2026
Digital Services Taxes and the WTO
The authors argue the U.S. refusal to restore a functioning WTO appellate system amid DST disputes is a rational response to asymmetric litigation risk, not hypocrisy. They contend that any U.S. challenge to foreign DSTs could invite counterclaims targeting U.S. tax provisions such as FDII and IC-DISC as prohibited export subsidies, which are easier to attack under WTO doctrine than DSTs. The piece frames DST conflict as a structural tax-trade mismatch, in which U.S. corporate tax incentives may be more legally vulnerable than the DSTs the United States opposes.
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OECD Notes Progress on Addressing Harmful Tax Practices
The OECD’s Forum on Harmful Tax Practices released updated peer review findings under BEPS Action 5, assessing preferential regimes and substantial activity requirements. Ireland and Peru were found not to have harmful regimes, while Fiji abolished two incentive regimes, and Anguilla and the Turks and Caicos Islands were flagged for follow-up. The report reflects ongoing multilateral monitoring and pressure to align domestic regimes with substance and transparency standards.
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Tax Bill Slashes MNE Manufacturing Tax Rates, Report Says
A new Urban-Brookings Tax Policy Center report finds that international provisions in the One Big Beautiful Bill Act, including revisions to the net controlled foreign corporations tested income regime, substantially reduce effective marginal tax rates on new export-oriented investments. The analysis indicates that outbound manufacturing activity benefits disproportionately, potentially altering location decisions for U.S.-parented multinationals. The findings raise broader policy questions about competitiveness, base erosion, and the long-term trajectory of the post-TCJA international tax framework.
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PwC Warns Dutch Lawmakers of Corporate Exodus Amid Pillar 2 Deal
PwC told Dutch lawmakers that the pillar 2 “side-by-side” safe harbor could prompt multinationals to shift their headquarters, R&D, or other high-value functions out of the Netherlands, thereby threatening the corporate tax base. It urged policymakers to consider competitiveness responses, such as lowering the corporate rate, redesigning innovation box incentives to align with the substance-based safe harbor, or using Article 11 of the EU Pillar 2 directive to opt out of the domestic top-up tax. The warning reflects broader EU tensions between minimum-tax coordination and national competitiveness strategies, as pillar 2 begins to influence location decisions.
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Lawmakers Announce Bill to Stop Corporate Inversions
Senate Democrats introduced the Stop Corporate Inversions Act to restrict further transactions that move a company’s tax residence abroad through acquisitions of smaller foreign corporations. The proposal signals renewed appetite to tighten the inversion rules and reinforce §7874-style constraints as part of a broader anti-base-erosion agenda. If enacted, it could narrow viable outbound restructuring paths and increase the tax friction of cross-border M&A involving U.S.-parented groups.
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Nathaniel Moran Announces Foreign Tech Deterrence Bill
Rep. Moran’s proposal would deny major federal business tax incentives to companies that use technology controlled by foreign entities of concern, tying tax eligibility to national security and data-risk considerations. The bill would effectively convert credits and incentives into a compliance lever for supply chain and technology governance, potentially affecting planning in manufacturing and tech-heavy sectors. It reflects a broader trend of using tax policy to advance geopolitical and cybersecurity goals, adding another layer of constraints to incentive-driven investment decisions.
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An End to Double Taxation
This opinion piece by the former chairman of the House Ways & Means committee discusses the administration’s agreement advancing a new global minimum tax framework aimed at reducing double taxation across jurisdictions. The article situates the proposal within broader OECD-led efforts to coordinate corporate tax rules and reallocate taxing rights internationally. It highlights ongoing political and policy debates surrounding implementation and sovereignty concerns. For international tax practitioners, the piece reflects the continuing evolution of multilateral tax coordination and the policy tensions surrounding global minimum tax enforcement.
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Tax Treaty Override Issue Has Nations Squaring Off in UN Talks
Countries with large tax treaty networks said that a prospective United Nations tax agreement on cross-border services would see far less uptake if it required an automatic override of existing treaties.
EU Tax Commissioner Is Not Ready to Cross the DST Bridge Alone
Commissioner Wopke Hoekstra said pillar 2 has “deteriorated” and pillar 1 remains stalled, but he is not ready to push an EU-wide digital services tax and wants to exhaust options to preserve the two-pillar project. He argued that an EU DST would be politically and technically difficult because DST countries would push their existing models, while other member states would demand trade-offs. Hoekstra also defended the Commission’s 2026 withdrawal of several stalled tax proposals (including DEBRA, Unshell, and a transfer pricing directive) while keeping older DST and “significant digital presence” proposals available as leverage.
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