tax. The timing seems ripe: his Treasury Secretary, Janet Yellen, has been a prominent advocate. Big business has flipped from opponent to proponent. Republican opposition is no longer monolithic. But a carbon tax lacks support where it matters most: with Mr. Biden and the Democratic base. Progressive Democrats claim a carbon tax and its close cousin, cap-and-trade, are unfair to the poor and racial minorities. And a carbon tax appears to conflict with Mr. Biden’s promise not to raise taxes on any household earning less than $400,000 a year.
By: Andrew Velarde
The global intangible low-taxed income provision was a primary target of criticism from Democrats and witnesses at a Senate Finance Committee hearing, although most critiques focused on reforming GILTI rather than advocating a complete rewrite. The criticism at the March 25 hearing appeared to coalesce around three aspects of GILTI — its exemption from tax for qualified business asset investment income, its reduced rate, and its inapplicability on a per-country basis. These critiques come as Finance Committee Chair Ron Wyden, D-Ore., announced that he will release a new international tax framework “in the coming days” in cooperation with committee members Sherrod Brown, D-Ohio, and Mark R. Warner, D-Va.
By: Stephanie Soong Johnston
A U.S. proposal to increase the rate of the global intangible low-taxed income provision of the Tax Cuts and Jobs Act may influence OECD global tax reform discussions, a top German official said. “We are of course aware there’s a plan to raise the GILTI rate; of course, this plays a role in our discussions, given that the U.S. is the world’s largest economy,” Martin Kreienbaum, director general of international taxation at the German Federal Ministry of Finance and chair of the OECD Committee on Fiscal Affairs, said. He was speaking during a March 25 panel at the American Bar Association U.S. and Europe Tax Practice Trends virtual conference. “If the world’s largest economy thinks that the rate currently laid down in the GILTI should be higher in [the] future, then I think that would also have an impact on our discussions,” Kreienbaum added.
By: Mindy Herzfeld
With the success of its first big legislative initiative, the American Rescue Plan Act of 2021 (P.L. 117-2), the Biden administration has moved on to the next item on its agenda: infrastructure. Long discussed but highly elusive, the need for additional spending on the country’s infrastructure has broad bipartisan support. The problem is how to pay for a measure that’s expected to cost more than $2 trillion. The first of a series on various alternatives for funding infrastructure, this article considers how corporate tax increases might be used. Imposing more taxes on profitable corporations was high on President Biden’s campaign list, which included ways to both reverse and fix some of the legislative changes enacted by the Tax Cuts and Jobs Act. Progressive Democrats also have made higher taxes on corporations a key part of their platform.
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