Int'l Tax News

Ten EU countries are aiming to sign an agreement by the end of the year to create a cross-border tax dispute resolution commission that would improve the speed and efficiency of mutual agreement procedures.

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A higher share of non-US tech companies paid the UK’s digital services tax in 2025-26, even as the levy remains a flash point in trade tensions between Washington and London.

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The Treasury Department and the IRS moved Friday to address concerns that sovereign-wealth funds and other foreign-government investors in the US could be penalized by new regulations on when their US investment income is exempt from US taxation.

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The European Commission is proposing a raft of exemptions from certain taxes and rules to headline the bloc’s corporate tax reform aimed at making it easier to do business.

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Since the beginning of 2025, the Trump administration withdrew from a global effort to curb offshore tax-dodging by multinational companies. As a result, U.S. companies skirted at least $40 billion in taxes since then to schemes in places like Malta, Bermuda and Cyprus.

Following the Trump administration withdrawal from global effort to curb offshore tax-dodging by multinational companies since the beginning of 2025, U.S. multinationals have circumvented an estimated $40 billion in taxes in places like Malta, Bermuda and Cyprus.

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An OECD report published Wednesday concluded that corporate income tax regimes can disproportionately disadvantage younger and smaller businesses by favoring larger multinational enterprises with greater tax planning capacity and access to specialized compliance resources. The report also raises questions about whether current international tax frameworks adequately balance revenue collection objectives with the need to support market entry and growth among smaller firms operating in increasingly globalized markets.

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An Irish digital infrastructure group warned that delays in expanding data center and energy capacity could threaten Ireland’s corporate tax base by prompting multinational technology companies to relocate intellectual property and future investment elsewhere.

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Private equity-backed companies are seeking exemptions from proposed UK tax reporting rules for “close companies,” arguing the measures were designed for small closely controlled businesses rather than large investment-backed corporate groups. The proposal highlights how technical ownership rules can inadvertently expand compliance obligations for multinational investment structures and private funds. The debate also reflects broader tensions between tax transparency initiatives and the administrative burdens imposed on complex cross-border corporate ownership arrangements.

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European countries are increasingly participating in United Nations negotiations aimed at expanding developing countries’ ability to tax remote and digital businesses, reflecting growing dissatisfaction with stalled OECD digital tax discussions and declining confidence in US cooperation. The negotiations center on replacing traditional physical presence standards with broader taxing rights over multinational enterprises operating digitally across borders.

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The OECD blog explains how cross-border remote work may affect whether an employer has a taxable presence in another country under Article 5(1) of the OECD Model Tax Convention. It highlights the November 2025 OECD Model Commentary updates, which clarify that an employee working from home abroad does not automatically create a permanent establishment, especially where the arrangement is part-time or driven by personal preference rather than business necessity. 

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A partial draft of the U.N. tax convention provides that some countries may need to interpret, apply, and renegotiate existing tax treaties and related agreements to fulfill their obligations under the U.N. convention. Several countries including Germany, Norway, and Sweden voiced objections to the renegotiation of existing agreements, arguing they are inconsistent with principles of the fair allocation of taxing rights. The draft also includes articles 15, 17, and 19, which deal with the convention’s interaction with other international agreements and procedural matters.

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Lobbying group BusinessEurope asked California Gov. Gain Newsom (D) to prevent a draft bill introducing worldwide combined reporting for multinational businesses to reemerge during budget negotiations. Believing this bill would risk risks double taxation, disproportionate compliance burdens, and cross-border tax disputes, BusinessEurope urges Newsom to strike the bill.

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Swiss officials warned that the OECD’s revised global minimum tax framework may reduce Switzerland’s competitiveness for attracting US multinationals because companies could relocate to jurisdictions that have not implemented comparable minimum tax rules.

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A U.S. court administratively closed a lawsuit filed by a Texas-based Sabre GLGL claiming that British Airways refused to compensate it for the U.K.’s digital services tax. The DST requires payment of 2% on “the revenues of search engines, social media services, and online marketplaces which derive value from U.K. users.” Whether British airways was required to reimburse Sabre  depends on whether DST applies to Sabre’s services under U.K. law, which the judge believed is best determined in a U.K. forum. A  resolution of these issues has significant implications for how a digital services tax is treated under U.K. law and may provide guidance to how similar tax provisions will be treated.

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G7 anticipates an OECD report by the end of 2026 on counties’ progress on identifying common challenges linked to taxing the digital economy. Separately, G7 ministers issued a declaration reinforcing actions to promote domestic resource mobilization and public financial management in partner countries.

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Herzfeld describes the recent phenomenon of companies are looking to bring their operations back to the U.S., as well as various challenges companies may face in their attempt to domesticate in the U.S.

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In the second installment of a four-part series, Gribinski explains the shortcomings of reforms targeting the digital economy when applied to autonomous artificial intelligence.

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A year into the Trump administration’s global tariff campaign, many companies are still struggling to coordinate their trade functions with their tax and transfer pricing teams, risking messy audits in the years to come.

The article reports on Turkey’s proposed tax package to attract foreign investment, regional operations hubs, exporters, and high-net-worth immigrants. The proposal would provide major corporate tax exemptions for qualified service centers, reduced tax rates for export income, a long-term foreign-source income exemption for qualifying new residents, and an amnesty for funds transferred into Turkish financial institutions.  

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The article examines European and business concerns over California A.B. 1790, which would phase out the water’s-edge election and require worldwide combined reporting for multinational corporations doing business in California. Mandatory worldwide combined reporting could lead to double taxation, increased compliance burdens, and foreign government objections by applying California’s formulary apportionment system to global corporate income.  

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The article reports that Portugal plans to propose a windfall tax on energy companies that have benefited from higher prices linked to the Iran war. The proposal builds on Portugal’s 2022 excess profits tax and follows unsuccessful efforts by Portugal and other EU countries to push the European Commission toward an EU-wide energy-sector windfall tax. The article shows how governments are reviving excess profits taxation as a national fiscal response to geopolitical shocks, energy price volatility, and public pressure over corporate gains during crises.

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The article reports that Switzerland is considering delaying the application of OECD Pillar 2 guidance on deferred tax assets from tax years beginning in 2024 to tax years beginning in 2025. The guidance affects how preexisting deferred tax assets tied to government arrangements or new corporate tax regimes are treated in effective tax rate calculations under the GloBE rules and Switzerland’s qualified domestic minimum top-up tax.

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The article examines how FIRPTA’s treatment of intangible rights remains unclear for transportation infrastructure projects, even as foreign investment in AI-related data centers and supporting infrastructure becomes increasingly important. Yu argues that while recent FIRPTA reforms and REIT structures provide clearer treatment for data center investment, foreign investors in public-private transportation concessions still face uncertainty over whether operational permits, licenses, and tolling rights constitute U.S. real property interests.  

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The European Union wants the main parts of a US trade deal adopted by July, as it pushed Washington to respect previous commitments made under the pact.

The article discusses disagreement among EU member states over whether windfall taxes on energy companies should be imposed at the EU level or left to national governments. Germany, Austria, Portugal, and Spain supported an EU-wide approach, while the Eurogroup president emphasized that taxing windfall profits remains a national policy decision that must take into account energy security, supply chains, and infrastructure investment.  

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The article examines renewed calls for a windfall profits tax on oil and gas companies following price increases tied to conflict in Iran. It discusses the political and practical difficulties of imposing sector-specific taxes, including concerns about revenue generation, energy markets, and long-term investment incentives. 

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The article criticizes Germany’s Federal Central Tax Office for denying treaty-based withholding tax relief to U.S. investors in German entities treated as fiscally transparent under the U.S. check-the-box rules. The authors argue that Germany’s position misapplies Article 1(7) of the Germany-U.S. tax treaty by focusing on the classification of the German payer rather than whether the income is taxed at the U.S. resident level.  

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AI is changing the practice of tax law. This series examines China’s Golden Tax IV system, powered by Big Data and AI, is actively rewriting the rules of tax enforcement—intensifying audits with a precision that increasingly catches companies off guard. 

Professor Herzfeld examines the first reporting season under FASB’s expanded income tax disclosure rules. The article highlights that the new disclosures provide greater detail regarding companies’ federal, state, foreign, and jurisdiction-specific tax payments. The article connects financial accounting disclosures to broader debates over income tax policy and examines the impact of FDII, research credits, energy credits, Pillar 2, foreign tax rules, and other statutory incentives on corporate effective tax rates.  

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The article contrasts Reform UK’s proposed tax cuts with the Green Party’s wealth tax and previews how smaller parties might influence tax debates. Reform UK’s platform emphasizes lower taxes on businesses and individuals, while the Green Party would shift more of the tax burden onto wealth, capital gains, and high-income taxpayers. 

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The article analyzes how remote, hybrid, and digital nomad work, as well as employer-of-record models, create new tax challenges, including those related to personal income tax, permanent establishment, profit attribution, and transfer pricing. The authors argue that existing treaties and OECD frameworks assume traditional work patterns, leading to uncertainty over presence tracking, withholding, PE risk, and profit attribution for home-office PEs.  

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Rising energy profits have renewed debates over windfall taxes in Europe and beyond. This article examines how governments consider taxing extraordinary gains in globally integrated industries. It reflects broader tensions between revenue generation, investment incentives, and international competitiveness.

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A Treasury rule is allowing companies like Meta and Qualcomm to claim billions in tax benefits, highlighting how regulatory changes can significantly affect the taxation of multinational income. The development raises questions about how cross-border earnings are classified and the extent to which Treasury guidance shapes corporate tax outcomes. 

This article looks at the current state of U.S. tariffs after a Supreme Court decision struck down parts of earlier trade measures. It explains how the administration is adjusting tariff policy across different trading partners and industries.

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The revised global minimum tax agreement puts EU companies at a competitive disadvantage compared to US firms, a key European parliamentary committee says. See the EU Parliament report.

The European Parliament called for digital services taxes and levies on online gambling and crypto assets if needed to strengthen the EU’s revenue streams.

The OECD’s global minimum tax was billed as a landmark change to curb corporate tax avoidance. A 15% effective tax rate on multinational groups with revenues over €750 million ($883 million) was supposed to reduce the advantages of shifting profits to low-tax jurisdictions.

Recent shifts in US tariff policy may add $1.1 trillion to federal budget deficits over a 10-year period, though exact calculations aren’t yet possible, according to the director of the nonpartisan Congressional Budget Office.

Expenditure-based investment tax incentives can provide more value for money than income-based incentives and should be considered by policymakers as the basis for new incentive design, the OECD said. See OECD Guide to Investment Tax Incentives

Teaser: The article discusses the European Commission’s warning that OECD pillar 2 simplification efforts must remain compatible with the EU pillar 2 directive because there is no short-term plan to amend the directive. Additional simplification may be possible through safe harbors, but only if those safe harbors fit within EU law, including Article 32 and the framework used for the U.S. side-by-side package.

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The growing web of circular deals among billion-dollar companies funding AI’s explosive growth is feeding investor worry about a massive bubble. For corporate tax departments there’s another concern, maybe unrecognized: the risk of transfer pricing regulation.

The UK government defended its digital services tax as an appropriate measure for taxing businesses in the wake of fresh tariff threats from the Trump administration.

This article examines the aftermath of invalidated U.S. tariffs and the government’s refund process, highlighting how repayments are directed to businesses rather than consumers who bore much of the economic burden. It raises important questions about the incidence of tariffs and the distributional consequences of trade policy.

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The article argues that the original policy justifications for the U.K. digital services tax have weakened because BEPS reforms, U.S. international tax changes, and the implementation of pillar 2 have substantially changed how large digital multinationals report and pay tax. It criticizes the DST as an extraterritorial gross-receipts tax that functions more like a tariff or back-door VAT, creating trade friction with the United States while sitting uneasily with treaty-based income tax principles.

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Failure to find a multilateral solution on the taxation of the digital economy would make fresh regional or unilateral measures “almost unavoidable,” a senior European Commission official said.

The European Commission’s coming tax simplification package will reduce the administrative burdens on companies that have signed up to the global minimum tax deal, a top official said.

This article explores how geopolitical conflict is influencing tax policy debates in Australia, particularly regarding the taxation of natural resource exports. It focuses on whether current tax regimes adequately capture revenue from multinational energy companies.

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President Donald Trump sent what might be construed as a chilling message to the thousands of American importers applying this week for refunds for his illegal tariffs: In his eyes, you might fare better if you don’t.

Countries involved in international tax talks at the OECD are working to develop permanent tests to ease compliance with the global minimum tax, a US Treasury official said.