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Tax Cuts and Jobs Act offshoring Controlled Foreign Corporation rules around the world CFC rules US CFC rules passive foreign investment companies, PFICs GILTI, global minimum tax
Blog

How Controlled Foreign Corporation Rules Look Around the World: United States of America

The United States was the first country to enact CFC rules, and it is probably the country with the most complex set of rules that will be presented in this blog series. The rules determine control using a combined ownership test: one for the corporation and the other at the shareholder level. The assessable income under the rules is generally passive income but the amount of foreign income subject to U.S. tax has expanded with the adoption of GILTI.

10 min read
intellectual property IP tax GILTI FDII global minimum tax Biden tax patent boxes impact business, patent boxes, software, intellectual property tax
Blog

How Patent Boxes Impact Business Decisions

As with every change in tax policy, there are trade-offs. The Modified Nexus Approach adds an additional layer of complexity to the already complex issue of taxing IP income. Linking tax breaks for IP income to its associated R&D activity has changed the game and will likely result in some businesses restructuring and relocating their IP assets and R&D activity. Effective tax rates on IP income will likely play an important role in determining optimal locations, giving measures such as R&D credits more importance. Whether this new approach to IP taxation will impact profit shifting and which countries will be the winners and losers is yet to be seen.

6 min read
international tax avoidance To help countries face the pandemic-related financing needs while reducing inequality, the International Monetary Fund (IMF) has released a series of policy recommendations based on a temporary COVID-19 tax, levied on high incomes or wealth. IMF tax proposals: shrink inequality or harm pandemic economic recovery? OECD work plan, BEPs 2.0, base erosion, profit allocation, global minimum tax, base erosion and profit shifting oecd
Research

Summary and Analysis of the OECD’s Work Program for BEPS 2.0

From a broad standpoint, agreement at the OECD will require countries to give up some measure of their own tax sovereignty on policies they have designed to minimize the distortionary effects of the corporate income tax. Over the years tax competition has led to some countries adopting policies that are attractive to businesses because they have a more neutral rather than distortionary approach to taxing corporate income. This project could directly undermine that progress by introducing new levels of complexity and distortion that would ultimately have a negative impact on global trade and growth.

34 min read
OECD global tax deal CFC Rules, OECD CFC, OECD multinational, OECD minimum tax, OECD multinational companies
Blog

CFC Rules Around the World

Our paper undertakes a review of controlled foreign corporation (CFC) rules around the world as a contribution to the global discussion over the possible expansion of existing anti-base erosion CFC regimes or the potential adoption of a minimum tax.

3 min read
controlled foreign corporation rules
Blog

Ripple Effects from Controlled Foreign Corporation Rules

Governments should recognize these trade-offs as they implement controlled foreign corporation (CFC) rules or change their tax policies in ways that increase taxes on foreign subsidiaries.

7 min read
BEPS Base Erosion and Profit Shifting International Tax Rules Base Erosion Profit Shifting 2019
Blog

Putting the Pieces Together on BEPS

Taxes matter for decisions to be made by businesses, individuals, and families, and it is important for policymakers to understand that rules can be designed to be neutral rather than distortionary.

6 min read