Int'l Tax News

Larissa Neumann and William R. Skinner review the One Big Beautiful Bill Act and the bill introduced by Senate Finance Committee member Thom Tillis, R-N.C. They also examine the IRS guidance memo on resource allocation for the advance pricing and mutual agreement program, developments with pillar 2, and the challenge to stock-based compensation in McKesson.

The European Commission is still waiting on select countries to address or commit to countering aggressive tax planning, despite toned-down economic recommendations from member states earlier this year.

Several aspects of the section 899 retaliatory tax in the House-passed tax bill raise red flags that the provision violates Senate procedures, which could lead to the tax being severely constrained or scrapped altogether.

The European Commission is signaling a potentially more ambitious review of its 2017 dispute resolution mechanism directive, according to a top EU tax official.

President Trump’s tariffs would raise $2.5 trillion in revenue over the next decade, but the cost to the economy would more than offset the total economic growth expected from the House bill’s tax cuts.

Several U.S. industry organizations, including the U.S. Chamber of Commerce and the National Foreign Trade Council, issued a letter to the U.S. trade representative and the secretaries for the U.S. Treasury and the U.S. Department of Commerce calling on the government to push back against the discriminatory digital services tax measures from Canada and the United Kingdom, noting that the Canadian DST will cost the United States up to $2.3 billion annually.

The UK is weighing the future of its Digital Services Tax (DST), under pressure from US trade threats. From the White House to the tech sector, the DST has been described as a discriminatory ‘tariff’ almost entirely targeting large US internet companies. No-one seems to have asked whether that’s actually true. New data obtained by TaxWatch show that nearly 40 percent of the companies subject to the UK DST are not headquartered in the US at all, contrary to claims made by politicians and the tech industry itself.

Treasury Deputy Secretary Michael Faulkender warned the OECD that the United States will retaliate if the group doesn’t accept several existing U.S. tax provisions as being compliant with a global minimum tax initiative.

Bermuda has started a public consultation on draft technical amendments to its corporate income tax regime to bring it more in line with OECD pillar 2 global minimum tax rules and related administrative guidance.

The OECD issued a release announcing that it has published its June 2025 economic outlook report, which analyzes the economic prospects of various member jurisdictions, noting that global economic growth is projected to slow down from 3.3 percent to 2.9 percent in 2025 and 2026 and that various factors could affect overall economies in the coming years, including inflation pressures, increased tariffs and high trade costs, high debt payments, and uncertain tax policies.

Danielle Rolfes, Alistair Pepper, Daniel Winnick, and Casey Caldwell analyze the revised versions of two proposed retaliatory tax measures, consolidated in proposed section 899, now before the Senate as part of the budget reconciliation package, assessing whether the more significant modifications to those now-combined proposals are consistent with Congress’s stated policy goals in responding to “unfair” taxes imposed by foreign countries.

Mindy Herzfeld examines the international tax provisions of the House reconciliation bill and considers how they could affect international investment in the United States.

Renewed efforts to allow the United States to retaliate against countries with discriminatory taxes will affect most foreign direct investment in the United States and put American jobs at risk, stakeholders and observers warned.

Samuel Narh Dorhetso explores the effects of President Trump’s tariffs on Ghana and offers suggestions on how to move away from the vulnerability of preferential trade agreements.

 In a letter to the editor, Jefferson VanderWolk explains why the U.S. position on pillar 2 could improve global tax policy.

Ryan Finley explains why, despite Medtronic’s claims to the contrary, the section 482 regulations do not swallow their own comparability methodological reliability standards.

Germany’s government is preparing a legislative proposal to tax online platforms like Google and Facebook to counter what the country’s culture minister described as “clever . . . tax avoidance.”

A new European Commission proposal wants to harmonize several aspects of employee taxation across borders for start-ups and businesses scaling up to encourage innovation.

Provision could hike taxes on some foreign companies’ U.S. investments and reduce the appetite for U.S. assets.

The American Chamber of Commerce to the European Union has written to EU Tax Commissioner Wopke Hoekstra saying that uncertainties regarding the EU’s pillar 2 directive and its interaction with the U.S. tax system must be resolved quickly.

EU member states are ready to negotiate simplification of the carbon border adjustment mechanism with the European Parliament after tightening the regulation’s antiabuse measures.

European Parliament rapporteur Evelyn Regner said the definition of a permanent establishment in the proposed Business in Europe: Framework for Income Taxation system should include companies that have a significant economic — if not physical — presence.

Parthasarathi Shome explores the ramifications of the recent expanded use of tariffs by the United States.

The OECD has released several new and updated transfer pricing country profiles containing information about their positions on the optional amount B simplified and streamlined approach to pricing baseline and marketing distribution transactions.

Robert Goulder comments on the recently announced United Kingdom-United States trade deal framework.

Wade Sutton proposes updating U.S. dual consolidated loss rules to reflect the post-2017 international taxation environment.

The New Zealand government has pulled back proposed legislation that would have implemented a digital services tax, citing countries’ support of OECD work to address the tax challenges of the digital economy.

The tax committee of a U.S. business group told Treasury’s top OECD negotiator that it supports the government’s push to ensure that the U.S. tax system exists separately from the OECD's pillar 2 regime.

Australia’s Productivity Commission, which advises the government on economic policies, has asked for recommendations on reforming the country’s corporate tax regime and reducing regulations.

An international governance platform for tax has released a final report on its principles to guide policymakers in designing tax incentives to avoid economic distortion and revenue loss.

The Platform for Collaboration on Tax published a report May 20 providing guidance to international policymakers on designing and developing tax incentives in ways that avoid cross-border issues and revenue losses.

Michael J. Waggoner proposes replacing the lowest brackets of income tax with a VAT as an alternative to tariffs.

Mindy Herzfeld examines U.S. international tax policy’s shift toward unilateralism under the Trump administration.

Addressing U.S. concerns about pillar 2 and stabilizing the global minimum tax are OECD member countries’ first priorities, and a return to discussions on pillar 1 “will come after,” a top OECD official said.

Hong Kong’s legislative council is moving forward with a proposal to use its existing general antiavoidance rule to address arrangements that can potentially exploit Hong Kong’s pillar 2 minimum tax rules.

Miguel Cortez Pimentel and Joana Sobral examine the practicalities of the European Council directive on faster and safer relief of excess withholding taxes (FASTER).

German state finance ministers have asked the federal government to ensure that the global minimum tax rules under pillar 2 of the OECD’s two-pillar tax reform plan won’t leave German companies at a competitive disadvantage.

Poonam Khaira Sidhu examines the potential effects of the United States’ lack of participation with pillar 2.

The latest section of House Republicans’ reconciliation tax bill revives proposals to allow the United States to retaliate against what Republicans call discriminatory extraterritorial taxes, this time explicitly referencing digital services taxes and undertaxed profits rules.

The European Commission said it will work to avoid a fragmented situation on pillar 2 that would lead to a “bureaucratic nightmare” for European companies.

Muhammad Ashfaq Ahmed examines the title change of the U.N. Model Double Taxation Convention Between Developed and Developing Countries to the U.N. Model Tax Convention.

The OECD has released an updated consolidated commentary to the global anti-base-erosion model rules under pillar 2 of its two-pillar global tax reform plan, incorporating three years’ worth of administrative guidance.

Katherin Díaz Velilla explains the OECD’s and U.N.’s approaches to creating an international tax framework and shows how developing nations and Latin American countries will play an important role in the U.N. approach.

Treating the global intangible low-taxed income regime as an income inclusion rule and extending the transitional undertaxed profits rule safe harbor won’t be sufficient to address U.S. concerns about pillar 2, a Treasury official said.

A former Treasury official expressed hope that the Trump administration’s tariffs, though ill-advised, could spur policymakers to give more credence to the merits of a consumption-based tax in the United States.

 The government has formed a working group to clarify application of a long-dormant antiabuse statute to a check-the-box election, according to a Treasury official.

Reuven S. Avi-Yonah and Doron Narotzki examine how the history of the United States’ relationship with the global economy could offer insight into innovative tax options in the current economic environment.

Carrie Brandon Elliot interviews four tax professionals to discuss the status of amount B in their respective jurisdictions and compliance suggestions for taxpayers.

R. Glenn Hubbard examines a GOP tax bill that could curb the fears of President Trump's tariffs with a pro-growth tax policy that advances the Made in America agenda. 

While statutory tax rates in the EU declined only slightly in 2014-2022, countries increasingly relied on base-narrowing measures, a trend that will require reconsideration of tax incentives under pillar 2, the EU Tax Observatory warned.