2026
AI Makes Tracking Foreign Digital Taxes Harder. Here’s What to Do
The IRS’s final regulations for foreign tax credits for digital taxes cast a broader net than just addressing treatment—they may prevent taxpayers from obtaining foreign tax credits because of artificial intelligence, which enables intellectual property to migrate seamlessly across borders.
Global Tax Deal Boosts US Allure for Companies Weighing a Move
A growing number of foreign multinationals are exploring whether to relocate their parent companies to the US, with interest spurred in recent weeks by a deal struck at the OECD exempting American businesses from key parts of the 15% global minimum tax.
Three Major Banks to Pay $457M to Settle Brazilian Tax Disputes
Three large banks, Banco Citibank SA, Itaú Unibanco, and Banco Santander Brasil, reportedly paid about BRL 2.4 billion, around $457 million, to settle Brazilian tax disputes, with average discounts of about 21 percent on interest and penalties. The settlements reportedly covered disputes involving Brazil’s former financial transactions tax for Santander and Citibank, and PIS and COFINS-style social contributions plus income tax and the social contribution on net profit for Itaú. The piece shows how Brazil uses settlement programs to close contentious assessments by discounting add-ons such as interest and penalties, and it underscores the real cash costs and compliance risks multinationals face in Brazil’s financial sector.
To read the document, it be can be read here.
Section 892 and the Regulatory-Policy Paradox
Semer argues that the Treasury’s December 15, 2025, final and proposed section 892 regulations would significantly restrict how foreign sovereign investors can invest in the United States while keeping the section 892 exemption. He says the rules could treat routine lending and credit activity, and even standard minority protection governance rights, as disqualifying commercial activity or effective control. The result, he argues, is a policy contradiction where rules meant to police abuse could make sovereign capital harder and more expensive to attract, forcing funds and deal parties to rethink loan terms, veto rights, and compliance planning under section 892.
To read the document, it be can be read here.
Global Mobility Framed as an EU Competitiveness Issue
An EU Commission official says member states are divided on cross-border remote work, and businesses warn that unclear tax rules are changing hiring and investment decisions across the single market. Companies cite permanent establishment and broader corporate tax exposure as the main problem, with some limiting remote work or hiring to avoid creating nexus through employee presence. The piece frames this as a live administration challenge at the intersection of PE standards, corporate residence, and withholding and payroll compliance, with implications for the EU’s simplification and competitiveness agenda.
To read the document, it be can be read here.
Business Group Warns of Net Tax Loss Under UN Approach
A global business group said that developing countries would lose hundreds of millions of dollars a year if they adopt a new method of taxing cross-border services endorsed by the United Nations. The International Chamber of Commerce said a report (read the report here) it commissioned found the UN Model Tax Convention’s Article 12AA would lower annual revenue in developing countries by $241 million.
Practitioners Urge Netherlands to Seek Pillar 2 Exemption
Two Dutch tax practitioners say the Netherlands should apply for the OECD Pillar Two side by side safe harbor, arguing its system is already closed because of the 25.8 percent corporate rate, a domestic top up tax, and strong antiavoidance rules. They frame it as a competitiveness and compliance burden move, warning the Netherlands could face maximum hassle and minimum revenue if it implements Pillar Two without safe harbor protection, especially after the Inclusive Framework’s January 5 deal shielding U.S. groups from IIR and UTPR. They also stress timing, noting the OECD will review regimes on request by the end of the first half of 2026, while Dutch politics have not clearly committed to applying despite parliamentary pressure and potential state aid concerns.
To read the document, it be can be read here.
UK, EU Must Grapple With Implications of OECD Side-by-Side Deal
The OECD’s new “side-by-side” deal exempts US-headquartered multinationals from much of its global minimum tax rules. The UK government has announced that it will implement this deal through new domestic legislation (retroactive to Jan. 1). The EU plans to implement it as well, likely through treating the new safe harbor as consistent with existing exemptions rather than trying to amend the Pillar Two directive that created the minimum tax regime.
Nations Raise Tax Treaty Impact Concerns as UN Talks Resume
More than a half-dozen countries said negotiations over a future United Nations tax treaty need to quickly clarify how the agreement will affect exiting tax treaties as delegates began a new round of talks.
Pillar 2 Side-by-Side Safe Harbor: A Slightly Choppy Period
Sheppard argues the OECD’s “side-by-side” safe harbor is an imperfect near-term fix for U.S. multinationals because it does not eliminate QDMTT exposure and may not meaningfully reduce ongoing Pillar 2 compliance. Until countries actually enact and implement the law, U.S. groups may still need to book and compute current IIR/UTPR exposure for financial reporting purposes. The piece also flags structural frictions, including the lack of a QDMTT “push-down” and continued reliance on complex book-income adjustments and elections, suggesting the safe harbors are a band-aid on a flawed framework.
To read the document, it be can be read here.
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