Base Erosion and Profit Shifting (BEPS)

How Does the Inflation Reduction Act Minimum Tax Compare to Global Minimum Tax?

Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules.

Profit Shifting

4 Things to Know About the Global Tax Debate

The Biden administration has been supportive of the negotiations, but the changes should be reviewed in the context of recent policy changes in the U.S. and elsewhere, the general landscape of business taxation in the U.S., and potential challenges and risks arising from the global tax deal.

Why FDI Matters for U.S. Employment, Wages, and Productivity

Contrary to the Biden administration’s claims, raising taxes on cross-border investment would hurt U.S. economic growth and jobs. Research shows that FDI creates jobs in the U.S. and raises workers’ wages and productivity.

Time for an Updated Impact Assessment of the Global Tax Deal

Treasury Secretary Janet Yellen offered estimates from the EU Tax Observatory as evidence that the Polish government would benefit from supporting the global tax deal. Unfortunately, evidence was, at best, out of date.

Which Global Minimum Tax Will We Get?

Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have been debated in recent months, there are clear divides between U.S. proposals and the global minimum tax rules.

Windfall Profits Tax

A Regulatory Tax Hike on U.S. Multinationals

While much of the policy focus has been on proposals embedded in the Build Back Better agenda, a meaningful tax hike for multinational companies has already been adopted.

The Global Minimum Tax Changes the Game for Build Back Better Revenue

One goal for the Build Back Better Act has been to increase the amount of revenue the U.S. raises from U.S. companies at home or abroad. With the global minimum tax rules in play, it is likely that the expected gains to the U.S. Treasury from foreign profits of U.S. companies will diminish.

Rushing Headlong into Formulary Apportionment

Complex tax policies that work well “in theory” can often have a hard time when the rubber meets the road. One instance of this is the challenge that the OECD has created for itself with the global tax deal, also fondly known as Pillar 1 and Pillar 2.

OECD Pillar One

OECD Pillar Two (Global Minimum Tax)

U.S. Tax Incentives Could be Caught in the Global Minimum Tax Crossfire

The current prospect for the global minimum tax requires the attention of U.S. lawmakers. Otherwise, a tax benefit at home will just mean a tax increase abroad.

Gift or Lump of Coal: U.S. Cross-border Tax Changes Won’t Be Home for Christmas

As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act in the United States means new uncertainties for a global agreement and for taxpayers.

What Do Global Minimum Tax Rules Mean for Corporate Tax Policies?

The new OECD global minimum tax rules are complex, and some countries may opt to put them in place on top of preexisting rules for taxing multinational companies. However, countries should also consider ways to reform their existing rules in response to the minimum tax.

Digital Services Taxes in Europe, 2021

Despite ongoing multilateral negotiations in the OECD, about half of all European OECD countries have either announced, proposed, or implemented their own unilateral digital services tax.

Testimony: EU Parliament Subcommittee on Tax Matters Hearing on the Impact of National Tax Reforms on the EU Economy

Tax Foundation testimony on the diversity of tax systems within the EU, three important ways to consider reforms by Member States, and several recommendations for the EU Parliament’s Subcommittee on Tax Matters to consider.

How Would the Ways and Means Proposal Affect Profit Shifting?

If Congress wants to reduce profit shifting, the proposal from the Ways and Means Committee is not an effective tool for this.

Patent Box Regimes in Europe

Patent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP. Most commonly, eligible types of IP are patents and software copyrights. Currently, 14 of the 27 EU member states have a patent box regime.

Tax Foundation Response to Ireland Department of Finance Consultation Document: Consultation on OECD International Tax Proposals

The recent effort to change international tax rules has been one of significant contradictions. The proposals have been driven by arguments about the need to raise additional revenues, to stabilize corporate tax rates, or to prevent offshoring. However, upon closer examination, these three arguments fail to capture what is occurring.