Int'l Tax News

Nine jurisdictions have signed a multilateral instrument to implement the OECD subject-to-tax rule, with 10 others to follow, advancing efforts to help developing countries ensure that some cross-border payments are taxed at a minimum rate.

The International Fiscal Association Congress will this year be held in Africa. The timing is fortuitous, as African countries are making significant advances in both modernizing tax administration and pursuing economic growth.

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While the adverse ruling is embarrassing, it’s only temporary. Ireland has a lot of credit in the bank following its moves to abolish the double Irish corporate tax avoidance structure and its embracing of both EU and global efforts to bring in a new set of global tax rules, which should maintain the country’s attractiveness to international investors.

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Italy’s Investment Management Exemption regime will help foreign investment vehicles avoid PE risk and attract non-resident investors to Italy, say CMS practitioners.

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The IRS is in the process of establishing a compliance assurance process team to streamline and expedite the resolution of transfer pricing issues in the CAP environment, an official has said.

House Republicans have expressed support for a recent legal challenge filed at the Belgian Constitutional Court against the undertaxed profits rule, saying the global minimum tax measure would give up U.S. sovereignty.

Assaf Harpaz explains the key issues being addressed in the U.N. framework convention on international tax cooperation, including the global north-south divide and its role in the multilateral process.

House Republicans are voicing support for a US business group’s legal challenge of an EU directive requiring all bloc member states to apply global minimum tax rules and vowing retaliatory action if countries employ the levy on US companies.

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The Organization for Economic Cooperation and Development forecasts “somewhere between 60 to 80 jurisdictions” to adopt the rules in the coming years, said John Peterson, head of division for cross-border and international tax at the organization.

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Business leaders have warned that the UK government’s tax-raising plans and negativity about its economic inheritance risk undermining its efforts to boost private sector investment.

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European Commission President Ursula von der Leyen has confounded the tax world with the announcement that EU tax policy will fall under the purview of the next climate commissioner.

The Estonian government agreed in principle Tuesday to impose a 2% tax on accounting profits of companies and raise value-added tax to 24% in a bid to bolster the country’s security and defense, according to a press release from the country’s ministry of finance.

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The new 15% global minimum tax that became effective in almost 40 countries is barely having an impact on many of the 100 largest US companies so far, but it has prompted low-tax jurisdictions to raise their corporate tax rates.

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After listening to a barrage of diverging arguments about ways to declutter the EU tax system, the European Commission told stakeholders it hopes to present its conclusions in the second half of 2025.

Practitioners are concerned that the IRS and Treasury may have overstepped their grant of rulemaking authority when addressing deduction/no-inclusion transactions without explicit congressional permission.

Governments are continuing to make strides in implementing the base erosion and profit-shifting project through country-by-country reporting under action 13 and mutual agreement procedures under action 14, the OECD said.

Pasquale Tridico, president of the European Parliament’s subcommittee on tax affairs, has called on policymakers to include a formula to share profits in the common consolidated corporate tax rulebook proposed by the European Commission.

EU member states soon will discuss three options for establishing a new joint transfer pricing forum, and the choice they make will determine who is in the driver’s seat.

The OECD has released a standardized template that tax administrations will use when issuing outcome letters to multinational enterprises after completing an international compliance assurance program tax risk assessment.

The Treasury Department has issued long-awaited proposed regulations on the corporate alternative minimum tax. The proposed rules released run through a long list of special situations that require special attention, including treatment of foreign subsidiaries.

The OECD is working with country delegates on guidance addressing incentives that governments are offering to taxpayers that potentially undermine the integrity of the pillar 2 global minimum tax rules, an OECD adviser said.

Companies in Singapore would receive generous tax credits to offset some of the impact of the global minimum tax under legislation being considered by lawmakers.

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Eduardo Méndez, Cameron Taheri, and Thomas D. Bettge explain recent Mexican tax reforms and why businesses may need to reconsider the structure of Mexican manufacturing operations.

Former European Central Bank President Mario Draghi said in his long-awaited report on the future of EU competitiveness that the EU should use taxation as a carrot rather than a stick.

Apple has suffered a significant defeat after the EU’s top court ruled the iPhone maker must pay €13bn in back taxes, overturning an earlier decision in the Big Tech group’s favor.

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By joining the international tax agreement, the US can move towards a stronger “country by country” minimum tax — which acts as a greater deterrent to tax competition and eliminates the perverse effects of global averaging across high and low tax jurisdictions.

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Mindy Herzfeld examines the progress and prognosis of U.N. efforts to develop a framework convention on international tax cooperation.

The IRS has ruled that lower-tier dividends from a specified foreign corporation to a controlled foreign corporation are ineligible for the dividends received deduction, countering arguments that have long been advanced by taxpayers seeking the deduction.

Anshu Khanna reviews India’s Union Budget 2024 and explains the importance of some key proposals and the effect they could have on the Indian economy and international investors looking to invest in the Indian market.

Reactions to the proposal are mixed: some predict a 15% tax cut will boost American jobs and wages, but others worry about administrative burdens and gamesmanship.

Countries should consider international tax solutions like a global financial transaction tax and levies on aircraft and shipping to finance the green transition, according to a new EU brief.

Former OECD tax chief Pascal Saint-Amans has forewarned the EU’s future tax commissioner of the likely failure of pillar 1 negotiations and possible tensions when the bloc starts collecting the minimum corporate tax.

Hafiz Choudhury explains efforts at the U.N. to create a fast track instrument to help countries implement changes to the U.N. model tax convention without requiring an onerous renegotiation of the treaty.

A European digital services tax could be used as a stopgap until a deal on pillar 1 of the two-pillar global tax reform plan is reached and could provide resources for the EU budget.

Switzerland will implement the income inclusion rule for the 15 percent corporate minimum tax under pillar 2 of the OECD’s inclusive framework on January 1, 2025, but will not enact the undertaxed profits rule.

Singapore’s Ministry of Finance has rejected stakeholder suggestions to limit the application of its proposed domestic top-up tax to the wholly owned constituent entities of Singapore-based multinational enterprise groups.

Developing countries should adopt the U.N.’s subject-to-tax rule because it is administratively simpler and broader in scope than the OECD’s version, according to the Independent Commission for the Reform of International Corporate Taxation.

Manuel “Nolin” López-Zambrana examines how Puerto Rico — known for relying on tax incentives to attract investment and encourage economic growth — will respond to pillar 2’s minimum tax requirements and how multinational enterprises operating in the territory will be affected by the new framework.

A German tax group has urged the EU to abolish its controlled foreign company (CFC) rules for companies that fall under the scope of the global minimum tax. The group argues that the CFC rules overlap with the global minimum tax and can lead to double taxation.

Multinational enterprises registered for Belgium’s global minimum tax regime can start making advance payments under the income inclusion rule and qualified domestic minimum top-up tax, according to the country’s tax authority.

Brazil’s government may propose taxes on major technology companies and introduce legislation to implement the OECD’s 15 percent minimum tax if projected 2025 revenues are insufficient to eliminate the country’s primary budget deficit.

The Argentine government has launched a new incentive program, the RIGI, designed to attract foreign direct investment and boost economic growth. The program offers significant benefits to investors in various sectors, including tax breaks, regulatory relief, and long-term stability..

The Inland Revenue Authority of Singapore (IRAS) reported a 17% increase in tax revenue for the financial year 2023-2024, reaching S$80.3 billion. Corporate tax collections saw the most significant growth, up 25.6% to S$29 billion, accounting for 36.1% of the total revenue.

UK venture capitalists and entrepreneurs have warned that the Labour government’s signal that it will raise taxes risks stifling the country’s technology industry.

Kyle Pomerleau and Carol Wang compare and analyze three minimum taxes on the foreign profits of multinational corporations — the global intangible low-taxed income regime, the corporate alternative minimum tax, and pillar 2’s income inclusion rule — evaluating each for impact on economic efficiency, robustness to avoidance, and administrability.

Jeffery M. Kadet responds to a recent article on the potential reform of income sourcing rules and emphasizes that simplicity, objectivity, and results that are fair to both taxpayers and tax authorities are key, including the need for sourcing rules to be applied on a unitary basis when appropriate and for the activities of independent contractors (especially when related) to be attributed to the taxpayer.

Kartikeya Singh uses a hypothetical example to explain how behavioral incentives created by pillar 1 amount A rules could influence in-scope companies to relocate personnel and physical capital away from headquarter jurisdictions to low-tax investment hubs.

Fed up with a stalled international effort at the Organization for Economic Cooperation and Development (OECD) to rein in the use of tax havens and put a global corporate minimum tax into force, African countries at the United Nations are now leading a charge for greater transparency and fairness in international tax.

The Taiwanese government has announced plans to adjust the corporate alternative minimum tax for large multinational enterprises to align with the 15 percent effective tax rate under the OECD’s pillar 2 global minimum tax rules.