Taxation of Multinational Businesses Archive
USICA, Competes Act, Corporate Tax Comparison
May 3, 2022
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TweetShareSharePin0 Shares Key Findings Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code. The existing U.S. tax code is biased against capital investment and it is scheduled to worsen over the next decade. The tax bias against
Pillar Two: Global Minimum Tax Model Rules
March 16, 2022
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TweetShareSharePin0 Shares Everyone loves accounting, right? You have debits and credits that change the balance of assets, liabilities, and equity on the balance sheet and report cash flows and accruals on the income statement. The rules are complex. To make matters worse, the accounting rules for tax are different than for financial accounting used to
A Regulatory Tax Hike on US Multinationals
March 3, 2022
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TweetShareSharePin0 Shares Throughout the first year of the Biden administration, one tax policy theme was consistent. The President and Treasury Secretary Janet Yellen were focused on increasing the tax burden on U.S. companies—particularly multinational companies. As Secretary Yellen put it last year, “It is about making sure that governments have stable tax systems that raise
Global Minimum Tax & Build Back Better Revenue
March 1, 2022
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TweetShareSharePin0 Shares The global minimum tax has upended many conversations about international tax policy, including in the United States. The goal of the policy is to set a worldwide 15 percent minimum effective tax rate on corporate profits and enforce it through a set of interconnected rules. If enough countries adopt those rules, then even
Formulary Apportionment and the OECD Tax Deal
February 28, 2022
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TweetShareSharePin0 Shares One of the greatest challenges of lawmaking is recognizing when a beautiful theory must succumb to an ugly fact. The purity of conceptual policymaking must take the real world into account and acknowledge that things that work well “in theory” sometimes fail spectacularly to meet expectations “in practice.” It would be wonderful if
10 Tax Reforms for Economic Growth and Opportunity
February 22, 2022
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TweetShareSharePin0 Shares Key Findings The waning pandemic and robust economic recovery have come with many benefits—plentiful jobs and fast-growing (nominal) incomes—but also serious challenges such as high and rising inflation. Rather than pushing for more fiscal stimulus or leaving it to the Federal Reserve to handle inflation through higher interest rates, policymakers should focus on
US Global Minimum Tax Build Back Better Considerations
January 28, 2022
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TweetShareSharePin0 Shares The Build Back Better legislative package includes both tax hikes and tax cuts, which contain two contrasting tax policy narratives. Tax hikes include corporate tax increases on foreign income and a new 15 percent domestic minimum tax, and green energy tax incentives provide a tax cut. Policymakers also sought to protect some pre-existing tax
US Cross-border Tax Changes | OECD Global Minimum Tax Rules
December 20, 2021
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TweetShareSharePin0 Shares As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act (BBBA) in the United States means new uncertainties for a global agreement and for taxpayers. Despite the 2017 U.S. tax reform serving as inspiration for current discussions of a
What Do Global Minimum Tax Rules Mean for Corporate Tax Policies?
December 20, 2021
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TweetShareSharePin0 Shares Today, the Organisation for Economic Co-operation and Development (OECD) released model rules for the global minimum tax (also known as Pillar 2). These rules are designed to apply to multinational companies with more than €750 million in total global revenues and place a minimum effective tax rate of 15 percent on those company’s
How Would the Ways and Means Proposal Affect Profit Shifting?
October 7, 2021
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TweetShareSharePin0 Shares Recent proposals to increase the effective tax rates (ETRs) faced by multinationals rely on the argument that these firms achieve artificially low tax rates by shifting profits to foreign tax havens and other low-tax countries. By raising the tax rates on the foreign income of U.S. multinationals, these proposals would supposedly reduce profit
