As one might expect, southern European countries that are well-known for their wines—such as France, Greece, Portugal, and Spain—either don’t tax it or do so at a very low rate. But travel north and you’ll see countries that tend to levy taxes on wine—and often hefty taxes.
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This interaction between the U.S. proposals and those that may be put into law in foreign jurisdictions should give lawmakers caution when evaluating the revenue potential of changes to GILTI.
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Changes to international tax rules are likely on the way, and it is therefore important for lawmakers to understand how various reform options would impact U.S. tax burdens on multinational companies. Moreover, policymakers should also recognize the need for prudent policies that do not put U.S.-based multinationals at a competitive disadvantage or severely curtail investment and hiring.
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Finland has the highest excise tax on beer in Europe, followed by Ireland and the United Kingdom. Compare beer taxes in Europe this International Beer Day
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19 European OECD countries employ a fully territorial tax system, exempting all foreign-sourced dividend and capital gains income from domestic taxation. No European OECD country operates a worldwide tax system.
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To discourage this form of international debt shifting, many countries have implemented so-called thin-capitalization rules (thin-cap rules), which limit the amount of interest a multinational business can deduct for tax purposes.
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The United Nations (UN) recently released its annual “World Investment Report,” which shows the dramatic fall in global foreign direct investment (FDI) caused by the COVID-19 crisis.
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To prevent businesses from minimizing their tax liability by taking advantage of cross-country differences, countries have implemented various anti-tax avoidance measures, such as the so-called Controlled Foreign Corporation (CFC) rules.
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To reduce tax compliance and administrative costs, most countries have VAT exemption thresholds: If a business is below a certain annual revenue threshold, it is not required to participate in the VAT system.
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The redistribution of income from the Biden administration’s tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031.
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Many companies have investment projects with different risk profiles and operate in industries that fluctuate greatly with the business cycle. Carryover provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
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As economic activity resumes and the task of accounting for the deficits incurred in navigating the crisis of the past year becomes the focus of fiscal policy deliberations, a greater reliance on VAT could be an important tool in ensuring fiscal stability going forward. Countries should use this as an opportunity to improve VAT systems by re-examining carveouts in the form of exemptions and reduced rates.
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There has been some confusion about how some parts of the recent G7 agreement on new tax rules for multinational companies might work. The new policies would target the largest and most profitable multinationals and bring in a global minimum tax.
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Corporate income taxes are commonly levied as a flat rate on business profits. However, some countries provide reduced corporate income tax rates for small businesses. Out of 27 European OECD countries covered in today’s map, eight levy a reduced corporate tax rate on businesses that have revenues or profits below a certain threshold.
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In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems (ETS), and carbon taxes.
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Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.
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Most countries provide tax relief to families with children—typically through targeted tax breaks that lower income taxes. While all European OECD countries provide tax relief for families, its extent varies substantially across countries.
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If the U.S. is suggesting a 15 percent effective rate as the minimum acceptable rate for a global agreement, then the tax bases of the various minimum taxes adopted as part of the agreement should be aligned to minimize complexities and unintended consequences.
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