Int'l Tax News

Enactment of the OECD’s global minimum tax only needs a critical mass of countries to implement it and result in an increase in annual tax revenue of 9%, while still creating favorable international tax competition in the form of tax credits, grants and subsidies.  

Colombian President Gustavo Petro calls for a tax reform proposal to lower the country’s high corporate tax rate, remove the VAT on tourism-related activities and create tax exemptions for clean energy. 

The missions given to EU Tax Commissioner Paolo Gentiloni when he took office have been fulfilled, but the European Commission still has some tax initiatives in the drawer for the closing months of its mandate.

Bulgaria, Croatia, and the Netherlands recently published laws implementing an EU directive providing for global minimum tax rules in line with an OECD-brokered, two-pillar plan to revamp the international corporate tax system.

 European Commissioner for the Economy, Paolo Gentiloni, discusses the application of the OECD’s minimum tax rules in jurisdiction around the world. According to Gentiloni, the global minimum tax will put an end to the downward spiral of corporate tax rates over the last four decades. 

Belgium's Chamber of Representatives has adopted a draft law transposing the EU directive on public country-by-country reporting, with some changes aimed at making it stronger.

The U.N. General Assembly has adopted a resolution that aims to move negotiations on international tax matters from the OECD to the U.N.

A Swiss qualified domestic minimum top-up tax will go into effect January 1, 2024, as part of an OECD/G-20-led two-pillar plan to modernize global corporate tax rules.

The European Commission has posted a lengthy FAQ in response to a wide range of technical questions from member states and other stakeholders about the application of the EU’s global minimum tax directive.

Corporate tax advisers are gearing up clients for 2024 tax code changes to research and development expenses, an election year that could determine the fate of some high-profile laws, and corporate minimum taxes, among other regulatory actions from the IRS and Treasury Department. 

The IRS updated its clean vehicle tax credits FAQs sheet, emphasizing that vehicles and dealers must follow the rules to be eligible for credits. Vehicles with battery components manufactured or assembled by a foreign entity of concern aren’t eligible for any amount of new clean vehicle credit, even if the vehicle meets the critical mineral applicable percentage requirements for 2024. In addition, qualified manufacturers are required to make an attestation demonstrating compliance with the foreign entity of concern requirements. 

Jeffrey Tebbs and Caroline Reaves of Miller & Chevalier Chartered analyze recent guidance addressing the interaction of the US foreign tax credit system with Pillar Two top-up taxes coming into effect in 2024. According to Tebbs and Reaves, it isn’t clear that Pillar Two taxes can (or should) be excluded from the US exceptions for high-taxed income. Nor is it clear how a Pillar Two tax could be ineligible for the US foreign tax credit but nevertheless result in a deemed dividend inclusion. 

Hong Kong started consulting on its implementation of global minimum tax rules for 2025 on the same day the U.K. government announced it is seeking input on more draft guidance for its pillar 2 regime.

Gibraltar plans to introduce legislation in 2024 to implement a qualified domestic minimum top-up tax on local subsidiaries and permanent establishments of large multinational enterprises.

Proposed criteria that would determine who gets generous tax credits for producing hydrogen are too strict and could stifle the industry, energy companies say.

Osler’s Patrick Marley and Kaitlin Gray say Canada’s latest move to implement a digital services tax is likely to encounter political and practical challenges related to the tax itself and the OECD’s Pillar One. 

Baker McKenzie’s Juan David Velasco and Juan Diego Fernandez analyze fiscal challenges arising from economic digitization and Colombia’s recent tax reform. New regulations taking effect on Jan. 1, 2024, consider nonresidents ‘significant economic presence’ as an alternative to the OECD’s proposed guidelines for its two-pillar approach.  

Discussions on a plan for international tax cooperation under U.N. auspices is feasible, but rethinking the OECD’s two-pillar global tax reform plan would be “a giant waste of time,” a top European Commission official said.

Brazil signed into law an overhaul to simplify a patchwork of tax codes from its states and thousands of municipalities.

Robert Goulder considers Canada’s refusal to extend the global DST moratorium beyond 2023.

Kevin Brogan, Alistair Pepper, and Daren J. Gottlieb consider the implementation of the pillar 2 global anti-base-erosion rules and ways in which revisions to them may create more consistency with policy objectives.

Mindy Herzfeld looks back at key tax litigation from 2023, including Christensen v. United States.

The United States expects an extension of the pillar 1 negotiation deadline into 2024 and is working to extend the digital services tax moratorium as well, Treasury’s outgoing OECD negotiator said.

The IRS and Treasury issued further interim guidance for the corporate alternative minimum tax, addressing potential double counting of income from controlled foreign corporations and modifying prior guidance for tax consolidated groups.

The U.K. will impose a tax on imports with a big overseas carbon footprint, the government announced, in a major new commitment that aligns the country with the EU in efforts to use the global trade system to tackle climate change.

Africa could lose as much as $25 billion annually due to the European Union’s new carbon border tax, hurting the continent’s trade by penalizing valued-added exports such as iron and fertilizers, African Development Bank Group President Akinwumi Adesina said.

The 15% global minimum tax, part of the 2021 global tax pact agreed to by more than 140 countries, seeks to end the “race to the bottom” that has nations competing to offer the lowest corporate tax rates to draw big business investment to their shores.

Australia started consultations with digital service providers to inform them on global minimum tax implementation plans, data requirements, and potential solutions for future compliance.

The United Nations’ framework for international tax cooperation is likely to initially include tackling illicit financial flows and cross-border services, two key areas of concern for developing countries, a UN official said.

The Kingdom of Saudi Arabia is aiming to transform into a significant business hub, attracting a growing influx of foreign companies.

The Biden administration released long-awaited rules designed to block electric-vehicle manufacturers from sourcing battery materials from China and other foreign adversaries, while giving automakers some flexibility to comply with the new mandates.

The Biden administration issued new rules to prevent Chinese firms from supplying parts for electric cars set to receive billions of dollars in tax credits.

The chair of the EU Code of Conduct Group on business taxation said implementation of pillar 2 probably won’t become a determining factor for the list of noncooperative jurisdictions until after the peer review.

House taxwriters unanimously advanced a fix to the issue of double taxation with Taiwan, moving a unique bill combining approaches from two Senate committees.

Tax measures put in place by EU countries will face closer scrutiny beginning next year for their possible harmful effects on other member countries’ economies, the chair of the bloc’s Code of Conduct Group (Business Taxation) told the European Parliament tax subcommittee.

More pillar 2 guidance is likely to be published by the end of 2023, including advice on the peer review process and on antiabuse rules related to a key safe harbor, a top Treasury official said.

The European Commission has decided against proposing a directive to implement pillar 1 of the OECD’s two-pillar global tax reform plan because the pillar 1 multilateral convention would be enough, an EU official said.

A minister from Barbados discouraged countries from blacklisting others based on how far they’ve developed their tax transparency frameworks.

European Union countries are largely on track to start applying Pillar Two of the global tax deal next year, but the finalization of Pillar One remains uncertain, an EU official said at a European Tax Adviser Federation seminar.

Tax talks that would combine a beefed-up child tax credit and reinstate full research and development expensing aren’t exactly sizzling, but they are picking up speed after a year in the doldrums.

The UK’s projection of £12.7 billion ($15.9 billion) in revenue within the next six years from the global minimum tax is highly uncertain, a top budget economist told lawmakers in a government budget hearing Tuesday.

The Austrian, Norwegian, and Slovenian governments have proposed legislation implementing an EU directive for adopting global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan.

Martin A. Sullivan explores financial data for more than 300 multinational companies to uncover trends in intellectual property transfers.

The United Kingdom will make full expensing for business capital investments permanent as part of a plan to invest £20 billion annually in businesses over the next decade, said Chancellor of the Exchequer Jeremy Hunt.