Int'l Tax News

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Robert Goulder critiques a proposal for renewed tariffs.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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

The European Commission’s Business in Europe: Framework for Income Taxation proposal to harmonize aspects of the corporate tax rules disproportionately encroaches on the competences of EU member states, the Swedish Riksdag (parliament) said.

The EU’s new Corporate Sustainability Reporting Directive will have tax implications on those companies required to report.

The Australian Tax Office is soliciting feedback on proposed rules that would limit the amount of interest payments that multinational companies can deduct.

The 15% global minimum tax is here, and it is raising corporate tax payments—just not in the U.S., where Congress hasn’t changed tax law to conform with an international deal.

Lucas de Lima Carvalho considers that maybe the income inclusion rule isn’t so bad when it’s compared with the undertaxed payments rule.

Leopoldo Parada examines the Court of Justice of the European Union’s rejection of the European Commission’s use of an autonomous EU arm’s-length standard and the Court’s move to set limits on the use of the OECD transfer pricing guidelines to identify a selective advantage under EU state aid law in the Court’s recent Amazon decision.

After raising tax on stock options, India projects to collect 12.5% more in security transaction tax in 2025.

Ryan Finley explains why the cost-sharing regulations’ definition of “platform contribution” shouldn't be interpreted as a restriction on specified methods other than the income method.

The country expects to generate A$160 million in fiscal year 2025-26 and A$210 million in fiscal year 2026-27 from the 15% tax on Australian multinational parent and subsidiary companies with at least 750 million euros in annual global revenue.

Some members of the European Parliament want the Business in Europe: Framework for Income Taxation proposal to include a formula for dividing the tax pie among EU member states.

Reuven S. Avi-Yonah examines what’s next for the United States and U.S. multinationals as pillar 2 becomes a reality.

As a country with only a handful of ultimate parent entities of groups that qualify for minimum taxation, Latvia is allowed a deferral of full European Union rules ensuring a global minimum level of taxation for multinational groups and large national groups.

Mindy Herzfeld examines whether Treasury’s recent efforts to clarify when U.S. taxpayers may claim a foreign tax credit contradicts U.S. law and congressional mandates.

While transfer pricing revenues reverted to pre-pandemic figures at £1.6 billion, results from the diverted profits tax appear to be highly cyclical, yielding only £40 million in tax year 2022–2023, HM Revenue & Customs said.

An Australian mining advocacy group has urged the commonwealth to adopt tax credits to contend with the movement of critical minerals investments to the United States as a result of the Inflation Reduction Act.

Michelle Markham examines the methods different countries are using to enhance tax certainty by exploring recent developments in multilateral avenues for improving international tax dispute resolution.

Companies using the International Compliance Assurance Program assessed risks faster than with other legal tools and were able to obtain more certainty about their tax bills.

Nine EU member states face infringement proceedings after missing a key deadline to communicate to the European Commission about measures transposing the pillar 2 global minimum tax directive into their national laws.

The adoption of a proposed common EU corporate tax system should be delayed until pillar 2 rules are comprehensively implemented and pillar 1 talks are finalized, business groups told the European Commission.